ex. 4.txt
<PAGE>

                                                   EXHIBIT 4.1

                                  INDENTURE
                     ===============================



                              CONSOLTEX GROUP INC.

                              CONSOLTEX (USA) INC.

                                 CONSOLTEX INC.

                        THE BALSON-HERCULES GROUP, LTD.

                         LINQ INDUSTRIAL FABRICS, INC.



                                 US$120,000,000

                11% SERIES A SENIOR SUBORDINATED NOTES DUE 2003

                11% SERIES B SENIOR SUBORDINATED NOTES DUE 2003





                                   INDENTURE

                         Dated as of September 30, 1993





                       FIRST TRUST NATIONAL ASSOCIATION,
                                as Trustee








<PAGE>


                          CROSS-REFERENCE TABLE*



<TABLE>
<CAPTION>
TRUST INDENTURE                  INDENTURE SECTION
ACT SECTION
<S>                                     <C>
     310 (a)(1)........................7.10
         (a)(2)........................7.10
         (a)(3)........................N.A.
         (a)(4)........................N.A.
         (a)(5)........................7.10
         (b)...........................7.10
         (c)...........................N.A.
     311 (a)...........................7.11
         (b)...........................7.11
         (c)............................N.A.
     312 (a)...........................2.05
         (b)..........................11.03
         (c)..........................11.03
     313 (a)...........................7.06
         (b)(1)........................N.A.
         (b)(2)........................7.06
         (c).....................7.06;11.02
         (d)...........................7.06
     314 (a).....................4.03;11.02
         (b)...........................N.A.
         (c)(1).......................11.04
         (c)(2) ..................... 11.04
         (c)(3)........................N.A.
         (d).......................... N.A.
         (e)........................ 11.05
         (f).........................  N.A.
     315 (a)......................... 7.01
         (b) ....................7.05,11.02
         (c)...........................7.01
         (d).......................... 7.01
         (e)...........................6.11
     316 (a)(last sentence)........... N.A.
         (a)(1)(A).................... 6.05
         (a)(1)(B).................... 6.04
         (a)(2)....................... N.A.
         (b).......................... 6.07
         (c).......................... 2.13
     317 (a)(1) .....................  6.08
         (a)(2)......................  6.09
         (b) ......................... 2.04
     318 (a).......................... 11.01
         (b).........................  N.A.
         (c)......................... 11.01
</TABLE>
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.



                                     i


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                             TABLE OF CONTENTS
                                                                PAGE

                                 ARTICLE 1
                       DEFINITIONS AND INCORPORATION
                               BY REFERENCE

     Section 1.01. Definitions................................. l
     Section 1.02. Other Definitions........................... 12
     Section 1.03. Incorporation  by Reference of Trust Indenture
                   Act..........................................12
     Section 1.04. Rules of Construction....................... 13

                               ARTICLE 2
                               THE NOTES

     Section 2.01. Form and Dating............................. 13
     Section 2.02. Execution and Authentication................ 14
     Section 2.03. Registrar, Depository and Paying Agent...... 14
     Section 2.04. Paying Agent to Hold Money in Trust......... 15
     Section 2.05. Holder Lists................................ 15
     Section 2.06. Transfer and Exchange....................... 15
     Section 2.07. Replacement Notes........................... 20
     Section 2.08. Outstanding Notes........................... 20
     Section 2.09. Treasury Notes.............................. 21
     Section 2.10. Temporary Notes............................. 21
     Section 2.11. Cancellation................................ 21
     Section 2.12. Defaulted Interest.......................... 21
     Section 2.13. Novation.................................... 22

                               ARTICLE 3
                               REDEMPTION

     Section 3.01. Notices to Trustee.......................... 22
     Section 3.02. Selection of Notes to Be Redeemed........... 22
     Section 3.03. Notice of Redemption........................ 23
     Section 3.04. Effect of Notice of Redemption.............. 23
     Section 3.05. Deposit of Redemption Price................. 23
     Section 3.06. Notes Redeemed in Part...................... 24
     Section 3.07. Optional Redemption......................... 24
     Section 3.08. Mandatory Redemption........................ 25
     Section 3.09. Offer to Purchase  by  Application  of  Excess
                   Proceeds.....................................25

                               ARTICLE 4
                               COVENANTS

     Section 4.01. Payment of Notes........................... 27
     Section 4.02. Maintenance of Office or Agency............ 27
     Section 4.03. Reports.................................... 27
     Section 4.04. Compliance Certificate..................... 28
     Section 4.05. Taxes...................................... 29
     Section 4.06. Stay, Extension and Usury Laws............. 29



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                                                               PAGE

     Section 4.07. Restricted Payments 29
     Section 4.08. Dividend   and   Other   Payment  Restrictions
                   Affecting Subsidiaries........................31
     Section 4.09. Incurrence  of  Indebtedness and  Issuance  of
                   Preferred Stock...............................31
     Section 4.10. Asset Sales.................................. 32
     Section 4.11. Transactions with Affiliates................. 33
     Section 4.12. Liens........................................ 34
     Section 4.13. Additional Guarantees........................ 34
     Section 4.14. Corporate Existence.......................... 35
     Section 4.15. Offer to Repurchase Upon Change of Control... 35
     Section 4.16. Senior Subordinated Debt..................... 36
     Section 4.17. Additional Amounts........................... 36
     Section 4.18. Agent for Service;  Submission  to Jurisdiction;
                   Waiver of Immunities ........................ 37
     Section 4.19. Conversion of Currency....................... 37

                               ARTICLE 5
                               SUCCESSORS

     Section 5.01. Amalgamation, Merger, Consolidation,  or Sale of
                   Assets........................................38
     Section 5.02. Successor Corporation Substituted............ 38

                               ARTICLE 6
                         DEFAULTS AND REMEDIES

     Section 6.01. Events of Default............................ 39
     Section 6.02. Acceleration................................. 40
     Section 6.03. Other Remedies............................... 41
     Section 6.04. Waiver of Past Defaults...................... 41
     Section 6.05. Control by Majority.......................... 41
     Section 6.06. Limitation on Suits.......................... 41
     Section 6.07. Rights of Holders of Notes to Receive Payment.42
     Section 6.08. Collection Suit by Trustee................... 42
     Section 6.09. Trustee May File Proofs of Claim............. 42
     Section 6.10. Priorities................................... 42
     Section 6.11. Undertaking for Costs........................ 43

                               ARTICLE 7
                                TRUSTEE

     Section 7.01. Duties of Trustee............................ 43
     Section 7.02. Rights of Trustee............................ 44
     Section 7.03. Individual Rights of Trustee................. 45
     Section 7.04. Trustee's Disclaimer......................... 45
     Section 7.05. Notice of Defaults........................... 45
     Section 7.06. Reports by Trustee to Holders of the Notes... 45
     Section 7.07. Compensation and Indemnity................... 46
     Section 7.08. Replacement of Trustee .......................46



                                    iii


<PAGE>


                                                               PAGE

     Section 7.09. Successor Trustee by Merger, etc.  ..........47
     Section 7.10. Eligibility; Disqualification ...............47
     Section 7.11. Preferential Collection of Claims Against
                   Issuers......................................48

                               ARTICLE 8
              LEGAL DEFEASANCE AND COVENANT DEFEASANCE AND
                     SATISFACTION AND DISCHARGE OF INDENTURE

     Section 8.01. Option  to  Effect Legal Defeasance or Covenant
                   Defeasance....................................48
     Section 8.02. Legal Defeasance and Discharge ...............48
     Section 8.03. Covenant Defeasance ..........................48
     Section 8.04. Conditions to Legal or Covenant Defeasance... 49
     Section 8.05. Deposited Money  and Government Securities to be
                   Held in Trust; Other Miscellaneous Provisions.50
     Section 8.06. Repayment to Issuers......................... 51
     Section 8.07. Reinstatement................................ 51
     Section 8.08. Satisfaction and Discharge of Indenture...... 51
     Section 8.09. Application of Trust Money................... 52

                               ARTICLE 9
                    AMENDMENT, SUPPLEMENT AND WAIVER

     Section 9.01. Without Consent of Holders of Notes.......... 52
     Section 9.02. With Consent of Holders of Notes............. 53
     Section 9.03. Compliance with Trust Indenture Act.......... 54
     Section 9.04. Revocation and Effect of Consents............ 54
     Section 9.05. Notation on or Exchange of Notes............. 55
     Section 9.06. Trustee to Sign Amendments, etc.............. 55

                               ARTICLE 10
                               GUARANTEE

     Section 10.01. Guarantee.................................. 55
     Section 10.02. Execution and Delivery of Guarantee ........56
     Section 10.03. Guarantors  May  Consolidate,  etc., on Certain
                    Terms.......................................56
     Section 10.04. Releases Following Sale of Assets.......... 57
     Section 10.05. Trustee to Include Paying Agent............ 57
     Section 10.06. Subordination of Guarantee................. 57

                               ARTICLE 11
                             MISCELLANEOUS

     Section 11.01. Trust Indenture Act Controls................57
     Section 11.02. Notices.................................... 57
     Section 11.03. Communication by Holders of Notes  with  Other
             Holders of Notes...................................59
     Section 11.04. Certificate  and  Opinion  as  to  Conditions
                    Precedent...................................59
     Section 11.05.  Statements  Required in Certificate or Opinion
                     ...........................................59



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<PAGE>


                                                               PAGE

     Section 11.06. Rules by Trustee and Agents................ 59
     Section 11.07. No Personal Liability  of  Directors, Officers,
                    Employees and Stockholders..................60
     Section 11.08. Governing Law.............................. 60
     Section 11.09. No Adverse Interpretation of Other Agreements
                    ............................................60
     Section 11.10. Successors................................. 60
     Section 11.11. Severability................................60
     Section 11.12. Counterpart Originals...................... 60
     Section 11.13. Table of Contents, Headings, etc........... 60

                               ARTICLE 12
                             SUBORDINATION

     Section 12.01. Agreement to Subordinate................... 61
     Section 12.02. Certain Definitions........................ 61
     Section 12.03. Liquidation; Dissolution; Bankruptcy....... 61
     Section 12.04. Default on Designated Senior Debt.......... 61
     Section 12.05. Acceleration of Notes...................... 62
     Section 12.06. When Distribution Must Be Paid Over........ 62
     Section 12.07. Notice by Issuers.......................... 63
     Section 12.08. Subrogation ................................63
     Section 12.09. Relative Rights............................ 63
     Section 12.10. Subordination May Not Be Impaired by Issuers.63
     Section 12.11. Payment, Distribution or Notice to
                    Representative...............................64
     Section 12.12. Rights of Trustee and Paying Agent.......... 64
     Section 12.13. Authorization to Effect Subordination....... 64
     Section 12.14. Amendments.................................. 65

                                EXHIBITS

   Exhibit A Form of Note
   Exhibit B Certificate of Transferor




<PAGE>


Canada Business Corporation
Form 7
RESTATED ARTICLES OF INCORPORATION
(SECTION 180)

1- Name of Corporation: CONSOLTEX GROUP INC.
   Corporation No.: 285292-6

2- The place in Canada where the registered office is situated:

   TERRITORY OF THE MONTREAL URBAN COMMUNITY, IN THE PROVINCE
   OF QUEBEC

3- The classes and any maximum number of shares that the corporation
    is authorized to issue:

    THE ANNEXEC SCHEDULE 1 IS INCORPORATED IN THIS FORM

4-  Restrictions if any on share transfers

     NOT APPLICABLE

5-  Number (or minimum and maximum number) of directors:

    MINIMUM 2 - MAXIMUM 20 - the number to be determined by the
    directors from time to time

    Restictions if any on business the corporation may carry on:

    NOT APPLICABLE

    Other provisions if any:

    NOT APPLICABLE


The foregoing restated articles of incorporation correctly set
out, without substantive change, the corresponding provisions of
the articles of incorporation as amended and supercede the original
articles of incorporation

Signature: /s/Norman M. Steinberg

Dated: December 17, 1992

Description of office: Director




                                     1


<PAGE>




INDENTURE dated as  of  September  30,  1993  among Consoltex Group Inc., a
Canadian corporation ("Consoltex Group"), Consoltex  (USA) Inc., a New York
corporation  ("Consoltex  USA"  and,  together  with Consoltex  Group,  the
"Issuers"),  Consoltex  Inc.,  a  Quebec corporation,  The  Balson-Hercules
Group,   Ltd.,  a  Rhode  Island  corporation   ("Balson-Hercules"),   LINQ
Industrial Fabrics, Inc., a Delaware corporation ("LINQ" and, together with
Consoltex  Inc.  and  Balson-Hercules,  the  "Guarantors")  and First Trust
National Association, as trustee (the "Trustee").

     Consoltex  Group  and  Consoltex  USA,  jointly  and  severally,  each
Guarantor, jointly and severally, and the Trustee agree as follows  for the
benefit  of each other and for the equal and ratable benefit of the Holders
of the 11  %  Series  A  Senior  Subordinated Notes due 2003 (the "Series A
Notes")  and the 11 % Series B Senior  Subordinated  Notes  due  2003  (the
"Series B Notes" and, together with the Series A Notes, the "Notes"):

                                 ARTICLE 1
                       DEFINITIONS AND INCORPORATION
                               BY REFERENCE

SECTION 1.01. DEFINITIONS.

     "ACQUIRED   DEBT"   means,  with  respect  to  any  specified  Person,
Indebtedness of any other  Person  existing  at  the time such other Person
merged  with  or  into  or  became a Subsidiary of such  specified  Person,
including Indebtedness incurred in connection with, or in contemplation of,
such other Person merging with  or  into  or  becoming a Subsidiary of such
specified Person.

     "ACQUISITION  NOTES"  means notes of Consoltex  USA  in  an  aggregate
principal amount of US$4 trillion  issued  to  Rom  L.  Reddy and George M.
Milner in connection with the acquisition of LINQ.

     "AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or  indirect common
control  with  such  specified  Person.  For  purposes  of this definition,
"control"  (including, with correlative meanings, the terms  "controlling,"
"controlled  by"  and "under common control with"), as used with respect to
any Person, shall mean the possession, directly or indirectly, of the power
to direct or cause  the  direction  of  the  management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise; PROVIDED, HOWEVER, that beneficial  ownership  of 20% or more of
the voting securities of a Person shall be deemed to be control.

     "AGENT" means any Registrar, Paying Agent or co-Registrar.

     "APPLICABLE  MAKE-WHOLE PREMIUM" means, with respect to  a  Note,  the
greater of (i) 1.0%  of  the then outstanding principal amount of such Note
and (ii) the excess of (A)  the  present value of the required interest and
principal payments due on such Note,  computed  using a discount rate equal
to the Treasury Rate plus 50 basis points, over (B)  the  then  outstanding
principal amount of such Note.

     "ASSET SALE" means, any sale, issuance, conveyance, transfer or lease,
directly or indirectly (including by way of a sale-leaseback transaction, a
secured  financing  transaction  or  Receivables  Financings),  of (i)  any
properties or assets of the Issuers and their respective Subsidiaries other
than  sales of inventory in the ordinary course of business or (ii)  equity
securities (other than preferred stock) of any Subsidiary of either Issuer,
in each  case,  whether  in  a  single  transaction  or a series of related
transactions, (a) that have a fair market value in excess  of  10%  of  the
book  value  (determined in accordance with GAAP) of the Tangible Assets of
Consoltex Group as of the end of Consoltex Group's most recently




                                     2


<PAGE>




ended full fiscal  quarter  for which financial statements are available or
(b) for net proceeds in excess  of  10%  of  the  book value (determined in
accordance with GAAP) of the Tangible Assets of Consoltex  Group  as of the
end of Consoltex Group's most recently ended full fiscal quarter for  which
financial statements are available. Notwithstanding the foregoing, the term
"Asset  Sale" shall not include (i) any sale, conveyance, transfer or lease
that is governed  by  Section  5.01  hereof,  (ii)  any  sale,  conveyance,
transfer  or  lease between or among either Issuer, a Guarantor or  any  of
them and (iii)  the  sale, conveyance, disposition or other transfer of the
Capital Stock of an Unrestricted Subsidiary.

     "BANKRUPTCY LAW"  means  title 11, U.S. Code or any similar federal or
state law for the relief of debtors.

     "BOARD OF DIRECTORS" means  the Board of Directors of Consoltex Group,
Consoltex USA or any Guarantor or any authorized committee of such Board of
Directors, as the context requires.

      "BORROWING BASE" means, as of any date, an amount equal to the sum of
(a) 75 % of the face amount of all  accounts  receivable owned by Consoltex
Group and its Subsidiaries as of such date and (b) 50% of the book value of
all  inventory owned by Consoltex Group and its  Subsidiaries  as  of  such
date,  all  calculated on a consolidated basis and in accordance with GAAP.
To the extent  that  information  is  not  available  as  to  the amount of
accounts receivable or inventory as of a specific date, Consoltex Group may
utilize  the  most recent available information for purposes of calculating
the Borrowing Base.

     "BUSINESS DAY" means any day other than a Legal Holiday.

     "CAPITAL LEASE  OBLIGATION"  means,  at  the  time  any  determination
thereof is to be made, the amount of the liability in respect of  a capital
lease  that  would  at  such  time  be so required to be capitalized on the
balance sheet in accordance with GAAP.

     "CAPITAL STOCK" means any and all  shares,  interests, participations,
rights  or  other equivalents (however designated) of  corporate  stock  or
partnership interests.

     "CASH EQUIVALENTS"  means  (i)  United  States  dollars, (ii) Canadian
dollars,  (iii)  securities  issued  or  directly and fully  guaranteed  or
insured  by  the  United States or Canadian government  or  any  agency  or
instrumentality thereof  having maturities of not more than six months from
the date of acquisition, (iv)  certificates  of deposit and eurodollar time
deposits  with  maturities  of  six  months  or  less   from  the  date  of
acquisition, bankers' acceptances with maturities not exceeding  six months
and  overnight  bank  deposits,  in  each  case  with  any United States or
Canadian  commercial  bank  having  capital and surplus in excess  of  $500
million, (v) repurchase obligations with a term of not more than seven days
for underlying securities of the types  described in clauses (iii) and (iv)
entered  into  with any financial institution  meeting  the  qualifications
specified in clause  (iv)  above  and  (vi)  commercial  paper rated A-I or
higher  or  the  equivalent thereof by Moody's Investors Service,  Inc.  or
Standard & Poor's  Corporation,  or  equivalent  ratings from Dominion Bond
Rating Services Limited or Canadian Bond Rating Services  Inc., and in each
case maturing within six months after the date of acquisition.

      "CHANGE OF CONTROL" meats the occurrence of any of the following: (i)
the sale, lease or transfer, in one or a series of related transactions, of
all or substantially all of the assets of Consoltex Group to  any person or
group  (as  such  term  is used in Section 13 (d) (3) of the Exchange  Act)
(other than the Principals  or their Related Parties), (ii) the adoption of
a plan relating to the liquidation or dissolution of Consoltex Group, (iii)
the acquisition by any person  or group (as such term is used in Section 13
(d) (3) of the Exchange Act) (other  than  the Principals and their Related
Parties) of direct or indirect majority





                                     3


<PAGE>




in interest (more than 50%) of the voting power  of  the  voting  stock  of
Consoltex  Group  by  way  of  amalgamation,  merger  or  consolidation  or
otherwise; PROVIDED, HOWEVER, that the acquisition by a person or group (as
such  term  is  used in Section 13 (d) (3) of the Exchange Act) (other than
the Principals and  their  Related  Parties) of all or substantially all of
the assets of Les Gantiers Holding B.V. or a direct or indirect majority in
interest (more than 50%) of the voting  power  of  the  voting stock of Les
Gantiers  Holding  B.V. by way of amalgamation, merger or consolidation  or
otherwise, shall be deemed to be a Change of Control.

     "CONSOLIDATED NET  INCOME"  means,  with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries
for such period, on a consolidated basis,  determined  in  accordance  with
GAAP;  PROVIDED  that  (i)  the  Net  Income  of  any  Person that is not a
Subsidiary  or  that  is accounted for by the equity method  of  accounting
shall be included only  to  the  extent  of  the  amount  of  dividends  or
distributions paid to the referent Person or a Subsidiary thereof that is a
Guarantor or a Subsidiary that is not subject to a Dividend Restriction (as
defined  below),  (ii) the Net Income of any Subsidiary that is a Guarantor
shall be included;  (iii)  the  Net  Income  of  any Subsidiary that is not
restricted  from  declaring  or  paying  dividends or other  distributions,
directly or indirectly, by operation of the  terms  of  its  charter or any
applicable agreement, instrument, judgment, decree, order, statute, rule or
governmental  regulation  or otherwise (each of the foregoing, a  "Dividend
Restriction") shall be included, (iv) the Net Income of any Subsidiary that
is  not a Guarantor and is subject  to  a  Dividend  Restriction  shall  be
included  only  to  the  extent of the amount of dividends or distributions
paid to the referent Person  or  a  Subsidiary  that  is  a  Guarantor or a
Subsidiary  that  is  not  subject to a Dividend Restriction, (v)  the  Net
Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of  such  acquisition  shall be excluded, and (vi)
the  cumulative  effect  of  a  change  in accounting principles  shall  be
excluded; PROVIDED, HOWEVER, that for purposes  of  clause  (c)  of Section
4.07  hereof, Net Income shall include gains and losses, together with  any
related  provision  for  taxes, realized in connection with any Asset Sale,
and any extraordinary gains  or losses, together with any related provision
for taxes on such extraordinary gains or losses.

     "CONSOLIDATED NET Worth" means, with respect to any Person, the sum of
(i) the consolidated equity of  the  common stockholders of such Person and
its consolidated Subsidiaries plus (ii)  the respective amounts reported on
such  Person's most recent balance sheet with  respect  to  any  series  of
preferred  stock  (other  than Disqualified Stock) that by its terms is not
entitled to the payment of  dividends unless such dividends may be declared
and  paid  only  out  of net earnings  in  respect  of  the  year  of  such
declaration and payment,  but  only  to  the extent of any cash received by
such Person upon issuance of such preferred  stock,  less (x) all write-ups
(other  than  write-ups  resulting from foreign currency  translations  and
write-ups of tangible assets  of  a  going  concern business made within 12
months after the acquisition of such business)  subsequent  to  the date of
this  Indenture  in the book value of any asset owned by such Person  or  a
consolidated  Subsidiary   of   such   Person,   (y)   all  investments  in
unconsolidated  Subsidiaries  and  in  Persons  that  are not  Subsidiaries
(except, in each case, investments in marketable securities),  and  (z) all
unamortized debt discount and expense and unamortized deferred charges, all
of the foregoing determined in accordance with GAAP.

     "CONTRIBUTIONS" means any loans, cash advances, capital contributions,
investments or other transfers of assets, in each case, for less than  fair
value,  in  each case, by Consoltex Group or any of its Subsidiaries to any
Subsidiary that  is  not a Guarantor or to any other Affiliate of Consoltex
Group or any of its Subsidiaries.




                                     4


<PAGE>




"CORPORATE TRUST OFFICE  OF  THE  TRUSTEE"  shall  be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which
the Trustee may give notice to the Issuers and the Guarantors.

     "CREDIT   AGREEMENT"  means  that  certain  letter  agreement,   dated
September 24, 1993,  by  and  among  Consoltex Inc. and a Canadian bank, as
principal  and/or  as  agent,  including  any   related   notes,   bankers'
acceptances, letters of credit, letters of guarantee, guarantees, including
the  guarantee  thereof  by  the  Issuers  or  either  of  them, collateral
documents,  instruments  and  agreements  executed  or  to  be executed  in
connection therewith, including a definitive agreement, and in each case as
amended, modified, renewed, refunded, replaced or refinanced  from  time to
time.

     "CUSTODIAN"  means  any  receiver,  trustee,  assignee,  liquidator or
similar official under any Bankruptcy Law.

     "DEFAULT" means any event that is or with the passage of time  or  the
giving of notice or both would be an Event of Default.

     "DEFINITIVE  NOTES"  means  Notes  that  are  in the form of Exhibit A
attached hereto that do not include the information called for by footnotes
1 and 2 thereof.

     "DEPOSITORY"  means,  with  respect to the Global  Notes,  the  Person
specified in Section 2.03 hereof as  the  Depository  with  respect  to the
Notes, until a successor shall have been appointed and become such pursuant
to   the   applicable   provision   of  this  Indenture,  and,  thereafter,
"Depository" shall mean or include such successor.

     "DESIGNATED SENIOR DEBT" means (i)  the  Credit  Agreement or (ii) any
other Senior Debt permitted under this Indenture and designated  as such by
the Issuers, the principal amount of which is $25 million or more.

     "DISQUALIFIED  STOCK" means any Capital Stock which, by its terms  (or
by the terms of any security  into  which it is convertible or for which it
is  exchangeable),  or upon the happening  of  any  event,  matures  or  is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or is redeemable at the  option of the holder thereof, in whole or in part,
on or prior to the date on which the Notes mature.

     "EBDAIT" means, with  respect  to  any  Person  for  any  period,  the
Consolidated  Net  Income of such Person for such period plus (a) an amount
equal to any extraordinary  loss  plus  any net loss realized in connection
with an Asset Sale (to the extent such losses  were  deducted  in computing
Consolidated Net Income), plus (b) provision for taxes based on  income  or
profits  to  the  extent such provision for taxes was included in computing
Consolidated Net Income,  plus  (c)  consolidated  interest expense of such
Person for such period, whether paid or accrued (including  amortization of
original  issue  discount,  non-cash  interest  payments  and  the interest
component  of  Capital  Lease Obligations), to the extent such expense  was
deducted in computing Consolidated  Net  Income,  plus (d) depreciation and
amortization (including amortization of goodwill and  other intangibles and
deferred financing expenses) of such Person for such period  to  the extent
such  depreciation and amortization were deducted in computing Consolidated
Net Income,  in  each  case,  on  a  consolidated  basis  and determined in
accordance with GAAP.




                                     5


<PAGE>




"EQUITY INTERESTS" means Capital Stock and all warrants, options  or  other
rights  to  acquire  Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

     "EXCHANGE ACT" means  the  U.S.  Securities  Exchange  Act of 1934, as
amended.

     "EXCHANGE  OFFER"  shall  have  the  meaning  ascribed  to  it in  the
Registration Rights Agreement.

     "FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any
period,  the  ratio  of EBDAIT of such Person for such period to the  Fixed
Charges of such Person  for  such period. In the event that Consoltex Group
or any of its Subsidiaries incurs, assumes, guarantees, refinances, redeems
or repurchases any Indebtedness (other than revolving credit borrowings) or
issues or redeems preferred stock  subsequent  to  the  commencement of the
period  for which the Fixed Charge Coverage Ratio is being  calculated  but
prior to  the  event for which the calculation of the Fixed Charge Coverage
Ratio is made, then  the  Fixed  Charge  Coverage Ratio shall be calculated
giving  pro  forma  effect  to  such  incurrence,   assumption,  guarantee,
refinancing, redemption or repurchase of Indebtedness,  or such issuance or
redemption of preferred stock, as if the same had occurred at the beginning
of the applicable four-quarter period.

     "FIXED CHARGES" means, with respect to any Person for  any period, the
sum  of  (a) consolidated interest expense of such Person for such  period,
whether paid  or  accrued,  to  the  extent  such  expense  was deducted in
computing Consolidated Net Income (including amortization of original issue
discount,  non-cash  interest payments, the interest component  of  capital
leases and net payments  (if  any)  pursuant  to  Hedging  Obligations  but
excluding  amortization  of deferred financing fees) and (b) the product of
(i) all cash dividend payments  (and non-cash dividend payments in the case
of a Person that is a Subsidiary)  on any series of preferred stock of such
Person,  times (ii) a fraction, the numerator  of  which  is  one  and  the
denominator of which is one minus the then current combined federal, state,
local and  foreign  statutory  tax  rate  of  such  Person,  expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.

     "FOREIGN SUBSIDIARY" means any Subsidiary organized under  the laws of
a  jurisdiction  outside  of the United States (other than Consoltex  Inc.)
that has no outstanding Indebtedness  on the date of its acquisition except
for such Indebtedness permitted to be incurred  pursuant  to  clause (g) of
Section  4.09  hereof  and  that  is  thereafter  prohibited from incurring
Indebtedness except for such Indebtedness permitted to be incurred pursuant
to such clause (g).

     "GAAP"  means  generally accepted accounting principles,  consistently
applied, which are in effect from time to time in Canada.

     "GLOBAL NOTE" means  a  Note that is in the form of Exhibit A attached
hereto that contains the paragraph  referred  to  in  footnote  1  and  the
additional schedule referred to in footnote 2 thereto.

     "GOVERNMENT  SECURITIES"  means  direct obligations of, or obligations
guaranteed  by,  the United States of America  for  the  payment  of  which
guarantee or obligations  the full faith and credit of the United States is
pledged.

     "GUARANTEE" means the joint and several and unconditional guarantee by
the  Guarantors of the Issuers'  obligations  on  the  Notes  on  a  senior
subordinated basis.




                                     6


<PAGE>




"GUARANTORS"  means  the  Persons  from time to time named as Guarantors in
this Indenture or that become a Guarantor  hereunder,  and  each  of  their
respective successors, PROVIDED, HOWEVER, that in the event a Guarantor  is
released from its Guarantee in accordance with the terms of this Indenture,
such  Guarantor  shall  without any further action no longer be a Guarantor
for any purpose of this Indenture  or  the  Notes.  On  the  date  of  this
Indenture, the Guarantors are Consoltex Inc., Balson-Hercules and LINQ.

     "HEDGING   OBLIGATIONS"   means,  with  respect  to  any  Person,  the
obligations  of  such Person under  (i)  interest  rate  or  currency  swap
agreements,  interest   rate   cap  agreements  and  interest  rate  collar
agreements and (ii) other agreements  or  arrangements  designed to protect
such Person against fluctuations in interest rates or currencies.

     "HOLDER" means a Person in whose name a Note is registered.

     "INDEBTEDNESS"   means,   with   respect   to   any  Person,  (without
duplication)  any  indebtedness  at any time outstanding  of  such  Person,
whether or not contingent, in respect  of  borrowed  money  or evidenced by
bonds,  notes,  debentures  or similar instruments or bankers' acceptances,
letters of guarantee or letters  of  credit (or reimbursement agreements in
respect thereof) or representing the balance  deferred  and  unpaid  of the
purchase  price  of  any  property (including Capital Lease Obligations) or
representing  any  Hedging  Obligations,   except  any  such  balance  that
constitutes an accrued expense or trade payable,  if  and to the extent any
of  the  foregoing indebtedness (other than letters of credit  and  Hedging
Obligations)  would  appear  as  a  liability  upon a balance sheet of such
Person prepared in accordance with GAAP, and also  includes,  to the extent
not  otherwise  included,  the  guarantee  of items which would be included
within  this  definition.  For  purposes  of  this   definition,  the  term
"Indebtedness"  shall  not  include  sale-leaseback  transactions,  secured
financing  transactions or Receivables Financings to the  extent  any  such
transaction  constitutes  an  Asset  Sale  or would otherwise constitute an
Asset Sale except for the fair market value  of such asset or the aggregate
amount of the net proceeds received in connection  with  the  sale  of such
asset. In addition, for purposes of this definition, each borrowing under a
revolving  credit  facility  which  increases  the  amount  of Indebtedness
outstanding thereunder shall be deemed to be an incurrence of Indebtedness.

     "INDENTURE" means this Indenture, as amended or supplemented from time
to time.

     "INVESTMENT  GRADE DEBT" means, for any Person, Indebtedness  of  such
Person that has a rating  of  "Baa" or better by Moody's Investors Service,
Inc. and "BBB" or better by Standard & Poor's Corporation.

     "INVESTMENT" means any direct  or  indirect  advance,  loan  or  other
extension of credit or capital contribution to (by means of any transfer of
cash  or  other  property to others or any payment for property or services
for the account or use of others), or any purchase or acquisition of Equity
Interests, bonds,  notes,  debentures  or  other  securities issued by, any
Unrestricted Subsidiary. For the purposes of Section  4.07  hereof  (i) the
term "Investment" shall include the fair market value of the net assets  of
any   Subsidiary  at  the  time  that  such  Subsidiary  is  designated  an
Unrestricted  Subsidiary, (ii) any property transferred to any Unrestricted
Subsidiary shall  be  valued  at  fair  market  value  at  the time of such
transfer, in each case as determined by the Board of Directors of Consoltex
Group in good faith and (iii) any Investment constituting an advance, loan,
extension of credit or capital contribution shall be deemed  to be incurred
only  to  the  extent  that  it  is not repaid in cash or Cash Equivalents,
PROVIDED that the amount credited  for  such repayment shall not exceed the
amount deducted as a result of such Investment.




                                     7


<PAGE>




"ISSUERS" means Consoltex Group and Consoltex  USA,  as  joint  and several
obligors  under  the  Notes, unless a successor replaces either or both  of
Consoltex Group or Consoltex  USA  in accordance with Article 5 hereof, and
thereafter includes such successor.

     "LEGAL HOLIDAY" means a Saturday,  a  Sunday or a day on which banking
institutions in the City of New York, the City of Montreal or at a place of
payment  are authorized by law, regulation or  executive  order  to  remain
closed. If a payment date is a Legal Holiday at a place of payment, payment
may be made  at  that  place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.

     "LIEN" means, with  respect  to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance  of  any  kind  in respect of such
asset,  whether  or  not  filed,  recorded  or  otherwise  perfected  under
applicable  law  (including  any conditional sale or other title  retention
agreement, any lease in the nature  thereof,  any option or other agreement
to sell or give a security interest in and any  filing  of  or agreement to
give  any  financing  statement  under  the  Uniform  Commercial  Code  (or
equivalent statutes) of any jurisdiction).

     "LIQUIDATED  DAMAGES" means all liquidated damages then owing pursuant
to the Registration  Rights  Agreement. Whenever in this Indenture there is
mentioned, in any context, the  payment of principal (and premium, if any),
redemption price, Change of Control Payment, Offered Price, interest or any
other amount payable under or with  respect to any Note, such mention shall
be deemed to include mention of the payment  of  Liquidated  Damages to the
extent  that  in  such  context  Liquidated  Damages are, were or would  be
payable in respect thereof.

     "NET INCOME" means, with respect to any Person,  the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction
in respect of preferred stock dividends, excluding, however,  any gain (but
not loss), together with any related provision for taxes on such  gain (but
not  loss),  realized in connection with any Asset Sale (including, without
limitation, dispositions  pursuant to sale and leaseback transactions), and
excluding any extraordinary  gain (but not loss), together with any related
provision  for  taxes  on  such  extraordinary   gain   (but   not   loss).
Notwithstanding the foregoing, the non-recurring charges related to (i) the
write-off of deferred financing expenses following the repayment of certain
Indebtedness  of Consoltex Group and its Subsidiaries and (ii) the interest
penalty on the  prepayment of the Senior Fixed Rate Loan, in each case with
the proceeds of the  Offering  and as reflected in Consoltex Group's income
statement for the period in which  such transactions are consummated, shall
not be included in the computation of Net Income.

     "NET  PROCEEDS" means the aggregate  cash  proceeds  received  by  the
Issuers or any  of  their  respective  Subsidiaries in respect of any Asset
Sale,  net  of the direct costs relating to  such  Asset  Sale  (including,
without limitation,  legal,  accounting  and  investment  banking fees, and
sales  commissions)  and  any  relocation  expenses  incurred as  a  result
thereof,  taxes  paid  or  payable as a result thereof (after  taking  into
account  any  available tax credits  or  deductions  and  any  tax  sharing
arrangements),   amounts  required  to  be  applied  to  the  repayment  of
Indebtedness secured  by  a Lien on the asset or assets the subject of such
Asset Sale and any reserve  for  adjustment in respect of the sale price of
such asset or assets.

     "NOTE CUSTODIAN" means the Trustee,  as  custodian with respect to the
Global Notes, or any successor entity thereto.

     "OBLIGATIONS"   means  any  principal,  interest,   penalties,   fees,
indemnifications, reimbursements,  damages  and  other  liabilities payable
under the documentation governing any Indebtedness.




                                     8


<PAGE>




"OFFERING" means the offering and sale by the Issuers of the Series A
Notes.

     "OFFERING  MEMORANDUM" means the Offering Memorandum  dated  September
23, 1993 relating to the Offering.

     "OFFICER" means,  with  respect  to  any  Person,  the Chairman of the
Board,  the  Chief  Executive  Officer, the President, the Chief  Operating
Officer,  the  Chief  Financial  Officer,   the  Treasurer,  any  Assistant
Treasurer,  the  Controller, the Secretary or any  Vice-President  of  such
Person.

     "OFFICERS' CERTIFICATE"  means  a  certificate signed by two Officers,
one  of  whom  must  be  the  principal executive  officer,  the  principal
financial officer, the treasurer  or  the  principal  accounting officer of
Consoltex Group, Consoltex USA or any Guarantor, as the  case  may be, that
meets the requirements of Section 11.05 hereof.

     "OPINION  OF  COUNSEL" meats an opinion from legal counsel that  meets
the requirements of Section 11.05 hereof. The counsel may be an employee of
or counsel to Consoltex Group, Consoltex USA, any Guarantor, the Trustee or
any Holder.

     "PERMITTED  ASSET   SALE   CONSIDERATION"   means,  at  any  one  time
outstanding,  (i)  Cash Equivalents, (ii) any notes  or  other  obligations
received by the Issuers or any Subsidiary from the transferee in connection
with an Asset Sale that  are immediately converted into cash (to the extent
of the cash received) and  (iii)  up to an aggregate of $10 million in fair
market value of Investment Grade Debt  issued  by a transferee of assets in
connection  with  Asset  Sales effected subsequent  to  the  date  of  this
Indenture. The fair market  value of any Permitted Asset Sale Consideration
received by the Issuers or its  Subsidiaries  in  connection  with an Asset
Sale shall be determined by Consoltex Group's Board of Directors  and shall
cease to be counted towards the aggregate limitations referred to in clause
(iii)  to  the  extent  such  consideration is reduced to cash. In no event
shall  the amount of outstanding  Permitted  Asset  Sale  Consideration  be
reduced  by  the  value  of  any security or other instrument that has been
written off by Consoltex Group or its Subsidiaries.

     "PERMITTED JUNIOR SECURITIES"  means equity securities or subordinated
securities  of either Issuer, any Guarantor  or  any  successor  to  either
Issuer or any Guarantor, as the case may be, with respect to Senior Debt of
such Issuer or  Guarantor (or such successor) that, in the case of any such
subordinated securities, are subordinated in right of payment to all Senior
Debt  of  such  Issuer  or  Guarantor  (or  such  successor)  that  may  be
outstanding to substantially  the  same  extent  as, or to a greater extent
than, the Notes are so subordinated.

     "PERMITTED LIENS" means (a) Liens securing Senior  Debt of the Issuers
or any Guarantor so long as such Senior Debt is permitted by this Indenture
to  be  incurred; (b) Liens in favor of the Issuers or any  Guarantor;  (c)
Liens on  property  of  a  Person  existing  at  the  time  such  Person is
amalgamated, merged into or consolidated with Consoltex Group or any of its
Subsidiaries;  PROVIDED  that  such  Liens  were  in existence prior to the
contemplation of such amalgamation, merger or consolidation;  (d)  Liens on
property existing at the time of acquisition thereof by Consoltex Group  or
any  of  its Subsidiaries; PROVIDED that such Liens were in existence prior
to  the  contemplation  of  such  acquisition;  (e)  Liens  to  secure  the
performance  of  statutory obligations, surety or appeal bonds, performance
bonds or other obligations of a like nature incurred in the ordinary course
of business; (f) Liens  existing  on  the date of this Indenture; (g) Liens
for taxes, assessments or governmental  charges  or claims that are not yet
delinquent  or  that  are  being  contested  in good faith  by  appropriate
proceedings promptly instituted and diligently concluded; PROVIDED that any
reserve or other appropriate provision as shall  be  required in conformity
with GAAP




                                     9


<PAGE>




shall  have  been  made therefor; and (h) Liens incurred  in  the  ordinary
course of business of  Consoltex  Group  or  any  of  its Subsidiaries with
respect  to  obligations  that do not exceed $10 million at  any  one  time
outstanding and that (i) are  not incurred in connection with the borrowing
of money or the obtaining of advances or credit (other than trade credit in
the  ordinary  course  of business)  and  (ii)  do  not  in  the  aggregate
materially detract from  the value of the property or materially impair the
use thereof in the operation  of  business by Consoltex Group or any of its
Subsidiaries.

     "PERSON"  means  any  individual,   corporation,   partnership,  joint
venture,   association,   joint-stock   company,  trust  or  unincorporated
organization (including any subdivision or  ongoing  business  of  any such
entity  or  substantially all of the assets of any such entity, subdivision
or business).

     "PRINCIPALS" means Les Gantiers Holding B.V. and Richard H. Willett.

     "RECEIVABLE"  means any right of a Person to payment for goods sold or
leased or for services rendered no matter how evidenced, including, but not
limited  to, chattel  paper,  instruments,  accounts  receivable,  contract
rights, notes,  drafts,  acceptances,  and  other  forms of obligations and
receivables, together with all interest of such Person or entity in any and
all goods, the sale or lease of which shall have given  or  shall give rise
to, and in any and all guarantees and other property securing  the  payment
of or performance under, any such right to payment and all proceeds of  any
of the foregoing.

     "RECEIVABLES  FINANCING"  means  (i)  the sale or other disposition of
Receivables  arising  in  the  ordinary course of  business,  but  only  in
connection with the compromise or  collection  thereof  or (ii) the sale or
other disposition of Receivables arising in the ordinary course of business
to  a  Receivables  Subsidiary  followed  by  a  financing  transaction  in
connection with such sale or disposition of such Receivables.

     "RECEIVABLES  SUBSIDIARY"  means  a  direct or indirect Subsidiary  of
Consoltex   Group  exclusively  engaged  in  Receivables   Financings   and
activities reasonably related thereto.

     "REGISTRATION   RIGHTS   AGREEMENT"   means  the  Registration  Rights
Agreement,  dated  as  of  the date of this Indenture,  by  and  among  the
Issuers, the Guarantors and  the other parties named on the signature pages
thereof, relating to the Notes,  as such agreement may be amended, modified
or supplemented from time to time.

     "RELATED  PARRY"  with  respect   to   any  Principal  means  (A)  any
controlling  stockholder, 80 % (or more) owned  Subsidiary,  or  spouse  or
immediate family member (in the case of an individual) of such Principal or
(B) trust, corporation,  partnership  or  other  entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially  holding  an  80% or
more  controlling  interest  of which consist of such Principal and/or such
other Persons referred to in the immediately preceding clause (A).

     "REPRESENTATIVE" means the  indenture  trustee or other trustee, agent
or representative for any Senior Debt, if any.

     "RESPONSIBLE OFFICER," when used with respect  to  the  Trustee, means
any  officer  within  the Corporate Trust Division of the Trustee  (or  any
successor group of the  Trustee)  or  any  other  officer  of  the  Trustee
customarily  performing functions similar to those performed by any of  the
above designated  officers  and  also  means,  with respect to a particular
corporate trust matter, any other officer to whom  such  matter is referred
because of his knowledge of and familiarity with the particular subject.




                                    10


<PAGE>




"RESTRICTED  GUARANTOR"  means a direct Wholly Owned Subsidiary  of  either
Issuer or any Guarantor organized  under  the laws of a jurisdiction within
the United States that (i) is created solely  for  the purpose of acquiring
and  owning  a  direct Foreign Subsidiary and (ii) is prohibited  from  (A)
engaging in any business  other  than  the  holding of the capital stock of
such Foreign Subsidiary and ancillary activities  related  thereto  or  (B)
granting  a  security  interest  to any Person in any capital stock of such
Foreign Subsidiary.

     "SEC" means the U.S. Securities and Exchange Commission.

     "SECURITIES ACT" means the Securities Act of 1933, as amended.

     "SENIOR  DEBT" means (i) the Obligations  in  respect  of  the  Credit
Agreement and (ii)  any  other Indebtedness permitted to be incurred by the
Issuers or a Guarantor, as  the  case  may  be,  under  the  terms  of this
Indenture,  unless the instrument under which such Indebtedness is incurred
expressly provides  that  it is on a parity with or subordinate in right of
payment to the Notes. Notwithstanding  anything  to  the  contrary  in  the
foregoing, Senior Debt shall not include (v) the Acquisition Notes, (w) any
liability  for  federal,  state,  local or other taxes owed or owing by the
Issuers or a Guarantor, as the case  may  be,  (x)  any Indebtedness of the
Issuers  or  a  Guarantor, as the case may be, to any of  their  respective
Subsidiaries or other  Affiliates, (y) any trade payables, other than trade
payables of Balson-Hercules  or  any  other converter designated as such by
the  Issuers up to an aggregate amount of  $15  million  at  any  one  time
outstanding,  or (z) any Indebtedness that is incurred in violation of this
Indenture.

     "SENIOR FIXED RATE LOAN" means that certain loan agreement dated as of
June 27, 1991 among  Consoltex  Inc.,  various  financial  institutions and
Glovesell  Investment  Company  Ltd., as amended on February 26,  1993  and
March 31, 1993.

     "SHELF REGISTRATION" shall have  the  meaning  ascribed  to  it in the
Registration Rights Agreement.

     "SIGNIFICANT   SUBSIDIARY"  means  any  Subsidiary  that  would  be  a
"significant subsidiary"  as  defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the  Securities  Act, as such Regulation is in
effect on the date hereof.

     "SUBSIDIARY" of any person means any corporation, association or other
business entity of which more than 50% of the total  voting power of shares
of  Capital  Stock  entitled  (without  regard  to  the occurrence  of  any
contingency)  to  vote in the election of directors, managers  or  trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more  of  the  other  Subsidiaries  of  that  Person  or a
combination thereof. Unrestricted Subsidiaries shall not be included in the
definition  of  Subsidiaries for any purposes of this Indenture (except, as
the context may otherwise  require,  for  purposes  of  the  definition  of
"Unrestricted Subsidiary").

     "TANGIBLE  ASSETS"  with  respect to any Person means the consolidated
assets of such Person determined in accordance with GAAP, except that there
shall be deducted therefrom all  intangible  assets (including goodwill and
any other intangibles determined in accordance with GAAP).

     "TIA"   means   the   Trust   Indenture   Act  of  1939   (15   U.S.C.
 as in effect from time to time.

     "TRANSFER RESTRICTED SECURITIES" shall have the meaning ascribed to it
in the Registration Rights Agreement.




                                    11


<PAGE>




"TREASURY RATE" means the yield to maturity at the  time  of computation of
United States Treasury securities (as compiled and published  in  the  most
recent  Federal  Reserve  Statistical  Release  H.15(519)  which has become
publicly available at least two business days prior to the date  fixed  for
redemption  of  the  Notes  following  a  Change  of  Control  or,  if such
Statistical  Release  is no longer published, any publicly available source
of similar market data)  with  a constant maturity most nearly equal to the
then remaining Weighted Average  Life  to  Maturity of the Notes; PROVIDED,
HOWEVER, that if the Weighted Average Life to  Maturity of the Notes is not
equal  to the constant maturity of a United States  Treasury  security  for
which a  weekly average yield is given, the Treasury Rate shall be obtained
by linear  interpolation  (calculated to the nearest one-twelfth of a year)
from the weekly average yields  of  United  States  Treasury securities for
which such yields are given, except that if the Weighted  Average  Life  to
Maturity  of  the  Notes is less than one year, the weekly average yield on
actually traded United  States  Treasury  securities adjusted to a constant
maturity of one year shall be used.

     "TRUSTEE"  means  the  party named as such  above  until  a  successor
replaces it in accordance with  the applicable provisions of this Indenture
and thereafter means the successor serving hereunder.

     "UNRESTRICTED SUBSIDIARY" means  (1) any Subsidiary of Consoltex Group
(a) which at the time of determination  shall be an Unrestricted Subsidiary
(as designated by the Board of Directors  of  Consoltex  Group  as provided
below)  and  (b)  all  the  Indebtedness of which shall be non-recourse  to
Consoltex  Group  and  its  Subsidiaries   other   than   its  Unrestricted
Subsidiaries   and  (2)  any  Subsidiary  of  an  Unrestricted  Subsidiary;
PROVIDED, that notwithstanding  clause  (1)(b)  above, Consoltex Group or a
Subsidiary  of  Consoltex Group may guarantee, endorse,  agree  to  provide
funds for the payment  or  maintenance  of, or otherwise become directly or
indirectly  liable  with  respect  to,  Indebtedness   of  an  Unrestricted
Subsidiary but only to the extent that Consoltex Group or  such  Subsidiary
could  make  an  Investment  in  such  Unrestricted Subsidiary pursuant  to
Section 4.07 hereof and any such guarantee,  endorsement or agreement shall
be deemed an incurrence of Indebtedness by Consoltex  Group for purposes of
Section  4.09  hereof.  The  Board  of  Directors  of Consoltex  Group  may
designate any newly acquired or newly formed Subsidiary  (but not any other
Subsidiary)  to  be an Unrestricted Subsidiary unless such Subsidiary  owns
any Capital Stock  of,  or  owns  or holds any Lien on any property of, any
other  Subsidiary  of  Consoltex  Group   which   is  not  an  Unrestricted
Subsidiary.  The Board of Directors of Consoltex Group  may  designate  any
Unrestricted Subsidiary  to  be  a  Subsidiary  of  the  Issuers; PROVIDED,
HOWEVER, that immediately after giving effect to such designation  (x)  the
Issuers  could incur $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage  Ratio  test  set forth in Section 4.09 hereof after giving
pro forma effect to such Unrestricted  Subsidiary's  Indebtedness  as if it
had  been  incurred  at the beginning of the applicable four-quarter period
and  (y)  no Default shall  have  occurred  and  be  continuing.  Any  such
designation by the Board of Directors of Consoltex Group shall be evidenced
to the Trustee  by  filing  with  the  Trustee  a  certified  copy  of  the
resolution  of  the Board of Directors of the Issuers giving effect to such
designation and an  Officers'  Certificate certifying that such designation
complied with the foregoing conditions.

     "WEIGHTED  AVERAGE  LIFE  TO MATURITY"  means,  when  applied  to  any
Indebtedness at any date, the number  of years obtained by dividing (a) the
then outstanding principal amount of such  Indebtedness into (b) the sum of
the products obtained by multiplying (x) the  amount of each then remaining
installment, sinking fund, serial maturity or other  required  payments  of
principal,  including payment at final maturity, in respect thereof, by (y)
the number of  years  (calculated  to  the  nearest  one-twelfth) that will
elapse between such date and the making of such payment.

     "WHOLLY  OWNED  SUBSIDIARY" OF any Person means a Subsidiary  of  such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares)




                                    12


<PAGE>




shall at the time be owned  by  such  Person or by one or more Wholly Owned
Subsidiaries of such Person or by such  Person and one or more Wholly Owned
Subsidiaries of such Person.

SECTION 1.02. OTHER DEFINITIONS.

       Term                               Defined in
                                             Section

     "Additional Amounts"                    4.17
     "Affiliate Transaction"                 4.11
     "Asset Sale Offer"                      3.09
     "Change of Control Offer"               4.15
     "Change of Control Payment "            4.15
     "Change of Control Payment Date"        4.15
     "Covenant Defeasance"                   8.03
     "Deficiency"                            4.10
     "Event of Default"                      6.01
     "Excess Proceeds"                       4.10
     "Excluded Holder"                       4.17
     "Fifth Anniversary"                     4.10
     "incur"                                 4.09
     "Legal Defeasance"                      8.02
     "Offer Amount"                          3.09
     "Offered Price"                         4.10
     "Offer Period"                          3.09
     "Paying Agent"                          2.03
     "Payment Blockage Notice"              12.04
     "Permitted Refinancing"                 4.09
     "Purchase Date"                         3.09
     "Refinancing Indebtedness"              4.09
     "Representative"                       12.02
     "Registrar"                             2.03
     "Restricted Payments"                   4.07
     "Taxes"                                 4.17
     "25 % Excess Proceeds"                  4.10

SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.

     Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this
Indenture.

     The following TIA terms used in this Indenture have the following
meanings:

     "INDENTURE SECURITIES" means the Notes;

     "INDENTURE SECURITY HOLDER" means a Holder of a Note;

     "INDENTURE TO BE QUALIFIED" means this Indenture;

     "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;




                                    13


<PAGE>




"OBLIGOR" on the Notes means either of the  Issuers,  any successor obligor
upon the Notes and any Guarantor.

     All other terms used in this Indenture that are defined  by  the  TIA,
defined  by  TIA  reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.

SECTION 1.04. RULES OF CONSTRUCTION.

     Unless the context otherwise requires:

     (1) a term has the meaning assigned to it;

     (2) an accounting  term not otherwise defined has the meaning assigned
   to it in accordance with GAAP;

     (3) "or" is not exclusive;

     (4) words in the singular  include  the  plural,  and  in  the  plural
include the singular;

     (5) provisions apply to successive events and transactions;

     (6)  references to sections of or rules under the Securities Act shall
   be deemed  to  include  substitute, replacement or successor sections or
   rules adopted by the SEC from time to time; and

     (7) all dollar amounts are in Canadian dollars.

                                 ARTICLE 2
                                 THE NOTES

SECTION 2.01. FORM AND DATING.

     The Notes and the Trustee's  certificate  of  authentication  shall be
substantially  in  the  form  of  Exhibit  A  hereto.  The  Notes  may have
notations, legends or endorsements required by law, stock exchange rule  or
usage.  Each  Note shall be dated the date of its authentication. The Notes
shall be in denominations of US$1,000 and integral multiples thereof.

     The terms  and provisions contained in the Notes shall constitute, and
are hereby expressly  made,  a  part of this Indenture and the Issuers, the
Guarantors  and  the  Trustee, by their  execution  and  delivery  of  this
Indenture, expressly agree  to  such  terms  and provisions and to be bound
thereby.

     The Notes will initially be issued in global  form,  substantially  in
the  form  of  Exhibit  A  attached  hereto  (including  footnotes  1 and 2
thereto). Each Global Note shall represent such of the outstanding Notes as
shall  be  specified therein and each shall provide that it shall represent
the aggregate  amount  of  outstanding  Notes  from  time  to time endorsed
thereon  and  that  the  aggregate  amount of outstanding Notes represented
thereby may from time to time be reduced  or  increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement  of  a  Global  Note  to
reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee or the Note




                                    14


<PAGE>




Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.

SECTION 2.02. EXECUTION AND AUTHENTICATION.

     Two  Officers  of each of Consoltex Group and Consoltex USA shall sign
the Notes for Consoltex  Group and Consoltex USA, respectively. Each of the
Issuers' seals shall be reproduced  on  the  Notes  and may be in facsimile
form.

     If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.

     A Note shall not be valid until authenticated by  the manual signature
of the Trustee. The signature shall be conclusive evidence  that  the  Note
has been authenticated under this Indenture.

     The  Trustee  shall, upon a written order of the Issuers signed by two
Officers of each of  Consoltex Group and Consoltex USA, authenticate Series
A Notes for original issue  up  to  US$120  million  in aggregate principal
amount  at  any one time outstanding and authenticate Series  B  Notes  for
original issue  up  to  US$120 million in aggregate principal amount at any
one time outstanding as contemplated by this Indenture and the Registration
Rights Agreement; PROVIDED,  HOWEVER,  that  there  shall  not be more than
US$120  million in aggregate principal amount of Notes outstanding  at  any
one time, except as provided in Section 2.07 hereof.

     The  Trustee  may  appoint  an  authenticating agent acceptable to the
Issuers  to authenticate Notes. An authenticating  agent  may  authenticate
Notes whenever  the  Trustee may do so. Each reference in this Indenture to
authentication by the  Trustee  includes  authentication  by such agent. An
authenticating  agent  has  the  same rights as an Agent to deal  with  the
Issuers or an Affiliate of the Issuers.

SECTION 2.03. REGISTRAR, DEPOSITORY AND PAYING AGENT.

     The Issuers shall maintain an  office  or  agency  where  Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer  and
exchange. The Issuers may appoint one or more co-Registrars and one or more
additional  paying  agents.  The term "Registrar" includes any co-Registrar
and  the term "Paying Agent" includes  any  additional  paying  agent.  The
Issuers  may  change  any  Paying  Agent or Registrar without notice to any
Holder. The Issuers shall notify the  Trustee  in  writing  of the same and
address of any Agent not a party to this Indenture. If the Issuers  fail to
appoint  or  maintain  another  entity  as  Registrar  or Paying Agent, the
Trustee shall act as such. Consoltex Group or any of its  Subsidiaries  may
act as Paying Agent or Registrar.

     The  Issuers  initially appoint The Depository Trust Company to act as
Depository with respect to the Global Notes.

     The Issuers initially  appoint the Trustee to act as the Registrar and
Paying Agent and to act as the  Note  Custodian  with respect to the Global
Notes and also appoint Montreal Trust Company at its  principal  office  in
the City of Montreal, Quebec, Canada, as co-Registrar.




                                    15


<PAGE>




SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.

     The  Issuers shall require each Paying Agent other than the Trustee to
agree in writing  that  the Paying Agent will hold in trust for the benefit
of Holders or the Trustee  all  money  held  by  the  Paying  Agent for the
payment of principal or interest on the Notes, and will notify  the Trustee
of any default by the Issuers or any Guarantor in making any such  payment.
While any such default continues, the Trustee may require a Paying Agent to
pay  all  money  held  by  it  to  the Trustee. The Issuers at any time may
require a Paying Agent to pay all money  held  by  it  to the Trustee. Upon
payment  over  to  the Trustee, the Paying Agent (if other  than  Consoltex
Group or a Subsidiary)  shall  have  no further liability for the money. If
Consoltex Group or a Subsidiary acts as  Paying  Agent,  it shall segregate
and hold in a separate trust fund for the benefit of the Holders  all money
held by it as Paying Agent.

SECTION 2.05. HOLDER LISTS.

     The  Trustee  shall  preserve  in  as  current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of all Holders and shall otherwise comply with TIA Section 312(a). If the
Trustee is not a Registrar, the Issuers and the Guarantors shall furnish to
the Trustee at least seven Business Days before each interest payment date,
and at such other times as the Trustee may request  in  writing  a  list in
such form and as of such date as the Trustee may reasonably require of  the
names  and  addresses  of  the  Holders  of  Notes  and the Issuers and the
Guarantors shall otherwise comply with TIA  312(a).

SECTION 2.06. TRANSFER AND EXCHANGE.

     (a) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES. When  Definitive  Notes
   are presented by a Holder to the Registrar with a request:

        (x) to register the transfer of the Definitive Notes; or

        (y) to exchange such Definitive Notes for an equal principal amount
          of Definitive Notes of other authorized denominations,

the Registrar shall register the transfer or make the exchange as requested
if  its requirements for such transactions are met; PROVIDED, HOWEVER, that
the Definitive  Notes  presented or surrendered for register of transfer or
exchange:

          (i)  shall  be  duly   endorsed   or  accompanied  by  a  written
             instruction of transfer in form  satisfactory to the Registrar
             duly  executed  by  such  Holder  or  by  his  attorney,  duly
             authorized in writing; and

          (ii)  in  the  case  of  a  Definitive Note that  is  a  Transfer
             Restricted Security, such  request shall be accompanied by the
             following additional information and documents, as applicable:

             (A) if such Transfer Restricted Security is being delivered to
               the Registrar by a Holder  for  registration  in the name of
               such  Holder,  without  transfer,  a certification  to  that
               effect  from  such  Holder  (in substantially  the  form  of
               Exhibit B hereto); or




                                    16


<PAGE>




               (B)   if  such  Transfer  Restricted   Security   is   being
               transferred to a "qualified institutional buyer" (as defined
               in Rule  144A  under  the Securities Act) in accordance with
               Rule  144A  under  the Securities  Act  or  pursuant  to  an
               exemption from registration  in  accordance  with  Rule  904
               under  the  Securities  Act  or  pursuant  to  an  effective
               registration   statement   under   the   Securities  Act,  a
               certification   to   that   effect  from  such  Holder   (in
               substantially the form of Exhibit B hereto); or

             (C) if such Transfer Restricted  Security is being transferred
               pursuant  to  an exemption from registration  in  accordance
               with Rule 144 under  the  Securities  Act  or in reliance on
               another exemption from the registration requirements  of the
               Securities  Act,  a  certification  to that effect from such
               Holder (in substantially the form of  Exhibit B hereto) and,
               at the request of either Issuer, an Opinion  of Counsel from
               such Holder or the transferee reasonably acceptable  to  the
               Issuers  and  to  the  Registrar  to  the  effect  that such
               transfer is in compliance with the Securities Act.

     (b)  RESTRICTIONS  ON  TRANSFER  OF A DEFINITIVE NOTE FOR A BENEFICIAL
   INTEREST IN A GLOBAL NOTE. A Definitive  Note may not be exchanged for a
   beneficial interest in a Global Note except  upon  satisfaction  of  the
   requirements  set  forth  below.  Upon  receipt  by  the  Trustee  of  a
   Definitive Note, duly endorsed or accompanied by appropriate instruments
   of transfer, in form satisfactory to the Trustee, together with:

          (i)  if such Definitive Note is a Transfer Restricted Security, a
             certification  from  the  Holder thereof (in substantially the
             form of Exhibit B hereto) to  the  effect that such Definitive
             Note  is  being  transferred by such Holder  to  a  "qualified
             institutional buyer"  (as  defined  in  Rule  144A  under  the
             Securities  Act)  in  accordance  with  Rule  144A  under  the
             Securities Act; and

          (ii) whether or not such Definitive Note is a Transfer Restricted
             Security,   written   instructions  from  the  Holder  thereof
             directing the Trustee to make, or to direct the Note Custodian
             to make, an endorsement  on  the  Global  Note  to  reflect an
             increase  in  the  aggregate  principal  amount  of  the Notes
             represented by the Global Note,

the Trustee shall cancel such Definitive Note and cause, or direct the Note
Custodian  to  cause,  in  accordance  with  the  standing instructions and
procedures  existing  between the Depository and the  Note  Custodian,  the
aggregate principal amount  of  Notes  represented by the Global Note to be
increased accordingly. If no Global Notes are then outstanding, the Issuers
shall issue and the Trustee shall authenticate  a  new  Global  Note in the
appropriate principal amount.

     (c)  TRANSFER AND EXCHANGE OF GLOBAL NOTES. The transfer and  exchange
   of Global  Notes  or  beneficial  interests  therein  shall  be effected
   through the Depository, in accordance with this Indenture including  the
   restrictions  on  transfer  set  forth  herein and the procedures of the
   Depository therefor.

     (d)  TRANSFER  OF  A  BENEFICIAL  INTEREST IN  A  GLOBAL  NOTE  FOR  A
   DEFINITIVE NOTE.

          (i) Any Person having a beneficial  interest in a Global Note may
             upon  request  exchange  such  beneficial   interest   for   a
             Definitive Note. Upon receipt by the




                                    17


<PAGE>




             Trustee   of  written  instructions  or  such  other  form  of
             instructions  as  is  customary  for  the Depository, from the
             Depository or its nominee on behalf of  any  Person  having  a
             beneficial  interest  in a Global Note and upon receipt by the
             Trustee of a written order  of such other form of instructions
             as is customary for the Depository or the person designated as
             the Depositary as having such a beneficial interest containing
             registration instructions and,  in  the  case  of  a  Transfer
             Restricted Security only, the following additional information
             and documents (all of which may be submitted by facsimile):

             (A)  if  such beneficial interest is being transferred to  the
               Person designated  by the Depository as being the beneficial
               owner, a certification  to  that effect from such Person (in
               substantially the form of Exhibit B hereto); or

             (B) if such beneficial interest  is  being  transferred  to  a
               "qualified  institutional  buyer"  (as  defined in Rule 144A
               under the Securities Act) in accordance with Rule 144A under
               the  Securities  Act  or  pursuant  to  an  exemption   from
               registration   in   accordance   with  Rule  904  under  the
               Securities  Act  or  pursuant  to an effective  registration
               statement under the Securities Act,  a certification to that
               effect  from the transferor (in substantially  the  form  of
               Exhibit B hereto); or

             (C) if such  beneficial interest is being transferred pursuant
               to an exemption  from  registration  in accordance with Rule
               144  under  the  Securities  Act or in reliance  on  another
               exemption  from  the  registration   requirements   of   the
               Securities  Act,  a  certification  to  that effect from the
               transferor (in substantially the form of  Exhibit  B hereto)
               and, at the request of either Issuer, an Opinion of  Counsel
               from  the transferee or transferor reasonably acceptable  to
               the Issuers  and  to  the  Registrar to the effect that such
               transfer is in compliance with the Securities Act,

             the Trustee or the Note Custodian,  at  the  direction  of the
             Trustee,   shall   cause,  in  accordance  with  the  standing
             instructions and procedures  existing  between  the Depository
             and  the  Note  Custodian,  the aggregate principal amount  of
             Global  Notes to be reduced accordingly  and,  following  such
             reduction,  the  Issuers  shall  execute and the Trustee shall
             authenticate and deliver to the transferee  a  Definitive Note
             in the appropriate principal amount.

          (ii)  Definitive  Notes  issued  in  exchange  for  a  beneficial
             interest  in  a  Global  Note pursuant to this Section 2.06(d)
             shall  be registered in such  names  and  in  such  authorized
             denominations as the Depository, pursuant to instructions from
             its  direct  or  indirect  participants  or  otherwise,  shall
             instruct   the   Trustee.   The  Trustee  shall  deliver  such
             Definitive Notes to the Persons  in whose names such Notes are
             so registered.

     (e)   RESTRICTIONS  ON  TRANSFER  AND  EXCHANGE   OF   GLOBAL   NOTES.
   Notwithstanding  any  other  provision of this Indenture (other than the
   provisions set forth in subsection  (f)  of this Section 2.06), a Global
   Note may not be transferred as a whole except  by  the  Depository  to a
   nominee  of  the  Depository  or  by  a nominee of the Depository to the
   Depository or another nominee of the Depository  or by the Depository or
   any  such  nominee  to  a  successor  Depository  or a nominee  of  such
   successor Depository.




                                    18


<PAGE>




   (f) AUTHENTICATION OF DEFINITIVE NOTES IN ABSENCE OF  DEPOSITORY.  If at
   any time:

          (i)  the  Depository  for the Notes notifies the Issuers that the
             Depository is unwilling  or  unable  to continue as Depository
             for the Global Notes and a successor Depository for the Global
             Notes is not appointed by the Issuers  within  90  days  after
             delivery of such notice; or

          (ii) the Issuers at their sole discretion, notify the Trustee  in
             writing  that  they  elect to cause the issuance of Definitive
             Notes under this Indenture,

then  the  Issuers shall execute, and  the  Trustee,  upon  receipt  of  an
Officers'  Certificate   requesting  the  authentication  and  delivery  of
Definitive Notes, shall authenticate  and  deliver,  Definitive Notes in an
aggregate  principal  amount equal to the principal amount  of  the  Global
Notes, in exchange for such Global Notes.

     (g) LEGENDS.

          (i) Except as  permitted  by  the  following paragraph (ii), each
             Note certificate evidencing Global  Notes and Definitive Notes
             (and  all  Notes issued in exchange therefor  or  substitution
             thereof) shall  bear  a  legend in substantially the following
             form:

             "THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
             ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION
             5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES
             ACT"), AND THE NOTE EVIDENCED  HEREBY MAY NOT BE OFFERED, SOLD
             OR OTHERWISE TRANSFERRED IN THE  ABSENCE  OF SUCH REGISTRATION
             OR AN APPLICABLE EXEMPTION THEREFROM. EACH  PURCHASER  OF  THE
             NOTE  EVIDENCED  HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY
             BE RELYING ON THE  EXEMPTION  FROM SECTION 5 OF THE SECURITIES
             ACT PROVIDED BY RULE 144A THEREUNDER.  THE  HOLDER OF THE NOTE
             EVIDENCED  HEREBY AGREES FOR THE BENEFIT OF THE  ISSUERS  THAT
             (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
             ONLY (1) (W) TO A PERSON WHO THE SELLER REASONABLY BELIEVES 1S
             A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
             THE SECURITIES  ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
             OF RULE 144A, (X) IN A TRANSACTION MEETING THE REQUIREMENTS OF
             RULE 144, UNDER THE  SECURITIES  ACT,  (Y)  OUTSIDE THE UNITED
             STATES  TO  A  FOREIGN  PERSON  IN  A TRANSACTION MEETING  THE
             REQUIREMENTS OF RULE 904 UNDER THE SECURITIES  ACT  OR  (Z) IN
             ACCORDANCE   WITH  ANOTHER  EXEMPTION  FROM  THE  REGISTRATION
             REQUIREMENTS OF  THE  SECURITIES  ACT  (AND,  WITH  RESPECT TO
             CLAUSES  (X)  AND  (Z),  BASED  UPON AN OPINION OF COUNSEL  IF
             EITHER  ISSUER  SO  REQUESTS), (2) TO  EITHER  ISSUER  OR  (3)
             PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT AND, IN EACH
             CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY
             STATE   OF   THE   UNITED   STATES  OR  ANY  OTHER  APPLICABLE
             JURISDICTION  AND (B) THE HOLDER  WILL,  AND  EACH  SUBSEQUENT
             HOLDER IS REQUIRED  TO,  NOTIFY  ANY  PURCHASER FROM IT OF THE
             NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS  SET FORTH IN
             (A) ABOVE."



                                    19


<PAGE>




             (ii)  Upon  any  sale,  transfer  or  exchange  of  a Transfer
             Restricted   Security   (including   any  Transfer  Restricted
             Security  represented by a Global Note)  and  receipt  of  the
             Opinion of  Counsel, if any, required in (i) above pursuant to
             Rule 144 under  the Securities Act or pursuant to an effective
             registration statement  under  the  Securities  Act or 40 days
             after any such sale or transfer pursuant to Rule 904 under the
             Securities Act:

             (A) in the case of any Transfer Restricted Security  that is a
               Definitive  Note,  the  Registrar  shall  permit  the Holder
               thereof to exchange such Transfer Restricted Security  for a
               Definitive  Note that does not bear the legend set forth  in
               (i) above and  rescind  any  restriction  on the transfer of
               such Transfer Restricted Security; and

             (B)   in   the   case  of  any  Transfer  Restricted  Security
               represented  by a  Global  Note,  such  Transfer  Restricted
               Security shall not be subject to the provisions set forth in
               (i) above and  shall  only  be  subject to the provisions of
               Section 2.06(d) hereof; PROVIDED, HOWEVER, that with respect
               to  any  request for an exchange of  a  Transfer  Restricted
               Security  that  is  represented  by  a  Global  Note  for  a
               Definitive  Note  that does not bear a legend, which request
               is made in reliance upon Rule 144 or 904, the Holder thereof
               shall certify in writing  to the Registrar that such request
               is  being  made  pursuant  to  Rule   144   or   904   (such
               certification  to be substantially in the form of Exhibit  B
               hereto).

     (h) CANCELLATION AND/OR ADJUSTMENT  OF  GLOBAL  NOTES. At such time as
   all beneficial interests in Global Notes have either  been exchanged for
   Definitive Notes, redeemed, repurchased or cancelled, all  Global  Notes
   shall  be  returned  to or retained and cancelled by the Trustee. At any
   time prior to such cancellation,  if any beneficial interest in a Global
   Note  is  exchanged  for  Definitive  Notes,  redeemed,  repurchased  or
   cancelled, the principal amount of Notes represented by such Global Note
   shall be reduced accordingly and an endorsement  shall  be  made on such
   Global  Note, by the Trustee or the Note Custodian, at the direction  of
   the Trustee, to reflect such reduction.

     (i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.

          (i)  To  permit  registrations  of  transfers  and exchanges, the
             Issuers  shall  execute  and  the  Trustee  shall authenticate
             Definitive Notes and Global Notes at the Registrar's request.

          (ii)  No  service  charge  shall  be  made  to a Holder  for  any
             registration  of  transfer or exchange, but  the  Issuers  may
             require payment of  a sum sufficient to cover any transfer tax
             or similar governmental charge payable in connection therewith
             (other than any such  transfer  taxes  or similar governmental
             charge payable upon exchange or transfer  pursuant to Sections
             3.07, 4.10, 4.15 and 9.05 hereto).

          (iii) The Registrar shall not be required:

             (A) to register the transfer or exchange of  any Note selected
               for  redemption  in whole or in part, except the  unredeemed
               portion of any Note being redeemed in part; or



                                    20


<PAGE>




               (B) to register the  transfer of or to exchange Notes during
               a period beginning at  the opening of 15 days before the day
               of any selection of Notes  for redemption under Section 3.02
               hereof and ending at the close of business on the day of the
               selection.

          (iv)  All  Definitive  Notes and Global  Notes  issued  upon  any
             registration of transfer  or  exchange  of Definitive Notes or
             Global Notes shall be the valid obligations  of  the  Issuers,
             evidencing  the  same  debt, and entitled to the same benefits
             under this Indenture, as  the Definitive Notes or Global Notes
             surrendered upon such registration of transfer or exchange.

          (v) The Issuers shall not be required  to  issue, to register the
             transfer of or to exchange Notes during a  period beginning at
             the  opening  of  15 days before the day of any  selection  of
             Notes for redemption  under  Section 3.02 hereof and ending at
             the close of business on the day of selection.

          (vi) Prior to due presentment for  the registration of a transfer
             of  any  Note, the Trustee, any Agent,  the  Issuers  and  the
             Guarantors  may  deem  and  treat the Person in whose name any
             Note is registered as the absolute  owner of such Note for the
             purpose of receiving payment of principal  of  and interest on
             such Note, and neither the Trustee, any Agent, the Issuers nor
             the Guarantors shall be affected by notice to the contrary.

          (vii)The Trustee shall authenticate Definitive Notes  and  Global
             Notes upon receipt of an Officers' Certificate instructing  it
             to do so.

SECTION 2.07. REPLACEMENT NOTES.

     If  any  mutilated  Note is surrendered to the Trustee, or the Issuers
and the Trustee receive evidence  to their satisfaction of the destruction,
loss or theft of any Note, the Issuers  shall  issue  and the Trustee, upon
the  written  order  of  the  Issuers  signed by two Officers  of  each  of
Consoltex Group and Consoltex USA, shall authenticate a replacement Note if
the  Trustee's requirements are met. If required  by  the  Trustee  or  the
Issuers,  an  indemnity  bond  must  be  supplied  by  the  Holder  that is
sufficient  in  the  judgment  of the Trustee or the Issuers to protect the
Issuers, the Trustee, any Agent  and any authenticating agent from any loss
that any of them may suffer if a Note  is  replaced. The Issuers may charge
for their expenses in replacing a Note.

     Every replacement Note is an additional  obligation of the Issuers and
shall  be  entitled to all of the benefits of this  Indenture  equally  and
proportionately with all other Notes duly issued hereunder.

SECTION 2.08. OUTSTANDING NOTES.

     The Notes  outstanding  at any time are all the Notes authenticated by
the Trustee except for those cancelled  by  it,  those  delivered to it for
cancellation, those reductions in the interest in a Global Note effected by
the Trustee in accordance with the provisions hereof, and  those  described
in  this  Section  as not outstanding. Except as set forth in Section  2.09
hereof, a Note does not cease to be outstanding because either Issuer or an
Affiliate of either Issuer holds the Note.



                                    21


<PAGE>




If a Note is replaced  pursuant  to  Section  2.07  hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory  to  it that the
replaced Note is held by a bona fide purchaser.

     If  the principal amount of any Note is considered paid under  Section
4.01 hereof,  it  ceases  to  be  outstanding  and interest on it ceases to
accrue.

     If the Paying Agent (other than Consoltex Group  or  its Subsidiaries)
holds, on a redemption date or maturity date, money sufficient to pay Notes
payable  on  that  date,  then on and after that date such Notes  shall  be
deemed to be no longer outstanding and shall cease to accrue interest.

SECTION 2.09. TREASURY NOTES.

     In determining whether the Holders of the required principal amount of
Notes have concurred in any  direction,  waiver  or consent, Notes owned by
either  Issuer,  any  Guarantor  or  any  Person  directly   or  indirectly
controlling  or  controlled  by or under direct or indirect common  control
with either Issuer or any Guarantor  shall  be  considered  as  though  not
outstanding,  except  that  for  the  purposes  of  determining whether the
Trustee  shall  be  protected in relying on any such direction,  waiver  or
consent,  only Notes that  a  Trustee  knows  are  so  owned  shall  be  so
disregarded.

SECTION 2.10. TEMPORARY NOTES.

     Until  definitive  Notes representing Definitive Notes or Global Notes
are ready for delivery, Consoltex  Group  and Consoltex USA may prepare and
the Trustee shall authenticate temporary securities upon a written order of
Consoltex  Group  and  Consoltex USA signed by  two  Officers  of  each  of
Consoltex Group and Consoltex  USA.  Temporary Notes shall be substantially
in the form of definitive Notes but may  have  variations  that the Issuers
consider appropriate for temporary Notes. Without unreasonable  delay,  the
Issuers  shall  prepare and the Trustee shall authenticate definitive Notes
in exchange for temporary Notes.

     Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.

SECTION 2.11. CANCELLATION.

     The Issuers  at  any  time  may  deliver  Notes  to  the  Trustee  for
cancellation.  The  Registrar and Paying Agent shall forward to the Trustee
any Notes surrendered  to  them  for  registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment,  replacement  or  cancellation
and  shall  destroy  cancelled  Notes  (subject  to  the  record  retention
requirement of the Exchange Act). Certification of the destruction  of  all
cancelled  Notes  shall  be  delivered  to  the Issuers unless by a written
order,  signed  by one Officer of each of the Issuers,  the  Issuers  shall
direct that cancelled  Notes be returned to them. The Issuers may not issue
new Notes to replace Notes  that it has paid or that have been delivered to
the Trustee for cancellation  other  than Series B Notes issued in exchange
for Series A Notes.

SECTION 2.12. DEFAULTED INTEREST.

     If the Issuers default in a payment  of  interest  on  the Notes, they
shall pay the defaulted interest in any lawful manner plus, to  the  extent
lawful, interest payable on the defaulted interest, to the Persons who  are
Holders  on  a  subsequent  special  record  date, in each case at the rate
provided in the Notes and in Section 4.01 hereof.  The  Issuers shall, with
the consent of the Trustee, fix each such special record





                                    22


<PAGE>




date and payment date. At least 15 days before the special record date, the
Issuers (or the Trustee, in the name of and at the expense  of the Issuers)
shall  mail  to Holders a notice that states the special record  date,  the
related payment date and the amount of such interest to be paid.

SECTION 2.13. NOVATION.

     As a result  of  the  Exchange  Offer contemplated by the Registration
Rights Agreement, a Holder of Transfer  Restricted Securities shall receive
a  new  evidence  of  Indebtedness;  however,  the  respective  rights  and
obligations of the Holder, the Issuers  and  the  Guarantors  shall  remain
unchanged. Such exchange shall not constitute a novation.

                                 ARTICLE 3
                                REDEMPTION

SECTION 3.01. NOTICES TO TRUSTEE.

     If  the  Issuers  elect  to  redeem  Notes  pursuant  to  the optional
redemption  provisions  of Section 3.07 hereof, they shall furnish  to  the
Trustee, at least 45 days  (unless  a  shorter  period is acceptable to the
Trustee) but not more than 60 days before a redemption  date,  an Officers'
Certificate  setting  forth  (i) the section of this Indenture pursuant  to
which the redemption shall occur,  (ii)  the  redemption  date,  (iii)  the
principal amount of Notes to be redeemed and (iv) the redemption price.

     If  the Issuers are required to make an offer to redeem Notes pursuant
to the provisions of Section 4.10 or 4.15 hereof, they shall furnish to the
Trustee at  least  30  days  (unless  a shorter period is acceptable to the
Trustee) but not more than 60 days before  a  redemption date, an Officers'
Certificate setting forth, (i) the section of this  Indenture  pursuant  to
which  the  redemption  shall  occur,  (ii)  the redemption date, (iii) the
principal amount of Notes to be redeemed, (iv) the redemption price and (v)
a statement to the effect that (a) the Issuers  or  one of their respective
Subsidiaries  has effected an Asset Sale and the conditions  set  forth  in
Section 4.10 have  been  satisfied  or (b) a Change of Control has occurred
and  the  conditions set forth in Section  4.15  have  been  satisfied,  as
applicable.

SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.

     If less  than  all  of  the  Notes are to be redeemed at any time, the
Trustee shall select the Notes to be  redeemed  among  the  Holders  of the
Notes  in  compliance  with  the  requirements  of  the  principal national
securities  exchange,  if any, on which the Notes are listed,  or,  if  the
Notes are not listed, on  a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate, PROVIDED that no Notes of US$1,000
or less shall be redeemed in  part. In the event of partial redemption, the
particular  Notes  to  be redeemed  shall  be  selected,  unless  otherwise
provided herein, not less  than  30  nor  more  than  60  days prior to the
redemption  date  by the Trustee from the outstanding Notes not  previously
called for redemption.

     The Trustee shall  promptly notify the Issuers in writing of the Notes
selected for redemption and,  in  the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions
of Notes selected shall be in amounts  of  US$  1,000 or whole multiples of
US$1,000; except that if all of the Notes of a Holder  are  to be redeemed,
the entire outstanding amount of Notes held by such Holder, even  if  not a
multiple of US$1,000, shall be redeemed. Except as provided in the



                                    23


<PAGE>




preceding sentence, provisions of this Indenture that apply to Notes called
for redemption also apply to portions of Notes called for redemption.

SECTION 3.03. NOTICE OF REDEMPTION

     Subject to the provisions of Section 3.09 hereof, at least 30 days but
not  more than 60 days before a redemption date, the Issuers shall mail  or
cause  to  be  mailed,  by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.

     The notice shall identify the Notes to be redeemed and shall state:

     (a) the redemption date;

     (b) the redemption price;

     (c)  if  any Note is being  redeemed  in  part,  the  portion  of  the
   principal amount  of  such  Note  to  be  redeemed  and  that, after the
   redemption  date  upon  surrender of such Note, a new Note or  Notes  in
   principal amount equal to the unredeemed portion shall be issued;

     (d) the name and address of the Paying Agent;

     (e) that Notes called for redemption must be surrendered to the Paying
   Agent to collect the redemption price;

     (f)  that,  unless  the Issuers  default  in  making  such  redemption
   payment, interest on Notes called for redemption ceases to accrue on and
   after the redemption date;

     (g) the paragraph of  the  Notes  and/or  section  of  this  Indenture
   pursuant  to  which  the Notes called for redemption are being redeemed;
   and

     (h) that no representation  is  made as to the correctness or accuracy
   of the CUSIP number, if any, listed  in  such  notice  or printed on the
   Notes.

     At  the  Issuers'  request,  the  Trustee  shall  give  the notice  of
redemption  in  the  names  of  the Issuers and at their expense; PROVIDED,
HOWEVER, that the Issuers shall have  delivered to the Trustee, at least 45
days prior to the redemption date (unless a shorter period is acceptable to
the Trustee), an Officers' Certificate  requesting  that  the  Trustee give
such  notice and setting forth the information to be stated in such  notice
as provided in the preceding paragraph.

SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.

     Once  notice  of  redemption is mailed in accordance with Section 3.03
hereof, Notes called for  redemption  become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not
be conditional.

SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.

     On or prior to the redemption date, the Issuers shall deposit with the
Trustee or with the Paying Agent money  sufficient  to  pay  the redemption
price of, premium, if any, and accrued interest on all Notes



                                    24


<PAGE>




to  be  redeemed  on  the redemption date. The Trustee or the Paying  Agent
shall promptly return to  the  Issuers any money deposited with the Trustee
or the Paying Agent by the Issuers  in  excess  of the amounts necessary to
pay  the redemption price of, and accrued interest  on,  all  Notes  to  be
redeemed.

     If  the Issuers comply with the provisions of the preceding paragraph,
on and after  the  redemption  date,  interest shall cease to accrue on the
Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid  interest  shall  be  paid to the
Person  in whose name such Note was registered at the close of business  on
such record  date,  and  no additional interest shall be payable to Holders
whose Notes are called for  redemption.  If  any Note called for redemption
shall not be so paid upon surrender for redemption  because  of the failure
of  the Issuers to comply with the preceding paragraph, interest  shall  be
paid on the unpaid principal, from the redemption date until such principal
is paid,  and  to the extent lawful on any interest not paid on such unpaid
principal, in each  case  at  the rate provided in the Notes and in Section
4.01 hereof.

SECTION 3.06. NOTES REDEEMED IN PART.

     Upon surrender of a Note that  is  redeemed in part, the Issuers shall
issue and the Trustee shall authenticate  for  the Holder at the expense of
the Issuers a new Note equal in principal amount  to the unredeemed portion
of the Note surrendered.

SECTION 3.07. OPTIONAL REDEMPTION.

     (a) Except as provided in paragraphs (b), (c)  and (d) of this Section
   3.07, the Issuers shall not have the option to redeem the Notes prior to
   October 1, 1998. Thereafter, the Issuers shall have the option to redeem
   the Notes, in whole or in part, upon not less than  30  nor more than 60
   days'  notice,  at  the  redemption prices (expressed as percentages  of
   principal amount) set forth  below  plus  accrued  and  unpaid  interest
   thereon  to  the  applicable  redemption  date,  if  redeemed during the
   twelve-month period beginning on October 1 of the years indicated below:

             YEAR                            PERCENTAGE

             1998 ...........................105.50%
 .............1999 ...........................103.67%
 .............2000 ...........................101.83%
 .............2001 and thereafter.............100.00%

     (b)  At  any time on or before October 1, 1996, the Issuers  may  also
   redeem  up to  33-1/3%  of  the  aggregate  principal  amount  of  Notes
   originally  issued  hereunder with the net proceeds of a public offering
   of Capital Stock (other  than  Disqualified  Stock and a public offering
   pursuant  to  a  registration statement on Form S-8)  of  Consoltex  USA
   within 90 days of  such  public  offering at a redemption price equal to
   110% of the principal amount of such  Notes,  plus  accrued  and  unpaid
   interest to the redemption date; PROVIDED that at least US$80 million in
   aggregate principal amount of Notes remain outstanding immediately after
   giving effect to such redemption.

     (c)  In  addition, prior to October 1, 1998, the Issuers may, at their
   option, redeem  the  Notes,  in whole or in part, at any time within 180
   days after a Change of Control,  upon  not less than 30 nor more than 60
   days' notice to each holder of Notes, at a redemption price equal to the
   sum of (i) the




                                    25


<PAGE>




principal amount thereof plus (ii) accrued  and unpaid interest to the date
of redemption plus (iii) the Applicable Make-Whole Premium.

     (d) The Issuers also may, at their option,  redeem  the  Notes,  as  a
   whole  but  not  in  part,  at  a  redemption price equal to 100% of the
   principal amount of the Notes, together with accrued and unpaid interest
   to  the redemption date, if the Issuers  have  become  or  would  become
   obligated  in  accordance  with  Section 4.17 hereof to pay, on the next
   date on which any amount would be  payable  under or with respect to the
   Notes, any Additional Amounts as a result of  any change in or amendment
   to the laws (or any regulations promulgated thereunder)  of  Canada  (or
   any  political  subdivision  or taxing authority thereof or therein), or
   any  change  in or amendment to  any  official  position  regarding  the
   application or  interpretation of such laws or regulations, which change
   or amendment is announced  or  becomes effective on or after the date of
   the Offering Memorandum.

     (e)  Any  redemption pursuant to  this  Section  3.07  shall  be  made
   pursuant to the provisions of Sections 3.01 through 3.06 hereof.

SECTION 3.08. MANDATORY REDEMPTION.

     Except as set  forth under Sections 4.10 and 4.15, the Issuers are not
required to make mandatory redemption or sinking fund payments with respect
to the Notes.

SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.

     In the event that,  pursuant to Section 4.10 hereof, the Issuers shall
be required to commence an  offer  to  all  Holders  to  purchase Notes (an
"ASSET SALE OFFER"), it shall follow the procedures specified below.

     The  Asset  Sale Offer shall remain open for a period of  20  Business
Days following its commencement, and up to an additional five Business Days
if extended by the  Issuers,  except  to the extent that a longer period is
required  by  applicable  law (the "OFFER  PERIOD").  No  later  than  five
Business Days after the termination  of  the  Offer  Period  (the "PURCHASE
DATE"),  the Issuers shall purchase the principal amount of Notes  required
to be purchased pursuant to Section 4.10 hereof (the "OFFER AMOUNT") or, if
less than  the  Offer  Amount  has  been  tendered,  all  Notes tendered in
response to the Asset Sale Offer.

     If the Purchase Date is on or after an interest record  date and on or
before  the related interest payment date, any accrued and unpaid  interest
shall be paid to the Person in whose name a Note is registered at the close
of business  on  such  record  date,  and  no  additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.

     Upon the commencement of an Asset Sale Offer,  the Issuers shall send,
by first class mail, a notice to the Trustee and each  of  the Holders. The
notice  shall  contain all instructions and materials necessary  to  enable
such Holders to  tender  Notes  pursuant to the Asset Sale Offer. The Asset
Sale Offer shall be made to all Holders. The notice, which shall govern the
terms of the Asset Sale Offer, shall state:

     (a) that the Asset Sale Offer  is  being made pursuant to this Section
   3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
   shall remain open;





                                    26


<PAGE>




   (b) the Offer Amount, the purchase price and the Purchase Date;

     (c) that any Note not tendered or accepted  for payment shall continue
   to accrue interest;

     (d)  that any Note accepted for payment pursuant  to  the  Asset  Sale
   Offer shall cease to accrue interest on and after the Purchase Date;

     (e) that  Holders  electing  to  have  a Note purchased pursuant to an
   Asset Sale Offer may only elect to have all  of  such Note purchased and
   may not elect to have only a portion of such Note purchased;

     (f)  that Holders electing to have a Note purchased  pursuant  to  any
   Asset Sale  Offer shall be required to surrender the Note, with the form
   entitled "Option  of  Holder  to  Elect  Purchase" on the reverse of the
   Note, or a similar form acceptable to the  Trustee,  completed,  to  the
   Issuers, a depository, if appointed by the Issuers, or a Paying Agent at
   the  address  specified  in  the  notice  at least three days before the
   Purchase Date;

     (g) that Holders shall be entitled to withdraw  their  election if the
   Issuers,  the  depository  or  the  Paying  Agent,  as the case may  be,
   receives, not later than the expiration of the Offer Period, a telegram,
   telex, facsimile transmission or letter setting forth  the  name  of the
   Holder,  the  principal  amount  of  the  Note  the Holder delivered for
   purchase and a statement that such Holder is withdrawing his election to
   have such Note purchased;

     (h) that, if the aggregate principal amount of  Notes  surrendered  by
   Holders  exceeds the Offer Amount, the Trustee shall select the Notes to
   be purchased on a PRO RATA basis (with such adjustments as may be deemed
   appropriate  by  the  Trustee  so  that  only  Notes in denominations of
   US$1,000, or integral multiples thereof, shall be purchased); and

     (i)  that Holders whose Notes were purchased only  in  part  shall  be
   issued new Notes equal in principal amount to the unpurchased portion of
   the Notes surrendered.

     On or  before  the  Purchase  Date,  the  Issuers shall, to the extent
lawful, accept for payment, on a PRO RATA basis  to  the  extent necessary,
the Offer Amount of Notes tendered pursuant to the Asset Sale  Offer, or if
less than the Offer Amount has been tendered, all Notes tendered, and shall
deliver to the Trustee an Officers' Certificate stating that such  Notes or
portions  thereof  were  accepted  for payment by the Issuers in accordance
with the terms of this Section 3.09.  The  Issuers,  the  depository or the
Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to  each  tendering
Holder an amount equal to the purchase price of the Notes tendered  by such
Holder  and  accepted  by  the  Issuers for purchase, and the Issuers shall
promptly issue a new Note, and the  Trustee  shall authenticate and mail or
deliver such new Note to such Holder, in a principal  amount  equal  to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall
be  promptly mailed or delivered by the Issuers to the Holder thereof.  The
Issuers  shall publicly announce the results of the Asset Sale Offer on the
Purchase Date.

     Other than as specifically provided in this Section 3.09, any purchase
pursuant to  this  Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.



                                    27


<PAGE>




                                 ARTICLE 4
                                 COVENANTS

SECTION 4.01. PAYMENT OF NOTES

     The Issuers shall  pay  or cause to be paid the principal of, premium,
if any, and interest on the Notes  on  the dates and in the manner provided
in the Notes, and shall pay Liquidated Damages, if any, on the dates and in
the  manner  provided  in  the Registration  Rights  Agreement.  Principal,
premium, if any, and interest  shall  be considered paid on the date due if
the Paying Agent, if other than Consoltex  Group  or  a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money  deposited by the
Issuers in immediately available funds and designated for and sufficient to
pay  all  principal,  premium,  if any, and interest then due. The  Issuers
shall pay all Liquidated Damages,  if  any, in the same manner on the dates
and in the amounts set forth in the Registration Rights Agreement.

     The Issuers shall pay interest (including  post-petition  interest  in
any  proceeding  under any Bankruptcy Law) on overdue principal at the rate
equal to 1 % per annum  in  excess  of the then applicable interest rate on
the  Notes  to  the  extent  lawful;  it  shall   pay  interest  (including
post-petition  interest  in  any proceeding under any  Bankruptcy  Law)  on
overdue installments of interest  (without  regard  to any applicable grace
period) at the same rate to the extent lawful.

SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.

     The Issuers shall maintain an office or agency (which may be an office
of the Trustee or an Affiliate of the Trustee, Registrar  or  co-Registrar)
where Notes may be surrendered for registration of transfer or for exchange
and  where  notices  and demands to or upon the Issuers in respect  of  the
Notes and this Indenture  may  be  served.  The  Issuers  shall give prompt
written  notice  to  the  Trustee  of the location, and any change  in  the
location, of such office or agency.  If  at any time the Issuers shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations,  surrenders,  notices
and  demands  may  be  made  or served at the Corporate Trust Office of the
Trustee.

     The Issuers may also from  time  to  time  designate one or more other
offices or agencies where the Notes may be presented or surrendered for any
or all such purposes and may from time to time rescind  such  designations;
PROVIDED,  HOWEVER,  that  no such designation or rescission shall  in  any
manner relieve the Issuers of  their  obligation  to  maintain an office or
agency for such purposes. The Issuers shall give prompt  written  notice to
the Trustee of any such designation or rescission and of any change  in the
location of any such other office or agency.

     The Issuers hereby designate the Corporate Trust Office of the Trustee
as  one  such  office  or  agency of the Issuers in accordance with Section
2.03.

SECTION 4.03. REPORTS.

     (a) Prior to the Issuers  becoming  subject  to Section 13 or 15(d) of
   the Exchange Act, the Issuers shall provide to Holders of the Notes and,
   whether or not required by the rules and regulations  of  the  SEC, file
   with  the  SEC  for  public  availability  (if  accepted) (i) as soon as
   reasonably available and in any event within 90 days  after  the  end of
   each fiscal year, annual consolidated financial statements for Consoltex
   Group  for  such  fiscal year prepared in accordance with GAAP, together
   with  a report thereon  by  an  independent  accountant  of  established
   national reputation, (ii) as soon as reasonably available and



                                    28


<PAGE>




   in any  event  within  45  days  after  the  end of each fiscal quarter,
   unaudited consolidated financial statements of  Consoltex Group for such
   quarterly  period,  certified  by  a  principal  financial   officer  of
   Consoltex  Group,  prepared in accordance with GAAP and (iii) all  other
   reports and communications that are generally provided to the holders of
   Consoltex Group's Subordinate Voting Shares pursuant to the rules of the
   Montreal and Toronto  Stock Exchanges and applicable Canadian securities
   legislation.

     (b) Upon becoming subject  to Section 13 or 15(d) of the Exchange Act,
   the Issuers and each Guarantor  shall  file  with  the Trustee, and mail
   copies to the Holders at their addresses appearing in  the  register  of
   Notes  maintained by the Registrar, within 15 days after filing with the
   SEC, copies  of  all  quarterly  and annual financial reports and of the
   information, documents and other reports  (or copies of such portions of
   any  of  the  foregoing  that  the  SEC  may  by rules  and  regulations
   prescribe) which the Issuers and each Guarantor  are  required  to  file
   with  the  SEC  pursuant  to Section 13 or 15(d) of the Exchange Act. If
   thereafter, the Issuers cease  to  be  subject to Section 13 or 15(d) of
   the  Exchange  Act,  the Issuers and each Guarantor  shall  nevertheless
   continue  to  cause  the  annual  and  quarterly  financial  statements,
   including any notes thereto  (and,  with  respect  to annual reports, an
   auditors'   report  by  an  accounting  firm  of  established   national
   reputation) and  a  "Management's  Discussion  and Analysis of Financial
   Condition and Results of Operations," comparable  to  that  which  would
   have  been required to appear in annual or quarterly reports filed under
   Section  13 or 15(d) of the Exchange Act to be so filed with the SEC for
   public availability  (if  accepted)  and  the  Trustee and mailed to the
   Holders within 90 days after the end of the Issuers'  fiscal  years  and
   within 45 days after the end of each of the first three quarters of each
   such  fiscal  year. The Issuers and any Guarantor shall also comply with
   the provisions of TIA 314(a).

     (c)  For  so  long   as  any  Transfer  Restricted  Securities  remain
   outstanding, the Issuers and the Guarantors shall furnish to all Holders
   and prospective purchasers  of  the  Notes  designated by the Holders of
   Transfer  Restricted  Securities,  promptly  upon   their  request,  the
   information required to be delivered pursuant to Rule  144A(d)(4)  under
   the Securities Act.

     (d) The Issuers shall provide the Trustee with a sufficient number  of
   copies  of  all  reports  and  other  documents and information that the
   Trustee may be required to deliver to the  Holders  of  Notes under this
   Section  4.03.  The delivery of such reports, documents and  information
   shall be at the sole expense of the Issuers.

SECTION 4.04. COMPLIANCE CERTIFICATE.

     (a) The Issuers shall deliver to the Trustee, within 90 days after the
   end of each fiscal  year, an Officers' Certificate stating that a review
   of the activities of  the  Issuers  and  their  respective  Subsidiaries
   during the preceding fiscal year has been made under the supervision  of
   the signing Officers with a view to determining whether the Issuers have
   kept,  observed,  performed  and  fulfilled their obligations under this
   Indenture (including with respect to any Restricted Payments made during
   such year, the basis upon which the  calculations  required  by  Section
   4.07  were  computed  (which  calculations  may  be based upon Consoltex
   Group's latest available financial statements)), and further stating, as
   to each such Officer signing such certificate, that  to  the best of his
   or  her  knowledge  the  Issuers  have  kept,  observed,  performed  and
   fulfilled  each and every covenant contained in this Indenture  and  are
   not in default  in  the  performance  or observance of any of the terms,
   provisions and conditions of this Indenture  (or,  if a Default or Event
   of Default shall have occurred, describing all such  Defaults  or Events
   of  Default  of  which he or she may have knowledge and what action  the
   Issuers are taking  or propose to take with respect thereto) and that to
   the best of his or her  knowledge  no  event has occurred and remains in
   existence by reason of which payments on  account of the principal of or
   interest, if any, on the Notes is



                                    29


<PAGE>




   prohibited or if such event has occurred, a description of the event and
   what  action  the Issuers are taking or propose  to  take  with  respect
   thereto.

     (b) The Issuers  shall,  so  long as any of the Notes are outstanding,
   deliver to the Trustee, forthwith upon any Officer becoming aware of any
   Default  or Event of Default an Officers'  Certificate  specifying  such
   Default or  Event  of  Default and what action the Issuers are taking or
   propose to take with respect thereto.

SECTION 4.05. TAXES.

     The Issuers shall pay,  and  shall  cause  each  of  their  respective
Subsidiaries to pay, prior to delinquency, all material taxes, assessments,
and governmental levies except such as are contested in good faith  and  by
appropriate  proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.

SECTION 4.06. STAY, EXTENSION AND USURY LAWS.

     Each of the  Issuers  and  each  of  the  Guarantors covenants (to the
extent that they may lawfully do so) that they shall not at any time insist
upon,  plead,  or in any manner whatsoever claim or  take  the  benefit  or
advantage of, any  stay, extension or usury law wherever enacted, now or at
any  time  hereafter in  force,  that  may  affect  the  covenants  or  the
performance  of  this  Indenture;  and  each of the Issuers and each of the
Guarantors (to the extent that they may lawfully  do  so)  hereby expressly
waives  all benefit or advantage of any such law, and covenants  that  they
shall not, by resort to any such law, hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.

SECTION 4.07. RESTRICTED PAYMENTS.

     The  Issuers  shall  not, and shall not permit any of their respective
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend on
or make any distribution on  account  of  either  Issuer's  or any of their
respective   Subsidiaries'  Equity  Interests  (other  than  dividends   or
distributions  payable  in Equity Interests (other than Disqualified Stock)
of such Issuer or such Subsidiary  or dividends or distributions payable to
either Issuer or a Guarantor); (ii)  purchase,  redeem or otherwise acquire
or retire for value any Equity Interests of either Issuer or any Subsidiary
or  other Affiliate of such Issuer (other than any  such  Equity  Interests
owned by either Issuer or a Guarantor); (iii) purchase, redeem or otherwise
acquire  or  retire  for value any Indebtedness that is subordinated to the
Notes, except in accordance  with  the  mandatory  redemption  or repayment
provisions   set   forth  in  the  original  documentation  governing  such
Indebtedness; (iv) make  any  Investment  in any Unrestricted Subsidiary or
(v) make any Contributions (all such payments  and  other actions set forth
in  clauses  (i)  through  (v)  above  being  collectively referred  to  as
"Restricted Payments"), unless, at the time of such Restricted Payment:

     (a)  no  Default  or  Event  of  Default shall have  occurred  and  be
   continuing or would occur as a consequence thereof;

     (b) Consoltex Group would, at the  time of such Restricted Payment and
   after giving pro forma effect thereto  as if such Restricted Payment had
   been made at the beginning of the applicable  four-quarter  period, have
   been  permitted  to  incur  at  least  $1.00  of additional Indebtedness
   pursuant to the Fixed Charge Coverage Ratio test  set  forth  in Section
   4.09 hereof; and



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   (c)  such  Restricted Payment, together with the aggregate of all  other
   Restricted  Payments   made   by   the   Issuers  and  their  respective
   Subsidiaries after the date of this Indenture,  is  less than the sum of
   (w) 50% of the Consolidated Net Income of Consoltex Group (determined by
   excluding cash dividends received by Consoltex Group or its Subsidiaries
   from  an  Unrestricted  Subsidiary referred to in clause  (x))  for  the
   period (taken as one accounting  period)  from  the  first  day  of  the
   quarter  in  which  the  Offering is consummated to the end of Consoltex
   Group's most recently ended  full  fiscal  quarter  for  which  internal
   financial  statements  are  available  at  the  time  of such Restricted
   Payment  (or,  if  such  Consolidated  Net Income for such period  is  a
   deficit,  100%  of  such  deficit), plus (x)  the  amount  of  all  cash
   dividends  received by Consoltex  Group  or  its  Subsidiaries  from  an
   Unrestricted  Subsidiary  subsequent  to the first day of the quarter in
   which the Offering is consummated, plus  (y)  100%  of the aggregate net
   cash proceeds (unless such proceeds are used pursuant  to clause (ii) of
   the next succeeding paragraph to redeem, repurchase, retire or otherwise
   acquire other Equity Interests) received by Consoltex Group  or  any  of
   its Subsidiaries from the issue or sale since the date of this Indenture
   of  Equity  Interests  of  either Issuer or of debt securities of either
   Issuer that have been converted  into  such Equity Interests (other than
   Equity  Interests  (or convertible debt securities)  sold  to  Consoltex
   Group or any of its  Subsidiaries  and  other than Disqualified Stock or
   debt securities that have been converted  into Disqualified Stock), plus
   (z) if any Unrestricted Subsidiary is redesignated  as a Subsidiary, the
   lesser of (i) the Consolidated Net Worth of such Unrestricted Subsidiary
   as of the date it is redesignated and (ii) the aggregate  amount  of the
   Issuers'   and   their  respective  Subsidiaries'  Investments  in  such
   Unrestricted Subsidiary.

     The foregoing provisions  shall  not  prohibit  (i) the payment of any
dividend within 60 days after the date of declaration  thereof  if  at said
date of declaration such payment would have complied with the provisions of
this  Indenture;  (ii)  the  redemption,  repurchase,  retirement  or other
acquisition of any Equity Interests of Consoltex Group in exchange for,  or
out  of the proceeds of, the substantially concurrent sale (other than to a
Subsidiary of Consoltex Group) of other Equity Interests of Consoltex Group
(other  than  any  Disqualified  Stock);  (iii)  the  repurchase  of Equity
Interests  of  Consoltex  Group  from  employees  of Consoltex Group or its
Subsidiaries pursuant to an employee compensation or  incentive  plan in an
aggregate amount not to exceed $1 million per annum; (iv) if (1) no Default
or Event of Default shall have occurred and be continuing or would occur as
a  consequence  thereof  and  (2)  Consoltex Group would, at the time of  a
Restricted Payment pursuant to this  clause (iv) and after giving pro forma
effect thereto as if such Restricted Payment had been made at the beginning
of the applicable four-quarter period,  have  been  permitted  to  incur at
least  $1.00  of  additional  Indebtedness  pursuant  to  the  Fixed Charge
Coverage  Ratio  test  set  forth  in  Section 4.09 hereof, Investments  in
Unrestricted Subsidiaries in an aggregate  amount not to exceed $10 million
dollars since the date of this Indenture; (v)  the  purchase, redemption or
other acquisition prior to the stated maturity thereof of Indebtedness that
is  subordinated  to  the  Notes  in exchange for or out of  the  net  cash
proceeds of a substantially concurrent issue and sale (other than to either
Issuer or their respective Subsidiaries) of new Indebtedness; PROVIDED that
(1) the principal amount of such new  Indebtedness  shall  not  exceed  the
principal  amount  of  Indebtedness  so  refinanced  (plus  the  amount  of
reasonable  expenses  incurred  in  connection  therewith),  (2)  such  new
Indebtedness  shall  have  a  Weighted Average Life to Maturity equal to or
greater than the Weighted Average  Life  to  Maturity  of  the Indebtedness
being refinanced, and (3) the new Indebtedness shall be pari  passu with or
subordinate in right of payment to the Indebtedness being refinanced;  (vi)
Contributions  to a Subsidiary if such Subsidiary (1) executes and delivers
to the Trustee a  supplemental  indenture  in form and substance reasonably
satisfactory  to  the  Trustee  pursuant  to which  such  Subsidiary  shall
guarantee all of the obligations of the Issuers  with  respect to the Notes
on a senior subordinated basis and (2) delivers to the Trustee  an  Opinion
of Counsel reasonably satisfactory to the Trustee to the effect that



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<PAGE>




such  supplemental  indenture  has been duly executed and delivered by such
Subsidiary and is in compliance with the terms of this Indenture; and (vii)
if no Default or Event of Default  shall have occurred and be continuing or
would occur as a consequence thereof,  additional Restricted Payments in an
aggregate amount not to exceed $2 million since the date of this Indenture.

SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.

     The Issuers shall not, and shall not  permit  any  of their respective
Subsidiaries  to,  directly  or  indirectly, create or otherwise  cause  or
suffer to exist or become effective  any  encumbrance or restriction on the
ability  of  any  Subsidiary to (a) (i) pay dividends  or  make  any  other
distributions to Consoltex  Group  or  any  of  its Subsidiaries (A) on its
Capital  Stock or (B) with respect to any other interest  or  participation
in, or measured  by,  its  profits,  or  (ii)  pay any indebtedness owed to
Consoltex Group or any of its Subsidiaries, (b)  make  loans or advances to
Consoltex  Group  or  any of its Subsidiaries or (c) transfer  any  of  its
properties or assets to  Consoltex Group or any of its Subsidiaries, except
for such encumbrances or restrictions  existing  under  or by reason of (i)
agreements governing Senior Debt of the Issuers or any Guarantor,  and  any
amendments,  modifications, restatements, renewals, increases, supplements,
refundings, replacements  or  refinancings thereof, (ii) any encumbrance or
restriction applicable to any Guarantor  pursuant to an agreement in effect
on the date of this Indenture, (iii) this  Indenture  and  the  Notes, (iv)
applicable law, (v) any instrument governing Indebtedness or Capital  Stock
of  a  Person  acquired by Consoltex Group or any of its Subsidiaries as in
effect  at  the time  of  such  acquisition  (except  to  the  extent  such
Indebtedness  was  incurred  in  connection  with  such acquisition), which
encumbrance  or  restriction  is  not  applicable  to any  Person,  or  the
properties or assets of any Person, other than the Person,  or the property
or assets of the Person, so acquired, PROVIDED that, unless such  Person is
a Guarantor, EBDAIT of such Person is not taken into account in determining
whether such acquisition was permitted by the terms of this Indenture, (vi)
by reason of customary non-assignment provisions in leases entered  into in
the  ordinary  course of business and consistent with past practices, (vii)
with respect to  clause  (c) above, purchase money obligations for property
acquired  in  the  ordinary  course   of   business,  or  (viii)  permitted
Refinancing Indebtedness, PROVIDED that the  restrictions  contained in the
agreements governing such Refinancing Indebtedness are no more  restrictive
than  those  contained  in the agreements governing the Indebtedness  being
refinanced.

SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.

     The Issuers shall not,  and  shall  not permit any of their respective
Subsidiaries  to,  directly or indirectly, create,  incur,  issue,  assume,
guaranty or otherwise  become directly or indirectly liable with respect to
(collectively, "incur")  any Indebtedness (including Acquired Debt) and the
Issuers shall not issue any  Disqualified Stock and shall not permit any of
their respective Subsidiaries  to  issue  any  shares  of  preferred stock;
PROVIDED, HOWEVER, that the Issuers or any Guarantor may incur Indebtedness
or  issue shares of preferred stock if the Fixed Charge Coverage  Ratio  of
Consoltex  Group  for the most recently ended four full fiscal quarters for
which internal financial statements are available immediately preceding the
date on which such  additional  Indebtedness  is incurred or such preferred
stock is issued would have been at least 2.0 to  1,  determined  on  a  pro
forma  basis  (including  a  pro  forma  application  of  the  net proceeds
therefrom),  as  if the additional Indebtedness had been incurred,  or  the
preferred stock had  been  issued,  as the case may be, at the beginning of
such  four-quarter  period:  PROVIDED FURTHER  that  no  guarantee  may  be
incurred  pursuant  to  the  provisions   of  this  paragraph,  unless  the
guaranteed Indebtedness is also incurred pursuant to this paragraph.

     The foregoing limitations shall not apply  to  (a)  the  incurrence by
either  Issuer  or  any  Guarantor  of Indebtedness pursuant to the  Credit
Agreement or otherwise in an aggregate principal amount not to



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<PAGE>




exceed  the Borrowing Base, (b) Indebtedness,  not  covered  by  any  other
clause of  this  paragraph,  outstanding on the date of this Indenture, (c)
Indebtedness arising out of letters  of  credit,  performance bonds, surety
bonds and bankers' acceptances incurred in the ordinary course of business;
PROVIDED  that  if  any  unpaid  reimbursement obligation  under  any  such
instrument is outstanding for more  than 10 consecutive business days, such
obligation shall not be permitted to be incurred under this clause (c), (d)
Indebtedness consisting of guarantees  (other  than  guarantees relating to
money borrowed), indemnities or obligations in respect  of  purchase  price
adjustments,  in  each  case,  in connection with the acquisition of assets
permitted under this Indenture,  (e)  additional  Indebtedness of up to $10
million in aggregate principal amount at any one time  outstanding, (f) the
incurrence by the Issuers and the Guarantors of Indebtedness represented by
the Notes, (g) Indebtedness of a Foreign Subsidiary existing at the time it
is acquired (1) that is not incurred in contemplation of the acquisition of
such  Foreign Subsidiary and (2) that is non-recourse to  the  Issuers  and
their  respective  Subsidiaries  except  to  the  assets  of  such  Foreign
Subsidiary  (for  purposes  of  this  clause (g), Indebtedness of a Foreign
Subsidiary  existing  at  the  time  it is acquired  includes  Indebtedness
incurred pursuant to credit facilities in existence upon the acquisition of
such  Foreign  Subsidiary;  PROVIDED  that   such  Indebtedness  meets  the
requirements of clauses (1) and (2) of this clause (g)), (h) the incurrence
by the Issuers and their respective Subsidiaries  of Indebtedness issued in
exchange  for,  or  the  proceeds of which are used to  extend,  refinance,
renew, replace or refund Indebtedness  referred  to in clauses (b), (f) and
(g) above (the "Refinancing Indebtedness"); PROVIDED, HOWEVER, that (1) the
principal  amount of such Refinancing Indebtedness  shall  not  exceed  the
principal  amount   of   Indebtedness  so  extended,  refinanced,  renewed,
replaced, substituted, or  refunded (plus the amount of reasonable expenses
incurred in connection therewith);  (2)  the Refinancing Indebtedness shall
have  a Weighted Average Life to Maturity equal  to  or  greater  than  the
Weighted  Average  Life  to  Maturity  of  the Indebtedness being extended,
refinanced,  renewed,  replaced  or  refunded;  and   (3)  the  Refinancing
Indebtedness shall be pari passu with or subordinate in right of payment to
the Indebtedness being extended, refinanced, renewed, replaced or refunded,
(i) intercompany Indebtedness between or among either Issuer  and/or any of
their respective Subsidiaries or any of them, (j) Hedging Obligations  that
are  incurred  for  the  purpose  of  fixing  or hedging currency risks, or
interest  rates  with  respect to any floating rate  Indebtedness  that  is
permitted by the terms of  this  Indenture to be outstanding. The foregoing
clauses (a) through (j) are independent  exceptions  to  the  covenant  set
forth  in  the  preceding paragraph and are additive in nature. Limitations
set forth in any  one of such clauses (a) through (j) or in the definitions
used therein shall not be applicable to any other such clauses or any other
such definitions. The Indebtedness permitted to be incurred pursuant to the
foregoing clauses (a) through (j) may be incurred pursuant to one agreement
or several agreements with one lender or several lenders.

SECTION 4.10. ASSET SALES.

      The Issuers shall  not,  and shall not permit any of their respective
Subsidiaries to, engage in any Asset  Sale,  unless (x) the Issuers or such
Subsidiary receives consideration at the time  of  such Asset Sale at least
equal to the fair market value (evidenced by a resolution  of  the Board of
Directors  set forth in an Officers' Certificate delivered to the  Trustee)
of the assets  sold  or  otherwise  disposed of and (y) at least 75% of the
consideration therefor received by the Issuers or such Subsidiary is in the
form of cash; PROVIDED, HOWEVER, that the amount of (A) any liabilities (as
shown on the Issuers' or such Subsidiary's  most recent balance sheet or in
the notes thereto) of the Issuers or any of their  respective  Subsidiaries
(other than liabilities that are by their terms subordinated to  the  Notes
or  any  guarantee  thereof) that are assumed by the transferee of any such
assets and (B) Permitted  Asset  Sale Consideration received by the Issuers
or such Subsidiary in any such Asset  Sale  shall  be deemed to be cash for
purposes of this provision.



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<PAGE>




The  Issuers  may  (a)  apply  the  Net Proceeds from such  Asset  Sale  to
permanently reduce Senior Debt of the  Issuers;  PROVIDED  that the Issuers
make  such a reduction within 365 days after any Asset Sale or  (b)  invest
the Net  Proceeds  from  such  Asset  Sale in the same or a similar line of
business as Consoltex Group was engaged in on the date of this Indenture or
in businesses reasonably related thereto:  PROVIDED  that the Issuers shall
have invested such Net Proceeds within 365 days after  such  Asset  Sale or
shall  have  commenced  and not completed or abandoned the project in which
the Board of Directors of  Consoltex  Group has determined that the Issuers
will invest such Net Proceeds and shall  have  segregated such Net Proceeds
from  the  general  funds of the Issuers and their  Subsidiaries  for  that
purpose; PROVIDED, FURTHER,  that  if  the  project  in which such Board of
Directors has determined that the Issuers will invest  such Net Proceeds is
thereafter abandoned, within 60 days after such project  is  abandoned, the
Issuers  shall  (i)  apply  the  Net  Proceeds  from  such  Asset  Sale  to
permanently  reduce  Senior  Debt  of  the  Issuers  or (ii) invest the Net
Proceeds from such Asset Sale in the same or a similar  line of business as
Consoltex  Group  was  engaged  in  on  the  date of this Indenture  or  in
businesses reasonably related thereto. Pending the final application of any
such  Net  Proceeds,  the Issuers may temporarily  reduce  Senior  Debt  or
otherwise invest such Net  Proceeds in any manner that is not prohibited by
this Indenture. Any Net Proceeds  from  the Asset Sale that are not applied
or invested as provided in the first sentence  of  this  paragraph shall be
deemed to constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds  exceeds  $10  million,  the  Issuers shall make an offer  to  all
Holders of Notes (an "Asset Sale Offer")  to purchase the maximum principal
amount of Notes that may be purchased out of  the  Excess  Proceeds,  at an
offer  price  in  cash  in  an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date fixed for the
closing  of  such  offer (the "Offered  Price"),  in  accordance  with  the
procedures set forth  in  this  Indenture. To the extent that the aggregate
amount of Notes tendered pursuant  to  an Asset Sale Offer is less than the
Excess Proceeds (a "Deficiency"), the Issuers  may  use such Deficiency for
general  corporate  purposes. If the aggregate principal  amount  of  Notes
surrendered by Holders  thereof  exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to  be  purchased  on a pro rata basis. Upon
completion of such offer to purchase, the amount of  Excess  Proceeds shall
be  reset  at zero; PROVIDED that the amount of 25 % Excess Proceeds  shall
constitute Excess  Proceeds  for  purposes  of the first offer that is made
after  the fifth anniversary of the original issuance  of  the  Notes  (the
"Fifth Anniversary").

     Notwithstanding  the  foregoing,  in  no  event  shall the Issuers use
Excess  Proceeds  to  purchase  more  than  25 % of the original  aggregate
principal  amount of Notes on or prior to the  Fifth  Anniversary.  If  the
aggregate Excess  Proceeds (disregarding any resetting to zero as described
above) resulting from Asset Sales occurring prior to the Fifth Anniversary,
less any Deficiencies  resulting  from  any offers made on or prior to such
date, exceed 25 % of the original aggregate  principal  amount of the Notes
(such excess being the "25 % Excess Proceeds"), then the Issuers shall make
an  offer at the Offered Price in accordance with the foregoing  provisions
(i) promptly  after  the  Fifth Anniversary, in the event the amount of the
25% Excess Proceeds exceeds  $10 million or (ii) at such time as the amount
of the 25% Excess Proceeds together with the Excess Proceeds received after
the Fifth Anniversary exceeds  $10  million, in the event the amount of the
25% Excess Proceeds is less than $10 million.

SECTION 4.11. TRANSACTIONS WITH AFFILIATES.

     The Issuers shall not, and shall  not  permit  any of their respective
Subsidiaries to, sell, lease, transfer or otherwise dispose  of  any of its
properties or assets to, or purchase any property or assets from,  or enter
into  any  contract,  agreement,  understanding, loan, advance or guarantee
with,  or for the benefit of, any Affiliate  (each  of  the  foregoing,  an
"Affiliate Transaction"), unless (a) such Affiliate Transaction is on terms
that are  no  less  favorable  to  the relevant corporation than those that
would  have  been  obtained in a comparable  transaction  by  the  relevant
corporation with an unrelated Person and (b)



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<PAGE>




the Issuers deliver  to  the  Trustee  (x)  with  respect  to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
payments  in excess of $5 million, a resolution of the Board  of  Directors
set forth in  an  Officers'  Certificate  certifying  that  such  Affiliate
Transaction  or  series  of  related  Affiliate  Transactions complies with
clause  (a)  above  and  such Affiliate Transaction or  series  of  related
Affiliate Transactions is  approved  by  a  majority  of  the disinterested
members  of  the  Board of Directors and (y) with respect to any  Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
payments in excess of $10 million, an opinion as to the fairness thereof to
the relevant corporation  from  a  financial  point  of  view  issued  by a
nationally   recognized  independent  appraisal  firm,  independent  public
accounting firm  or investment banking firm in Canada or the United States;
PROVIDED, HOWEVER,  that  (i)  any  employment  agreement  entered  into by
Consoltex  Group  or  any  of  its  Subsidiaries  in the ordinary course of
business and consistent with the past practice of Consoltex  Group  or such
Subsidiary,  (ii) transactions between or among Consoltex Group and/or  its
Subsidiaries,  (iii)  the  payment of reasonable fees to the Principals and
their  Affiliates in connection  with  consulting,  management,  investment
banking  or  financial  advisory  services rendered to the Issuers or their
respective Subsidiaries in an aggregate amount not to exceed $1 million per
annum, (iv) the reimbursement of reasonable  expenses of the Principals and
their  Affiliates  in  connection with consulting,  management,  investment
banking or financial advisory  services  rendered  to  the Issuers or their
respective Subsidiaries, (v) the payment of reasonable and  customary  fees
to  directors  of the Issuers and their respective Subsidiaries who are not
employees of such  entities,  (vi)  loans  or  other  advances to officers,
directors and employees for travel, entertainment, moving, other relocation
expenses (including housing loans) and other business purposes  made in the
ordinary  course  of  business  and  (vii)  transactions  permitted  by the
provisions  of  Section  4.07  hereof,  in  each  case, shall not be deemed
Affiliate Transactions.

SECTION 4.12. LIENS.

     The Issuers shall not, and shall not permit any  of  their  respective
Subsidiaries to, directly or indirectly create, incur, assume or suffer  to
exist  any Lien on any asset now owned or hereafter acquired, or any income
or profits  therefrom  or  assign  or  convey  any  right to receive income
therefrom,  except  Permitted  Liens, unless all payments  due  under  this
Indenture and the Notes are secured  on an equal and ratable basis with the
obligation so secured until such time  as  such  obligation  is  no  longer
secured by a Lien.

SECTION 4.13. ADDITIONAL GUARANTEES.

     Neither  Issuer nor any of their respective Subsidiaries shall acquire
or form a Significant  Subsidiary,  unless  the  Issuers (a) designate such
Significant Subsidiary as an Unrestricted Subsidiary  pursuant to the terms
of this Indenture or (b) cause such Significant Subsidiary  to  (i) execute
and  deliver  to the Trustee a supplemental indenture in form and substance
reasonably satisfactory  to  the Trustee pursuant to which such Significant
Subsidiary shall guarantee all  of  the  obligations  of  the  Issuers with
respect to the Notes on a senior subordinated basis and (ii) deliver to the
Trustee an Opinion of Counsel reasonably satisfactory to the Trustee to the
effect  that a supplemental indenture has been duly executed and  delivered
by such Significant  Subsidiary and is in compliance with the terms of this
Indenture; PROVIDED, HOWEVER,  that  the  Issuers  and  any  Subsidiary may
acquire  or  form  a  Foreign  Subsidiary  that is a Significant Subsidiary
without complying with the foregoing if such  Foreign  Subsidiary  is owned
directly  by  a Restricted Guarantor (PROVIDED that any Subsidiary of  such
Foreign Subsidiary need not be owned directly by a Restricted Guarantor).



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SECTION 4.14. CORPORATE EXISTENCE.

     Subject to  Article 5 hereof, the Issuers shall do or cause to be done
all things necessary  to  preserve  and  keep  in full force and effect (i)
their  respective  corporate existence, and the corporate,  partnership  or
other existence of each  of  their  respective  Subsidiaries, in accordance
with the respective organizational documents (as  the  same  may be amended
from  time  to  time) and (ii) the material rights (charter and statutory),
licenses and franchises  of  the Issuers and their respective Subsidiaries;
PROVIDED, HOWEVER, that the Issuers  shall  not be required to preserve any
such right, license or franchise, or the corporate,  partnership  or  other
existence  of any of their respective Subsidiaries if the applicable Issuer
or Subsidiary  shall  determine  that the preservation thereof is no longer
desirable  in  the  conduct of the business  of  Consoltex  Group  and  its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in
any material respect to the Holders of the Notes.

SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.

     (a) Upon the occurrence of a Change of Control, the Issuers shall make
   an offer (the "Change  of  Control  Offer")  to  each Holder of Notes to
   repurchase  all or any part (equal to US$1,000 or an  integral  multiple
   thereof) of such Holder's Notes pursuant to the offer described below at
   a purchase price  equal  to  101  %  of  the  aggregate principal amount
   thereof  plus  accrued  and  unpaid interest, if any,  to  the  date  of
   purchase (the "Change of Control Payment"). Within 40 days following any
   Change of Control, the Issuers  shall  mail  a  notice  to  each  Holder
   stating: (1) that the Change of Control Offer is being made pursuant  to
   the  covenant  entitled  "Change of Control" and that all Notes tendered
   will be accepted for payment;  (2)  the  purchase price and the purchase
   date, which shall be no earlier than 30 days nor later than 40 days from
   the date such notice is mailed (the "Change  of  Control Payment Date");
   (3)  that  any Note not tendered will continue to accrue  interest;  (4)
   that, unless the Issuers default in the payment of the Change of Control
   Payment, all  Notes  accepted  for  payment  pursuant  to  the Change of
   Control Offer shall cease to accrue interest after the Change of Control
   Payment  Date;  (5)  that  Holders  electing to have any Notes purchased
   pursuant to a Change of Control Offer  will be required to surrender the
   Notes, with the form entitled "Option of  Holder  to  Elect Purchase" on
   the  reverse  of the Notes, or similar form acceptable to  the  Trustee,
   completed, to the  Paying  Agent  at the address specified in the notice
   prior to the close of business on the  third  Business Day preceding the
   Change of Control Payment Date; (6) that Holders  will  be  entitled  to
   withdraw their election if the Paying Agent receives, not later than the
   close  of  business  on  the second Business Day preceding the Change of
   Control  Payment  Date, a telegram,  telex,  facsimile  transmission  or
   letter setting forth  the  name  of  the Holder, the principal amount of
   Notes  delivered  for  purchase, and a statement  that  such  Holder  is
   withdrawing his election  to  have  such  Notes  purchased; and (7) that
   Holders whose Notes are being purchased only in part  will be issued new
   Notes equal in principal amount to the unpurchased portion  of the Notes
   surrendered,  which  unpurchased  portion  must be equal to US$1,000  in
   principal  amount  or an integral multiple thereof.  The  Issuers  shall
   comply with the requirements  of  Rule  14e-1 under the Exchange Act and
   any other securities laws and regulations  thereunder to the extent such
   laws and regulations are applicable in connection with the repurchase of
   the Notes in connection with a Change of Control.

     (b) On the Change of Control Payment Date,  the  Issuers shall, to the
   extent lawful, (1) accept for payment Notes or portions thereof tendered
   pursuant  to the Change of Control Offer, (2) deposit  with  the  Paying
   Agent an amount equal to the Change of Control Payment in respect of all
   Notes or portions  thereof  so  tendered  and (3) deliver or cause to be
   delivered  to  the  Trustee  the  Notes  so accepted  together  with  an
   Officers' Certificate stating the Notes or  portions thereof tendered to
   the Issuers. The Paying Agent shall promptly  mail  to  each  Holder  of
   Notes  so  accepted payment in an amount equal to the purchase price for
   such Notes, and the Trustee shall promptly authenticate and mail to each
   Holder a new



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<PAGE>




   Note equal in  principal  amount to any unpurchased portion of the Notes
   surrendered, if any; PROVIDED  that  each  such  new  Note shall be in a
   principal amount of US$1,000 or an integral multiple thereof.  Prior  to
   complying  with the provisions of this covenant, but in any event within
   90 days following  a  Change  of Control, the Issuers shall either repay
   all outstanding Indebtedness of  the Issuers or the Guarantors under the
   Credit Agreement (if still in effect)  and  all other Senior Debt of the
   Issuers  or  obtain the requisite consents, if  any,  under  the  Credit
   Agreement and  all other agreements governing outstanding Senior Debt of
   the Issuers to permit  the  repurchase of Notes required by this Section
   4.15. The Issuers shall publicly  announce  the results of the Change of
   Control Offer on or as soon as practicable after  the  Change of Control
   Payment Date.

SECTION 4.16. SENIOR SUBORDINATED DEBT.

     (a) Consoltex Group and Consoltex USA shall not incur,  create, issue,
   assume,  guarantee or otherwise become liable for any Indebtedness  that
   is subordinate  or  junior  in  right  of  payment to any Senior Debt of
   Consoltex  Group  or  Consoltex USA, respectively,  and  senior  in  any
   respect in right of payment to the Notes.

     (b) No Guarantor shall  incur,  create,  issue,  assume,  guarantee or
   otherwise  become  liable  for  any indebtedness that is subordinate  or
   junior in right of payment to any  Senior  Debt  of  such  Guarantor and
   senior  in  any  respect  in  right of payment to the Guarantee by  such
   Guarantor of the Notes.

SECTION 4.17. ADDITIONAL AMOUNTS.

     All payments made by the Issuers  under  or  with respect to the Notes
shall be made free and clear of and without withholding or deduction for or
on account of any present or future tax, duty, levy,  impost, assessment or
other  governmental  charge  imposed  or  levied  by  or on behalf  of  the
Government  of  Canada or of any province or territory thereof  or  by  any
authority or agency  therein  or  thereof  having power to tax (hereinafter
"Taxes"), unless the Issuers are required to  withhold  or  deduct Taxes by
law or by the interpretation or administration thereof. If the  Issuers are
so  required  to  withhold or deduct any amount for or on account of  Taxes
from any payment made under or with respect to the Notes, the Issuers shall
pay such additional  amounts  ("Additional Amounts") as may be necessary so
that the net amount received by  each Holder (including Additional Amounts)
after such withholding or deduction  will  not  be less than the amount the
Holder would have received if such Taxes had not been withheld or deducted;
PROVIDED  that  no Additional Amounts will be payable  with  respect  to  a
payment made to a  Holder  (an  "Excluded  Holder")  (i)  with which either
Issuer does not deal at arm's length (within the meaning of  the INCOME TAX
ACT (Canada)) a the time of making such payment or (ii) which is subject to
such Taxes by reason of its being connected with Canada or any  province or
territory  thereof  otherwise  than  by  the  mere holding of Notes or  the
receipt  of  payments  thereunder. The Issuers shall  also  (i)  make  such
withholding or deduction  and  (ii)  remit  the  full  amount  deducted  or
withheld  to  the relevant authority in accordance with applicable law. The
Issuers shall furnish to the Holders of the Notes, within 30 days after the
date the payment  of any Taxes is due pursuant to applicable law, certified
copies of tax receipts  evidencing such payment by the Issuers. The Issuers
shall indemnify and hold  harmless  each  Holder  (other  than  an Excluded
Holder) and upon written request reimburse each such Holder for the  amount
of  (i)  any Taxes so levied or imposed and paid by such Holder as a result
of payments  made  under  or  with respect to the Notes, (ii) any liability
(including penalties, interest  and  expenses)  arising  therefrom  or with
respect  thereto,  and (iii) any present or future tax, duty, levy, impost,
assessment or other  governmental  charge imposed or levied with respect to
any reimbursement under clause (i) or (ii) above.



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<PAGE>




At least 30 days prior to each date  on  which  any  payment  under or with
respect  to the Notes is due and payable, if the Issuers will be  obligated
to pay Additional  Amounts  with respect to such payment, the Issuers shall
deliver to the Trustee an Officers'  Certificate stating the fact that such
Additional Amounts will be payable, the  amounts  so  payable and shall set
forth such other information necessary to enable the Trustee  to  pay  such
Additional  Amounts  to  Holders  on  the  payment  date.  Whenever in this
Indenture there is mentioned, in any context, the payment of principal (and
premium,  if  any),  redemption  price, Change of Control Payment,  Offered
Price, interest or any other amount  payable  under  or with respect to any
Note  such  mention shall be deemed to include mention of  the  payment  of
Additional Amounts provided for in this section to the extent that, in such
context, Additional  Amounts  are,  were  or  would  be  payable in respect
thereof pursuant to the provisions of this Section 4.17 and express mention
of  the  payment  of  Additional Amounts (if applicable) in any  provisions
hereof shall not be construed  as  excluding  Additional  Amounts  in those
provisions hereof where such express mention is not made (if applicable).

     The  obligations  of the Issuers under this Section 4.17 shall survive
the termination of this  Indenture  and the payment of all amounts under or
with respect to the Notes.

SECTION 4.18. AGENT FOR SERVICE; SUBMISSION TO JURISDICTION; WAIVER OF
IMMUNITIES.

     By the execution and delivery of  this  Indenture,  each  of Consoltex
Group  and  Consoltex  Inc.  (i)  acknowledges that they hereby irrevocably
designate and appoint CT Corporation  System  as  each of Consoltex Group's
and  Consoltex  Inc.'s,  as the case may be, authorized  agent  upon  which
process may be served in any  suit or proceeding arising out of or relating
to the Notes or this Indenture  that  may  be  instituted in any federal or
state  court in the State of New York or brought  under  federal  or  state
securities  laws  or  brought  by  the  Trustee  (whether in its individual
capacity or in its capacity as Trustee hereunder), and acknowledges that CT
Corporation  System  has accepted such designation,  (ii)  submits  to  the
non-exclusive  jurisdiction   of  any  such  court  in  any  such  suit  or
proceeding, and (iii) agrees that  service  of  process upon CT Corporation
System and written notice of said service to Consoltex  Group  or Consoltex
Inc., as applicable (mailed or delivered to its Corporate Secretary  at the
principal office of Consoltex Group in Montreal, Quebec, Canada), shall  be
deemed  in  every respect effective service of process upon Consoltex Group
or Consoltex  Inc.,  as applicable, in any such suit or proceeding. Each of
Consoltex Group and Consoltex  Inc.  further  agrees  to  take  any and all
action,  including  the  execution and filing of any and all such documents
and instruments, as may be  necessary  to  continue  such  designation  and
appointment  of  CT  Corporation System (or such other authorized agent for
service of process as  each  of  Consoltex  Group  and Consoltex Inc. shall
notify the Trustee in writing) in full force and effect  so  long as any of
the Notes shall be outstanding.

     To  the  extent that either Consoltex Group or Consoltex Inc.  has  or
hereafter may acquire  any  immunity from jurisdiction of any court or from
any legal process (whether through  service  of notice, attachment prior to
judgment,  attachment  in aid of execution, execution  or  otherwise)  with
respect to itself or its  property,  Consoltex  Group or Consoltex Inc., as
the case may be, hereby irrevocably waives such immunity  in respect of its
obligations under this Indenture and the Notes, to the extent  permitted by
law.

SECTION 4.19. CONVERSION OF CURRENCY.

     The  Issuers  covenant  and agree that the following provisions  shall
apply  to  conversion of currency  in  the  case  of  the  Notes  and  this
Indenture:



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<PAGE>




(a) If for the  purpose of obtaining judgment in, or enforcing the judgment
of, any court in  any  country,  it  becomes  necessary to convert into any
other currency (the "judgment currency") an amount  due  in  U.S.  dollars,
then the conversion shall be made at the rate of exchange prevailing on the
Business Day before the day on which the judgment is given or the order  of
enforcement  is  made,  as  the case may be (unless a court shall otherwise
determine).

     (b) The term "rate(s) of  exchange"  shall  mean the rate at which the
Holder or the Trustee, as the case may be, is able  or would have been able
on the relevant date to purchase at Citibank, N.A. (or if Citibank, N.A. is
no  longer  engaged  in  currency  exchange, such other money  center  bank
located in The City of New York as the Issuers and the Trustee shall agree)
U.S. dollars with the judgment currency other than U.S. dollars referred to
in subsection (a) above and includes  any  premiums  and  costs of exchange
payable.

                                 ARTICLE 5
                                SUCCESSORS

SECTION 5.01. AMALGAMATION, MERGER, CONSOLIDATION, OR SALE OF ASSETS.

     Neither of the Issuers shall amalgamate, consolidate or  merge with or
into  (whether or not such Issuer is the surviving corporation),  or  sell,
assign,   transfer,   lease,   convey   or  otherwise  dispose  of  all  or
substantially  all  of its properties or assets  in  one  or  more  related
transactions to, another  Person  unless  (i)  such Issuer is the surviving
corporation  or the Person formed by or surviving  any  such  amalgamation,
consolidation  or merger (if other than such Issuer) or to which such sale,
assignment, transfer,  lease,  conveyance  or  other disposition shall have
been made is a corporation organized or existing under (A) the federal laws
of Canada or any province thereof, or (B) the laws  of  the  United States,
any state thereof or the District of Columbia; (ii) the Person formed by or
surviving  any  such  amalgamation, consolidation or merger (if other  than
such Issuer) or the Person to which such sale, assignment, transfer, lease,
conveyance  or other disposition  will  have  been  made  assumes  all  the
obligations of  the  Issuers pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee, under the Notes and this Indenture;
(iii) immediately after  such  transaction  no  Default or Event of Default
exists; and (iv) such Issuer or any Person formed  by or surviving any such
amalgamation, consolidation or merger, or to which such  sale,  assignment,
transfer,  lease,  conveyance or other disposition will have been made  (A)
will have Consolidated  Net  Worth  (immediately  after the transaction but
prior to any purchase accounting adjustments resulting from the transaction
relating to goodwill) equal to or greater than the  Consolidated  Net Worth
of such Issuer immediately preceding the transaction and B) Consoltex Group
will,  at  the  time  of such transaction and after giving pro forma effect
thereto  as if such transaction  had  occurred  at  the  beginning  of  the
applicable  four-quarter  period,  be  permitted to incur at least $1.00 of
additional Indebtedness pursuant to the  Fixed  Charge  Coverage Ratio test
set forth in Section 4.09 hereof.

SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.

     Upon  any amalgamation, consolidation or merger, or any  sale,  lease,
conveyance or  other  disposition of all or substantially all of the assets
of either Issuer in accordance  with  Section  5.01  hereof,  the successor
corporation formed by such consolidation or into or with which an Issuer is
amalgamated  or  merged or to which such sale, lease, conveyance  or  other
disposition is made  shall succeed to, and be substituted for (so that from
and  after the date of  such  amalgamation,  consolidation,  merger.  sale,
lease,  conveyance  or  other disposition, the provisions of this Indenture
referring to such Issuer  shall  refer instead to the successor corporation
and not to such Issuer), and may exercise  every  right  and  power of such
Issuer  under  this  Indenture  with  the  same effect as if such successor
Person has been named as an



                                    39


<PAGE>




issuer  herein,  and  the  predecessor  Issuer  (if   not   the   surviving
corporation) shall be relieved from us obligations under this Indenture and
the Notes.

                                 ARTICLE 6
                           DEFAULTS AND REMEDIES

SECTION 6.01. EVENTS OF DEFAULT.

     An "Event of Default" occurs if:

     (a)  the  Issuers  default in the payment when due of interest on  the
   Notes and the default  continues for a period of 30 days (whether or not
   prohibited by the provisions of Article 12 hereof);

     (b) the Issuers default  in  the  payment  when due of principal of or
   premium,  if  any,  on  the  Notes  (whether or not  prohibited  by  the
   provisions of Article 12 hereof);

     (c) the Issuers fail to comply with Section 4.15 hereof;

     (d) the Issuers or any of the Guarantors  fail  to  observe or perform
   any other covenant, warranty or other agreement in this Indenture or the
   Notes  and  such failure continues for 60 days after written  notice  of
   such failure  shall  have been given to the Issuers by the Trustee or to
   the Issuers and the Trustee  by  Holders  of  at least 25 % in aggregate
   principal amount of the Notes then outstanding;

     (e) a default occurs under any mortgage, indenture or instrument under
   which there may be issued or by which there may  be secured or evidenced
   any Indebtedness for money borrowed by either Issuer  or  any  of  their
   respective Subsidiaries (or the payment of which is guaranteed by either
   Issuer   or   any   of   their  respective  Subsidiaries)  whether  such
   Indebtedness or guarantee  now  exists,  or is created after the date of
   this  Indenture,  which  default  results in the  acceleration  of  such
   Indebtedness prior to its express maturity or shall constitute a default
   in the payment of such issue of Indebtedness  at  final maturity of such
   issue and the principal amount of any such Indebtedness,  together  with
   the  principal  amount  of  any  other such Indebtedness the maturity of
   which has been so accelerated or which  has  not  been paid at maturity,
   aggregates $10 million or more;

     (f)  Consoltex  Group or any of its Subsidiaries fails  to  pay  final
   judgments aggregating  in excess of $10 million, which judgments are not
   satisfied or stayed for a period of 60 consecutive days;

     (g) either Issuer or any  of their respective Subsidiaries pursuant to
   or within the meaning of Bankruptcy Law:

          (i) commences a voluntary case;

          (ii) consents to the entry  of  an order for relief against it in
             an involuntary case;



                                    40


<PAGE>




             (iii) consents to the appointment  of a Custodian of it or for
             all or substantially all of its property; or

          (iv) makes a general assignment for the benefit of its creditors;

     (h) a court of competent jurisdiction enters  an order or decree under
   any Bankruptcy Law, which order or decree remains in effect and unstayed
   for 60 consecutive days, that:

          (i) is for relief against either of the Issuers  or  any of their
             respective Subsidiaries in an involuntary case;

          (ii)  appoints  a  Custodian  of  either  Issuer  or any of their
             respective Subsidiaries or for all or substantially all of the
             property   of   either  Issuer  or  any  of  their  respective
             Subsidiaries; or

          (iii) orders the liquidation  of  either  Issuer  or any of their
             respective Subsidiaries; or

     (i) except as permitted by this Indenture, any Guarantee shall be held
   in a judicial proceeding to be unenforceable or invalid or  shall  cease
   for  any  reason to be in full force and effect or any Guarantor, or any
   Person acting  on  behalf  of any Guarantor, shall deny or disaffirm its
   obligations under the Guarantee  of  such  Guarantor  and such condition
   shall  have  continued for a period of 60 days after written  notice  of
   such failure requiring  the relevant Guarantor and the Issuers to remedy
   the same shall have been  given  to the Issuers by the Trustee or to the
   Issuers  and the Trustee by Holders  of  at  least  25  %  in  aggregate
   principal amount of the Notes then outstanding.

SECTION 6.02. ACCELERATION.

      If any  Event of Default (other than an Event of Default specified in
clause (g) or (h)  of  Section 6.01 hereof with respect to either Issuer or
any of their respective Subsidiaries) occurs and is continuing, the Trustee
or the Holders of at least  25%  in  aggregate principal amount of the then
outstanding  Notes  may  declare  all the  Notes  to  be  due  and  payable
immediately; PROVIDED, that so long  as  any  Indebtedness  permitted to be
incurred  pursuant  to  clause (a) of the second paragraph of Section  4.09
hereof shall be outstanding, such acceleration shall not be effective until
the earlier of (i) an acceleration under any such Indebtedness or (ii) five
Business Days after receipt  by  the  Issuers  and  the  agent  (or, in the
absence of such agent, the lender) under the Credit Agreement (so  long  as
any  Indebtedness  is  outstanding  thereunder)  of  written notice of such
acceleration of the Notes. Notwithstanding the foregoing,  if  an  Event of
Default  specified in clause (g) or (h) of Section 6.01 hereof occurs  with
respect to  either  Issuer  or  any  of  their  respective Subsidiaries all
outstanding  Notes  shall  be due and payable immediately  without  further
action or notice. The Holders  of  a majority in aggregate principal amount
of the then outstanding Notes by written  notice  to  the  Trustee  may  on
behalf  of  all of the Holders rescind an acceleration and its consequences
(including the  related  payment  default)  if  the  rescission  would  not
conflict  with any judgment or decree and if all existing Events of Default
(except nonpayment  of  principal,  interest  or  premium, if any, that has
become due solely because of the acceleration) have been cured or waived.



                                    41


<PAGE>




SECTION 6.03. OTHER REMEDIES.

     If  an  Event  of Default occurs and is continuing,  the  Trustee  may
pursue any available  remedy  to collect the payment of principal, premium,
if any, and interest on the Notes  or  to  enforce  the  performance of any
provision of the Notes or this Indenture.

     The Trustee may maintain a proceeding even if it does  not possess any
of the Notes or does not produce any of them in the proceeding.  A delay or
omission by the Trustee or any Holder of a Note in exercising any  right or
remedy  accruing  upon  an  Event of Default shall not impair the right  or
remedy or constitute a waiver  of  or acquiescence in the Event of Default.
All remedies are cumulative to the extent permitted by law.

SECTION 6.04. WAIVER OF PAST DEFAULTS.

     Holders of not less than a majority  in  aggregate principal amount of
the then outstanding Notes by notice to the Trustee  may  on  behalf of the
Holders of all of the Notes waive an existing Default or Event  of  Default
and  its  consequences, except a continuing Default or Event of Default  in
the payment  of  the  principal  of,  premium,  if any, or interest on, the
Notes. Upon any such waiver, such Default shall cease  to  exist,  and  any
Event  of  Default arising therefrom shall be deemed to have been cured for
every purpose  of  this  Indenture;  but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.

SECTION 6.05. CONTROL BY MAJORITY.

     Holders of a majority in principal  amount  of  the  then  outstanding
Notes  may  direct  the time, method and place of conducting any proceeding
for exercising any remedy  available to the Trustee or exercising any trust
or power conferred on it. However,  the  Trustee  may  refuse to follow any
direction  that  conflicts  with  law or this Indenture, that  the  Trustee
determines may be unduly prejudicial  to  the  rights  of  other Holders of
Notes or that may involve the Trustee in personal liability.

SECTION 6.06. LIMITATION ON SUITS.

     A Holder of a Note may pursue a remedy with respect to  this Indenture
or the Notes only if:

     (a)  the  Holder  of a Note gives to the Trustee written notice  of  a
   continuing Event of Default;

     (b) the Holders of  at  least  25  %  in  principal amount of the then
   outstanding Notes make a written request to the  Trustee  to  pursue the
   remedy;

     (c) such Holder of a Note or Holders of Notes offer and, if requested,
   provide to the Trustee indemnity satisfactory to the Trustee against any
   loss, liability or expense;

     (d) the Trustee does not comply with the request within 60 days  after
   receipt of the request and the offer and, if requested, the provision of
   indemnity; and

     (e)  during  such 60-day period the Holders of a majority in principal
   amount of the then outstanding Notes do not give the Trustee a direction
   inconsistent with the request.



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<PAGE>




A Holder of a Note  may  not  use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.

SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.

     Notwithstanding any other  provision  of  this Indenture, the right of
any Holder of a Note to receive payment of principal,  premium, if any, and
interest on the Note, on or after the respective due dates expressed in the
Note or the Registration Rights Agreement, as the case may  be, or to bring
suit  for  the enforcement of any such payment on or after such  respective
dates, shall  not  be  impaired  or  affected  without  the consent of such
Holder.

SECTION 6.08. COLLECTION SUIT BY TRUSTEE.

     If an Event of Default specified in Section 6.01(a)  or (b) occurs and
is  continuing, the Trustee is authorized to recover judgment  in  its  own
name  and  as  trustee  of  an  express  trust  against  the Issuers or any
Guarantor  for  the  whole  amount  of principal of, premium, if  any,  and
interest remaining unpaid on the Notes  and  interest  on overdue principal
and,  to the extent lawful, interest and such further amount  as  shall  be
sufficient  to  cover  the  costs and expenses of collection, including the
reasonable  compensation,  expenses,  disbursements  and  advances  of  the
Trustee, its agents and counsel.

SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.

     The Trustee is authorized  to  file  such  proofs  of  claim and other
papers or documents as may be necessary or advisable in order  to  have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses,  disbursements  and  advances  of  the  Trustee,  its  agents and
counsel)  and  the Holders of the Notes allowed in any judicial proceedings
relative to the  Issuers  (or  any  other  obligor  upon  the  Notes),  its
creditors  or  its property and shall be entitled and empowered to collect,
receive and distribute  any  money or other property payable or deliverable
on any such claims and any custodian  in  any  such  judicial proceeding is
hereby authorized by each Holder to make such payments  to the Trustee, and
in the event that the Trustee shall consent to the making  of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable  compensation,  expenses,  disbursements  and  advances  of  the
Trustee,  its  agents  and counsel, and any other amounts due  the  Trustee
under Section 7.07 hereof.  To  the  extent  that  the  payment of any such
compensation,  expenses,  disbursements  and advances of the  Trustee,  its
agents and counsel, and any other amounts  due  the  Trustee  under Section
7.07 hereof out of the estate in any such proceeding, shall be  denied  for
any reason, payment of the same shall be secured by a Lien on, and shall be
paid  out  of,  any and all distributions, dividends, money, securities and
other properties  that  the Holders of the Notes may be entitled to receive
in  such  proceeding  whether   in   liquidation   or  under  any  plan  of
reorganization or arrangement or otherwise. Nothing  herein contained shall
be deemed to authorize the Trustee to authorize or consent  to or accept or
adopt  on  behalf  of  any  Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holders,
or to authorize the Trustee to  vote in respect of the claim of any Holder,
in any such proceeding.

SECTION 6.10. PRIORITIES.

     If the Trustee collects any  money  pursuant to this Article, it shall
pay out the money in the following order:



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<PAGE>




First:  to  the Trustee, its agents and attorneys  for  amounts  due  under
Section 7.07  hereof,  including  payment  of all compensation, expense and
liabilities incurred, and all advances made,  by  the Trustee and the costs
and expenses of collection;

     SECOND: to the holders of Senior Debt of the Issuers  or  a Guarantor,
as the case may be, to the extent required by Article 12;

     THIRD: to Holders of Notes for amounts due and unpaid on the Notes for
principal,  premium,  if any, and interest, ratably, without preference  or
priority of any kind, according to the amounts due and payable on the Notes
for principal, premium, if any, and interest, respectively; and

     FOURTH: to the Issuers  or  to  such  party  as  a  court of competent
jurisdiction shall direct.

     The  Trustee  may  fix  a  record date and payment date for  any  such
payment to Holders of Notes.

SECTION 6.11. UNDERTAKING FOR COSTS.

     In any suit for the enforcement  of  any  right  or  remedy under this
Indenture  or  in  any  suit  against the Trustee for any action  taken  or
omitted by it as a Trustee, a court  in  its  discretion  may  require  the
filing by any party litigant in the suit of an undertaking to pay the costs
of  the  suit, and the court in its discretion may assess reasonable costs,
including  reasonable  attorneys'  fees,  against any party litigant in the
suit,  having due regard to the merits and good  faith  of  the  claims  or
defenses  made by the party litigant. This Section does not apply to a suit
by the Trustee,  a  suit  by  a  Holder  of a Note pursuant to Section 6.07
hereof, or a suit by Holders of more than 10% in aggregate principal amount
of the then outstanding Notes.

                                 ARTICLE 7
                                  TRUSTEE

SECTION 7.01. DUTIES OF TRUSTEE.

     (a) If an Event of Default has occurred and is continuing, the Trustee
   shall  exercise  such of the rights and powers  vested  in  it  by  this
   Indenture, and use  the same degree of care and skill in their exercise,
   as a prudent man would  exercise  or  use under the circumstances in the
   conduct of his own affairs.

     (b) Except during the continuance of an Event of Default:

          (i) the duties of the Trustee shall  be  determined solely by the
             express  provisions  of this Indenture and  the  Trustee  need
             perform only those duties  that  are specifically set forth in
             this  Indenture and no others, and  no  implied  covenants  or
             obligations  shall  be  read  into  this Indenture against the
             Trustee; and

          (ii) in the absence of bad faith on its  part,  the  Trustee  may
             conclusively  rely,  as to the truth of the statements and the
             correctness   of   the  opinions   expressed   therein,   upon
             certificates  or  opinions   furnished   to  the  Trustee  and
             conforming to the requirements of this Indenture. However, the
             Trustee shall examine the



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             certificates  and opinions to determine whether  or  not  they
             conform to the requirements of this Indenture.

     (c) The Trustee may not  be  relieved  from  liabilities  for  its own
   negligent  action,  its own negligent failure to act, or its own willful
   misconduct, except that:

          (i) this paragraph  does not limit the effect of paragraph (b) of
             this Section:

          (ii) the Trustee shall  not  be  liable for any error of judgment
             made  in good faith by a Responsible  Officer,  unless  it  is
             proved  that  the  Trustee  was  negligent in ascertaining the
             pertinent facts; and

          (iii) the Trustee shall not be liable  with respect to any action
             it takes or omits to take in good faith  in  accordance with a
             direction received by it pursuant to Section 6.05 hereof.

     (d) Whether or not therein expressly so provided, every  provision  of
   this  Indenture  that  in  any  way relates to the Trustee is subject to
   paragraphs (a), (b), and (c) of this Section.

     (e) No provision of this Indenture shall require the Trustee to expend
   or risk its own funds or incur any liability. The Trustee shall be under
   no  obligation to exercise any of  its  rights  and  powers  under  this
   Indenture  at  the  request of any Holder, unless such Holder shall have
   offered to the Trustee security and indemnity satisfactory to it against
   any loss, liability or expense.

     (f) The Trustee shall not be liable for interest on any money received
   by it except as the Trustee may agree in writing with the Issuers. Money
   held in trust by the  Trustee  need  not  be segregated from other funds
   except to the extent required by law.

SECTION 7.02. RIGHTS OF TRUSTEE.

     (a) The Trustee may conclusively rely upon any document believed by it
   to be genuine and to have been signed or presented by the proper Person.
   The  Trustee  need  not investigate any fact or  matter  stated  in  the
   document.

     (b) Before the Trustee acts or refrains from acting, it may require an
   Officers' Certificate  or  an  Opinion  of  Counsel or both. The Trustee
   shall not be liable for any action it takes or  omits  to  take  in good
   faith  in  reliance on such Officers' Certificate or Opinion of Counsel.
   The Trustee  may  consult with counsel and the advice of such counsel or
   any Opinion of Counsel  shall  be  full  and  complete authorization and
   protection from liability in respect of any action  taken,  suffered  or
   omitted by it hereunder in good faith and in reliance thereon.

     (c) The Trustee may act through its attorneys and agents and shall not
   be  responsible  for the misconduct or negligence of any agent appointed
   with due care.

     (d) The Trustee  shall  not be liable for any action it takes or omits
   to take in good faith that  it  believes  to be authorized or within the
   rights or powers conferred upon it by this Indenture.



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<PAGE>




   (e)  Unless  otherwise  specifically provided  in  this  Indenture,  any
   demand, request, direction or notice from either Issuer or any Guarantor
   shall be sufficient if signed  by  an  Officer  of  such  Issuer or such
   Guarantor.

     (f) The Trustee shall be under no obligation to exercise  any  of  the
   rights  or  powers  vested  in  it  by  this Indenture at the request or
   direction of any of the Holders unless such  Holders  shall have offered
   to  the  Trustee  reasonable  security or indemnity against  the  costs,
   expenses and liabilities that might be incurred by it in compliance with
   such request or direction.

     (g) Except with respect to Section  4.01,  the  Trustee  shall have no
   duty  to  inquire  as  to  the performance of the Issuers' covenants  in
   Article 4 hereof. In addition,  the  Trustee shall not be deemed to have
   knowledge of any Default or Event of Default  except  (i)  any  Event of
   Default  occurring pursuant to Sections 6.01(a) (except with respect  to
   interest constituting  Liquidated  Damages under the Registration Rights
   Agreement), 6.01(b) and 4.01, or (ii) any Default or Event of Default of
   which the Trustee shall have received  written  notification or obtained
   actual knowledge.

SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.

     The  Trustee in its individual or any other capacity  may  become  the
owner or pledgee  of Notes and may otherwise deal with either Issuer or any
Affiliate of either  Issuer  with  the same rights it would have if it were
not  Trustee.  However,  in  the  event  that   the  Trustee  acquires  any
conflicting interest it must eliminate such conflict  within 90 days, apply
to the SEC for permission to continue as trustee or resign.  Any  Agent may
do  the  same  with like rights and duties. The Trustee is also subject  to
Sections 7.10 and 7.11 hereof.

SECTION 7.04. TRUSTEE'S DISCLAIMER.

     The Trustee  shall  not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not
be accountable for the Issuers'  use  of the proceeds from the Notes or any
money  paid  to  the  Issuers  or  upon the Issuers'  direction  under  any
provision of this Indenture, it shall  not  be  responsible  for the use or
application  of  any  money  received  by  any Paying Agent other than  the
Trustee,  and  it shall not be responsible for  any  statement  or  recital
herein or any statement  in  the  Notes or any other document in connection
with the sale of the Notes or pursuant  to  this  Indenture  other than its
certificate of authentication.

SECTION 7.05. NONE OF DEFAULTS.

     If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes  a  notice
of  the  Default or Event of Default within 90 days after it occurs. Except
in the case  of  a  Default or Event of Default in payment of principal of,
premium, if any, or interest  on  any  Note,  the  Trustee may withhold the
notice if and so long as a committee of its Responsible  Officers  in  good
faith  determines  that  withholding  the notice is in the interests of the
Holders of the Notes.

SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.

     Within 60 days after each May 15 beginning  with  the May 15 following
the date of this Indenture, the Trustee shall mail to the  Holders  of  the
Notes a brief report dated as of such reporting date that complies with TIA
313(a)  (but  if  no event described in TIA 313(a) has
occurred within the twelve



                                    46


<PAGE>




months preceding the reporting  date,  no  report need be transmitted). The
Trustee also shall comply with TIA 313(b)(2).  The Trustee shall
also transmit by mail all reports as required by TIA 313(c).

     A  copy  of each report at the time of its mailing to the  Holders  of
Notes shall be  mailed to the issuers and filed with the SEC and each stock
exchange on which  the  Notes are listed. The Issuers shall promptly notify
the Trustee when the Notes are listed on any stock exchange.

SECTION 7.07. COMPENSATION AND INDEMNITY.

     The Issuers shall pay  to  the  Trustee  from  time to time reasonable
compensation for its acceptance of this Indenture and  services  hereunder.
The  Trustee's compensation shall not be limited by any law on compensation
of a trustee  of  an express trust. The Issuers shall reimburse the Trustee
promptly  upon request  for  all  reasonable  disbursements,  advances  and
expenses incurred  or  made  by  it in addition to the compensation for its
services.  Such  expenses  shall  include   the   reasonable  compensation,
disbursements and expenses of the Trustee's agents and counsel.

     The Issuers shall indemnify the Trustee against  any  and  all losses,
liabilities or expenses incurred by it arising out of or in connection with
the acceptance or administration of its duties under this Indenture without
negligence  or bad faith on its part. The Trustee shall notify the  Issuers
promptly of any  claim  for  which  it  may  seek indemnity. Failure by the
Trustee to so notify the Issuers shall not relieve  the  Issuers  of  their
obligations  hereunder.  The Issuers shall defend the claim and the Trustee
shall cooperate in the defense.  The  Trustee may have separate counsel and
the Issuers shall pay the reasonable fees and expenses of such counsel. The
Issuers need not pay for any settlement  made  without their consent, which
consent shall not be unreasonably withheld.

     The obligations of the Issuers under this Section  7.07  shall survive
the satisfaction and discharge of this Indenture.

     To  secure  the  Issuers'  payment  obligations  in this Section,  the
Trustee shall have a Lien prior to the Notes on all money  or property held
or  collected  by the Trustee, except that held in trust to pay  principal,
premium, if any,  and interest on particular Notes. Such Lien shall survive
the satisfaction and discharge of this Indenture.

     When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and
the compensation for  the  services (including the fees and expenses of its
agents and counsel) are intended  to  constitute expenses of administration
under any Bankruptcy Law.

SECTION 7.08. REPLACEMENT OF TRUSTEE.

     A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance
of appointment as provided in this Section.

     The Trustee may resign in writing  at  any time and be discharged from
the trust hereby created by so notifying the  Issuers.  The  Holders  of  a
majority  in  aggregate  principal amount of the then outstanding Notes may
remove the Trustee by so notifying  the Trustee and the Issuers in writing.
The Issuers may remove the Trustee if:

     (a) the Trustee fails to comply with Section 7.10 hereof;



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<PAGE>




   (b) the Trustee is adjudged a bankrupt  or  an insolvent or an order for
   relief is entered with respect to the Trustee under any Bankruptcy Law;

     (c) a Custodian or public officer takes charge  of  the Trustee or its
   property; or

     (d) the Trustee becomes incapable of acting.

     If  the Trustee resigns or is removed or if a vacancy  exists  in  the
office of  Trustee  for  any  reason,  the Issuers shall promptly appoint a
successor  Trustee.  Within  one year after  the  successor  Trustee  takes
office,  the  Holders  of  a majority  in  principal  amount  of  the  then
outstanding Notes may appoint  a successor Trustee to replace the successor
Trustee appointed by the Issuers.

     If a successor Trustee does  not  take office within 60 days after the
retiring Trustee resigns or is removed,  the retiring Trustee, the Issuers,
or the Holders of at least 10% in aggregate  principal  amount  of the then
outstanding Notes may petition any court of competent jurisdiction  for the
appointment of a successor Trustee.

     If the Trustee, after written request by any Holder of a Note who  has
been  a  Holder  of  a  Note  for at least six months, fails to comply with
Section 7.10, such Holder of a  Note  may  petition  any court of competent
jurisdiction  for  the  removal  of  the Trustee and the appointment  of  a
successor Trustee.

     A  successor  Trustee  shall  deliver  a  written  acceptance  of  its
appointment to the retiring Trustee  and  to  the  Issuers.  Thereupon, the
resignation or removal of the retiring Trustee shall become effective,  and
the  successor  Trustee shall have all the rights, powers and duties of the
Trustee under this  Indenture. The successor Trustee shall mail a notice of
its succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property  held  by  it  as  Trustee  to the successor Trustee,
PROVIDED all sums owing to the Trustee hereunder have been paid and subject
to   the   Lien  provided  for  in  Section  7.07  hereof.  Notwithstanding
replacement  of  the  Trustee  pursuant  to this Section 7.08, the Issuers'
obligations under Section 7.07 hereof shall continue for the benefit of the
retiring Trustee.

SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.

     If the Trustee consolidates, merges or converts into, or transfers all
or  substantially  all  of  its  corporate  trust   business   to,  another
corporation, the successor corporation without any further act shall be the
successor Trustee.

SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.

     There  shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America
or of any state  thereof  that  is  authorized  under such laws to exercise
corporate trustee power, that is subject to supervision  or  examination by
federal or state authorities and that has a combined capital and surplus of
at  least  $25  million  as  set forth in its most recent published  annual
report of condition.

     This  Indenture  shall  always   have  a  Trustee  who  satisfies  the
requirements  of TIA 310(a)(1),  (2)  and  (5).  The  Trustee  is
subject to TIA 310(b).



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<PAGE>




SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUERS.

     The Trustee is subject to TIA 311(a), excluding any creditor
relationship listed  in TIA  311(b). A Trustee who has resigned or
been removed shall be  subject  to  TIA  311  (a)  to the extent
indicated therein.

                                 ARTICLE 8
               LEGAL DEFEASANCE AND COVENANT DEFEASANCE AND
                  SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.

     The Issuers may, at the option of their Boards of Directors  evidenced
by  a  resolution  set  forth  in  an  Officers' Certificate of each of the
Issuers, at any time, elect to have either  Section  8.02 or 8.03 hereof be
applied to all outstanding Notes upon compliance with  the  conditions  set
forth below in this Article Eight.

SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.

     Upon  the  Issuers'  exercise  under Section 8.01 hereof of the option
applicable to this Section 8.02, the  Issuers  (as  well as the Guarantors)
shall, subject to the satisfaction of the conditions  set  forth in Section
8.04 hereof, be deemed to have been discharged from their obligations  with
respect to all outstanding Notes on the date the conditions set forth below
are  satisfied  (hereinafter,  "LEGAL DEFEASANCE"). For this purpose, Legal
Defeasance  means  that the Issuers  shall  be  deemed  to  have  paid  and
discharged the entire  Indebtedness  represented  by the outstanding Notes,
which shall thereafter be deemed to be "outstanding"  only for the purposes
of Section 8.05 hereof and the other Sections of this Indenture referred to
in  (a)  and  (b) below, and to have satisfied all their other  obligations
under such Notes  and  this Indenture (and the Trustee, on demand of and at
the expense of the Issuers,  shall execute proper instruments acknowledging
the same), except for the following  provisions  which  shall survive until
otherwise terminated or discharged hereunder: (a) the rights  of Holders of
outstanding  Notes  to  receive  solely  from  the trust fund described  in
Section 8.04 hereof, and as more fully set forth  in such Section, payments
in respect of the principal of, premium, if any, and interest on such Notes
when such payments are due, (b) the Issuers' obligations  with  respect  to
such  Notes  under  Article  Two  and  Section 4.02 hereof, (c) the rights,
powers, trusts, duties and immunities of  the  Trustee  hereunder  and  the
Issuers'  obligations  in  connection therewith and (d) this Article Eight.
Subject to compliance with this  Article  Eight,  the  Issuers may exercise
their option under this Section 8.02 notwithstanding the  prior exercise of
its option under Section 8.03 hereof.

SECTION 8.03. COVENANT DEFEASANCE.

     Upon  the  Issuers' exercise under Section 8.01 hereof of  the  option
applicable to this  Section  8.03,  the Issuers (as well as the Guarantors)
shall, subject to the satisfaction of  the  conditions set forth in Section
8.04  hereof,  be  released  from  their obligations  under  the  covenants
contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16,
4.17 and Article Five hereof with respect  to  the outstanding Notes on and
after the date the conditions set forth below are  satisfied  (hereinafter,
"COVENANT  DEFEASANCE"),  and  the  Notes  shall  thereafter be deemed  not
"outstanding"  for  the  purposes  of  any  direction, waiver,  consent  or
declaration  or act of Holders (and the consequences  of  any  thereof)  in
connection  with   such   covenants,   but  shall  continue  to  be  deemed
"outstanding" for all other purposes



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<PAGE>




hereunder  (it  being  understood  that such  Notes  shall  not  be  deemed
outstanding  for accounting purposes).  For  this  purpose,  such  Covenant
Defeasance means  that,  with respect to the outstanding Notes, the Issuers
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly,  by  reason of any  reference  elsewhere  herein  to  any  such
covenant or by reason  of  any  reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall
not constitute a Default or an Event  of Default under Section 6.01 hereof,
but, except as specified above, the remainder  of  this  Indenture and such
Notes shall be unaffected thereby. In addition, upon the Issuers'  exercise
under  Section  8.01  hereof of the option applicable to this Section 8.03,
subject to the satisfaction  of  the  conditions  set forth in Section 8.04
hereof,  Sections  6.01(c), 6.01(d), 6.01(e), 6.01(f)  and  6.01(i)  hereof
shall not constitute Events of Default.

SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.

     The following shall  be  the  conditions  to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:

     In order to exercise either Legal Defeasance or Covenant Defeasance:

     (a) the Issuers must irrevocably deposit with  the  Trustee, in trust,
   for  the  benefit  of  the  Holders,  cash  in  United  States  dollars,
   non-callable  Government  Securities, or a combination thereof, in  such
   amounts as will be sufficient, in the opinion of a nationally recognized
   firm  of  independent public  accountants,  to  pay  the  principal  of,
   premium, if  any,  and  interest  on  the  Notes  on the stated date for
   payment thereof or on the applicable redemption date,  as  the  case may
   be,  of such principal or installment of principal of, premium, if  any,
   or interest on the Notes;

     (b)  in the case of an election under Section 8.02 hereof, the Issuers
   shall have  delivered to the Trustee an Opinion of Counsel in the United
   States reasonably  acceptable  to  the  Trustee  confirming that (A) the
   Issuers have received from, or there has been published by, the Internal
   Revenue Service a ruling or (B) since the date of  this Indenture, there
   has been a change in the applicable federal income tax  law,  in  either
   case to the effect that, and based thereon such Opinion of Counsel shall
   confirm  that,  the Holders of the Notes will not recognize income, gain
   or loss for federal  income  tax  purposes  as  a  result  of such Legal
   Defeasance  and  will  be  subject  to  federal  income tax on the  same
   amounts, in the same manner and at the same times as would have been the
   case if such Legal Defeasance had not occurred;

     (c) in the case of an election under Section 8.03  hereof, the Issuers
   shall have delivered to the Trustee an Opinion of Counsel  in the United
   States reasonably acceptable to the Trustee confirming that  the Holders
   of  the  outstanding  Notes will not recognize income, gain or loss  for
   federal income tax purposes  as a result of such Covenant Defeasance and
   will be subject to federal income  tax  on the same amounts, in the same
   manner  and  at  the same times as would have  been  the  case  if  such
   Covenant Defeasance had not occurred;

     (d)  in the case of an election under Section 8.02 or 8.03 hereof, the
   Issuers shall have  delivered  to  the  Trustee an Opinion of Counsel in
   Canada reasonably acceptable to the Trustee  confirming  that Holders of
   the  outstanding  Notes  will  not  recognize  income, gain or loss  for
   Canadian federal or provincial income tax purposes  as  a result of such
   Legal Defeasance or Covenant Defeasance, as the case may be, and will be
   subject to Canadian federal or provincial



                                    50


<PAGE>




   income tax on the same amounts, in the same manner and at the same times
   as  would  have  been  the  case  if  such  Legal Defeasance or Covenant
   Defeasance, as the case may be, had not occurred;

     (e)  no  Default  or  Event  of  Default shall have  occurred  and  be
   continuing on the date of such deposit (other than a Default or Event of
   Default resulting from the incurrence  of  Indebtedness all or a portion
   of the proceeds of which will be used to defease  the  Notes pursuant to
   this  Article  Eight  concurrently with such incurrence) or  insofar  as
   Sections 6.01(g) and 6.01(h)  hereof  are  concerned, at any time in the
   period ending on the 91st day after the date of such deposit;

     (f) such Legal Defeasance or Covenant Defeasance shall not result in a
   breach  or  violation  of,  or  constitute a default  under  the  Credit
   Agreement  (if  then  in effect) or  any  other  material  agreement  or
   instrument (other than  this  Indenture) to which Consoltex Group or any
   of its Subsidiaries is a party or by which Consoltex Group or any of its
   Subsidiaries is bound;

     (g) the Issuers shall have delivered  to  the  Trustee  an  Opinion of
   Counsel  to  the  effect that after the 91st day following deposit,  the
   trust funds shall not be subject to the effect of any Bankruptcy Law;

     (h) the Issuers shall  have  delivered  to  the  Trustee  an Officers'
   Certificate  stating  that the deposit was not made by the Issuers  with
   the intent of preferring  the  Holders  over  any other creditors of the
   Issuers  or  with  the  intent  of  defeating,  hindering,  delaying  or
   defrauding any other creditors of the Issuers; and

     (i)  the  Issuers  shall  have delivered to the Trustee  an  Officers'
   Certificate and an Opinion of  Counsel, each stating that all conditions
   precedent  provided for or relating  to  the  Legal  Defeasance  or  the
   Covenant Defeasance have been complied with.

SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.

     Subject to  Section 8.06 hereof, all money and non-callable Government
Securities (including  the proceeds thereof) deposited with the Trustee (or
other qualifying trustee,  collectively  for purposes of this Section 8.05,
the  "Trustee")  pursuant  to  Section  8.04  hereof   in  respect  of  the
outstanding  Notes shall be held in trust and applied by  the  Trustee,  in
accordance with  the  provisions  of  such Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Issuers
or a Guarantor acting as Paying Agent) as the Trustee may determine, to the
Holders of such Notes of all sums due and  to become due thereon in respect
of principal, premium, if any, and interest,  but  such  money  need not be
segregated from other funds except to the extent required by law.

     The Issuers shall pay and indemnify the Trustee against any  tax,  fee
or  other  charge  imposed  on or assessed against the cash or non-callable
Government Securities deposited  pursuant  to  Section  8.04  hereof or the
principal and interest received in respect thereof other than any such tax,
fee or other charge which by law is for the account of the Holders  of  the
outstanding Notes.

     Anything  in  this  Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay  to  the  Issuers  from  time to time upon the
Issuers' request any money or non-callable Government Securities held by it
as provided in Section 8.04 hereof which, in the opinion  of  a  nationally
recognized



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<PAGE>




firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered  under
Section  8.04(a)  hereof),  are  in excess of the amount thereof that would
then be required to be deposited to  effect  an equivalent Legal Defeasance
or Covenant Defeasance.

SECTION 8.06. REPAYMENT TO ISSUERS.

     Any money deposited with the Trustee or any Paying Agent, or then held
by the Issuers, in trust for the payment of the  principal  of, premium, if
any,  or interest on any Note and remaining unclaimed for two  years  after
such principal, and premium, if any, or interest has become due and payable
shall be  paid  to  the  Issuers  on  their request or (if then held by the
Issuers) shall be discharged from such  trust:  and the Holder of such Note
shall  thereafter,  as  an unsecured general creditor,  look  only  to  the
Issuers for payment thereof,  and  all  liability  of  the  Trustee or such
Paying  Agent  with respect to such trust money, and all liability  of  the
Issuers as trustee  thereof, shall thereupon cease; PROVIDED, HOWEVER, that
the Trustee or such Paying  Agent,  before  being required to make any such
repayment, may at the expense of the Issuers cause to be published once, in
THE NEW YORK TIMES and THE WALL STREET JOURNAL  (national  edition), notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such notification  or
publication,  any  unclaimed  balance  of such money then remaining will be
repaid to the Issuers.

SECTION 8.07. REINSTATEMENT.

     If the Trustee or Paying Agent is unable  to  apply  any United States
dollars  or non-callable Government Securities in accordance  with  Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment
of any court  or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Issuers' obligations (as well as the
obligations of  the Guarantors) under this Indenture and the Notes shall be
revived and reinstated  as  though  no  deposit  had  occurred  pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying  Agent
is  permitted  to  apply  all such money in accordance with Section 8.02 or
8.03 hereof, as the case may  be;  PROVIDED,  HOWEVER, that, if the Issuers
make any payment of principal of, premium, if any,  or interest on any Note
following  the  reinstatement  of  its  obligations, the Issuers  shall  be
subrogated  to the rights of the Holders of  such  Notes  to  receive  such
payment from the money held by the Trustee or Paying Agent.

SECTION 8.08. SATISFACTION AND DISCHARGE OF INDENTURE.

     This indenture  shall, upon the receipt by the Trustee of an Officers'
Certificate, cease to  be  of further effect (except as to surviving rights
of registration of transfer  or exchange of Notes herein expressly provided
for) and the Trustee, on demand of and at the expense of the Issuers, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when

     (a)  all  Notes  not  theretofore   delivered   to   the  Trustee  for
   cancellation

          (i) have become due and payable, or

          (ii) will become due and payable at their stated  maturity within
             one year, or

          (iii)  are  to  be  called  for redemption within one year  under
             arrangements satisfactory  to  the  Trustee  for the giving of
             notice of redemption by the Trustee in the name,  and  at  the
             expense, of the Issuers,



                                    52


<PAGE>




   and  the  Issuers,  in  the  case  of  (i),  (ii)  or  (iii) above, have
   irrevocably  deposited  or  caused to be deposited with the  Trustee  as
   trust funds in trust for the  purpose (provided that (x) Article 12 does
   not then prohibit the Issuers from  making  or  causing  to  be made any
   payments  in  respect  of principal of or interest on the Notes and  (y)
   such deposit does not result  in a breach or violation of, or constitute
   a default under, this Indenture  or  any  other  material  agreement  or
   instrument to which either Issuer is a party or by which it is bound) an
   amount  sufficient  to pay and discharge the entire Indebtedness on such
   Notes not theretofore  delivered  to  the  Trustee for cancellation, for
   principal (and premium, if any) and interest to the date of such deposit
   (in  the case of Notes which have become due  and  payable)  or  to  the
   stated maturity or redemption date, as the case may be;

     (b)  the Issuers have paid or caused to be paid all other sums payable
   hereunder by the Issuers; and

     (c) the Issuers have delivered to the Trustee an Officers' Certificate
   and an Opinion  of  Counsel  each  stating that all conditions precedent
   herein provided for relating to the  satisfaction  and discharge of this
   Indenture have been complied with.

     Notwithstanding the satisfaction and discharge of  this Indenture, the
obligations  of  the  Issuers  to  the Trustee under Section 7.07  and  the
obligations  of  the Trustee under Section  8.09  and  Section  8.06  shall
survive.

SECTION 8.09. APPLICATION OF TRUST MONEY

     Subject to the  provisions  of  Section 8.06, all money deposited with
the Trustee pursuant to Section 8.08 shall  be held in trust and applied by
it, in accordance with the provisions of the  Notes  and this Indenture, to
the  payment,  either directly or through any Paying Agent  (including  any
Issuer acting as  Paying  Agent) thereto, of the principal (and premium, if
any) and interest for whose  payment such money has been deposited with the
Trustee. Money so held in trust  shall  not be subject to the provisions of
Article 12 of this Indenture.

                                 ARTICLE 9
                     AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.

     Notwithstanding  Section  9.02  of this  Indenture,  Consoltex  Group,
Consoltex USA, any Guarantor and the Trustee,  as  applicable, may amend or
supplement this Indenture or the Notes without the consent of any Holder of
a Note:

     (a) to cure any ambiguity, defect or inconsistency;

     (b) to provide for uncertificated Notes in addition  to or in place of
   certificated Notes;

     (c) to provide for the assumption of the Issuers' and  the Guarantors'
   obligations  to  the  Holders  of  the Notes in the case of a merger  or
   consolidation pursuant to Article Five or Article 10 hereof;

     (d) to provide for additional Guarantors  or the release of Guarantors
   pursuant to the terms of this Indenture;



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<PAGE>




   (e)  to  make  any change that would provide any  additional  rights  or
   benefits to the  Holders  of the Notes or that does not adversely affect
   the legal rights hereunder of any Holder; or

     (f) to comply with requirements  of  the  SEC  in  order  to effect or
   maintain the qualification of this Indenture under the TIA.

     Upon  the  request of Consoltex Group, Consoltex USA or any Guarantor,
as applicable, accompanied  by  a  resolution  of the Board of Directors of
Consoltex Group, Consoltex USA and each Guarantor,  as  the  case  may  be,
authorizing  the  execution  of any such amended or supplemental Indenture,
and upon receipt by the Trustee of the documents described in Section 11.04
hereof, the Trustee shall join with Consoltex Group, Consoltex USA and each
Guarantor,  as  the  case may be,  in  the  execution  of  any  amended  or
supplemental Indenture  authorized  or  permitted  by  the  terms  of  this
Indenture  and  to make any further appropriate agreements and stipulations
that may be therein  contained,  but  the Trustee shall not be obligated to
enter  into  any  such  amended or supplemental  Indenture  that  adversely
affects  its own rights, duties  or  immunities  under  this  Indenture  or
otherwise.

SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.

     Consoltex  Group,  Consoltex  USA,  any  Guarantor and the Trustee, as
applicable, may amend or supplement this Indenture (including Sections 4.10
and  4.15  hereof) and the Notes may be amended or  supplemented  with  the
consent of the  Holders  of  at least a majority in principal amount of the
Notes then outstanding (including  consents  obtained  in connection with a
tender  offer  or exchange offer for the Notes), and, subject  to  Sections
6.04 and 6.07 hereof,  any existing Default or Event of Default (other than
a Default or Event of Default  in the payment of the principal of, premium,
if any, or interest on the Notes,  except  a payment default resulting from
an acceleration that has been rescinded) or  compliance  with any provision
of  this  Indenture  or  the  Notes may be waived with the consent  of  the
Holders of a majority in principal  amount  of  the  then outstanding Notes
(including consents obtained in connection with a tender  offer or exchange
offer for the Notes).

     Upon the request of Consoltex Group, Consoltex USA or  any  Guarantor,
as  the  case may be, accompanied by a resolution of the Board of Directors
of Consoltex  Group,  Consoltex USA and each Guarantor, as the case may be,
authorizing the execution  of  any  such amended or supplemental Indenture,
and  upon  the filing with the Trustee  of  evidence  satisfactory  to  the
Trustee of the  consent  of  the  Holders  of  Notes as aforesaid, and upon
receipt by the Trustee of the documents described  in Section 11.04 hereof,
the  Trustee  shall  join  with  Consoltex Group, Consoltex  USA  and  each
Guarantor,  as  the  case may be, in  the  execution  of  such  amended  or
supplemental  Indenture  unless  such  amended  or  supplemental  Indenture
affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise, in  which  case  the Trustee may in its discretion, but shall
not be obligated to, enter into such amended or supplemental Indenture.

     It shall not be necessary for  the  consent  of  the  Holders of Notes
under  this  Section  9.02  to approve the particular form of any  proposed
amendment or waiver, but it shall  be  sufficient  if such consent approves
the substance thereof.

     After an amendment, supplement or waiver under  this  Section  becomes
effective,  the Issuers shall mail to the Holders of Notes affected thereby
a notice briefly  describing  the  amendment,  supplement  or  waiver.  Any
failure  of  the  Issuers to mail such notice, or any defect therein, shall
not, however, in any  way impair or affect the validity of any such amended
or supplemental Indenture or waiver.



                                    54


<PAGE>




Notwithstanding the foregoing, without the consent of each Holder affected,
an amendment or waiver   may  not  (with  respect  to  any  Notes held by a
non-consenting Holder):

     (a) reduce the principal amount of Notes whose Holders must consent to
   an amendment, supplement or waiver;

     (b) reduce the principal of or change the fixed maturity  of  any Note
   or  alter  or waive any of the provisions with respect to the redemption
   of the Notes;

     (c) reduce  the  rate  of  or change the time for payment of interest,
   including default interest. on any Note;

     (d) waive a Default or Event of Default in the payment of principal of
   or premium, if any, or interest  on  the  Notes  (except a rescission of
   acceleration  of  the  Notes by the Holders of at least  a  majority  in
   aggregate principal amount of the then outstanding Notes and a waiver of
   the payment default that resulted from such acceleration);

     (e) make any Note payable  in  money  other  than  that  stated in the
   Notes;

     (f)  make  any change in the provisions of this Indenture relating  to
   waivers of past  Defaults  or  the rights of Holders of Notes to receive
   payments of principal of or interest on the Notes;

     (g)  make any change in Article  12  hereof  or  any  other  provision
   relating to subordination that adversely affects Holders of Notes; or

     (h) make any change in Section 6.04 or 6.07 hereof or in the foregoing
   amendment and waiver provisions.

SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.

     Every  amendment or supplement to this Indenture or the Notes shall be
set forth in  an  amended  or supplemental Indenture that complies with the
TIA as then in effect.

SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.

     Until an amendment, supplement  or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note
and every subsequent Holder of a Note  or  portion of a Note that evidences
the same debt as the consenting Holder's Note,  even  if  notation  of  the
consent  is  not  made  on  any Note. However, any such Holder of a Note or
subsequent Holder of a Note may  revoke  the  consent as to its Note if the
Trustee receives written notice of revocation before  the  date the waiver,
supplement  or  amendment  becomes  effective. An amendment, supplement  or
waiver becomes effective in accordance  with its terms and thereafter binds
every Holder.

SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.

     The  Trustee may place an appropriate  notation  about  an  amendment,
supplement  or  waiver on any Note thereafter authenticated. The Issuers in
exchange for all  Notes  may  issue  and the Trustee shall authenticate new
Notes that reflect the amendment, supplement or waiver.



                                    55


<PAGE>




Failure to make the appropriate notation  or  issue  a  new  Note shall not
affect the validity and effect of such amendment, supplement or waiver.

SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.

     The   Trustee   shall  sign  any  amended  or  supplemental  Indenture
authorized pursuant to  this  Article  Nine  if the amendment or supplement
does not adversely affect the rights, duties,  liabilities or immunities of
the Trustee. Neither Consoltex Group, Consoltex  USA  nor any Guarantor may
sign an amendment or supplemental Indenture until the Board of Directors of
Consoltex  Group, Consoltex USA or such Guarantor, as applicable,  approves
it.

                                ARTICLE 10
                                 GUARANTEE

SECTION 10.01. GUARANTEE.

     Each  Guarantor,   jointly   and   severally,  hereby  unconditionally
guarantees  to each Holder of a Note authenticated  and  delivered  by  the
Trustee and to  the  Trustee  and its successors and assigns, regardless of
the  validity and enforceability  of  this  Indenture,  the  Notes  or  the
obligations  of  the  Issuers  hereunder  and  thereunder,  that:  (a)  the
principal  of,  premium, if any, and interest on the Notes will be promptly
paid in full when  due, whether at maturity, by acceleration, redemption or
otherwise, and interest  on  the  overdue  principal of and interest on the
Notes,  if  any, to the extent lawful, and all  other  obligations  of  the
Issuers to the  Holders  or  the  Trustee  hereunder  or thereunder will be
promptly paid in full or performed, all in accordance with the terms hereof
and thereof; and (b) in case of any extension of time of payment or renewal
of  any  Notes  or  any of such other Obligations, that the  same  will  be
promptly paid in full when due or performed in accordance with the terms of
the extension or renewal,  whether  at  stated maturity, by acceleration or
otherwise. An Event of Default under this  Indenture  or  the  Notes  shall
constitute an event of default under this Guarantee, and shall entitle  the
Holders  to  accelerate  the Obligations of each Guarantor hereunder in the
same manner and to the same  extent as the Obligations of the Issuers. Each
Guarantor  hereby  agrees  that  its   obligations   hereunder   shall   be
unconditional,  regardless of the validity, regularity or enforceability of
the Notes or this Indenture, the absence of any action to enforce the same,
any waiver or consent  by  any  Holder  of  the  Notes  with respect to any
provisions  hereof  or  thereof, the recovery of any judgment  against  the
Issuers, any action to enforce  the  same  or  any  other circumstance that
might otherwise constitute a legal or equitable discharge  or  defense of a
guarantor. Each Guarantor hereby waives diligence, presentment,  demand  of
payment,  filing  of  claims  with  a  court  in the event of insolvency or
bankruptcy of the Issuers, any right to require  a proceeding first against
the Issuers, protest, notice and all demands whatsoever  and covenants that
this Guarantee will not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture. If any Holder or the
Trustee is required by any court or otherwise to return to  the  Issuers or
any  Guarantor,  or  any  Custodian,  Trustee,  liquidator or other similar
official acting in relation to either of the Issuers  or any Guarantor, any
amount paid to the Trustee or such Holder, this Guarantee,  to  the  extent
theretofore  discharged, shall immediately be reinstated in full force  and
effect. Each Guarantor agrees that it shall not be entitled to any right of
subrogation in  relation  to  the  Holders  in  respect  of any Obligations
guaranteed  hereby  until  payment  in  full of all Obligations  guaranteed
hereby. Each Guarantor further agrees that,  as  between the Guarantors, on
the one hand, and the Holders and the Trustee, on  the  other hand, (x) the
maturity  of  the  Obligations  guaranteed  hereby  may  be accelerated  as
provided  in  Article  Six  hereof  for  the  purposes  of  this  Guarantee
notwithstanding  any stay, injunction or other prohibition preventing  such
acceleration in respect of the Obligations guaranteed



                                    56


<PAGE>




hereby, and (y) in  the  event  of  any declaration of acceleration of such
Obligations as provided in Article Six hereof, such Obligations (whether or
not due and payable) shall forthwith  become  due and payable by Guarantors
for the purpose of this Guarantee. Notwithstanding  the  foregoing,  in the
event that this Guarantee would constitute or result in a violation of  any
applicable   fraudulent   conveyance   or   similar  law  of  any  relevant
jurisdiction, the liability of each Guarantor under this Guarantee shall be
reduced to the maximum amount permissible under  such fraudulent conveyance
or  similar  law.  In  addition,  in  the event that this  Guarantee  would
constitute or result in a violation of  any  applicable  corporate law, the
liability of each Guarantor under this Guarantee shall be  reduced  to  the
maximum amount permissible under such applicable corporate law.

SECTION 10.02. EXECUTION AND DELIVERY OF GUARANTEE.

     To  evidence  its  Guarantee  set  forth in Section 10.01 hereof, each
Guarantor hereby agrees that this Indenture  shall be executed on behalf of
each Guarantor by its President or one of its  Vice Presidents and attested
to by an Officer.

SECTION 10.03. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.

     (a) No Guarantor shall amalgamate or consolidate with or merge with or
   into (whether or not such Guarantor is the surviving  entity or Person),
   another  Person  unless (i) the Person formed by or surviving  any  such
   amalgamation, consolidation  or  merger  (if  other than such Guarantor)
   assumes all the obligations of such Guarantor pursuant to a supplemental
   indenture in a form reasonably satisfactory to  the  Trustee,  under the
   Notes  and this Indenture, (ii) immediately after giving effect to  such
   transaction,  no  Default  or  Event  of  Default exists, and (iii) such
   Guarantor, or the Person formed by or surviving  any  such amalgamation,
   consolidation   or  merger,  (A)  shall  have  Consolidated  Net   Worth
   (immediately after  giving  effect  to such transaction but prior to any
   purchase accounting adjustments from  the  transaction  relating to good
   will), not less than 90% of the Consolidated Net Worth of such Guarantor
   immediately  preceding  the  transaction and of the (B) Consoltex  Group
   shall be permitted to incur, immediately  after  giving  effect  to such
   transaction,  at least $1.00 of additional Indebtedness pursuant to  the
   Fixed Charge Coverage  Ratio  test  set  forth in the first paragraph of
   Section  4.09  hereof. In case of any such amalgamation,  consolidation,
   merger, sale or  conveyance  and  upon  the  assumption by the successor
   corporation, by supplemental indenture, executed  and  delivered  to the
   Trustee  and  satisfactory  in  form to the Trustee, of the Guarantee in
   this Indenture and the due and punctual  performance  and  observance of
   all of the covenants and conditions of this Indenture to be performed by
   the  Guarantor,  such  successor  corporation  shall  succeed to and  be
   substituted  for the Guarantor with the same effect as if  it  had  been
   named herein as a Guarantor.

     Notwithstanding  the  foregoing,  (A)  a  Guarantor  may amalgamate or
consolidate  with or merge with or into either Issuer, PROVIDED,  that  the
surviving corporation  (if other than either Issuer) shall expressly assume
by  supplemental  indenture   complying   with  the  requirements  of  this
Indenture, the due and punctual payment of  the  principal  of, premium, if
any, and interest on all of the Notes, and the due and punctual performance
and observance of all the covenants and conditions of this Indenture  to be
performed  by  the  Issuers and (B) a Guarantor may amalgamate, consolidate
with or merge with or into any other Guarantor.

SECTION 10.04. RELEASES FOLLOWING SALE OF ASSETS.



                                    57


<PAGE>




Upon a sale or other  disposition of all or substantially all of the assets
of any Guarantor or all of the Capital Stock of any Guarantor to any person
that is not an Affiliate  of  Consoltex  Group,  by  way  of  amalgamation,
merger, consolidation or otherwise, then such Guarantor (in the  event of a
sale or other disposition of all of the Capital Stock of such Guarantor) or
the  corporation  acquiring  the property (in the event of a sale or  other
disposition of all or substantially  all  of  the assets of such Guarantor)
shall  be  released and relieved of its obligations  under  its  Guarantee;
PROVIDED that  (i)  such  sale or disposition is in compliance with Section
4.10 hereof and (ii) the Net  Proceeds  of any such sale or disposition are
applied in accordance with the applicable  provisions  of  this  Indenture.
Upon delivery by the Issuers to the Trustee of an Officers' Certificate  to
the effect of the foregoing clauses (i) and (ii), the Trustee shall execute
any  documents reasonably required in order to evidence the release of such
Guarantor  from  its  Obligations  under  its  Guarantee. Any Guarantor not
released from its Obligations under its Guarantee  shall  remain liable for
the full amount of principal of, premium, if any, and interest on the Notes
and  for  the  other  Obligations  of  the Issuers under this Indenture  as
provided in this Article Ten.

SECTION 10.05. TRUSTEE TO INCLUDE PAYING AGENT.

     In case at any time any Paying Agent other than the Trustee shall have
been  appointed  by  the Issuers and be then  acting  hereunder,  the  term
"Trustee" as used in this Article 10 shall in such case (unless the context
shall otherwise require)  be  construed  as extending to and including such
Paying Agent within its meaning as fully and  for  all intents and purposes
as  if  such Paying Agent were named in this Article 10  in  place  of  the
Trustee.

SECTION 10.06. SUBORDINATION OF GUARANTEE.

     The  Obligations of any Guarantor under its Guarantee pursuant to this
Article 10  shall  be  subordinated to any Senior Debt of such Guarantor on
the same basis as the Notes  are  subordinated  to  such Senior Debt of the
Issuers. For the purposes of the foregoing sentence,  the  Trustee  and the
Holders  shall  have  the  right  to  receive and/or retain payments by any
Guarantor only at such times as they may  receive and/or retain payments in
respect  of  the  Notes pursuant to this Indenture,  including  Article  12
hereof.

                                ARTICLE 11
                               MISCELLANEOUS

SECTION 11.01. TRUST INDENTURE ACT CONTROLS.

     If any provision of this Indenture limits, qualifies or conflicts with
the  duties imposed  by  TIA  318(c),  the  imposed  duties  shall
control.

SECTION 11.02. NOTICES.

     Any  notice  or  communication  by  the  Issuers, any Guarantor or the
Trustee to the others is duly given if in writing  and  delivered in Person
or  mailed  by  first  class mail (registered or certified, return  receipt
requested), telex, telecopier  or  overnight  air courier guaranteeing next
day delivery, to the others' address:



                                    58


<PAGE>




If to Consoltex Group, Consoltex USA or any Guarantor:

        Consoltex Group Inc.
        125 Rue Chabanel Ouest
        Montreal, Quebec H2N 1E4
        Telecopier No.: (514) 382-4575
        Attention: Paul J. Bamatter

     and to:

        Shearman & Sterling
        599 Lexington Avenue
        New York, New York 10022
        Telecopier No.: (212) 848-7179
        Attention: Kevin Handwerker, Esq.

     If to the Trustee:

        First Trust National Association
        180 East Fifth Street
        Saint Paul, Minnesota 55101
        Telecopier No.: (612) 244-0711
        Attention: Frank P. Leslie III

     The Issuers, any Guarantor or the Trustee, by notice to the others may
designate  additional  or  different addresses for  subsequent  notices  or
communications.

     All notices and communications  (other  than  those  sent  to Holders)
shall be deemed to have been duly given: at the time delivered by  hand, if
personally delivered; five Business Days after being deposited in the mail,
postage  prepaid,  if  mailed; when answered back, if telexed; when receipt
acknowledged,  if telecopied;  and  the  next  Business  Day  after  timely
delivery to the courier, if sent by overnight air courier guaranteeing next
day delivery.

     Any notice or communication to a Holder shall be mailed by first class
mail, certified  or  registered,  return receipt requested, or by overnight
air courier guaranteeing next day delivery  to  its  address  shown  on the
register  kept by the Registrar. Any notice or communication shall also  be
so mailed to  any  person  described in TIA 313(c), to the extent
required by the TIA. Failure  to mail a notice or communication to a Holder
or any defect in it shall not affect  its sufficiency with respect to other
Holders.

     If a notice or communication is mailed  in  the  manner provided above
within the time prescribed, it is duly given, whether or  not the addressee
receives it.

     If the Issuers mail a notice or communication to Holders,  they  shall
mail a copy to the Trustee and each Agent at the same time.



                                    59


<PAGE>




SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF
NOTES.

     Holders  may  communicate  pursuant to TIA 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Issuers, the Guarantors, the Trustee,  the  Registrar and anyone else shall
have the protection of TIA 312(c).

SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

     Upon  any  request or application by Consoltex  Group,  Consoltex  USA
and/or  any Guarantor  to  the  Trustee  to  take  any  action  under  this
Indenture,  Consoltex  Group,  Consoltex  USA and/or such Guarantor, as the
case may be, shall furnish to the Trustee:

     (a)  an  Officers'  Certificate  in  form  and   substance  reasonably
   satisfactory  to  the  Trustee (which shall include the  statements  set
   forth in Section 11.05 hereof)  stating  that,  in  the  opinion  of the
   signers, all conditions precedent and covenants, if any, provided for in
   this Indenture relating to the proposed action have been satisfied; and

     (b)   an   Opinion   of  Counsel  in  form  and  substance  reasonably
   satisfactory to the Trustee  (which  shall  include  the  statements set
   forth  in  Section  11.05 hereof) stating that, in the opinion  of  such
   counsel,  all  such  conditions   precedent   and  covenants  have  been
   satisfied.

SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

     Each  certificate  or  opinion  with  respect  to  compliance  with  a
condition  or  covenant  provided  for  in  this  Indenture (other  than  a
certificate provided pursuant to TIA Section 314(a)(4)) shall comply with
the provisions of TIA Section 314(e) and shall include:

     (a) a statement that the Person making such certificate or opinion has
   read such covenant or condition;

     (b) a brief statement as to the nature and scope of the examination or
   investigation upon which the statements or opinions  contained  in  such
   certificate or opinion are based;

     (c)  a  statement  that,  in the opinion of such Person, he or she has
   made such examination or investigation  as is necessary to enable him to
   express  an  informed opinion as to whether  or  not  such  covenant  or
   condition has been satisfied; and

     (d) a statement  as  to whether or not, in the opinion of such Person,
   such condition or covenant has been satisfied.

SECTION 11.06. RULES BY TRUSTEE AND AGENTS.

     The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying  Agent  may  make reasonable rules and set
reasonable requirements for its functions.



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<PAGE>




SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.

     No director, officer, employee or shareholder  of  the  Issuers or any
Guarantor,  as  such, shall have any liability for any obligations  of  the
Issuers or any Guarantor  under  the Notes, this Indenture or for any claim
based  on,  in  respect of, or by reason  of,  such  obligations  or  their
creation. Each Holder  by  accepting  a  Note  waives and releases all such
liability.  The  waiver  and  release  are  part of the  consideration  for
issuance of the Notes.

SECTION 11.08. GOVERNING LAW.

     The internal law of the State of New York  shall govern and be used to
construe this Indenture and the Notes.

SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

     This Indenture may not be used to interpret  any other indenture, loan
or debt agreement of the Issuers or any of their respective Subsidiaries or
of any other Person. Any such indenture, loan or debt  agreement may not be
used to interpret this Indenture.

SECTION 11.10. SUCCESSORS.

     All agreements of the Issuers in this Indenture and  the  Notes  shall
bind  its successors. All agreements of the Trustee in this Indenture shall
bind its successors.

SECTION 11.11. SEVERABILITY.

     In  case  any  provision  in  this  Indenture or in the Notes shall be
invalid,   illegal   or   unenforceable,   the   validity,   legality   and
enforceability  of  the  retraining provisions shall  not  in  any  way  be
affected or impaired thereby.

SECTION 11.12. COUNTERPART ORIGINALS.

     The parties may sign  any  number  of  copies  of this Indenture. Each
signed  copy shall be an original, but all of them together  represent  the
same agreement.

SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.

     The  Table  of  Contents,  Cross-Reference  Table  and Headings of the
Articles and Sections of this Indenture have been inserted  for convenience
of  reference  only, are not to be considered a part of this Indenture  and
shall in no way modify or restrict any of the terms or provisions hereof.



                                    61


<PAGE>




                                ARTICLE 12
                               SUBORDINATION

SECTION 12.01. AGREEMENT TO SUBORDINATE.

     The Issuers  agree,  and  each Holder by accepting a Note agrees, that
the Obligations with respect to  such  Note  are  subordinated  in right of
payment,  to the extent and in the manner provided in this Article  12,  to
the prior payment  in  full  of  all  Senior  Debt  of the Issuers (whether
outstanding on the date hereof or hereafter created,  incurred,  assumed or
guaranteed),  and that the subordination is for the benefit of the  holders
of such Senior Debt.

SECTION 12.02. CERTAIN DEFINITIONS.

     For purposes  of  this Article 12, a distribution may consist of cash,
securities or other property,  by  set-off  or  otherwise.  As used in this
Indenture  and  the  Notes,  the  term  "payment"  of  or  with respect  to
Obligations relating to the Notes and similar phrases include  any  payment
(including  by  issuance of additional securities of any kind), redemption,
acquisition, deposit,  segregation,  retirement,  sinking  fund payment and
defeasance of or with respect to any Obligations relating to  the Notes. In
addition, the term "payment in full" meats either (i) the actual payment in
full  of an Obligation or Indebtedness in cash or cash equivalents  in  the
currency in which the Obligation or Indebtedness is denominated or (ii) the
provision   for  such  payment,  PROVIDED  that  such  provision  shall  be
satisfactory to holders of a majority in aggregate principal amount of each
issue of outstanding Senior Debt.

SECTION 12.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.

     Upon any  payment  or  distribution  to  creditors of the Issuers in a
liquidation   or   dissolution   of  the  Issuers  or  in   a   bankruptcy,
reorganization, insolvency, receivership  or similar proceeding relating to
the Issuers or their respective properties,  an  assignment for the benefit
of  creditors  or  any  marshalling of the assets and  liabilities  of  the
Issuers:

     (1) holders of Senior Debt of the Issuers shall be entitled to receive
   payment in full of all  Obligations  due  in respect of such Senior Debt
   (including interest after commencement of any  such  proceeding  at  the
   rate  specified in the applicable Senior Debt of the Issuers) before the
   Holders  shall  be  entitled to receive any payment or distribution with
   respect to the Notes  (except  payments in or distributions of Permitted
   Junior Securities); and

     (2) until all Obligations with  respect  to Senior Debt of the Issuers
   (as provided in subsection (1) above) are paid  in  full, any payment or
   distribution to which Holders would be entitled but for  this Article 12
   shall  be  made  to  holders  of  Senior  Debt  (except  payments in  or
   distributions  of  Permitted Junior Securities), as their interests  may
   appear.

SECTION 12.04. DEFAULT ON DESIGNATED SENIOR DEBT.

     The Issuers may not make any payment or distribution to the Trustee or
any Holder upon or in respect  of Obligations with respect to the Notes and
may  not  acquire from the Trustee  or  any  Holder  any  Notes  for  cash,
securities  or  other  property  (other  than Permitted Junior Securities),
until all principal and other Obligations  with  respect to the Senior Debt
have been paid in full, if:



                                    62


<PAGE>




   (a) a default in the payment, including payments  due  by  reason  of an
   acceleration,  whether  such  acceleration  resulted  from  a payment or
   nonpayment  default,  of any Obligation in respect of Designated  Senior
   Debt occurs and is continuing beyond any applicable period of grace; or

     (b)  any other default  occurs  and  is  continuing  with  respect  to
   Designated  Senior  Debt  that  then  permits  holders of the Designated
   Senior Debt as to which such default relates to  accelerate its maturity
   and the Trustee receives a written notice of such  default  (a  "Payment
   Blockage  Notice")  from the holders, or from the Representative of  the
   holders, of any such Designated Senior Debt. If the Trustee receives any
   such notice, a subsequent  notice  received  within  360 days thereafter
   shall not be effective for purposes of this Section 12.04. No nonpayment
   default that existed or was continuing on the date of  delivery  of  any
   Payment  Blockage  Notice to the Trustee shall be, or be made, the basis
   for a subsequent Payment  Blockage Notice unless such default shall have
   been cured or waived for a  period  of  not less than 90 days; PROVIDED,
   HOWEVER, that if a default arising from noncompliance  with  a financial
   covenant  contained  in  Designated Senior Debt exists and continues  in
   excess of 90 days, each 90-day  period  during  which the default exists
   and continues shall be deemed to be a separate default.

     The  Issuers  may  and shall resume payments on and  distributions  in
respect of the Notes and may acquire them upon the earlier of:

          (i) the date on which the default is cured or waived, or

          (ii) in the case  of  a default referred to in clause (b) of this
             Section 12.04, 179 days  pass  after  the  date  on  which the
             applicable  Payment  Blockage  Notice is received, unless  the
             maturity of any Designated Senior Debt has been accelerated,

if  this  Article  12  otherwise  permits  such  payment,  distribution  or
acquisition at the time of such payment, distribution or acquisition.

SECTION 12.05. ACCELERATION OF NOTES.

     If payment of the Notes is accelerated because of an Event of Default,
the  Issuers  shall  promptly  notify  holders  of  Senior   Debt  of  such
acceleration.

SECTION 12.06. WHEN DISTRIBUTION MUST BE PAID OVER.

     In  the event that the Trustee or any Holder receives any  payment  of
any Obligations  with  respect  to the Notes at a time when such payment is
prohibited by this Article 12, such  payment  or distribution shall be held
by  the  Trustee  or such Holder, in trust for the  benefit  of,  and  upon
written notice to the  Trustee  or  any such Holder shall be paid forthwith
over and delivered to, the holders of  Senior  Debt  as their interests may
appear or their Representative under the indenture or  other  agreement (if
any)  pursuant  to  which  Senior  Debt  may  have  been  issued,  as their
respective  interests  may  appear,  for  application to the payment of all
Obligations  with respect to Senior Debt remaining  unpaid  to  the  extent
necessary to pay  such  Obligations,  after giving effect to any concurrent
payment or distribution to or for the holders of Senior Debt.

     With respect to the holders of Senior  Debt, the Trustee undertakes to
perform  only  such  obligations  on  the  part  of   the  Trustee  as  are
specifically  set  forth  in this Article 12, and no implied  covenants  or
obligations with respect to  the  holders of Senior Debt shall be read into
this Indenture against the



                                    63


<PAGE>




Trustee. The Trustee shall not be deemed  to  owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable  to any such holders if the
Trustee  shall pay over or distribute to or on behalf  of  Holders  or  the
Issuers or  any other Person money or assets to which any holders of Senior
Debt shall be entitled by virtue of this Article 12, except if such payment
is made as a  result  of  the willful misconduct or gross negligence of the
Trustee.

SECTION 12.07. NOTICE BY ISSUERS.

     The Issuers shall promptly  notify the Trustee and the Paying Agent of
any  facts  known  to  the  Issuers that  would  cause  a  payment  of  any
Obligations with respect to the  Notes  to  violate  this  Article  12, but
failure to give such notice shall not affect the subordination of the Notes
to the Senior Debt as provided in this Article 12.

SECTION 12.08. SUBROGATION.

     After  all  Obligations with respect to Senior Debt have been paid  in
full and until all  Obligations with respect to the Notes have been paid in
full, Holders shall be  subrogated  (equally  and  ratably  with  all other
Indebtedness pari passu with the Notes) to the rights of holders of  Senior
Debt to receive distributions applicable to Senior Debt to the extent  that
distributions  otherwise  payable  to  the Holders have been applied to the
payment of Senior Debt, to the extent permitted by law. A distribution made
under this Article 12 to holders of Senior  Debt  that otherwise would have
been made to Holders is not, as between the Issuers  and Holders, a payment
by the Issuers on the Notes

SECTION 12.09. RELATIVE RIGHTS.

     This Article 12 defines the relative rights of Holders  and holders of
Senior Debt. Nothing in this Indenture shall:

     (a) impair, as between the Issuers and Holders, the obligation  of the
   Issuers,  which  is  absolute and unconditional, to pay principal of and
   interest on the Notes in accordance with their terms;

     (b) affect the relative  rights  of Holders and other creditors of the
   Issuers, other than Holders' rights  in  relation  to  holders of Senior
   Debt; or

     (c)  prevent the Trustee or any Holder from exercising  its  available
   remedies  upon  a  Default or Event of Default, subject to the rights of
   holders and owners of  Senior Debt to receive distributions and payments
   otherwise payable to Holders.

     If the Issuers fail because  of this Article 12 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event
of Default.

SECTION 12.10. SUBORDINATION MAY NOT BE IMPAIRED BY ISSUERS.

     The  rights  and  recourses  of holders  of  Senior  Debt  to  enforce
subordination shall remain in full  force  and effect without regard to and
shall not be impaired by (i) any act or failure  to  act  on  the part of a
holder of Senior Debt, unless such holder has agreed to change  its  rights
and recourses to enforce subordination, (ii) any extension or indulgence in
respect of any payment or prepayment, (iii) any amendment, modification  or
waiver  of,  or addition or supplement to, or deletion from, or compromise,
release, consent  or  other  action  in respect of, any of the terms of any
Senior Debt, any agreement or



                                    64


<PAGE>




instrument creating or evidencing or any  other agreement which may be made
relating to any Senior Debt, unless such holder  has  agreed  to change its
rights  and  recourses  to  enforce  subordination.  (iv)  any exercise  or
non-exercise by a holder of Senior Debt of any right, power,  privilege  or
remedy  under  or in respect of any Senior Debt, or agreement or instrument
creating or evidencing any Senior Debt or any waiver in respect thereof and
(v) any merger or  consolidation  of  any  of the Issuers or any Subsidiary
thereof or any sale, lease or transfer of any  or  all of the assets of the
Issuers or any of their Subsidiaries to any person.

SECTION 12.11. PAYMENT, DISTRIBUTION OR NOTICE TO REPRESENTATIVE.

     Whenever a payment or distribution is to be made  or a notice given to
holders  of  any issue of Senior Debt, the payment or distribution  may  be
made and the notice given to the Representative, if any, for such issue.

     Upon any  payment  or  distribution  of  assets,  securities  or other
property of the Issuers referred to in this Article 12, the Trustee and the
Holders  shall  be  entitled  to  rely upon any order or decree made by any
court  of  competent  jurisdiction  or   upon   any   certificate  of  such
Representative  or  of  the  liquidating trustee or agent or  other  Person
making any distribution to the Trustee or to the Holders for the purpose of
ascertaining  the  Persons entitled  to  participate  in  such  payment  or
distribution, the holders  of the Senior Debt and other Indebtedness of the
Issuers, the amount thereof  or payable thereon, the amount or amounts paid
or distributed thereon and all  other  facts  pertinent  thereto or to this
Article 12.

SECTION 12.12. RIGHTS OF TRUSTEE AND PAYING AGENT.

     Notwithstanding  the  provisions  of  this  Article  12 or  any  other
provision of this Indenture, the Trustee shall not (a) be deemed  to  be  a
fiduciary for any holder of Senior Debt or (b) be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution  by  the  Trustee, and the Trustee and the Paying Agent (other
than Consoltex Group and its Subsidiaries) may continue to make payments on
the Notes, without limiting  the  rights  and remedies of holders of Senior
Debt hereunder (including, without limitation,  the  right  to  recover any
such payments from Holders), unless the Trustee shall have received  at the
Corporate Trust Office of the Trustee at least five Business Days prior  to
the  date  of  such  payment,  written notice of facts that would cause the
payment of any Obligations with  respect  to  the  Notes  to  violate  this
Article  12.  Only the Issuers, a Representative or a holder of an issue of
Senior Debt that has no Representative may give the notice. Nothing in this
Article 12 shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof.

     The Trustee  in  its  individual or any other capacity may hold Senior
Debt with the same rights it  would  have if it were not Trustee. Any Agent
may do the same with like rights.

SECTION 12.13. AUTHORIZATION TO EFFECT SUBORDINATION.

     Each Holder of a Note by the Holder's  acceptance  thereof  authorizes
and directs the Trustee on the Holder's behalf to take such action  as  may
be  necessary or appropriate to effectuate the subordination as provided in
this Article 12, and appoints the Trustee the Holder's attorney-in-fact for
any and  all  such purposes. If the Trustee does not file a proper proof of
claim or proof  of  debt in the form required in any proceeding referred to
in Section 6.09 hereof  at  least 30 days before the expiration of the time
to file such claim, so long as  any  Indebtedness  is outstanding under the
Credit Agreement,



                                    65


<PAGE>




the agent (or, in the absence of such agent, the lender)  under  the Credit
Agreement  is  hereby  authorized  to file an appropriate claim for and  on
behalf of the Holders of the Notes.

SECTION 12.14. AMENDMENTS.

     The provisions of this Article  12 shall not be amended or modified so
as to affect adversely the rights of any  holder of Senior Debt at the time
outstanding without the consent of such holders  of a majority in aggregate
principal amount of each issue of outstanding Senior Debt.

                        [signatures on following pages]



                                    66


<PAGE>




                                SIGNATURES


Dated as of September 30, 1993 CONSOLTEX GROUP INC.

                               By:/s/Paul J. Bamatter
                                    Name:
                                    Title:
Attest:
/s/Claire Gohier


Dated as of September 30, 1993 CONSOLTEX (USA) INC.


                               By:/s/Paul J. Bamatter
                                    Name:
                                    Title:
Attest:

/s/Claire Gohier

Dated as of September 30, 1993 CONSOLTEX INC.

                               By:/s/Richard H. Willett
                                    Name:
                                    Title:
Attest:

/s/Claire Gohier


Dated as of September 30, 1993 THE BALSON-HERCULES GROUP, LTD.

                               By:/s/Richard H. Willett
                                    Name:
                                    Title:
Attest:

/s/Claire Gohier




                                    67


<PAGE>





Dated as of September 30, 1993 LINQ INDUSTRIAL FABRICS, INC.

                                      By:/s/William L. Holt
                                      Name:
                                      Title:
 Attest:

/s/Claie Gohier
                                           (SEAL)


Dated as of September 30, 1993 FIRST TRUST NATIONAL ASSOCIATION,
                                      as Trustee


                                       By:
                                       Name:
                                       Title:
Attest:
                                           (SEAL)



<PAGE>


Dated as of September 30, 1993 LINQ INDUSTRIAL FABRICS, INC.

                                      By:
                                      Name:
                                      Title:
 Attest:

                                           (SEAL)


Dated as of September 30, 1993 FIRST TRUST NATIONAL ASSOCIATION,
                                      as Trustee

                                      By:/s/Frank Leslie
                                      Name: Frank P. Leslie III
                                     Title: Assistant Vice-President
Attest:

/s/ illegible signature                    (SEAL)



<PAGE>







                                 EXHIBIT A
                              (Face of Note)

            11 % Series [A/B] Senior Subordinated Note due 2003

No.                                                   US$__________

                           CONSOLTEX GROUP INC.
                           CONSOLTEX (USA) INC.

promises to pay to

or registered assigns, the principal sum of

US Dollars on October 1, 2003.

Interest Payment Dates: April 1 and October 1, commencing April 1, 1994

Record Dates: March 15 and September 15, commencing March 15, 1994.

                                   Dated: September 30, 1993

                                   CONSOLTEX GROUP INC.

                                   By:
                                       Name:
                                       Title:

                                   By:
                                       Name:
                                       Title:

                                                              (SEAL)

                                   CONSOLTEX (USA) INC.

                                   By:
                                       Name:
                                       Title:

                                   By:
                                       Name:
                                       Title:

                                       (SEAL)

This is one of the Notes
referred to in the within-
mentioned Indenture:

FIRST TRUST NATIONAL ASSOCIATION,
as Trustee

By:
     Authorized Signatory




<PAGE>


                              (Back of Note)
            11 % Series [A/B] Senior Subordinated Note due 2003

     [Unless and until it is exchanged in whole or  in  part  for  Notes in
definitive form, this Note may not be transferred except as a whole  by the
Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository
or  any  such  nominee  to  a  successor  Depository  or  a nominee of such
successor Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street,  New York,
New  York)  ("DTC"),  to  either  Issuer  or  its agent for registration of
transfer, exchange or payment, and any certificate  issued is registered in
the  name  of  Cede  &  Co.  or such other name as may be requested  by  an
authorized representative of DTC  (and any payment is made to Cede & Co. or
such other entity as may be requested  by  an  authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered  owner  hereof, Cede &
Co., has an interest herein.]{1}

        THE  NOTE  (OR  ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
   ISSUED IN A TRANSACTION  EXEMPT  FROM REGISTRATION UNDER SECTION 5 OF
   THE UNITED STATES SECURITIES ACT OF  1933 (THE "SECURITIES ACT"), AND
   THE  NOTE  EVIDENCED  HEREBY MAY NOT BE OFFERED,  SOLD  OR  OTHERWISE
   TRANSFERRED IN THE ABSENCE  OF  SUCH  REGISTRATION  OR  AN APPLICABLE
   EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED  HEREBY  IS
   HEREBY  NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
   SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE
   HOLDER OF  THE  NOTE  EVIDENCED  HEREBY AGREES FOR THE BENEFIT OF THE
   ISSUERS  THAT  (A)  SUCH NOTE MAY BE  RESOLD,  PLEDGED  OR  OTHERWISE
   TRANSFERRED, ONLY (1)  (W)  TO  A  PERSON  WHO  THE SELLER REASONABLY
   BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED  IN RULE 144A
   UNDER  THE  SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
   OF RULE 144A,  (X)  IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
   144  UNDER  THE  SECURITIES  ACT,  (Y)  TO  A  FOREIGN  PERSON  IN  A
   TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES
   ACT OR (Z) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
   REQUIREMENTS OF THE  SECURITIES ACT (AND, WITH RESPECT TO CLAUSES (X)
   AND  (Z), BASED UPON AN  OPINION  OF  COUNSEL  IF  EITHER  ISSUER  SO
   REQUESTS),  (2)  TO  EITHER  ISSUER  OR  (3) PURSUANT TO AN EFFECTIVE
   REGISTRATION  STATEMENT AND, IN EACH CASE,  IN  ACCORDANCE  WITH  THE
   APPLICABLE SECURITIES  LAWS  OF ANY STATE OF THE UNITED STATES OR ANY
   OTHER APPLICABLE JURISDICTION  AND  (B)  THE  HOLDER  WILL,  AND EACH
   SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
   NOTE  EVIDENCED  HEREBY  OF THE RESALE RESTRICTIONS SET FORTH IN  (A)
   ABOVE.

Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.


1. This paragraph should be included only if the Note is issued in global
form.

                                    A-2




<PAGE>


1.  INTEREST;  LIQUIDATED  DAMAGES.   Consoltex   Group  Inc.,  a  Canadian
corporation  ("Consoltex  Group"), and Consoltex (USA)  Inc.,  a  New  York
corporation  ("Consoltex USA"  and,  together  with  Consoltex  Group,  the
"Issuers"), promise to pay interest on the principal amount of this Note at
a rate of 11 %  per annum from the date this Note is issued until maturity,
which rate shall  be  subject  to  increase  as  specified  in that certain
Registration Rights Agreement dated September 30, 1993 to which the Issuers
are  party.  The  Issuers  shall  pay  interest  (including  the additional
interest,   if   any,   payable  as  Liquidated  Damages  pursuant  to  the
Registration Rights Agreement)  semi-annually  on  April 1 and October 1 of
each year, commencing April I, 1994, or if any such  day  is not a Business
Day, on the next succeeding Business Day (each an "Interest Payment Date").
Interest  on  the  Notes  will  accrue from the most recent date  to  which
interest has been paid or, if no  interest  has been paid, from the date of
issuance, to but not including the Interest Payment  Date; PROVIDED that if
there is no existing Default in the payment of interest,  and  if this Note
is  authenticated between a record date referred to on the face hereof  and
the next  succeeding Interest Payment Date, interest shall accrue from such
next succeeding  Interest  Payment  Date.  The  Issuers  shall pay interest
(including  post-petition interest in any proceeding under  any  Bankruptcy
Law) on overdue  principal and premium, if any, from time to time on demand
at a rate that is  1%  per annum in excess of the rate then in effect; they
shall pay interest (including  post-petition  interest  in  any  proceeding
under  any  Bankruptcy  Law)  on  overdue installments of interest (without
regard to any applicable grace periods)  at  the  same  rate  to the extent
lawful. Interest will be computed on the basis of a 360-day year  of twelve
30-day months.

     2.  METHOD OF PAYMENT. The Issuers shall pay interest and premium,  if
any, on the Notes to the Persons who are registered Holders of Notes at the
close of business  on  the  March  15  or  September  15 next preceding the
Interest Payment Date, even if such Notes are cancelled  after  such record
date  and on or before such Interest Payment Date, except that the  Issuers
shall pay  defaulted interest as provided in Section 2.12 of the Indenture.
The Notes shall  be payable both as to principal and interest at the office
or agency of the Issuers  maintained  for such purpose or, at the option of
the Issuers, payment of interest may be made by check mailed to the Holders
at  their  addresses  set forth in the register  of  Holders,  except  that
payment  by wire transfer  in  same  day  funds  may  be  required  by  the
Depository Trust Company. Such payment shall be in such coin or currency of
the United  States of America as at the time of payment is legal tender for
payment of public and private debts.

     3.  PAYING  AGENT  AND  REGISTRAR.  Initially,  First  Trust  National
Association,  the Trustee under the Indenture, will act as Paying Agent and
Registrar. The  Issuers  may  change  any Paying Agent or Registrar without
notice to any Holder. Consoltex Group or any of its Subsidiaries may act in
any such capacity.

     4. INDENTURE. The Issuers issued the Notes under an Indenture dated as
of September 30, 1993 (the "Indenture")  among  the Issuers, the Guarantors
and  the  Trustee.  The  terms  of the Notes include those  stated  in  the
Indenture and those made part of  the  Indenture  by reference to the Trust
Indenture  Act  of  1939,  as  amended  (15  U.S.  Code  Section
77aaa-77bbbb).  The  Notes are subject to all such terms, and  Holders  are
referred to the Indenture  and  such Act for a statement of such terms. The
Notes are unsecured obligations of the Issuers limited to US$120 million in
aggregate principal amount at any one time outstanding.

     5. OPTIONAL REDEMPTION.

     (a)  Except  as  provided in paragraphs  (b),  (c)  and  (d)  of  this
paragraph 5, the Issuers  shall  not  have  the  option to redeem the Notes
prior to October 1, 1998. Thereafter, the Issuers  shall have the option to
redeem the Notes, in whole or in part, upon not less  than 30 nor more than
60 days' notice, at the

                                      A-3




<PAGE>


redemption prices (expressed as percentages of principal  amount) set forth
below plus accrued and unpaid interest thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning  on October 1 of
the years indicated below:

                YEAR                                      PERCENTAGE

                1998 ......................105.50%
                1999 ......................103.67%
                2000 ......................101.83%
                2001 and thereafter........100.00%

     (b)  At  any time on or before October 1, 1996, the Issuers  may  also
redeem up to 33-1/3%  of the aggregate principal amount of Notes originally
issued under the Indenture  with  the  net proceeds of a public offering of
Capital Stock (other than Disqualified Stock and a public offering pursuant
to a registration statement on Form S-8) of Consoltex USA within 90 days of
such public offering at a redemption price  equal  to 110% of the principal
amount of such Notes, plus accrued and unpaid interest  to  the  redemption
date; PROVIDED that at least US$80 million in aggregate principal amount of
Notes   remain   outstanding   immediately  after  giving  effect  to  such
redemption.

     (c) In addition, prior to October  1,  1998, the Issuers may, at their
option, redeem the Notes, in whole or in part,  at any time within 180 days
after a Change of Control, upon not less than 30  nor  more  than  60 days'
notice  to each Holder of Notes, at a redemption price equal to the sum  of
(i) the principal  amount  thereof plus (ii) accrued and unpaid interest to
the date of redemption plus (iii) the Applicable Make-Whole Premium.

     (d) The Issuers also may,  at  their  option,  redeem  the Notes, as a
whole but not in part, at a redemption price equal to 100% of the principal
amount  of  the  Notes,  together with accrued and unpaid interest  to  the
redemption date, if the Issuers  have  become  or  would  become obliged in
accordance with Section 4.17 of the Indenture to pay, on the  next  date on
which  any amount would be payable under or with respect to the Notes,  any
Additional  Amounts  as  a result of any change in or amendment to the laws
(or any regulations promulgated  thereunder)  of  Canada  (or any political
subdivision or taxing authority thereof or therein), or any  change  in  or
amendment   to   any   official   position  regarding  the  application  or
interpretation of such laws or regulations,  which  change  or amendment is
announced  or  becomes  effective  on  or  after  the  date of the Offering
Memorandum.

     6. MANDATORY REDEMPTION.

     Except  as  set  forth  under paragraph 7 below, the Issuers  are  not
required to make mandatory redemption or sinking fund payments with respect
to the Notes.

     7. REPURCHASE AT OPTION OF HOLDER.

     (a) Upon the occurrence of a Change of Control, the Issuers shall make
an  offer (the "Change of Control  Offer")  to  each  Holder  of  Notes  to
repurchase  all  or  any  part  (equal  to US$1,000 or an integral multiple
thereof) of such Holder's Notes pursuant  to the offer described below at a
purchase  price equal to 101 % of the aggregate  principal  amount  thereof
plus accrued  and  unpaid  interest,  if  any, to the date of purchase (the
"Change of Control Payment"). Holders of Notes that are subject to an offer
to purchase will receive a Change of Control  Offer  from the Issuers prior
to any related Change of Control

                                      A-4




<PAGE>


Payment Date and may elect to have such Notes purchased  by  completing the
form  entitled  "Option of Holder to Elect Purchase" appearing below  or  a
similar form acceptable to the Trustee.

     (b) If the Issuers  or any of their respective Subsidiaries consummate
any Asset Sales and the aggregate  amount  of  Excess  Proceeds exceeds $10
million, the Issuers shall commence an offer to all Holders  of  Notes  (an
"Asset  Sale Offer") pursuant to Sections 3.09 and 4.10 of the Indenture to
purchase the maximum principal amount of Notes that may be purchased out of
the Excess Proceeds based upon an offer price in cash in an amount equal to
100% of the  principal amount thereof, plus accrued and unpaid interest, if
any, to the date fixed for the closing of such offer (the "Offered Price"),
in accordance  with  the  procedures  set  forth  in  Section  3.09  of the
Indenture.  To  the  extent  that  the  aggregate principal amount of Notes
tendered pursuant to an Asset Sale Offer  is  less than the Excess Proceeds
(a "Deficiency"), the Issuers (or such Subsidiary)  may use such Deficiency
for general corporate purposes. If the aggregate principal  amount of Notes
surrendered  by Holders thereof exceeds the amount of Excess Proceeds,  the
Trustee shall  select  the  Notes to be purchased on a pro rata basis. Upon
completion of such offer to purchase,  the  amount of Excess Proceeds shall
be reset at zero; PROVIDED that the amount of  25  %  Excess Proceeds shall
constitute  Excess Proceeds for purposes of the first offer  that  is  made
after the fifth  anniversary  of  the  original  issuance of the Notes (the
"Fifth Anniversary"). Holders of Notes that are the  subject of an offer to
purchase  will receive an Asset Sale Offer from the Issuers  prior  to  any
related purchase  date  and  may  elect  to  have  such  Notes purchased by
completing  the form entitled "Option of Holder to Elect Purchase"  on  the
reverse of the Notes or a similar form acceptable to the Trustee.

     Notwithstanding  the  foregoing,  in  no  event  shall the Issuers use
Excess  Proceeds  to  purchase  more  than  25 % of the original  aggregate
principal  amount of Notes on or prior to the  Fifth  Anniversary.  If  the
aggregate Excess  Proceeds (disregarding any resetting to zero as described
above) resulting from Asset Sales occurring prior to the Fifth Anniversary,
less any Deficiencies  resulting  from  any offers made on or prior to such
date, exceed 25 % of the original aggregate  principal  amount of the Notes
(such excess being the "25% Excess Proceeds"), then the Issuers  shall make
an  offer  at the Offered Price in accordance with the foregoing provisions
(i) promptly  after  the  Fifth Anniversary, in the event the amount of the
25% Excess Proceeds exceeds  $10 million or (ii) at such time as the amount
of the 25% Excess Proceeds together with the Excess Proceeds received after
the Fifth Anniversary exceeds  $10  million, in the event the amount of the
25% Excess Proceeds is less than $10 million.

     8. NOTICE OF REDEMPTION. Notice  of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose  Notes  are  to  be  redeemed  at its registered  address.  Notes  in
denominations larger than US$1,000 may  be  redeemed  in  part  but only in
whole  multiples of US$1,000, unless all of the Notes held by a Holder  are
to be redeemed.  On and after the redemption date interest ceases to accrue
on Notes or portions thereof called for redemption.

     9. SUBORDINATION.  Each  Holder  by  accepting  a Note agrees that the
Indebtedness evidenced by each Note is subordinated in right of payment, to
the  extent  and  in  the manner provided in the Indenture,  to  the  prior
payment in full of all  Senior Debt (whether outstanding on the date of the
Indenture or thereafter created, incurred, assumed or guaranteed), and that
the subordination is for the benefit of the holders of Senior Debt.

     10. DENOMINATIONS, TRANSFER,  EXCHANGE.  The  Notes  are in registered
form without coupons in denominations of US$1,000 and integral multiples of
US$1,000.  The  transfer  of  Notes  may  be  registered and Notes  may  be
exchanged as provided in the Indenture. The Registrar  and  the Trustee may
require  a Holder, among other things, to furnish appropriate  endorsements
and transfer documents and

                                      A-5




<PAGE>


the issuers  may require a Holder to pay any taxes and fees required by law
or permitted by  the  Indenture.  The Issuers need not exchange or register
the transfer of any Note or portion  of  a  Note  selected  for redemption,
except for the unredeemed portion of any Note being redeemed in part. Also,
the Issuers need not exchange or register the transfer of any  Notes  for a
period of 15 days before a selection of Notes to be redeemed or during  the
period between a record date and the corresponding Interest Payment Date.

     11.  PERSONS  DEEMED  OWNERS.  The  registered Holder of a Note may be
treated as its owner for all purposes.

     12. AMENDMENT, SUPPLEMENT AND WAIVER.  Subject  to certain exceptions,
the Indenture or the Notes may be amended or supplemented  with the consent
of  the  Holders  of  at least a majority in principal amount of  the  then
outstanding  Notes,  and  any  existing  default  or  compliance  with  any
provision of the Indenture  or  the Notes may be waived with the consent of
the  Holders of a majority in principal  amount  of  the  then  outstanding
Notes.  Without  the  consent of any Holder of a Note, the Indenture or the
Notes may be amended or  supplemented  to  cure  any  ambiguity,  defect or
inconsistency,  to  provide  for uncertificated Notes in addition to or  in
place of certificated Notes, to  provide for the assumption of the Issuers'
or the Guarantors' obligations to  Holders of the Notes in case of a merger
or consolidation pursuant to Article  5  or Article 10 of the Indenture, to
provide for additional Guarantors or the release  of Guarantors pursuant to
the  terms  of  the Indenture, to make any change that  would  provide  any
additional rights  or benefits to the Holders of the Notes or that does not
adversely affect the  legal rights under the Indenture of any Holder, or to
comply with the requirements  of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA.

     13. DEFAULTS AND REMEDIES.  An  "Event  of Default" occurs if: (i) the
Issuers default in the payment when due of interest  on  the  Notes and the
default continues for a period of 30 days (whether or not prohibited by the
subordination provisions of the Indenture); (ii) the Issuers default in the
payment when due of principal of or premium, if any, on the Notes  (whether
or not prohibited by the subordination provisions of the Indenture),  (iii)
the  Issuers  fail  to  comply with Section 4.15 of the Indenture; (iv) the
Issuers or any Guarantor  fail  to  observe  or perform any other covenant,
warranty or other agreement in the Indenture or  the Notes and such failure
continues for 60 days after written notice of such  failure shall have been
given to the Issuers by the Trustee or to the Issuers  and  the  Trustee by
Holders  of  at least 25 % in aggregate principal amount of the Notes  then
outstanding;  (v)  a  default  occurs  under  any  mortgage,  indenture  or
instrument under which there may be issued or by which there may be secured
or evidenced any Indebtedness for money borrowed by either Issuer or any of
their respective  Subsidiaries  (or  the  payment of which is guaranteed by
either  Issuer  or  any  of  their  respective Subsidiaries)  whether  such
Indebtedness or guarantee now exists  or  is  created after the date of the
Indenture, which default results in the acceleration  of  such Indebtedness
prior to its express maturity or shall constitute a default  in the payment
of such issue of Indebtedness at final maturity and the principal amount of
any such Indebtedness, together with the principal amount of any other such
Indebtedness the maturity of which has been so accelerated or which has not
been paid at maturity, aggregates $10 million or more; (vi) Consoltex Group
or  any  of  its  Subsidiaries fails to pay final judgments aggregating  in
excess of $10 million,  which  judgments  are not satisfied or stayed for a
period  of  60  consecutive days; (vii) certain  events  of  bankruptcy  or
insolvency occur  with respect to the Issuers or any of their Subsidiaries;
or (viii) except as permitted by the Indenture, any Guarantee shall be held
in a judicial proceeding  to be unenforceable or invalid or shall cease for
any reason to be in full force  and  effect or any Guarantor, or any Person
acting on behalf of any Guarantor, shall  deny or disaffirm its obligations
under  the  Guarantee  of  such  Guarantor and such  condition  shall  have
continued for a period of 60 days  after  written  notice  of  such failure
requiring  the relevant Guarantor and the Issuers to remedy the same  shall
have been given

                                      A-6




<PAGE>


to the issuers  by the Trustee or to the Issuers and the Trustee by Holders
of  at  least  25%  in   aggregate  principal  amount  of  the  Notes  then
outstanding. If any Event  of Default occurs and is continuing, the Trustee
or the Holders of at least 25  %  in aggregate principal amount of the then
outstanding  Notes  may  declare  all the  Notes  to  be  due  and  payable
immediately: PROVIDED, that so long  as  any  Indebtedness  permitted to be
incurred pursuant to clause (a) of the second paragraph of Section  4.09 of
the  Indenture  shall  be  outstanding,  such  acceleration  shall  not  be
effective  until  the  earlier  of  (i)  an  acceleration  under  any  such
Indebtedness  or  (ii)  five Business Days after receipt by the Issuers and
the agent (or, in the absence  of  such agent, the lender) under the Credit
Agreement  (so  long  as any Indebtedness  is  outstanding  thereunder)  of
written notice of such  acceleration  of  the  Notes.  Notwithstanding  the
foregoing,  in  the case of an Event of Default arising from certain events
of bankruptcy or  insolvency  with  respect  to the issuers or any of their
respective Subsidiaries, all outstanding Notes  will become due and payable
without further action or notice. Holders may not  enforce the Indenture or
the  Notes  except  as  provided  in  the  Indenture.  Subject  to  certain
limitations,  Holders  of  a  majority  in  principal  amount of  the  then
outstanding Notes may direct the Trustee in its exercise  of  any  trust or
power.  The  Trustee  may withhold from Holders of the Notes notice of  any
continuing Default or Event  of  Default  (except  a  Default  or  Event of
Default  relating to the payment of principal or interest) if it determines
that withholding  notice is in their interest. The Holders of a majority in
aggregate principal  amount  of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except
a continuing Default or Event  of Default in the payment of interest on, or
the principal of, the Notes. The  Issuers  are  required  to deliver to the
Trustee  annually  a  statement  regarding  compliance with the  Indenture,
including with respect to any Restricted Payments  made  during  such year,
the  basis  upon  which  the  calculations required by Section 4.07 of  the
Indenture were computed (which  calculations  may  be  based upon Consoltex
Group's  latest  financial statements), and the Issuers are  required  upon
becoming aware of  any  Default  or  Event  of  Default,  to deliver to the
Trustee a statement specifying such Default or Event of Default.

     14. TRUSTEE DEALINGS WITH ISSUERS. The Trustee, in its  individual  or
any  other  capacity,  may make loans to, accept deposits from, and perform
services for the Issuers  or  their Affiliates, and may otherwise deal with
the Issuers or their Affiliates, as if it were not Trustee.

     15. NO RECOURSE AGAINST OTHERS.  No  director,  officer,  employee  or
shareholder  of  the  Issuers  or  any  Guarantor,  as such, shall have any
liability  for  any obligations of the Issuers or any Guarantor  under  the
Notes, the Indenture or for any claim based on, in respect of, or by reason
of, such obligations  or  their  creation.  Each Holder by accepting a Note
waives and releases all such liability. The waiver  and release are part of
the consideration for the issuance of the Notes.

     16. AUTHENTICATION. This Note shall not be valid  until  authenticated
by the manual signature of the Trustee or an authenticating agent.

     17. ABBREVIATIONS. Customary abbreviations may be used in  the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants  by  the  entireties),  JT  TEN  (=  joint  tenants  with  right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).

     18. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition  to  the  rights provided to Holders of Notes under the Indenture,
Holders of Transferred  Restricted Securities shall have all the rights set
forth in the Registration Rights Agreement referred to above.

                                    A-7




<PAGE>


19. GUARANTEE. Payment of  principal  of,  premium, if any, and interest on
the  Notes,  and interest on overdue principal  and  overdue  interest,  if
lawful, as well as all other obligations under the Notes and the Indenture,
is unconditionally  guaranteed  by  each  Guarantor  on a joint and several
basis. Such guarantee is subordinated to the Senior Debt  of such Guarantor
on  the  same  basis  as the Notes are subordinated to Senior Debt  of  the
Issuers.

     20.  ADDITIONAL  AMOUNTS.  The  Issuers  shall  pay  to  Holders  such
Additional Amounts as may  become due and payable under Section 4.17 of the
Indenture.

     21.  INDENTURE AND REGISTRATION  RIGHTS  AGREEMENT.  Each  Holder,  by
accepting a  Note, agrees to be bound to all of the terms and provisions of
the Indenture  and  the  Registration  Rights Agreement, as the same may be
amended from time to time.

     The  Issuers  will  furnish to any Holder  upon  written  request  and
without  charge a copy of the  Indenture  and/or  the  Registration  Rights
Agreement. Requests may be made to:

     Consoltex Group Inc.
     125 Chabanel Street Ouest
     Montreal, Quebec H2N 1E4 Canada
     Attention: Corporate Secretary















                                      A-8






<PAGE>


                                ASSIGNMENT FORM


 To assign this Note, fill in the form below: (I) or (we) assign and transfer
                                 this Note to

                 (Insert assignee's soc. sec. or tax I.D. no.)


             (Print or type assignee's name, address and zip code)


and irrevocably appoint

to transfer this Note on the books of the Issuers.  The agent may substitute
another to act for him.

Date:
Your Signature:

     (Sign exactly as your name appears on the face of this Note)

Signature Guarantee.
















                                      A-9







<PAGE>


                      OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers pursuant
to Section 4.10 or 4.15 of the Indenture, check the box below:
     ( Section 4.10               (  Section 4.15

If you want to elect to have only part of the Note purchased by the
Issuers pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
principal amount you elect to have purchased:  US$

Date:
          (Sign exactly as your name appears on the Note)

             Tax Identification No.:

Signature Guarantee.







<PAGE>



                                   Exhibit B
                   CERTIFICATE TO BE DELIVERED UPON EXCHANGE
                     OR REGISTRATION OF TRANSFER OF NOTES

Re:  11% Series  [A/B]  Senior  Subordinated  Notes due 2003 of
Consoltex Group Inc. and Consoltex (USA) Inc.

This Certificate relates to US$ _______ principal amount of Notes held
in 2( __________ book-entry or * __________ definitive form by
____________________________________________ (the "Transferor").

The Transferor*:

(    has requested the Trustee by written order to deliver in
exchange for its beneficial interest in the Global Note held by
the Depository a Note or Notes in definitive, registered form
of authorized denominations and in an aggregate principal
amount equal to its beneficial interest in such global Note
(or the portion thereof indicated above); or

(    has requested the Trustee by written order to exchange or
 register the transfer of a Note or Notes.

 In connection with such request and in respect of each such Note, the
Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Notes and as provided in Section
2.06 of such Indenture, the transfer of this Note does not require
registration under the Securities Act (as defined below) because:*

(    Such Note is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section
2.06(d)(i)(A) of the Indenture).

(    Such Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act")) in reliance on Rule 144A (in satisfaction
of Section 2.06(a)(ii)(B), Section 2.06(b)(i) or Section 2.06(d)(i)(B)
of the ndenture) or pursuant to an exemption from registration in accordance
with Rule 904 under the Securities Act (in satisfaction of Section 2.06(a)(ii
(B) or Section 2.06(d)(i)(B) of the Indenture).






<PAGE>


(    Such Note is being transferred pursuant to an effective registration
statement under the Securities Act (in satisfaction of Section 2.06(a)(ii)
B)or Section 2.06(d)(i)(B) of the Indenture).

(    Such Note is being transferred in accordance  with Rule 144 under the
Securities Act or in reliance on and in compliance with an  exemption  from
the registration  requirements  of  the  Securities  Act,  other  than Rule
144A or Rule  904 under the Securities Act.  An Opinion of Counsel to the
effect  that such transfer  does  not require registration under the
Securities Act shall be provided upon request by either Issuer
(in  satisfaction  of  Section 2.06(s)(ii)(C) of the Indenture).


                              ============================
                              [INSERT NAME OF TRANSFEROR]


                              By: =======================


					Date: ======================


                                      B-2






<PAGE>
                                                      EXHIBIT 4.2


                           SUPPLEMENTAL INDENTURE
                  =======================================


                             CONSOLTEX GROUP INC.
                             CONSOLTEX (USA) INC.
                                CONSOLTEX INC.
                       THE BALSON-HERCULES GROUP, LTD.
                        LINQ INDUSTRIAL FABRICS, INC.
                            RAFYTEK, S.A. DE C. V.
                        CONSOLTEX MEXICO, S.A. DE C.V.

                                     and

                  FIRST TRUST NATIONAL ASSOCIATION, TRUSTEE


                            SUPPLEMENTAL INDENTURE


                         Dated as of August 18, 1994



                                      to

                                  INDENTURE

                        Dated as of September 30, 1993

               Supplementing and amending the Indenture dated
      as of September 30, 1993, among CONSOLTEX GROUP INC., CONSOLTEX
       (USA) INC., CONSOLTEX INC., THE BALSON-HERCULES GROUP, LTD.,
                      LINQ INDUSTRIAL FABRICS, INC. and
                 FIRST TRUST NATIONAL ASSOCIATION, Trustee
                              with respect to
            11 % Series A Senior Subordinated Notes due 2003
            11 % Series B Senior Subordinated Notes due 2003




<PAGE>

                                      2




SUPPLEMENTAL INDENTURE dated as of August 18, 1994 among Consoltex
Group Inc., a Canadian corporation ("Consoltex Group"), Consoltex
(USA) Inc., a New York corporation ("Consoltex USA" and, together
with Consoltex Group, the "Issuers"), Consoltex Inc., a Quebec
corporation, The Balson-Hercules Group, Ltd., a Rhode Island
corporation ("Batson-Hercules"), LINQ Industrial Fabrics, Inc., a
Delaware corporation ("LINQ" and, together with Consoltex Inc. and
Batson-Hercules, the "Original Guarantors), Consofex Mexico S.A.
de C.V., a corporation organized under the laws of Mexico
("Consoltex Mexico"), Rafytek, S.A. de C.V., a corporation
organized under the laws of Mexico ("Rafytek" and,together with
Consoltex Mexico, the "New Guarantors") and First Trust National
Association, as trustee (the "Trustee") with respect to the 11 %
Series A Senior Subordinated Notes due 2003 of the Issuers and the
11 %" Series B Senior Subordinated Notes due 2003 of the Issuers
issued in exchange therefor (collectively, the "Notes").

                             RECITALS

The Issuers, each of the Original Guarantors and the Trustee are
parties to an indenture dated as of September 30, 1993 (the
"Indenture"), pursuant to which the Issuers issued $120,000,000
aggregate principal amount of the Notes and the Original
Guarantors guaranteed all of the obligations of the Issuers
with respect to the Notes on a Subordinated basis.

Consoltex USA, Consoltex Mexico, Jose Ma. Funtanet Marti,
Nicholas Xacor Eljure, Jofuma, S.A. de C.V., Jordax, S.A.
de C.V., Propitecnica, S.A. de C.V. and Gruppo Marel, S.A. de
C.V. have entered into an agreement pursuant to which Consoltex
Mexico will acquire all of the equity interests of Rafytek
(the "Acquisition").

Upon consummation of the Acquisition, Consoltex Mexico and Rafytek
will be Significant Subsidiaries of Consoltex USA under the Indenture.

Section 4.13 of the Indenture provides that neither Issuer nor any
of their respective Subsidiaries shall acquire or form a Significant
Subsidiary, unless the Issuers (a) designate such Significant
Subsidiary as an Unrestricted Subsidiary pursuant to the terms of the
Indenture or (b) cause such Significant Subsidiary to execute and
deliver to the Trustee a supplemental indenture pursuant to which
such Significant Subsidiary shall guarantee all of the obligations
of the Issuers with respect to the Notes on a senior subordinated basis.

Each of the New Guarantors is duly authorized to execute and
deliver this Supplemental Indenture and to guarantee all of the
obligations of the Issuers with respect to the Notes on a senior
subordinated basis.

All the conditions and requirements necessary to make this Supplemental
Indenture, when duly executed and delivered, a valid and binding
agreement in accordance with its terms and for the purposes herein
expressed have been performed and fulfilled.



<PAGE>

                                      3




NOW, THEREFORE, for value received, it is agreed as follows:

SECTION 1.01.  DEFINED TERMS. Capitalized terms used but not defined
herein shall have the respective meanings assigned to them in the
Indenture.

SECTION 1.02.  ADDITIONAL GUARANTEES. Each of the New Guarantors
agrees that it shall guarantee all of the obligations of the Issuers
with respect to the Notes on a senior subordinated basis as provided
in Sections 4.13 and 10.01 of the Indenture. References in the Indenture
to the term "Guarantor" or "Guarantors" shall be deemed to include each
of the New Guarantors.

SECTION 1.03.  CONSENT TO JURISDICTION. The New Guarantors each
irrevocably

 (a) submits to the jurisdiction of any New York State or Federal
  court sitting in New York City and any appellate court therefrom
  in any action or proceeding arising out of or relating to this
  Supplemental Indenture;

 (b) agrees that all claims in respect of such action or proceeding
  may be heard and determined in such New York State court or in such
  Federal court;

 (c) waives, to the fullest extent it may effectively do so, the
 defense of an inconvenient forum to the maintenance of such action
 or  proceeding;

 (d) consents to the service of any and all process in any action or
 proceeding by the mailing of copies of such process to such New
 Guarantor, at its address maintained in the records of the Issuers;
 and

 (e) agrees that a final judgment in any such action or proceeding
 shall be conclusive and may be enforced in other jurisdictions by suit
 on the judgment or in any other manner provided by law.

Nothing in this Section 1.03 shall affect the right of any party hereto
or any Holder to serve legal process in any other manner permitted by
law or affect the right of any party hereto to bring any action or
proceeding against the Issuers or any Guarantor or their respective
property in the courts of other jurisdictions.

SECTION 1.04.  CONDITION TO EFFECTIVENESS. This Supplemental Indenture
shall become effective on and as of the date counterparts hereof
shall have been executed and delivered by each of the parties hereto.



<PAGE>

                                      4




SECTION 1.05.  RECITALS. The Trustee shall not be responsible in any
manner for the correctness of the recitals herein contained, all of
which are made by the Issuers or THE GUARANTORS. The Trustee makes no
representations as to the validity or sufficiency of this Supplemental
Indenture.

SECTION 1.06.  CONFIRMATION. Except as expressly modified or amended
hereby, the Indenture continues in full force and effect and is in all
respects confirmed and preserved.

SECTION 1.07.  COUNTERPARTS. This Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.



<PAGE>

                                      5




SECTION 1.08.  GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK.


IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.



Dated as of August 18 , 1994     CONSOLTEX GROUP INC.

                                 By: /s/Paul J. Bamatter
                                    Name:
                                    Title

Attest:

/s/C. Suzanne Crawford


Dated as of August 18 , 1994     CONSOLTEX (USA) INC.

                                 By: /s/Paul J. Bamatter
                                    Name:
                                    Title

Attest:

/s/C. Suzanne Crawford


Dated as of August 18 , 1994     CONSOLTEX INC.

                                 By: /s/Paul J. Bamatter
                                    Name:
                                    Title

Attest:

/s/C. Suzanne Crawford




<PAGE>

                                      6




Dated as of August 18 , 1994     THE BALSON-HERCULES GROUP, LTD.

                                 By: /s/Paul J. Bamatter
                                    Name:
                                    Title

Attest:

/s/C. Suzanne Crawford


Dated as of August 18 , 1994     LINQ INDUSTRIAL FABRICS, INC.

                                 By: /s/Paul J. Bamatter
                                    Name:
                                    Title

Attest:

/s/C. Suzanne Crawford


Dated as of August 18 , 1994     RAFYTEK, S.A. DE C.V.

                                 By: /s/Paul J. Bamatter
                                    Name:
                                    Title

Attest:

/s/C. Suzanne Crawford


Dated as of August 18 , 1994     CONSOLTEX MEXICO S.A. DE C.V.

                                 By: /s/Paul J. Bamatter
                                    Name:
                                    Title

Attest:

/s/C. Suzanne Crawford




<PAGE>

                                      7




                                 Dated as of August 18 , 1994 FIRST TRUST
                                 NATIONAL ASSOCIATION, as Trustee

                                 By: /s/Richard Prokosch
                                    Name: Richard Prokosch
                                    Title: Trust Officer

Attest:

__________________________

<PAGE>
                                                            EXHIBIT 4.3

CONSENT IN RESPECT OF 11% SENIOR SUBORDINATED NOTES DUE 2003
============================================================

                                                     Execution Version

                                  Consent
                               in Respect of
                           11% SENIOR SUBORDINATED NOTES DUE 2003


     CONSENT  (this  "CONSENT") given, as of September 18, 2000, by Income
Series, Franklin Income  Securities  Fund  and  Franklin  High  Yield Fund
(together, "FRANKLIN"), collectively as the holders of a majority  of  the
outstanding  11%  Senior  Subordinated Notes due 2003 (the "NOTES") issued
pursuant to the Indenture dated  September  30,1993 (the "FIRST LNDENTURE")
among  Consoltex  Inc.,  a  corporation organized  under the laws of New
Brunswick,  Canada (formerly Consoltex  Group  Inc.)  ("CONSOLTEX  INC."),
Consoltex (USA) Inc., a New York corporation ("Consoltex USA" and together
with Consoltex  Inc.,  the  "Issuers"),  The Balson-Hercules Group Ltd., a
Rhode  Island  corporation,  LINQ Industrial  Fabrics,  Inc.,  a  Delaware
corporation ("LINQ"), Rafytek, S.A. De C.V., a corporation organized under
the  laws  of  Mexico ("RAFYTEK'),  Consoltex  Mexico,  S.A.  De  C.V.,  a
corporation organized  under  the  laws  of Mexico ("Consoltex MEXICO" and
together with the Issuers, certain affiliates  of  the  Issuers,  LINQ and
Rafytek,   the  "Company"),  and  U.S.  Bank  Trust  National  Association
(formerly First Trust National Association), as Trustee.

     WHEREAS,   the  Issuers,  the  original  subsidiary  guarantors  (the
"ORIGINAL GUARANTORS")  and the Trustee are parties to the First Indenture
pursuant to which the Issuers issued the Notes;

     WHEREAS, the Issuers,  the  Original  Guarantors,  Rafytek, Consoltex
Mexico   (together   with   the  Original  Guarantors  and  Rafytek,   the
"Guarantors") and the Trustee  are  parties to the Supplemental Indenture,
dated August 18,1994 (together with the First Indenture, the "INDENTURE");

     WHEREAS, Section 9.02 of the Indenture  authorizes  the  Issuers, the
Guarantors  and  the Trustee, from time to time, with the consent  of  the
holders of not less than a majority in principal amount of
Notes and when authorized by  appropriate  action,  to amend or supplement
the Indenture by supplemental indenture for the purpose therein set forth;
and

      WHEREAS, Franklin holds not less than a majority in principal amount
 ofNotes  and  hereby  agrees  to  the  amendment  of  ceTtain  terms  and
 conditions of the Indenture as more fully set forth, herein.

      NOW, THEREFORE, in consideration of the premises set  forth  herein,
 the parties hereto agree as follows:

      Section 1. CONSENT. Franklin hereby consents to the: (a) waiver (the
 "Waivers")  of  the  ISSUERS'  OBLIGATIONS  UNDER (I) SECTION 4.15 OF THE
 INDENTURE, INCLUDING THE ISSUERS' OBLIGATION  TO MAKE a change of Control
 Offer (as defmed in the Indenture), (ii) Section  4.14  of the Indenture,
 (iii) SECTION 4.11 of the Indenture, (iv) Section 4.10 of  the  Indenture
 and (v) Section 4.07 of the Indenture, in each case, in connection  with,
 and only to the extent necessary to accomplish, the restructuring of  the
 COMPANY  (the "RESTRUCTURING"), as shown on EXHIBIT 1 attached hereto and
 (b) amendment of the Indenture, as set forth in EXHIBIT 2 attached hereto
 (the "AMENDMENTS"). Franklin


<PAGE>




agrees and  acknowledges  that,  by the execution and delivery hereof, the
undersigned makes and provides the  written  Consent to the Restructuring,
the  Waivers  and  the  Amendments as permitted by  Section  9.02  of  the
Indenture. Franklin understands  and agrees that (1) this Consent shall be
effective on, and remain in full force  and  effect  from,  the  date this
Consent is accepted by the Issuers; (2) the Company will be deemed to have
accepted this Consent if, as and when this Consent is countersigned by the
Issuers;  and  (3)  from and after the date hereof, this Consent shall  be
IRREVOCABLE; PROVIDED,  HOWEVER,  that  in  no event shall this Consent be
effective unless American Industrial Partners  Capital  Fund  lI, L.P. and
Les   Gantiers  Holding  B.V.  shall  have  contributed  US$7,377,000  and
US$2,133,000  in  cash,  respectively,  to  Consoltex Holdings, Inc. on or
prior to September 30, 2000.

     Section 2. REPRESENTATIONS AND WARRANTIES.  Franklin  represents  and
 warrants to the Company that: (a) it is the beneficial owner of the Notes
 described on Exhibit 3 hereto; (b) it has the full power and authority to
 give  this  Consent;  (c)  this  Consent  constitutes a valid and legally
 binding  obligation  of  Franklin,  enforceable   against   Franklin   in
 accordance  with  its terms; (d) it need not give any notice to, make any
 filing with or obtain  any  authorization,  consent  or  approval  of any
 government or governmental agency in order to consummate the transactions
 contemplated  hereby;  and (e) it has been given a reasonable opportunity
 to  ask  questions relating  to  the  Waivers,  the  Amendments  and  the
 Restructuring  and to receive answers thereto frozen the Issuers, and all
 such questions have  been  adequately  answered  to  the  satisfaction of
 Franklin.  Each  of the Issuers represents and warrants to Franklin  that
 each of them, as of the date hereof, is in compliance with the Indenture.

      Section 3. LIMITED INDEMNITY. TO the extent of breaches of Section 2
 hereof, Franklin shall indemnify each of the Company and the Trustee, and
 their respective officers,  directors,  managers,  shareholders, members,
 partners, employees, agents and representatives (each,  an  "INDEMNITEE")
 against any loss, liability, damage, settlement, cost, OX other  expense,
 including  reasonable  attorneys'  fees in connection therewith, to which
 any such Indemnitee may directly or  indirectly  become  subj  ect  as  a
 result of any breach by Franklin of its representations or warranties set
 forth in Section 2 hereof.

      Section  4.  MISCELLANEOUS. Franklin agrees, upon request, to execute
 and deliver any additional documents deemed by the Issuers to be necessary
 or desirable to perfect  Franklin's  Consent to the Waivers and Amendments
 and to consummate the Restructuring. Every  obligation  of  Franklin under
 this  Consent  shall  be  binding  upon  Franklin's  successors,  assigns,
 trustees  in  bankruptcy and other legal representatives. No amendment  or
 modification of  any  provision  of this Consent shall be effective unless
 the same shall be set forth in writing  and  signed  by  Franklin  and the
 Issuers.  This  Consent shall be construed in accordance with the laws  of
 the State of New  York,  without regard to principles of conflicts of law.
 If  it  is  determined  by a court  of  competent  jurisdiction  that  any
 provision of this Consent  is invalid under applicable law, such provision
 shall be ineffective only to the extent of such prohibition or invalidity,
 without invalidating the remainder  of this Consent. This Consent contains
 the entire agreement among the Issuers  and  Franklin  and  supersedes all
 prior arrangements or understanding with respect thereto- This Consent may
 be  executed  in separate counterparts each of which shall be an  original
 and  all of which  taken  together  shall  constitute  one  and  the  same
 agreement.

               [END OF PAGE - SIGNATURE PAGE FOLLOWS]



                        -2-
<PAGE>

                  WITNESS WHEREOF, the parties have executed this
Consent as of the date first above written.





                             Franklin Custodian Funds, Inc., on
                             behalf of Income Series

                             By: /s/Christopher Molumphy
                             Name: Christopher Molumphy
                             Title: Executive Vice-President


                             Franklin Templeton Variable Insurance
                             Products Trust,On behalf of Franklin
                             Income Securities Fund

                             By:/s/Christopher Molumphy
                             Name: Christopher Molumphy
                             Title: Executive Vice-President

                             Franklin Templeton Investment Funds,
                             on behalf, of Franklin High Yield Fund

                             By: /s/Betsy Hofman-Schwab
                             Name: Betsy Hofman-Schwab
                             Title: Portfolio Manager, V.P.


Accepted as of September __, 2000:

CONSOLTEX INC.

By: _____________________________
Name:
Title:

CONSOLTEX (USA) INC.

By:  _____________________________
Name:
Title


<PAGE>

                 WITNESS WHEREOF, the parties have
executed this Consent as of the date first above written.




                           Franklin Custodian Funds, Inc., on
                           behalf of Income Series

                           By:
                           Name:
                           Title:


                           Franklin Templeton Variable Insurance
                           Products Trust, On behalf of Franklin
                           Income Securities Fund

                           By:
                           Name:
                           Title:

                           Franklin Templeton Investment Funds,
                           on behalf, of Franklin High Yield Fund

                            By:
                            Name:
                            Title:

Accepted as of September __, 2000:

CONSOLTEX INC.

By: /s/Paul J. Bamatter
Name: Paul J. Bamatter
Title:  V.P. Finance & CFO

CONSOLTEX (USA) INC.

By:  /s/Paul J. Bamatter
Name: Paul J. Bamatter
Title: V.P. Finance & CFO

<PAGE>


 Corporate Structure Prior to the Restructuring


          CHART OMITTED


<PAGE>


Corporate Structure After the Restructuring


     CHART OMITTED


<PAGE>

1. AIP/CGI  NB  Acquisition Corp. ("NB ACQUISITION") exercises option to
   purchase all of  the  outstanding  multiple  voting shares held by Les
   Gantiers  Holding  B.V.  ("LGH")  for  a  purchase  price   equal   to
   US$12,164,529.72,  which  is  offset against the unpaid balance of LGH
   under  the  loan  agreement  with NB  Acquisition  in  the  amount  of
   US$9,041,53 8.51. NB Acquisition  will  pay  US$3,122,991.22 to LGH in
   the form of a demand promissory note (the "NOTE").

2. NB Acquisition will amalgamate (the "Amalgamation")  with  Consoltex
   Inc.,  one  of  the  issuers  under the Indenture-Consoltex Inc., the
   successor after the Amalgamation,  will  be  a  party  to  the  Second
   Supplemental  Indenture,  assuming  all  of  the  obligations  of  its
   predecessor under the Indenture.

3. Consoltex Inc. will distribute all of the capital stock of Consoltex
   USA to Consoltex Holdings, Inc. in a tax-free transfer.

4. Consoltex,  Inc.  pays LGH US$3,122,991.22 in cash in satisfaction of
   the Note. LGH contributes  US$2,133,000  to  Consoltex Holdings, Inc.
   ("HOLDINGS")  in  exchange  for  a  10.5% convertible  PIK  debenture
   maturing  October  15,  2003.  The  capital   structure  of  Holdings
   immediately after the Restructuring, but prior  to the implementation
   of the management option plan of Holdings, will be as follows:


             PRIOR TO RESTRUCTURING AFTER RESTRUCTUING

           NO.            %       VOTING     NO.       %       VOTING %

AIP     14,887,551.00   82.58%   48,67%   1,000.00  100.00%    100.00%
LGH      3,140,000.00   17.42%   51.33%      -        -          -
TOTAL  118,027,551.00   100.00%  100.00%  1,000.00  100,00%    100.00%



5. Subsidiary  mergers:  (a) Vera Pak, S.A. de C.V. merges  with  and  into
   Rafytek, S.A. de C.V. and  (b)  Marino  Technologies  de Mexico, S.A. de
   C.V. sold to, and then merges with and into, Rafytek, S.A. de C.V.
<PAGE>



                        DESCRIPTION OF NOTES

Name and Address of Registered Holder (Please include DTC Number):
Bank of New York
Mutual Funds Custody NY
100 Church St., 10th Floor
NY, NY  10286
DTC#: 0901
Held o behalf of Franklin Templeton funds nos. 309, 385 & 829

Certificate Number(s): -

Aggregate Principal Amount(s) Represented*: $67,700,000

Principal Amount(s) as to which Consents are given in the
Solicitation: $67,700,000


Total Principal amount of Notes

Aggregate Principal Amount Represented: $67,700,000
Principal Amount as to which Consent are given in the
Soliciation: $67,700,000

* Unless otherwise indicated in the column labeled "Principal
Amount(s) As to Which Consents Are Given in the Solicitation,"
you will be deemed to have delivered Consent with respect to the
entire aggregate principal amount represented by the Notes indicated
in the column labeled "Aggregate Principal Amount(s) Represented."


<PAGE>
                                                EXHIBIT 4.4


                       SECOND SUPPLEMENTAL INDENTURE
                     ======================================


                              CONSOLTEX INC.
                           CONSOLTEX (USA) INC.
                      THE BALSON-HERCULES GROUP LTD.
                       LINQ INDUSTRIAL FABRICS, INC.
                           RAFYTEK, S.A. DE C.V.
                      CONSOLTEX MEXICO, S.A. DE C.V.

                                   AND

               U.S. BANK TRUST NATIONAL ASSOCIATION, TRUSTEE



                       SECOND SUPPLEMENTAL INDENTURE

                      DATED AS OF SEPTEMBER 29, 2000







<PAGE>
                       SECOND SUPPLEMENTAL INDENTURE


This   SECOND   SUPPLEMENTAL   INDENTURE,  (the  "SECOND
SUPPLEMENTAL INDENTURE"), dated as of September 29, 2000, is made
by and among Consoltex Inc., a  corporation organized under  the
laws of New Brunswick, Canada and successor  after  the
amalgamation  with  AIP/CGI  NB  Acquisition  Corp.,
Consoltex (USA) Inc., a New York corporation  ("CONSOLTEX USA" and
together with  Consoltex  Inc., the "ISSUERS"), The Balson-Hercules
Group  Ltd.,  a Rhode  Island  corporation,  LINQ  Industrial
Fabrics,  Inc.,  a  Delaware corporation ("LINQ"),  Rafytek,
S.A. de C.V., a corporation organized under the  laws  of
Mexico  ("RAFYTEK"),  Consoltex  Mexico,  S.A.  de  C.V.,  a
corporation organized under  the  laws  of   Mexico ("CONSOLTEX
MEXICO" and together with the Issuers, certain affiliates  of
the  Issuers,  LINQ  and Rafytek, the "COMPANY"), and U.S. Bank
Trust National Association (formerly First  Trust National
Association) (the "TRUSTEE"), governing the 11% Notes due 2003
of the Issuers (the "NOTES").

     WHEREAS,   the   Issuers,  the  original  subsidiary
guarantors  (the "ORIGINAL GUARANTORS")  and the Trustee are
parties to the Indenture, dated September 30, 1993 (the "
FIRST INDENTURE"), pursuant to which the Issuers
issued the Notes;


     WHEREAS,  the Issuers, the  Original  Guarantors,  Rafytek,
Consoltex Mexico  (together   with   the   Original   Guarantors
and  Rafytek,  the "GUARANTORS")  and  the Trustee are parties
to the Supplemental  Indenture, dated August 18, 1994 (together
with the First Indenture, the "INDENTURE");

     WHEREAS, Section  9.02  of  the  Indenture authorizes the
Issuers, the Guarantors and the Trustee, from time to  time,
with  the  consent  of the Holders  of  not less than a majority
in principal amount of Notes and when authorized by  appropriate
action, to amend or supplement the Indenture by supplemental
indenture for the purpose therein set forth;

     WHEREAS,  in  accordance with  Section  9.02  of  the
Indenture,  the Trustee, the Issuers,  the  Guarantors  and
the Holders of not less than a majority in principal amount of
the Notes as of the date hereof have agreed to amend or
supplement certain terms and conditions  of  the  Indenture  to
permit  the  restructuring  of  the  Company  and  Consoltex
Holdings, Inc. ("CHI") as more fully set forth herein; and

     WHEREAS,  the  Issuers  and  the Guarantors, by appropriate
corporate action,  have determined to amend and  supplement
the provisions of the Indenture  in the manner described herein
and have taken all acts necessary to duly authorize,  execute
and deliver this Second Supplemental Indenture and to constitute
this Second  Supplemental  Indenture  a  legal, valid and
binding  agreement  of  each of the Issuers and the Guarantors
enforceable against each of them in accordance with the terms
herein.


     NOW, THEREFORE, in consideration of the premises set forth
herein, the parties hereto agree as follows:

<PAGE>
                                 ARTICLE 1

                     DEFINITIONS AND OTHER PROVISIONS
                          OF GENERAL APPLICATION

     Section 1. GENERAL.   For  all  purposes of this Second
Supplemental Indenture, except as otherwise expressly  provided
or unless the context otherwise requires:

          (a)  capitalized terms used herein without definition
shall have the meanings specified in the Indenture;

          (b) all  references  herein  to  Articles  and
Sections, unless otherwise  specified, refer to the corresponding
Articles and Sections of this Second  Supplemental Indenture and,
where so specified, to the Articles and Sections  of the
Indenture as amended and supplemented by this Second Supplemental
Indenture; and

          (c) the terms "hereof," "herein," "hereby," "hereto,"
"hereunder" and "herewith" refer to this Second Supplemental
Indenture.

                                 ARTICLE 2

                          AMENDMENTS TO INDENTURE

     Section 1.c. AMENDMENT OF SECTION 1.01.

          (a)  Section 1.1 of  the  Indenture is hereby amended
by deleting the  definition  of  "GAAP" and replacing  it  in
its  entirety  with  the following:

          "GAAP" means generally accepted accounting principles
set forth  in  the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or  in such other statements by such
other entity as have been approved by a significant segment of
the accounting profession, which are in effect from time to time.

          (b)  Section 1.1 of the Indenture is hereby amended by
inserting immediately after the definition of
"CHANGE OF CONTROL"  and  immediately before the definition of
"CONSOLIDATED NET INCOME" the following:

          "CHI" means Consoltex Holdings, Inc., a Delaware
corporation.

          (c)  Section  1.1  of the Indenture is hereby amended
by deleting the definition of "CHANGE OF CONTROL" and replacing
it in its entirety with the following:

          "CHANGE OF CONTROL" means the occurrence of any
of the following:

<PAGE>

               (i) the sale, lease or transfer, in one or a
series of related transactions, of all or substantially all
of the assets of CHI to any person or group(as  such term is
used in Section 13(d)(3) of the Exchange Act)(other than the
Principals or their Related Parties);

               (ii) the adoption of a plan relating to the
liquidation or dissolution of CHI; or

               (iii) the  acquisition  by any person or group
as such term is used in Section 13(d)(3) of the Exchange Act)
(other than the Principals and their Related Parties) of direct
or indirect majority in interest (more than 50%) of the voting
power  of  the voting stock of CHI by way  of  amalgamation,
merger or consolidation or otherwise.

          (d)  Section  1.1  of the Indenture is hereby amended
by deleting the definition of "PRINCIPALS" and replacing
it in its entirety with the following:

          "PRINCIPALS" means American Industrial Partners Capital
Fund II, L.P., a Delaware limited partnership, and its Affiliates.

          (e)  Section 1.1 of the Indenture is hereby  amended
by inserting immediately after the definition of "SIGNIFICANT
SUBSIDIARY" and immediately before the definition of
"SUBSIDIARY" the following:

          "SPECIAL  CONTRIBUTION"   means  the  cash
contribution  of US$11,587,000 from CHI to any of  the  Issuers,
US$9,464,000  of which  was  contributed  to  CHI  by American
Industrial Partners Capital Fund II, L.P., and US$2,123,000
of which was contributed to CHI by Les Gantiers Holding B.V.

     Section 2.e. AMENDMENT OF SECTION 4.07. Section 4.07 of the
Indenture is hereby amended by  inserting in subsection
(c)  thereof  immediately preceding the comma ending
"CLAUSE (Y)" the following:

     ; PROVIDED, HOWEVER, that the Special Contribution shall
not be included in the calculation under this clause (y).

     Section 3.e. AMENDMENT OF SECTION 4.11.  Section 4.11 of
the Indenture is  hereby  amended  by deleting "PROVISO
(III)" and replacing  it  in  its entirety with the following:

               (iii) the  payment of reasonable fees to the
Principals and  their  Affiliates   in   connection   with
consulting, management,   investment   banking  or  financial
advisory services  rendered  to  the  Issuers   or  their
respective Subsidiaries   in   an  aggregate  amount  not   to
exceed US$1.4 million per annum,


<PAGE>
     Section 4.e. AMALGAMATION OF CONSOLTEX INC. AND AIP/CGI NB
ACQUISITION CORP. Immediately upon the effectiveness  of the
amalgamation of Consoltex Inc. and AIP/CGI NB Acquisition Corp.
(the "AMALGAMATION"), Consoltex Inc., the successor after the
Amalgamation, hereby assumes all of the obligations of its
predecessor hereunder and under the Indenture and the Notes.

                                 ARTICLE 3

                               MISCELLANEOUS

     Section 1.e. EFFECTIVENESS.   This Second Supplemental
Indenture shall become effective on and as of the date the
counterparts  hereto  shall have been executed and delivered
by each of the parties hereto.


  Section 2.e. GOVERNING LAW.  This Second Supplemental
Indenture shall be  governed  by  and construed in accordance
with the laws of the State of New York applicable to contracts
to be performed entirely in that State.

     Section 3.e. COUNTERPARTS.   This Second Supplemental
Indenture may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the
signatures thereto  and hereto were upon the
same instrument.

     Section  4.e.  SEVERABILITY.   In case any provision  in
this  Second Supplemental  Indenture shall be invalid,  illegal
or  unenforceable,  the validity, legality and enforceability
of the remaining provisions shall not in any way be affected
or impaired thereby.

     Section  5.e.   RATIFICATION.    Except   as   expressly
amended  or supplemented hereby, each provision of the Indenture
shall remain  in  full force  and  effect and, as amended or
supplemented hereby, the Indenture is in all respects  agreed
to, ratified and confirmed by each of the Issuers, the Guarantors
and the Trustee.

     Section 6.e. TRUSTEE.   The  Trustee accepts the trusts
created by the Indenture,  as  supplemented by this  Second
Supplemental  Indenture,  and agrees to perform  the same upon
the terms and conditions of the Indenture, as amended and
supplemented by this Second Supplemental Indenture.

     Section 7.e. RECITALS.   The  recitals contained herein
shall be taken as statements of the Issuers and the Guarantors,
and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or
sufficiency of this Second Supplemental Indenture.

     Section 8.e. REAFFIRMATION.  The  parties  hereto make
and reaffirm as of the date of execution of this Second
Supplemental Indenture all of their respective  representations,
covenants and agreements  set  forth  in  the Indenture.

<PAGE>

     Section 9.e. ASSIGNMENT.  All covenants and agreements of
the Issuers, the Guarantors and the Trustee  in this Second
Supplemental Indenture shall bind each of their respective
successors  and assigns, whether so expressed or not.

     Section  10.e.  THIRD-PARTY BENEFICIARIES.   Nothing  in
this  Second Supplemental Indenture, express or implied, shall
give to any Person, other than the parties hereto  and  their
successors under the Indenture and the Holders of the Notes,
any benefit or any  legal  or equitable right, remedy
or claim under the Indenture.

     Section  11.e. TRUST INDENTURE ACT.  If any provisions
hereof  limit, qualify or conflict with a provision of the Trust
Indenture Act of 1939, as may be amended  from time to time
(the "TIA"), required under the TIA to be a  part  of and
govern  this  Second  Supplemental  Indenture,  the  latter
provision  shall control.  If any provision hereof modifies
or excludes any provision of  the  TIA  that  may  be  so
modified or excluded, the latter provision shall be deemed to
apply to this Second Supplemental Indenture as so modified or
excluded, as the case may be.

     Section  12.e.  UNITY.   All provisions of  this  Second
Supplemental Indenture shall be deemed to be  incorporated  in,
and made a part of, the Indenture; and the Indenture, as
amended and supplemented  by  this  Second Supplemental
Indenture, shall be read, taken and construed as one and  the
same instrument.

                               [END OF PAGE]
                         [SIGNATURE PAGES FOLLOW]



<PAGE>
     IN WITNESS  WHEREOF,  the  parties  hereto  have  caused
this  Second Supplemental  Indenture  to  be  duly executed as
of the day and year first above written.

CONSOLTEX INC.

By:/s/Paul J. Bamatter
   Name:Paul J. Bamatter
   Title:V-P Finance and CFO


CONSOLTEX (USA) INC.

By:/s/Paul J. Bamatter
   Name:Paul J. Bamatter
   Title:V-P Finance and CFO


THE BALSON-HERCULES GROUP, LTD.

By:/s/Paul J. Bamatter
   Name:Paul J. Bamatter
   Title:V-P Strategic Planning


LINQ INDUSTRIAL FABRICS, INC.

By:/s/Paul J. Bamatter
   Name:Paul J. Bamatter
   Title:V-P, Strategic Planning

RAFYTEK, S.A. DE C.V.

By:/s/Paul J. Bamatter
   Name:Paul J. Bamatter
   Title:Director

<PAGE>

CONSOLTEX MEXICO, S.A. DE C.V.

By:/s/C. Suzanne Crawford
   Name:C. Suzanne Crawford
   Title:Attorney-in-Fact


U.S. BANK TRUST NATIONAL ASSOCIATION

By:
   Name:
   Title:

<PAGE>

CONSOLTEX MEXICO, S.A. DE C.V.

By:
   Name:
   Title:


U.S. BANK TRUST NATIONAL ASSOCIATION

By:/s/Joel J. Geist
   Name:Joel J. Geist
   Title:Asst V-P


<PAGE>
                                                          EXHIBIT 4.5

                                                          EXECUTION VERSION








                         CONSOLTEX HOLDINGS, INC.
                              CONSOLTEX INC.
                           CONSOLTEX (USA) INC.
                      THE BALSON-HERCULES GROUP LTD.
                       LINQ INDUSTRIAL FABRICS, INC.
                           RAFYTEK, S.A. DE C.V.
                      CONSOLTEX MEXICO, S.A. DE C.V.

                                    AND

               U.S. BANK TRUST NATIONAL ASSOCIATION, TRUSTEE


                   ____________________________________

                       THIRD SUPPLEMENTAL INDENTURE

                        DATED AS OF APRIL 12, 2001
                   ____________________________________




<PAGE>





                       THIRD SUPPLEMENTAL INDENTURE


     This   THIRD   SUPPLEMENTAL   INDENTURE,   (the   "THIRD  SUPPLEMENTAL
INDENTURE"),  dated  as of April 12, 2001, is made by and  among  Consoltex
Holdings, Inc., a Delaware  corporation  and the parent of the Issuers (the
"NEW GUARANTOR"), Consoltex Inc., a  corporation  organized  under the laws
of New Brunswick, Canada and successor after the amalgamation  with AIP/CGI
NB  Acquisition  Corp.,  Consoltex  (USA)  Inc.,  a  New  York  corporation
("CONSOLTEX  USA"  and  together  with Consoltex Inc., the "ISSUERS"),  The
Balson-Hercules Group Ltd., a Rhode  Island  corporation,  LINQ  Industrial
Fabrics,  Inc.,  a Delaware corporation ("LINQ"), Rafytek, S.A. de C.V.,  a
corporation organized  under  the  laws  of  Mexico  ("RAFYTEK"), Consoltex
Mexico,  S.A. de C.V., a corporation organized under the  laws  of   Mexico
("CONSOLTEX  MEXICO"),  and  U.S. Bank Trust National Association (formerly
First Trust National Association)  (the "TRUSTEE"), governing the 11% Notes
due 2003 of the Issuers (the "NOTES").

     WHEREAS,  the  Issuers,  the  original   subsidiary   guarantors  (the
"ORIGINAL GUARANTORS") and the Trustee are parties to the Indenture,  dated
September  30, 1993 (the " FIRST INDENTURE"), pursuant to which the Issuers
issued the Notes;

     WHEREAS,  the  Issuers,  the  Original  Guarantors, Rafytek, Consoltex
Mexico   (together   with  the  Original  Guarantors   and   Rafytek,   the
"GUARANTORS") and the  Trustee  are  parties to the Supplemental Indenture,
dated  August  18,  1994,  and  the Second  Supplemental  Indenture,  dated
September 29, 2000 (together with the First Indenture, the "INDENTURE");

     WHEREAS, Section 9.01(d) of  the Indenture authorizes the Issuers, the
Guarantors and the Trustee, from time  to  time, without the consent of any
Holder, to amend or supplement the Indenture  by  supplemental indenture to
provide for additional Guarantors;

     WHEREAS,  in  accordance with Section 9.01(d) of  the  Indenture,  the
Trustee, the Issuers,  and  the  Guarantors  have  agreed  to  add  the New
Guarantor as a Guarantor under the Indenture; and

     WHEREAS,  the  Issuers  and  the  Guarantors, by appropriate corporate
action,  have  determined to amend and supplement  the  provisions  of  the
Indenture in the  manner described herein and have taken all acts necessary
to duly authorize,  execute  and  deliver this Third Supplemental Indenture
and to constitute this Third Supplemental  Indenture  a  legal,  valid  and
binding  agreement  of  each  of the Issuers and the Guarantors enforceable
against each of them in accordance with the terms herein.

     NOW, THEREFORE, in consideration of the premises set forth herein, the
parties hereto agree as follows:
                                 ARTICLE 1

                     DEFINITIONS AND OTHER PROVISIONS
                          OF GENERAL APPLICATION

     Section 1.1. GENERAL.  For  all  purposes  of  this Third Supplemental
Indenture,  except as otherwise expressly provided or  unless  the  context
otherwise requires:

          (a)  capitalized  terms used herein without definition shall have
     the meanings specified in the Indenture;

          (b)  all references  herein  to  Articles  and  Sections,  unless
     otherwise specified,  refer to the corresponding Articles and Sections
     of this Third Supplemental  Indenture  and, where so specified, to the
     Articles and Sections of the Indenture as  amended and supplemented by
     this Third Supplemental Indenture; and

          (c) the terms "hereof," "herein," "hereby," "hereto," "hereunder"
     and "herewith" refer to this Third Supplemental Indenture.

     Section 1.2. ADDITIONAL GUARANTEE.  The New  Guarantor  agrees that it
shall guarantee all  of the obligations of the Issuers with respect  to the
Notes  on  a  senior subordinated basis as provided in Section 10.01 of the
Indenture.   References  in  the  Indenture  to  the  term  "Guarantor"  or
"Guarantors" shall be deemed to include the New Guarantor.

     Section 1.3. CONSENT TO JURISDICTION.  The New Guarantor irrevocably

          (a)  submits to the jurisdiction of any New York State or Federal
     court sitting  in  New  York City and any appellate court therefrom in
     any action or proceeding  arising  out  of  or  relating to this Third
     Supplemental Indenture;

          (b)  agrees  that  all  claims  in  respect  of  such  action  or
     proceeding may be heard and determined in such New York State court or
     in such Federal court;

          (c) waives, to the fullest extent it may effectively  do  so, the
     defense of an inconvenient forum to the maintenance of such action  or
     proceeding;

          (d) consents to the services of any and all process in any action
     or  proceeding  by  the  mailing  of copies of such process to the New
     Guarantor, at its address maintained  in  the  records of the Issuers;
     and

          (e) agrees that a final judgment in any such action or proceeding
     shall be conclusive and may be enforced in other jurisdictions by suit
     on the judgment or in any other manner provided by law.

Nothing in this Section 1.3 shall affect the right of  any  party hereto or
any Holder to serve legal process in any other manner permitted  by  law or
affect  the  right  of  any  party hereto to bring any action or proceeding
against the Issuers or any Guarantor  or  their  respective property in the
courts of other jurisdictions.

                                 ARTICLE 2

                               MISCELLANEOUS

     Section 2.1. EFFECTIVENESS.   This Third Supplemental  Indenture shall
become effective on and as of the date the counterparts hereto  shall  have
been executed and delivered by each of the parties hereto.

     Section  2.2.  GOVERNING LAW.  This Third Supplemental Indenture shall
be governed by and construed  in  accordance  with the laws of the State of
New York applicable to contracts to be performed entirely in that State.

     Section 2.3. COUNTERPARTS.  This Third Supplemental  Indenture  may be
signed  in  any number of counterparts, each of which shall be an original,
with the same  effect as if the signatures thereto and hereto were upon the
same instrument.

     Section 2.4.  SEVERABILITY.   In  case  any  provision  in  this Third
Supplemental  Indenture  shall  be  invalid, illegal or unenforceable,  the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

     Section   2.5.  RATIFICATION.   Except   as   expressly   amended   or
supplemented hereby,  each  provision of the Indenture shall remain in full
force and effect and, as amended  or  supplemented hereby, the Indenture is
in all respects agreed to, ratified and  confirmed  by each of the Issuers,
the Guarantors and the Trustee.

     Section 2.6. TRUSTEE.  The Trustee accepts the trusts  created  by the
Indenture, as supplemented by this Third Supplemental Indenture, and agrees
to  perform  the  same  upon  the terms and conditions of the Indenture, as
amended and supplemented by this Third Supplemental Indenture.

     Section 2.7. RECITALS.  The  recitals  contained herein shall be taken
as statements of the Issuers and the Guarantors, and the Trustee assumes no
responsibility for their correctness.  The Trustee makes no representations
as to the validity or sufficiency of this Third Supplemental Indenture.

     Section 2.8. REAFFIRMATION.  The parties  hereto  make and reaffirm as
of the date of execution of this Third Supplemental Indenture  all of their
respective  representations,  covenants  and  agreements  set forth in  the
Indenture.

     Section 2.9. ASSIGNMENT.  All covenants and agreements of the Issuers,
the  Guarantors and the Trustee in this Third Supplemental Indenture  shall
bind each  of their respective successors and assigns, whether so expressed
or not.

     Section  2.10.  THIRD-PARTY  BENEFICIARIES.   Nothing  in  this  Third
Supplemental Indenture, express or implied, shall give to any Person, other
than  the  parties  hereto and their successors under the Indenture and the
Holders of the Notes,  any  benefit or any legal or equitable right, remedy
or claim under the Indenture.

     Section 2.11. TRUST INDENTURE  ACT.   If  any provisions hereof limit,
qualify or conflict with a provision of the Trust Indenture Act of 1939, as
may be amended from time to time (the "TIA"), required  under the TIA to be
a  part  of  and  govern  this  Third  Supplemental  Indenture, the  latter
provision shall control.  If any provision hereof modifies  or excludes any
provision  of  the  TIA  that  may  be so modified or excluded, the  latter
provision shall be deemed to apply to  this Third Supplemental Indenture as
so modified or excluded, as the case may be.

     Section  2.12.  UNITY.   All provisions  of  this  Third  Supplemental
Indenture shall be deemed to be  incorporated  in,  and made a part of, the
Indenture;  and the Indenture, as amended and supplemented  by  this  Third
Supplemental  Indenture,  shall be read, taken and construed as one and the
same instrument.

                               [END OF PAGE]
                         [SIGNATURE PAGES FOLLOW]





<PAGE>



     IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Third
Supplemental Indenture to be  duly  executed  as  of the day and year first
above written.

                                  CONSOLTEX HOLDINGS, INC.



                                  By: ____________________________________
                                   Name:
                                   Title:


                                  CONSOLTEX INC.



                                  By: ____________________________________
                                   Name:
                                   Title:


                                  CONSOLTEX (USA) INC.


                                  By: ____________________________________
                                   Name:
                                   Title:


                                  THE BALSON-HERCULES GROUP LTD.


                                  By: ____________________________________
                                   Name:
                                   Title:






<PAGE>


                                  LINQ INDUSTRIAL FABRICS, INC.



                                  By: ____________________________________
                                   Name:
                                   Title:

                                  RAFYTEK, S.A. DE C.V.


                                  By: ____________________________________
                                   Name:
                                   Title:


                                  CONSOLTEX MEXICO, S.A. DE C.V.



                                  By: ____________________________________
                                   Name:
                                   Title:


                                  U.S. BANK TRUST NATIONAL ASSOCIATION



                                  By: ____________________________________
                                   Name:
                                   Title:



<PAGE>

                                              EXHIBIT 4.6


                         STOCKHOLDERS AGREEMENT
                       ==========================




                             [EXECUTION COPY]



                          STOCKHOLDERS AGREEMENT


                       dated as of September 9, 1999


                                   among


                       AIP/CGI NB ACQUISITION CORP.

                           CONSOLTEX GROUP INC.,

                        LES GANTIERS HOLDING B.V.,

                           LES GANTIERS LIMITED,

                                    and

                             THE BIG SKY TRUST






<PAGE>

                            TABLE OF CONTENTS

                                                               PAGE

SECTION 1.   DEFINITIONS........................................ 1
        1.1  DEFINED TERMS...................................... 1
        1.2  OTHER DEFINITIONAL PROVISIONS; INTERPRETATION...... 6

SECTION 2.  REPRESENTATIONS AND WARRANTIES...................... 6
        2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY....... 6
        2.2 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS...7
        2.3 REPRESENTATIONS AND WARRANTIES OF LGH AND LGL........7

SECTION 3.  CORPORATE GOVERNANCE............................... 10
        3.1 BOARD OF DIRECTORS................................. 10
        3.2 BOARD COMMITTEES................................... 11
        3.3 FINANCIAL STATEMENTS AND OTHER INFORMATION......... 11
        3.4 AFFIRMATIVE COVENANTS.............................. 12
        3.5 NEGATIVE COVENANTS................................. 13
        3.6 ARTICLES OF INCORPORATION AND BY-LAWS.............. 15

SECTION 4.  TRANSFERS RESTRICTIONS; OPTION ON LGH SECURITIES... 15
        4.1 TRANSFER OR CONVERSION OF MULTIPLE VOTING SHARES... 15
        4.2 EFFECT OF VOID TRANSFERS OR CONVERSIONS............ 16
        4.3 LEGEND ON SECURITIES............................... 16
        4.4 TRANSFERS OF INTERESTS IN LGH...................... 16
        4.5 OPTION TO PURCHASE LGH SECURITIES.................. 16

SECTION 5.  MISCELLANEOUS...................................... 18
        5.1 EFFECTIVENESS AND TERMINATION...................... 18
        5.2 ADDITIONAL SECURITIES SUBJECT TO AGREEMENT......... 18
        5.3 INJUNCTIVE RELIEF.................................. 18
        5.4 OTHER AGREEMENTS................................... 18
        5.5 AMENDMENTS......................................... 19
        5.6 SUCCESSORS......................................... 19
        5.7 NOTICES............................................ 19
        5.8 INTEGRATION ........................................20
        5.9 SEVERABILITY....................................... 20
        5.10 COUNTERPARTS...................................... 20
        5.11 GOVERNING LAW..................................... 20
        5.12 JURISDICTION ......................................20

 <PAGE>



         THIS STOCKHOLDERS AGREEMENT (this "AGREEMENT"), is made
as of September 9, 1999 among Consoltex Group Inc., a corporation
subject to the laws of Canada (the "COMPANY"), AIP/CGI NB
Acquisition Corp., a corporation subject to the laws of New
Brunswick ("AIP"), Les Gantiers Holding B.V., a company subject
to the laws of the Netherlands ("LGH"), Les Gantiers Limited, a
company incorporated under the laws of Jersey ("LGL"), and The
Big Sky Trust, a trust established under the laws of the Island
of Jersey (the "TRUST").

                           W I T N E S S E T H :

          WHEREAS, AIP and the Company are entering into a
certain letter agreement of even date herewith
the "OFFER AGREEMENT") pursuant to which AIP will agree,
subject to the conditions set forth therein, to make a
tender offer for all of the outstanding Subordinate Voting Shares
the "TENDER OFFER"); and

          WHEREAS, AIP requires, as a condition to its execution
of the Offer Agreement that it enter into this Agreement with the
Company, LGH, LGL, and the Trust, and in light of the substantial
direct and indirect benefits that each expects to realize as a
result of the Tender Offer, such other persons desire to enter
into this Agreement with AIP.

          NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained, the parties hereto
agree as follows:

          SECTION 1.DEFINITIONS

          1.1* DEFINED TERMS.  As used in this Agreement, terms
defined in the headings and the recitals shall have their
respective assigned meanings, and the following capitalized
terms shall have the meanings ascribed to them below:

          "AFFILIATE" means, with respect to any Person,
any Person that directly or indirectly controls, is controlled
by or is under common control with, such Person.  For purposes
of the foregoing definition, "control" shall have the meaning
specified in Rule 12b-2 under the Exchange Act.

          "AIP LOAN AGREEMENT" means the Loan Agreement to be
entered into between LGH and AIP, dated as of the Closing Date.

          "BOARD OF DIRECTORS" means, unless the context
otherwise indicates, the Board of Directors of the Company, as
the same shall from time to time be constituted.

          "CAPITAL EXPENDITURES" means all expenditures
(consistent with past practice and established Company policy)
for any capital or fixed assets or improvements, or for
replacements, substitutions or additions thereto
(including the principal portion of capitalized lease
obligations but excluding expenditures which are fully expensed
in the period incurred in accordance with GAAP consistently
applied).

 <PAGE>

          "COATTAIL AGREEMENT" means the Trust Agreement made
as of March 22, 1993 among LGH, Richard H. Willett,
Anne Elizabeth Willett, the Company and Montreal Trust Company,
as amended.

          "CLAIRVEST LOAN AGREEMENT" means that certain Loan
Agreement among LGH, LGL, RHW and Clairvest Group Inc., dated
January 13, 1997, and related security agreements, as amended.

          "CHANGE OF CONTROL" means (a) a "change of control"
under the Credit Agreement or (b) a "change of control" under
the Indenture; PROVIDED that for purposes of Section 4.5(e)
ii) hereof, Change of Control shall not include any event
(i) resulting from Richard H. Willett's gross negligence
or willful misconduct in the performance of his duties as a
director or officer of the Company or any of its Subsidiaries or
(ii) resulting from actions taken by LGH, LGL or the Trust in
material violation of this Agreement.

          "CLOSING DATE" means the date the Subordinate Voting
Shares are taken up and paid for pursuant to the Tender Offer.

          "COMPANY OPTION" means the option issued by the Company,
granting AIP the right to purchase Subordinate Voting Shares of
the Company pursuant to that certain Option Agreement of even
date herewith.

          "COMPANY SALE" means the consummation of a transaction,
whether in a single transaction or in a series of related and
substantially contemporaneous transactions, with a Third Party or
a group of Third Parties that are Affiliates of each other
pursuant to which such party or parties (a) acquire
(whether by merger, consolidation, or transfer or issuance of
capital stock or otherwise) capital stock of the Company (or
any surviving or resulting corporation) possessing the voting
power to elect a majority of the board of directors of the
Company (or such surviving or resulting corporation) or
(b) acquire assets constituting all or substantially all of
the assets of the Company and its Subsidiaries (as determined
on a consolidated basis).

          "CREDIT AGREEMENT" means the Credit Agreement,
dated March 19, 1996 among the Company, certain of its
subsidiaries, National Bank of Canada and NationsBank,
National Association and the other lenders thereto from time
to time, as amended, restated or supplemented.

          "DEFAULT" means (a) an event of default under the
Credit Agreement, (b) an event of default under the Indenture,
(c) the occurrence of a Change of Control or (d) gross negligence
or willful misconduct by Richard H. Willett in the performance of
his duties as a director or officer of the Company or any of its
Subsidiaries which continues uncured after a period of 30 days
following written notice thereof from the Company to
Richard H. Willett.

 <PAGE>

          "EXCHANGE ACT" means the United States Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, as the same may be amended from
time to time.

          "GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of
the accounting profession.

          "GOVERNMENTAL AUTHORITY" means any nation or
government, any state or other political subdivision thereof,
and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining
to government.

          "GUARANTY AGREEMENT" means the Guaranty Agreement,
in favor of Les Gantiers Holding, B.V., dated as of the date
hereof, of American Industrial Partners Capital Fund II, L.P.

          "INDEBTEDNESS" means, with respect to any Person,
(a) any indebtedness for borrowed money or issued in
substitution for or exchange of indebtedness for borrowed
money, (b) any indebtedness evidenced by any note, bond,
debenture or other debt instrument, (c) any indebtedness for
the deferred purchase price of property or services with
respect to which a Person is liable, contingently or otherwise,
as obligor or otherwise (other than current trade payables and
other current liabilities incurred in the ordinary course of
business), (d) any commitment by which a Person assures a
creditor against loss (including contingent reimbursement
obligations with respect to letters of credit),
(e) any obligations for which a Person is obligated pursuant
to a guaranty, (f) any obligations under capitalized leases with
respect to which a Person is liable, contingently or otherwise,
as obligor, guarantor or otherwise, or with respect to which
obligations a Person assures a creditor against loss,
(g) any indebtedness secured by a Lien on a Person's assets,
and (h) net obligations under hedging arrangements designed to
protect a Person against fluctuations in interest rates,
currency exchange rates or commodity prices.

          "INDENTURE" means the Indenture, dated as of
September 30, 1993,among the Company, certain of its
subsidiaries and First Trust National Association, as Trustee.

          "LIENS" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, without
limitation, any conditional sale or other title retention
agreement or lease in the nature thereof), any sale of
receivables with recourse against the Company, any Subsidiary or
any Affiliate, any filing or agreement to file a financing
statement as debtor under the Uniform Commercial Code, personal
property legislation in Canada or any similar statute other than
to reflect ownership by a third party of property leased to the
Company or any Subsidiaries under a lease which is not in the
nature of a conditional sale or title retention agreement, or
any subordination arrangement in favor of another Person
(other than any subordination arising in the ordinary course
of business).

 <PAGE>

          "LOAN PURCHASE AGREEMENT" means that certain Loan
Purchase Agreement among AIP, Clairvest Group Inc., certain
other parties and the Company, dated as of the date hereof.

          "MANAGEMENT SERVICES AGREEMENT" means the Management
Services Agreement attached hereto as Exhibit 1 to be executed
on the Closing Date.

          "LOCK-UP AGREEMENT" means the Lock-up Agreement, dated
as of the date hereof, between AIP and Clairvest Group Inc.

          "MULTIPLE VOTING SHARES" means the Multiple Voting
Shares in the capital of the Company.

          "OPTION AGREEMENT" means the Option Agreement, dated
the date hereof, between AIP and the Company.

          "OPTION COMMENCEMENT DATE" means the first to occur of
(i) the consummation of the transactions contemplated by the
Loan Purchase Agreement and the Tender Offer and
(ii) a Triggering Event.

          "OPTION EXPIRY DATE" means the earliest of: (i) 5 days
after Securities are taken up under, or the effective date of,
an Acquisition Proposal (as defined in the Offer Agreement),
(ii) the day the Offer (as defined in the Offer Agreement)
expires and the conditions thereto have not been waived or
satisfied or the day the Offer is withdrawn and (iii) 255 days
after the date of this Agreement.

          "OPTION SHARES" means, prior to the Termination of
the Coattail Agreement,  3,140,000 Subordinate Voting Shares
issued upon the conversion of 3,140,000 Multiple Voting Shares
held by LGH as of the date of this Agreement, and from and
after the termination of the Coattail Agreement, means
3,140,000 Multiple Voting Shares held by LGH.

          "ORGANIC CHANGE" means any recapitalization,
reorganization, reclassification, consolidation, merger,
statutory arrangement, sale of all or substantially all of
the Company's assets or other transaction, in each case which
is effected in such a way that the holders of Securities are
entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or
in exchange for such Securities.

          "PERMITTED INDEBTEDNESS" means (i) outstanding and
unpaid principal and interest under the Credit Agreement and
the Indenture, (ii) Indebtedness arising from guarantees of
the Company in respect of obligations of its Subsidiaries for
the purchases of raw materials in the ordinary course of
business and (iii) other Indebtedness of the Company and
its Subsidiaries not exceeding an aggregate principal amount
of $5 million outstanding at any time on a consolidated basis.

          "PERMITTED LIENS" means (a) liens securing
obligations under the Credit Agreement; (b) liens on property
of a Person existing at the time such Person is amalgamated,
merged into or consolidated with the Company or any of its
Subsidiaries; PROVIDED that such liens

 <PAGE>


were in existence prior to the contemplation of such amalgamation,
merger or consolidation; (c)liens on property existing at the time
of acquisition thereof by the Company or any of its Subsidiaries;
PROVIDED that such liens were in existence prior to the
contemplation of such acquisition; (d) liens to secure the
performance of statutory obligations, surety or appeal bonds,
performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(e) liens existing on the date of this Agreement;
(f) liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested
in good faith by appropriate proceedings promptly instituted
and diligently concluded; PROVIDED that any reserve or other
appropriate provision as shall be required in conformity with
GAAP shall have been made therefor; and (g) liens incurred in
the ordinary course of business of the Company or any of its
Subsidiaries with respect to obligations that do not exceed $5
million at any one time outstanding and that (i) are not
incurred in connection with the borrowing of money or the
obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (ii) do not in the aggregate
materially detract from the value of the property or materially
impair the use thereof in the operation of business by the
Company or any of its Subsidiaries.

          "PERSON" means any individual, corporation,
partnership, trust, joint stock company, business trust,
unincorporated association, joint venture, Governmental
Authority or other entity of any nature whatsoever.

          "REQUIRED HOLDERS" means holders of Voting Securities
possessing at least two-thirds (2/3) of the voting power of all
Voting Securities then outstanding.

          "SECURITIES" means Subordinate Voting Shares, Multiple
Voting Shares or other capital stock or equity securities of the
Company, whether outstanding on the date hereof or hereafter
issued.

          "SET-OFF AMOUNT" means C$13.4 million increasing at
a rate of 10.5% per annum from the date hereof (computed on the
basis of a 360-day year and the actual number of days elapsed
to the Option Closing Date).

          "STOCKHOLDERS" means AIP and LGH.

          "SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association or other business entity
of which more than fifty percent (50%) of the total voting power
of shares of capital stock entitled (without regard to the
occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof, or more than fifty
percent (50%) of the equity interest therein, is at the time
owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of such Person or a
combination thereof.

          "SUBORDINATE VOTING SHARES" means the Subordinate
Voting Shares in the capital of the Company.

          "THIRD PARTY" means any Person other than the Company,
the Stockholders the other parties to this Agreement and any
trustee or beneficiary of the Trust and all such Person's
Affiliates.

 <PAGE>

          "TRANSACTION AGREEMENTS" means the Management Services
Agreement, the Company Option and the Guaranty.

          "TRANSFER" means any transfer, sale, assignment,
distribution, exchange, mortgage, pledge, hypothecation or other
disposition of any Securities or any interest therein
(including a transfer of the voting power of such Securities by
proxy, voting agreement or otherwise).

          "TRIGGERING EVENT" means the date on which AIP is
entitled to receive the Cash Compensation Amount (as defined in
the Offer Agreement).

          "VOTING SECURITIES" means any Securities entitled
(without regard to the occurrence of any contingency) to vote in
the election of directors.

          1.2  OTHER DEFINITIONAL PROVISIONS; INTERPRETATION.
(a)  The words "hereof",  "herein", and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, Subsection, Schedule and Exhibit
references are to this Agreement unless otherwise specified.

          (b)  The headings in this Agreement are included for
convenience of reference only and shall not limit or otherwise
affect the meaning or interpretation of this Agreement.

          (c)  The meanings given to terms defined herein
shall be equally applicable to both the singular and plural
forms of such terms.

          SECTION 2.REPRESENTATIONS AND WARRANTIES.

          2.1  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Stockholders
that:

          (a)  it is a corporation duly incorporated, organized,
validly existing and in good standing under the laws of Canada,
it has full power and authority to execute, deliver and perform
this Agreement and to consummate the transactions contemplated
hereby, and the execution, delivery and performance by it of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate and stockholder action;

          (b)  this Agreement has been duly and validly executed
and delivered by the Company and constitutes a legal and binding
obligation of the Company,enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights and to general principles of equity; and

          (c)  the execution, delivery and performance by the
Company of this Agreement and the performance by the Company
of its obligations hereunder will not, with or without the
giving of notice or lapse of time, or both (i) violate any
provision of law, statute, rule or regulation to which the
Company is subject, (ii) violate any order, judgment or decree

 <PAGE>


applicable to the Company or (iii) conflict with, or result in
a breach or default under, any term or condition of the
Company's articles of incorporation or by-laws or any agreement
or instrument to which the Company is a party or by which it is
bound.

        2.2  REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS.
Each Stockholder (as to itself only) represents and warrants to
the Company and the other Stockholder that:

          (a)  this Agreement has been duly and validly executed
and delivered by such Stockholder and this Agreement constitutes
a legal and binding obligation of such Stockholder, enforceable
against such Stockholder in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer,reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general principles of
equity; and

          (b)  the execution, delivery and performance by such
Stockholder of this Agreement and the performance by such
Stockholder of its obligations hereunder will not, with or
without the giving of notice or lapse of time,or both (i)
violate any provision of law, statute, rule or regulation to
which such Stockholder is subject, (ii) violate any order,
judgment or decree applicable to such Stockholder, or
(iii) conflict with, or result in a breach or default under,
any term or condition of any agreement or other instrument to
which such Stockholder is a party or by which such Stockholder
is bound.

          2.3  REPRESENTATIONS AND WARRANTIES OF LGH AND LGL.

          (a)  LGH represents and warrants to AIP that:

               (i)  LGH is the legal and beneficial owner of
and has good title to 3,140,000 Multiple Voting Shares, free and
clear of any Liens(other than Liens incurred in connection with
the Loan Purchase Agreement, the Coattail Agreement and the
Clairvest Loan Agreement); and

               (ii) no event has occurred prior to the date
hereof (or, as a result of actions taken prior to the date
hereof,is required to occur) that would, when given effect,
either by itself or in conjunction with the transactions
contemplated by the Offer Agreement, cause a Change of Control.

          (b)  LGL represents and warrants to AIP that:

               (i)  LGL is the legal and beneficial owner of
all of the issued and outstanding capital stock of LGH;

               (ii) no event has occurred prior to the date
hereof (or, as a result of actions taken prior to the date
hereof, is required to occur) that would, when given effect,
either by itself or in conjunction with the transactions
contemplated by the Offer Agreement, cause a Change of Control;
and
               (iii)the execution, delivery and performance by
LGL of this

 <PAGE>

Agreement and the performance of its obligations
hereunder will not, with or without the giving of notice or
lapse of time, or both (A) violate any provision of law,
statute, rule or regulation to which LGL is subject,
(B) violate any order, judgment or decree applicable to LGL
or (C) conflict with, or result in a breach or default under,
any term or condition of any agreement or other instrument to
which LGL is a party or by which it is bound; and

               (iv)this Agreement has been duly and validly
executed and delivered by LGL,  and this Agreement constitutes a
legal and binding obligation of LGL, enforceable against LGL in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors'
rights and to general principles of equity; and

          (c)  the Trust represents and warrants to AIP that:

               (i) the Trust is the legal and beneficial owner
of all of the issued and outstanding capital stock of LGL;

               (ii) the "Willett Family" (as defined in section
3.3.3(a) of the Company's restated articles of incorporation
(the "ARTICLES")) is the beneficial owner (as defined in section
3.3.3(b) of the Articles) of Multiple Voting Shares and
Subordinate Voting Shares having attached thereto 50% or more of
the votes attaching to all of the Multiple Voting Shares and
Subordinate Voting Shares outstanding as of the date hereof;

               (iii) no event has occurred prior to the date
hereof (or, as a result of actions taken prior to the date
hereof, is required to occur) that would, when given effect,
either by itself or in conjunction with the transactions
contemplated by the Offer Agreement, cause a Change of Control;
and
               (iv) the execution, delivery and performance by
the Trust of this Agreement and the performance of its
obligations hereunder will not, with or without the giving of
notice or lapse of time, or both (A) violate any provision of
law, statute, rule or regulation to which the Trust is subject,
(B) violate any order, judgment or decree applicable to the
Trust or (C) conflict with, or result in a breach or default
under, any term or condition of any agreement or other instrument
to which the Trust is a party or by which it is bound;

               (v) this Agreement has been duly and validly
executed and delivered by the Trust,  and this Agreement
constitutes a legal and binding obligation of the Trust,
enforceable against the Trust in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general principles of equity.

 <PAGE>

          SECTION 3.CORPORATE GOVERNANCE.

          3.1  BOARD OF DIRECTORS.  (a) Subject to Sections
3.1(b) and 3.1(e), each Stockholder hereby agrees to vote all
of the Voting Securities owned or held of record by such
Stockholder and to take all other necessary stockholder action
so as to elect and to continue in office a Board of Directors
and board of directors of each of the Subsidiaries of the
Company (to the extent permitted by applicable local law)
consisting of five members, of which (i) three (3) members
shall be qualified designees of LGH and (ii) two (2) members
shall be qualified designees of AIP.  LGH agrees to use its best
efforts to nominate, remove, and replace its designees to
the Board of Directors so that its designees, consistent with
their fiduciary duties, are directors who effectively and
efficiently manage the operations of the Company.

          (b)  Prior to the Closing Date, the Company shall
deliver to AIP(i) the resignations provided for in Section 3.1
(i) of the Lock-up Agreement and the resignations of
Paul Bamatter, William L. Holt and Henry Winterstern
(the "RESIGNATIONS") and (ii) unanimous resolutions
(the "RESOLUTIONS") of the Board of Directors appointing
James Turner and Sharon Pel as designees of LGH and Kim A. Marvin
and Kevin Morris as designees of AIP; PROVIDED, HOWEVER, that the
Resignations and Resolutions shall only beeffective as of the
Closing Date.  In addition, the Company shall cause one of its
Subsidiaries to execute the Management Services Agreement on the
Closing Date.

          (c)  Subject to Section 3.1(e), if AIP or LGH shall
notify the other Stockholders of its desire to remove, with or
without cause, any director of the Company previously designated
by it, each Stockholder shall vote all of the Voting Securities
owned or held of record by such Stockholder and to take all
other necessary stockholder action so as to cause the removal
of  such director.

          (d)  Subject to Section 3.1(e), if any director
designated by AIP or LGH ceases to serve on the Board of
Directors (whether by reason of death, resignation, removal or
otherwise), the Stockholder who designated such director shall
be entitled to designate a successor director qualified to fill
the vacancy created thereby.  Each Stockholder agrees to vote
all of the Voting Securities owned or held of record by such
Stockholder and to take all such other necessary stockholder
action so as to cause such designee to be elected or appointed
as a director.

          (e)  Upon the occurrence and during the continuance of
a Default, AIP may, by written notice given to LGH, require LGH
to remove any one of its designees from the Board of Directors
as AIP directs and elect any qualified person that AIP
designates as a replacement director to serve as AIP's designee
for the continuation of such Default and LGH shall vote all
of the Voting Securities owned or held of record by it and shall
take all other necessary stockholder action so as to cause the
removal of its designee from, and the election of AIP's designee
to, the Board of Directors in such circumstance.

          (f)  The Board of Directors shall meet (i) at any time
requested in writing by Stockholders holding a majority of the
Subordinate Voting Shares then outstanding (provided

 <PAGE>

that such notice is given at least three business days prior to the
date of the meeting proposed in such notice), and (ii) in any event
not less frequently than quarterly.

          (g)  The consent of at least one of the directors
designated by AIP shall be required for the Board of Directors
to take any action regarding:

          (i) the approval or rejection of the annual budget or
business plan of the Company and its Subsidiaries;

          (ii) the hiring, promotion, demotion, retention or
termination of any officer or senior manager of the Company or
any of its Subsidiaries; and

          (iii) amendments to the Company's by-laws.

          (h)  No individual who is an officer, director,
partner or the holder of 5% or more of the voting equity of any
competitor of the Company or any of its Subsidiaries shall serve
as a director unless the other Stockholder consent thereto.

          3.2  BOARD COMMITTEES.  (a)  Subject to the general
oversight and authority of the full Board of Directors, the
Board of Directors may establish, empower and maintain such
Board committees as the Board of Directors deems necessary or
desirable, and the Board of Directors shall establish and
maintain a compensation committee and an audit committee.
AIP and LGH shall be entitled to representation on each of the
committees of the Board of Directors proportionate to their
representation on the Board of Directors; PROVIDED that AIP
shall be entitled to designate a majority of the members of
the compensation committee and audit committee.

          (b)  No action by any committee of the Board of
Directors shall be valid unless taken at a meeting for which
three business days' prior notice has been duly given or waived
by the members of such committee. Such notice shall include a
brief description of the general nature of the business to be
transacted at the meeting.  Any committee member unable to
participate in person at any meeting shall be given the
opportunity to participate by telephone.  Each of the committees
established by the Board of Directors pursuant to this Section
3.2 shall establish such other rules and procedures for its
operation and governance as it shall see fit and may seek such
consultation and advice as to matters within its purview as it
shall require.

          3.3  FINANCIAL STATEMENTS AND OTHER INFORMATION.
The Company shall deliver to AIP:

          (a)  as soon as available but in any event within
twenty-one days after the end of each monthly accounting period
in each fiscal year,unaudited consolidating and consolidated
statements of income and cash flows of the Company and its
Subsidiaries for such monthly period and for the period from
the beginning of the fiscal year to the end of such month, and
unaudited consolidating and consolidated balance sheets of the
Company and its Subsidiaries as of the end of such monthly
period, setting forth in each case comparisons to the Company's
annual budget and to the corresponding period in the preceding
fiscal year, and all such

 <PAGE>

statements shall be prepared in accordance with GAAP, consistently
applied, subject to the absence of footnote disclosures and to normal
year-end adjustments and shall be certified by the Company's chief
financial officer;

          (b)  within sixty days after the end of each fiscal
year, consolidating and consolidated statements of income and
cash flows of the Company and its Subsidiaries for such fiscal
year, and consolidating and consolidated balance sheets of the
Company and its Subsidiaries as of the end of such fiscal year,
setting forth in each case comparisons to the Company's annual
budget and to the preceding fiscal year, all prepared in
accordance with GAAP, consistently applied, and accompanied by
with respect to the consolidated portions of such statements,
an opinion of an independent accounting firm of recognized
national standing that is unqualified with respect to the scope
of such firm's examination and the Company's status as a going
concern;

          (c)  prior to the beginning of each fiscal year, an
annual budget prepared on a monthly basis for the Company and
its Subsidiaries for such fiscal year (displaying anticipated
statements of income and cash flows and balance sheets), and
promptly upon preparation thereof any other significant
forecasts prepared by the Company and any revisions of such
annual or other forecasts;

          (d)  promptly (but in any event within five business
days) after the discovery or receipt of notice of any default
under any material agreement to which it or any of its
Subsidiaries is a party or any other material adverse change,
event or circumstance affecting the Company or any
Subsidiary (including, without limitation, the filing of any
material litigation against the Company or any Subsidiary or
the existence of any dispute with any Person which involves a
reasonable likelihood of such litigation being commenced), an
officer's certificate specifying the nature and period of
existence thereof and what actions the Company and its
Subsidiaries have taken and propose to take with respect
thereto; and

          (e)  with reasonable promptness, such other
information and financial data concerning the Company and its
Subsidiaries as any Person entitled to receive information under
this Section 3.3 may reasonably request.

          3.4  AFFIRMATIVE COVENANTS.  (a) The Company shall
cause Consoltex (USA) Inc. to enter into the Management Services
Agreement in the form attached hereto as Exhibit 1.

          (b)  The Company shall, and cause each Subsidiary to:
          (a)  at all times cause to be done all things necessary
to maintain, preserve and renew its corporate existence and all
material licenses, authorizations and permits necessary to the
conduct of its businesses; (b) maintain and keep its material
properties in good repair, working order and condition, and from
time to time make all necessary or desirable repairs, renewals
and replacements, so that its businesses may be properly and
advantageously conducted in all material respects at all times;
(c)  pay and discharge when payable all taxes,
assessments and governmental charges imposed upon its properties
or upon the income or profits therefrom (in each case before the
same becomes delinquent and before penalties accrue thereon) and
all claims for labor, materials or supplies which if unpaid would
by law become a Lien upon any of its property unless and to the
extent

<PAGE>

that the same are being contested in good faith and by
appropriate proceedings and adequate reserves (as determined in
accordance with generally accepted accounting principles,
consistently applied) have been established on its books with
respect thereto; (d) comply with all applicable laws, rules and
regulations of all governmental authorities; (e) apply for and
continue in force with good and responsible insurance companies
adequate insurance covering risks of such types and in such
amounts as are customary for corporations of similar size engaged
in similar lines of business; and (f) maintain proper books of
record and account which present fairly in all material respects
its financial condition and results of operations and make
provisions on its financial statements for all such proper
reserves as in each case are required in accordance with
generally accepted accounting principles, consistently applied.

          3.5  NEGATIVE COVENANTS.  Except as otherwise required
by the terms of this Agreement, without the prior written consent
of the Required Holders, the Company shall not, and shall not
cause, permit or suffer any of its Subsidiaries to, directly or
indirectly, do any of the following:

          (a)  authorize, issue or sell any capital stock or
equity securities or any securities convertible into or
exercisable or exchangeable for any class or series of capital
stock, of the Company or any Subsidiary of the Company (other
than the issuance of shares of capital stock to the Company or
any Subsidiary of the Company by any Subsidiary of the Company
or the issuance of shares of capital stock pursuant to the
exercise of the Company Option or other options outstanding as of
the date hereof);

          (b)  declare or pay dividends or make any distributions
on, or redeem or otherwise acquire any shares of any class or
series of capital stock or equity securities of the Company
(other than pursuant to the Company Option);

          (c)  effect a reclassification, combination, split, or
subdivision of any of the capital stock of the Company or any
Subsidiary of the Company;

          (d)  amend the articles of incorporation or bylaws
(or equivalent governing documents) of the Company or any
Subsidiary of the Company, except as provided in this Agreement;

          (e)  adopt any plan or proposal for a complete or
partial liquidation or dissolution of the Company or any
Subsidiary of the Company or any reorganization or
recapitalization of the Company or commence any case, proceeding
or action seeking relief under any existing or future laws
relating to bankruptcy, insolvency, conservatorship or relief
of debtors with respect to the Company or any Subsidiary of
the Company;

          (f)  engage in, or enter into, any lines of business
other than the lines of business which the Company and its
Subsidiaries are presently engaged in;

          (g)  change the fiscal year of the Company or make
any material change in accounting policies or procedures of the
Company or any Subsidiary of the Company unless

 <PAGE>

required under
generally accepted accounting principles in effect in the country
in which the Company or any of its Subsidiaries is located or
change the fiscal year of the Company;

          (h)  create, incur, assume or suffer to exist any
Indebtedness (other than Permitted Indebtedness);

          (i)  create or suffer to exist any Liens (other than
Permitted Liens);

          (j)  adopt any stock option, restricted stock or other
equity-based compensation plan or increase any compensation or
benefits (including any salary, bonuses and other forms of
current or deferred compensation) of any director, officer or
senior manager (except as required by agreements in force as
of the date of this Agreement);

          (k)  enter into, amend, modify or supplement or permit
any Subsidiary to enter into, amend, modify or supplement any
agreement, transaction, commitment or arrangement with an
Affiliate (other than any Subsidiary of the Company and other
than as contemplated by the Tender Offer and the Transaction
Agreements) or any entity in which an Affiliate has an interest
as a director, officer, employee or greater than 5% stockholder
or interest through a family relationship;

          (l)  acquire any assets or business, other than
acquisitions of inventory inputs, fixed assets and other similar
acquisitions in the ordinary course of business;

          (m)  enter into any merger, consolidation, business
combination, joint venture or other material corporate
transaction;

          (n)  establish or acquire any Subsidiaries that are not
wholly-owned by the Company or any Subsidiaries;

          (o)  make or commit to make (whether in one transaction
or a series of transactions) Capital Expenditures in excess of
amounts set forth in the annual budget approved by the Board of
Directors;

          (p)  sell, assign, transfer, convey or otherwise
dispose of any assets, securities or businesses (other than sales
of inventory or other dispositions of assets in the ordinary
course of business);

          (q)  amend or modify any provision of the Credit
Agreement, the Indenture or any contract disclosed on Schedule 6
(j) of the Company Disclosure Letter (as defined in the Offer
Agreement);

          (r)  repay, repurchase or redeem the notes issued under
the Indenture; and

          (s)  enter into any agreement, commitment or
arrangement (other than the Credit Agreement or the Indenture)
that would limit the ability of the Company or any of its
Subsidiaries to make payment pursuant to the Management
Services Agreement.

 <PAGE>
          3.6  ARTICLES OF INCORPORATION AND BY-LAWS.

          (a)  Immediately following the Closing Date, the
Stockholders shall take or cause to be taken all necessary
corporate and stockholder action to cause section 3.3.3 of the
Company's Restated Articles of Incorporation to be amended to
read as follows:

"On the date as the Willett Family (as hereinafter defined)
cease to be the beneficial owners in the aggregate of Multiple
Voting Shares and Subordinate Voting Shares having attached
thereto 50% or more of the votes attaching to all Multiple Voting
Shares and Subordinate Voting Shares then outstanding, the
Multiple Voting Shares will automatically be converted into a
like number of Subordinate Voting Shares."

          (b)  The Company and the Stockholders shall take or
cause to be taken all necessary corporate and stockholder action
to ensure at all times that the Company's Articles of
Incorporation and By-Laws are not, at any time, inconsistent
with the provisions of this Agreement and contain such
provisions as are necessary to give effect to the provisions
contained in this Section 3, including, without limitation,
taking any action to (i)obviate the requirement that the
Board of Directors be comprised of a majority of Canadian
residents (ii) ensure that the Multiple Voting Shares represent
51% of the voting power of the Voting Securities and (iii)
provide the Multiple Voting Shares with a liquidation preference
of $4.3 million.

    SECTION 4.TRANSFERS RESTRICTIONS; OPTION ON LGH SECURITIES.

   4.1  TRANSFER, CONVERSION OR VOTING OF MULTIPLE VOTING SHARES.

          (a)  LGH, LGL and the Trust each hereby agree, subject
to the rights of Clairvest Group Inc. under the Clairvest Loan
Agreement, that each of them will not, without the prior written
consent of AIP, which AIP may grant or withhold in its sole
discretion, except as required by the terms of this Agreement,
(i) directly or indirectly Transfer, or permit the Transfer of,
as the case may be, any Securities, (ii) except as required
hereunder and by the Articles of Incorporation of the Company,
convert, or permit the conversion of, as the case may be, any of
the Multiple Voting Shares LGH owns into Subordinate Voting
Shares or (iii) until AIP has taken up Subordinate Voting Shares
under the Offer (as defined in the Offer Agreement) or withdrawn
the Offer, exercise the voting rights of the Multiple Voting
Shares in respect of any amalgamation, merger, sale of the
Company's assets, take-over bid, plan of arrangement,
reorganization, recapitalization, shareholder rights plan,
liquidation or winding up of, or reverse take-over or other
business combination or similar transactions involving the
Company or any of its Subsidiaries.

          (b)  LGH, LGL and the Trust each agree that
immediately prior to the Option Closing (as defined below)
LGH, LGL and the Trust each will, at the written request of
AIP, convert or cause LGH to convert, as the case may be, all
of the Multiple Voting Shares LGH holds at such time into
Subordinate Voting Shares.

 <PAGE>
          4.2  EFFECT OF VOID TRANSFERS OR CONVERSIONS.  In the
event of any purported Transfer of any Securities, or
purported conversion of Multiple Voting Shares into Subordinate
Voting Shares,  in violation of the provisions of this
Agreement, such purported Transfer or conversion shall be void
and of no effect and the Company shall not give effect to such
Transfer or conversion.

          4.3  LEGEND ON SECURITIES.  Each certificate
representing Securities issued to any Stockholder shall bear
the following legend:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
A STOCKHOLDERS AGREEMENT AMONG CONSOLTEX GROUP INC.
(THE "COMPANY") AND CERTAIN OTHER PARTIES. A COPY OF WHICH IS
ON FILE WITH THE SECRETARY OF THE COMPANY.  NO TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT
IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS
AGREEMENT.  THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE
OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS
OF SUCH STOCKHOLDERS AGREEMENT, INCLUDING RESTRICTIONS RELATING
TO THE TRANSFERABILITY OF, AND THE EXERCISE OF ANY VOTING RIGHTS
GRANTED BY, THE SECURITIES."

          4.4  TRANSFERS OF INTERESTS IN LGH.  LGL and the Trust
each agree, subject to the rights of Clairvest Group Inc. under
the Clairvest Loan Agreement and except for a transfer pursuant
to the provisions of this Agreement, that without the prior
written consent of AIP, which AIP may grant or withhold in its
sole discretion, neither LGL nor the Trust shall Transfer, or
permit the Transfer of, as the case may be, any interest in or
any asset of LGH, or except as required hereunder, take any
action, or cause LGL or the Trust to take any action, that
would, by itself or in conjunction with the transactions
contemplated by the Offer Agreement, cause a Change of Control.

          4.5  OPTION TO PURCHASE LGH SECURITIES.

          (a)  LGH hereby grants to AIP an irrevocable option
(the "OPTION") to purchase during the period beginning on the
Option Commencement Date and ending on October 1, 2003
(the "EXERCISE PERIOD"), subject to the terms of this Agreement,
all, but not less than all, of the Option Shares at a price per
share in cash equal to C$5.60 (or such greater amount offered
for the Subordinate Voting Shares by AIP), increasing in an
amount equal to 10.5% per annum (computed on the basis of a
360-day year and the actual number of days elapsed from the date
hereof to the Option Closing Date) (the "OPTION PRICE"), subject
to adjustment as provided below; provided that, prior to the
Closing Date, AIP can only exercise the Option in connection
with the consummation of an Acquisition Proposal (as defined in
the Offer Agreement) that includes the purchase of the Clairvest
Loan Agreement on the terms set forth therein and the purchase by
the Person making such Acquisition Proposal of the Subordinate
Voting Shares held by Clairvest Group Inc. and its direct or
indirect subsidiaries.  In no event will the Option be exercisable
unless at the Option Closing AIP purchases the Subordinate Voting
Shares of

 <PAGE>

Clairvest Group Inc. and its subsidiaries and purchases
the Clairvest Loan Agreement pursuant to the terms of the Loan
Purchase Agreement.

          (b)  Any time during the Exercise Period, AIP may
exercise the Option by delivering an irrevocable written notice
(the date of which is referred to in this Agreement as the
"NOTICE DATE"), (i) stating that AIP will acquire the Option
Shares from LGH at the Option Price and subject to the other
terms and conditions set forth in this Agreement and (ii)
specifying  a place and date (the "OPTION CLOSING DATE") not
earlier than three business days nor later than 20 business days
from the Notice Date for the consummation of such purchase
(the "OPTION CLOSING"); PROVIDED that the Option Closing Date
may be deferred at the election of AIP so that AIP may obtain
any regulatory approvals necessary for its acquisition of the
Option Shares.

          (c)  At the Option Closing, (i) AIP shall pay to LGH
the aggregate purchase price for the Option Shares purchased
pursuant to the exercise of the Option LESS the Set-off Amount
in immediately available funds by a wire transfer to a bank
account designated by LGH, and (ii) LGH shall sell, assign and
transfer the Option Shares to AIP free of all claims, liens,
encumbrances, security interests and adverse claims and shall
deliver to AIP, if not previously delivered, a certificate or
certificates representing the Option Shares purchased by AIP
endorsed in blank or accompanied by stock powers executed in
blank with signature guarantees, all in form and substance
satisfactory to AIP.

          (d)  If the Company at any time after the date of this
Agreement subdivides (by any stock split, stock dividend,
recapitalization or otherwise) its outstanding Multiple Voting
Shares into a greater number of shares, the Option Price in
effect immediately prior to such subdivision shall be
proportionately reduced and the number of Option Shares
obtainable upon exercise of the Option shall be proportionately
increased. If the Company at any time after the date of this
Agreement combines (by reverse stock split or otherwise) its
outstanding shares of Multiple Voting Shares into a smaller
number of shares, the Option Price in effect immediately
prior to such combination shall be proportionately increased and
the number of Option Shares obtainable upon exercise of the
Option shall be proportionately decreased.  Prior to the
consummation of any Organic Change after the date of this
Agreement, the Company shall make appropriate provision
(in form and substance satisfactory to AIP) to insure that AIP
shall thereafter have the right to acquire and receive, in lieu
of or addition to (as the case may be) the Option Shares
immediately theretofore acquirable and receivable upon the
exercise of the Option, such shares of stock, securities or
assets as may be issued or payable with respect to or in
exchange for the number of Option Shares immediately theretofore
acquirable and receivable upon exercise of the Option had such
Organic Change not taken place.  In any such case, the Company
shall make appropriate provision (in form and substance
satisfactory to AIP) with respect to such holders' rights and
interests to insure that the provisions of this Section 4.5
(d) shall thereafter be applicable to the Option (including,
in the case of any such consolidation, merger or sale in which
the successor entity or purchasing entity is other than the
Company, an immediate adjustment of the Option Price to the
value for the Securities reflected by the terms of such
consolidation, merger or sale, and a corresponding immediate
adjustment in the number of Option Shares acquirable and
receivable upon exercise of the Option, if the value so
reflected is less than the Option Price in effect immediately
prior to such consolidation, merger or sale).

 <PAGE>

          (e)  Any time after the Closing Date, upon
(i) the consummation of a Company Sale, (ii) a Change of Control
or (iii) the repayment, repurchase or redemption of the notes
issued under the Indenture, AIP agrees to exercise the Option
immediately prior to the consummation of the transactions
described in clause (i) and (iii) of this Section 4.5(e) and
immediately upon a Change of Control.

          SECTION 5.MISCELLANEOUS

          5.1  EFFECTIVENESS AND TERMINATION.  Except for
Sections 2, 3.1(b), 4.1(a) and 4.4, all of which shall come
into effect and be effective from the date hereof and
Section 4.5 which shall come into effect on the Option
Commencement Date, all rights and  obligations under this
Agreement shall come into effect on the  Closing Date.
If the Option Commencement Date has not occurred and there is no
Closing Date within 10 days after Expiry Time (as defined in the
Offer Agreement), then this Agreement shall terminate on the
tenth day after the Expiry Time.  If the Option Commencement
Date occurs prior to the Expiry Time and there is no Closing
Date prior to the Option Expiry Date, then this Agreement shall
terminate on the Option Expiry Date. If a Closing Date occurs,
this Agreement shall terminate on the first to occur of
(a) October 1, 2003 and (b) the date on which AIP exercises its
rights to purchase the Option Shares pursuant to Section
4.5.  No termination shall relieve any party hereto from
(i) liability for any breach of this Agreement and (ii) any
obligation arising pursuant to Section 4.5 of this Agreement.

          5.2  ADDITIONAL SECURITIES SUBJECT TO AGREEMENT.
Each Stockholder agrees that any other Securities which it shall
hereafter acquire by means of a stock split, stock dividend,
distribution, exercise of stock options, or otherwise shall be
subject to the provisions of this Agreement to the same extent
as if held on the date hereof.

          5.3  INJUNCTIVE RELIEF.  The Stockholders acknowledge
and agree that a violation of any of the terms of this Agreement
will cause the Stockholders irreparable injury for which
adequate remedy at law is not available.  Accordingly, it is
agreed that each Stockholder shall be entitled to an injunction,
restraining order or other equitable relief to prevent breaches
of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof in any court of
competent jurisdiction in the United States or any state thereof,
in addition to any other remedy to which they may be entitled
at law or in equity.

          5.4  OTHER AGREEMENTS.  During the term of this
Agreement, none of the Company or any of the Stockholders
shall enter into any stockholder agreement or other arrangement
of any kind with any Person with respect to any Securities which
is inconsistent with the provisions of this Agreement or which
may impair its ability to comply with this Agreement.

          5.5  AMENDMENTS.  This Agreement may be amended only
by a written instrument signed by the Company and each of the
Stockholders.

          5.6  SUCCESSORS.  The provisions of this Agreement
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, each of which
shall

 <PAGE>

agree, in a writing in form and substance satisfactory to
the Company and the Stockholders, to become a party hereto and
be bound to the same extent as its transferor hereby.

          5.7  NOTICES.  All notices, requests and demands to
or upon the respective parties hereto to be effective shall be
in writing (including by telecopy), and, unless otherwise
expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or when delivered by a
recognized courier or, in the case of telecopy notice, when
transmitted (provided that an appropriate confirmation is
received), addressed as follows to the parties hereto, or to
such other address as may be hereafter notified by the
respective parties hereto:

               if to AIP, to:

               AIP/CGI NB Acquisition Corp.
               c/o American Industrial Partners
               One Maritime Plaza
               Suite 2525
               San Francisco, California 94111
               Attention:  Kim A. Marvin
               Telecopy:  (415) 788-5302

               with a copy to:

               Kirkland & Ellis
               655 Fifteenth Street, N.W.
               12{th} Floor
               Washington, D.C.  20005
               Attention: Michael T. Edsall
               Telecopy:  (202) 879-5200

               if to the Company, to:

               Consoltex Group Inc.
               c/o Consoltex (USA) Inc.
               1040 Avenue of the Americas
               6{th} Floor
               New York, New York 10018
               Attention:  Paul Bamatter
               Telecopy:   (212) 596-0483

               with a copy to:

               Osler, Hoskin & Harcourt
               280 Park Avenue, 30W
               New York, New York  10017
               Attention:  John Stevens
 <PAGE>

               Telecopy:  (212) 867-5802

               and, prior to the Closing Date, with a copy to:

               Goodman Phillips & Vineberg
               1501 McGill College
               26{th} Floor
               Montreal, Canada H3A 3N9
               Attention:   Sidney Horn
               Telecopy:   (514) 841-6499

          5.8  INTEGRATION.  This Agreement, the Offer Agreement
and the documents referred to herein or delivered pursuant
hereto contain the entire understanding of the parties with
respect to the subject matter hereof and thereof.  There are no
greements, representations, warranties, covenants or
undertakings with respect to the subject matter hereof and
thereof other than those expressly set forth herein and therein.
This Agreement and the Offer Agreement supersede all prior
agreements and understandings between the parties with respect
to such subject matter.

          5.9  SEVERABILITY.  If one or more of the provisions,
paragraphs, words, clauses, phrases or sentences contained
herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason,
the validity, legality and enforceability of any such provision,
paragraph, word, clause, phrase or sentence in every other
respect and of the remaining provisions, paragraphs, words,
clauses, phrases or sentences hereof shall not be in any way
impaired, it being intended that all rights, powers and
privileges of the parties hereto shall be enforceable to the
fullest extent permitted by law.

          5.10 COUNTERPARTS.  This Agreement may be executed in
two or more counterparts, and by different parties on separate
counterparts each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.

          5.11 GOVERNING LAW.  This Agreement shall be governed
by and construed and enforced in accordance with the laws of the
Province of Ontario and the laws of Canada.

          5.12 JURISDICTION.  Any action to enforce, which
arises out of or in any way relates to, any of the provisions
of this Agreement may be brought and prosecuted in such court
or courts located within the State of New York as provided by
law; and the parties consent to the jurisdiction of such court
or courts located within the State of New York and to service
of process by registered mail, return receipt requested, or by
any other manner provided by New York law.


                               [END OF PAGE]
                         [SIGNATURE PAGE FOLLOWS]
<PAGE>
          IN WITNESS WHEREOF, each of the undersigned has
executed this Agreement or caused this Agreement to be executed
on its behalf as of the date first written above.


AIP/CGI NB ACQUISITION CORP.

By: /s/ Kim A. Marvin
Name: Kim A. Marvin
Title: President


CONSOLTEX GROUP INC.

By: /s/Richard H. Willett
Name: Richard H. Willett

LES GANTIERS HOLDING B.V.

By: /s/Richard H. Willett
Name: Richard H. Willett


LES GANTIERS LIMITED

By:
Name:
Title:


By:
Name:
   as Trustee for The Big Sky Trust


<PAGE>
          IN WITNESS WHEREOF, each of the undersigned has
executed this Agreement or caused this Agreement to be executed
on its behalf as of the date first written above.


AIP/CGI NB ACQUISITION CORP.

By:
Name:
Title:


CONSOLTEX GROUP INC.

By:
Name:

LES GANTIERS HOLDING B.V.

By:
Name:


LES GANTIERS LIMITED

By: /s/Patrick Flinn Cubitt Sowden
Name: Patrick Flinn Cubitt Sowden
Title: Director


By: /s/Patick Flinn Cubitt Sowden
Name: Patrick Flinn Cubitt Sowden,
   as Trustee for The Big Sky Trust


<PAGE>

                                                     EXHIBIT 4.7


            AMENDED AND RESTATED LOAN AGREEMENT
=============================================================


THIS AGREEMENT is made as of the 20th day of October, 1999.

 BETWEEN:

               LES GANTIERS HOLDINGS B.V., a corporation
               governed by the laws of the Netherlands
               (the "Borrower")

                -and-

               LES GANTIERS LIMITED, a

               corporation governed by the laws of Jersey
               ("Holdco")

               and -

               AIP/CGI NB ACQUISITION CORP., a corporation
               governed by the laws of New Brunswick (the
               "Lender")

RECITALS:

A. Pursuant to a loan agreement dated January 13, 1997 among C
   Clairvest, the Borrower, Holdco and Willett (the "Clairvest
   Loan Agreement"), Clairvest made a loan facility available
   to the Borrower under which a single, one-time advance was
   made in the amount of US$8,800,000.

B. Pursuant to a loan purchase agreement dated September 9,
   1999 among Clairvest, the Lender, the Borrower, Holdco, Willett
   and Consoltex (the "Loan Purchase Agreement"), the Lender, among
   other things, agreed. to purchase the Clairvest Loan Agreement and
   the Security from Clairvest and release Willett from certain
   guarantee and security obligations relating thereto and from any
   obligation relating to Willett being a party to the Clairvest Loan
   Agreement.

C. The parties hereto wish to amend, restate and replace the Clairvest
   Loan Agreement in its entirety by entering into this Agreement.

  NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of
the mutual covenants and agreements herein contained and for other
good and valuable consideration (the receipt and sufficiency of which
are hereby acknowledged), the parties hereto covenant and agree as
follows:

                                  ARTICLE 1.


<PAGE>
`                                   -2-


                               INTERPRETATION

1.1. Definitions. Whenever used in this Agreement, unless the context
otherwise specifies or requires the following words and terms shall have
the meanings set out below:

"Agreement" means this Loan Agreement and all schedules, exhibits and all
instruments  supplementing  or  confirming or amending this Agreement and
references to "Article", "Section"  and  "Schedule" mean and refer to the
specified article, section and schedule of this Agreement.

"Amounts  Owing" means, at any time, the principal  amount  of  the  Loan
outstanding  at  such  time, any interest accrued and unpaid hereunder at
such time, and any other  amounts  owing  by  the  Borrower to the Lender
hereunder or under any of the other Security at such time.

"Applicable Law" means, with respect to any person, property, transaction
or event all present or future applicable laws (including  common law and
civil  law),  statutes, regulations, treaties, judgments and decrees  and
(whether  or not  having  the  force  of  law)  all  applicable  official
directives,   rules,  consents,  approvals,  authorizations,  guidelines,
orders and policies issued by any Governmental Authority or other persons
having authority over any of the parties hereto.

"Borrower" means Les Gantiers Holding B.V., a corporation governed by the
laws of the Netherlands, and its successors and assigns.

"Borrower Shares"  means  1,900  issued  and  outstanding  shares  in the
capital  of  the  Borrower, representing all of the Borrower's issued and
outstanding shares.

"Clairvest" means Clairvest Group Inc., a corporation governed by the
laws of Ontario.

"Closing Time" means  the  time  on  October 20, 1999 at which the Lender
first takes up and pays for Subordinate Voting Shares under the take-over
bid to be made pursuant to the Offer Agreement.

"Coattail Agreement" means the trust agreement dated as of March 22, 1993
between  the  Borrower, Willett, Anne Elizabeth  Willett,  Consoltex  and
Montreal Trust Company, as amended.

"Consoltex" means  Consoltex  Group  Inc.,  a corporation governed by the
laws of Canada, and its successors and assigns.

"Default" means any event which is or which,  with  the  passage of time,
the giving of notice or both, would be an Event of Default.

"Event of Default" means any one of the events set forth in section 7.1.

"Exercise Period" has the meaning ascribed thereto in the Stockholders
Agreement.

"Governmental  Authority"  means  any  government, regulatory  authority,
governmental  department,  agency,  commission,  board,  tribunal,  crown
corporation, central bank or court or

<PAGE>

                            -3-


other law, rule, or regulation-making entity having or purporting to
have jurisdiction on behalf of any nation, or province or state or other
subdivision thereof or any municipality, district or other subdivision
thereof.

"Holdco" means Les Gantiers Limited, a corporation  incorporated under the
laws of Jersey, and its successors and assigns.

"Holdco Pledge" means the pledge by Holdco of its shares  in the Borrower
dated October 20, 1999 between Clairvest, Holdco and the Borrower.

"INDEBTEDNESS" means, at any time, the principal amount of the Loan
outstanding at such time, any interest accrued and unpaid hereunder at
such  time, and any other amounts owing by the Borrower to the Lender
hereunder or under any of the other Security Documents at such time.

"Interest Rate" has the meaning ascribed thereto in Section 2.2.

"Lender" means AIP/CGI NB Acquisition Corp., a corporation governed
by the laws of New Brunswick, and its successors and assigns.

"Liens"  means any mortgage, pledge, hypothec, security interest,
encumbrances, lien, charge,  escrow  or  deposit  arrangement  or
any  other  arrangement or condition that in substance secures payment
or performance of an obligation and shall  include  the  interest of
a vendor or lessor under any conditional  sale agreement, capitalized
lease or other title retention agreement.

"LINCOLNSHIRE CLAIM" means the claim of Lincolnshire Management,
Inc. described in its letter dated August 11, 1999 to the Borrower,
Holdco, Willett, Consoltex and American Industrial  Partners  and the
Summons with Notice filed October 8, 1999 with Supreme Court of the
State  of  New  York,  County  of  New  York  in connection  with
the  actions  of  Lincolnshire  Management,  Inc. against the Borrower,
Holdco, Consoltex, American Industrial Partners, American  Industrial
Partners Capital Fund II, L.P., the Lender and Willett.

"Loan" means the aggregate principal amount contemplated by section
2.1 hereof, all  capitalized  interest thereon and all fees or other
amounts that are  from time to time added to such principal amount, as
is outstanding from time to time.

"LOAN PURCHASE AGREEMENT" shall have the meaning ascribed thereto in
Recital B.

"Maturity Date" means date on which, following  the exercise of the
Option, the Lender pays to the Borrower the aggregate purchase price
of the Option Shares purchased pursuant to the exercise of the Option.

"MV  Share Pledge" means the hypothec of shares dated as of March  7,
1997 in respect of the MV Shares by and between the Borrower, Clairvest
and Montreal Trust Company and assigned by Clairvest to the Lender
pursuant to the Loan Purchase Agreement.

<PAGE>

"MV  Shares" means, collectively, the 3,140,000 multiple  voting
shares  of Consoltex owned by the Borrower on the date hereof.

"Offer Agreement" means  the  letter agreement dated September 9,
1999 executed by the Lender and Consoltex.

"Option" means the option granted  by the Borrower to the Lender to
acquire all but not less than all of the MV Shares as set forth in
section  4.5 of the Stockholders Agreement.

"Option Closing" has the meaning ascribed to such term in the
Stockholders Agreement.

"Option Shares" has the meaning ascribed to such term in the
Stockholders Agreement.

"Person" means any individual, sole proprietorship, partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, body corporate, limited liability company, limited
liability partnership, Governmental Authority, or a natural person in
such person's  capacity  as trustee, executor, administrator or other
legal representative.

"Security" means this Agreement, the MV Share Pledge, the Holdco Pledge
and the Supplementary Pledge Agreement, as each such agreement may from
time to time be amended,  restated  or  supplemented  and  any  and
every  deed,  document  or instrument  which is supplementary or ancillary
hereto  or  thereto  or  is  in implementation hereof and thereof.

"Stockholders  Agreement"  means  the stockholders agreement dated
September 9, 1999 among the Lender, the Borrower,  Holdco,  The  Big
Sky Trust and Consoltex governing the relationship of the shareholders
of Consoltex, as amended.

"Subordinate Voting Shares" means subordinate voting shares in the
capital of Consoltex.

"SUPPLEMENTARY PLEDGE AGREEMENT" means the agreement  dated  January
13,  1997 concerning  the MV Share Pledge and other matters, by and
between the Borrower, Willett, Holdco, Consoltex, Clairvest and Montreal
Trust Company.

"Taxes" means  all  taxes  of  any kind or nature whatsoever including,
without limitation, income taxes, sales  or  value-added  taxes, levies,
stamp taxes, royalties,  duties, and all fees, deductions, compulsory
loans and withholdings imposed, levied, collected, withheld or assessed
as of the date hereof or at any time in the future, by. any Governmental
Authority  of or within Canada or any other jurisdiction whatsoever having
power to tax, together with penalties, fines, additions to tax and interest
thereon.

"Willett" means Richard H. Willett, an individual resident in the State
of Montana.

<PAGE>
                              -5-


1.2. Applicable Law. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the Province of Ontario
and the laws of Canada applicable therein.

1.3. Currency. Unless otherwise specified, all references to money amounts
are to lawful currency of Canada.

1.4. Reference. The words "hereto", "hereunder" and similar expressions
refer to this Agreement. Unless otherwise specifically provided, words
importing the singular include the plural and vice versa and words
importing gender include all genders. Headings in this Agreement have
been inserted for convenience only and do not form part of the
agreement between the parties.

1.5. Accounting Terms. All accounting terms not otherwise defined in
this Agreement and shall have the meanings assigned to them in
accordance with Canadian generally accepted accounting principles
applied on a consistent basis.

1.6. CONFLICT WITH SECURITY. In the event there is a conflict or
inconsistency between any provision of the Security and this
Agreement, this Agreement shall prevail.


                                 ARTICLE 2.
                                   LOAN

2.1. Loan. The Borrower unconditionally promises to pay on the
Maturity Date to the Lender or to its order, at its offices at
One Maritime Plaza, Suite 2525, San Francisco, California, the
amount of Cdn.$13,381,477.18 (the "Principal Amount") together
with interest on the Principal Amount as provided for herein.

2.2. Interest. Interest on the Principal Amount shall accrue
at a rate equal to 10 1/2% per annum computed on the basis
of a 360-day year and the actual number of days elapsed from
the date hereof to the Maturity Date, (the "Interest Rate").
Interest on the Principal Amount shall not be currently
payable nor shall it be capitalized or compounded annually.

2.3. Equivalency Clause. For the purposes of disclosure pursuant
to the INTEREST ACT (Canada), the annual rate of interest which
is equivalent to the rate of interest provided for in this
Agreement, which is to be calculated on any basis other than a
full calendar year, may be determined by multiplying such rate
of interest (expressed as a percentage) by a fraction, the
numerator of which is the number of days in the calendar year
and the denominator of which is the number of days comprising
such other basis.

2.4. Security. The Borrower and Holdco acknowledge and confirm
that the MV Share Pledge and the Supplementary Pledge Agreement
are in full force and effect unamended and constitute continuing
security for the payment and performance of the obligations of the
Borrower under this Agreement. The Borrower and Holdco agree to
execute the Holdco Pledge at the Closing Time. For greater certainty,
the Borrower and Holdco confirm that the terms "Obligations" under
the MV Share Pledge and "Guaranteed Obligations" under the Holdco Pledge
include the obligations of the Borrower under this Agreement.

<PAGE>
                              -6-


                            ARTICLE 3.
                REPRESENTATIONS AND WARRANTIES

3.1. Representations and Warranties. During the Exercise Period, each
of the Borrower and Holdco hereby jointly and severally represents
and warrants to the Lender as at the date hereof and on each date
that financial information is delivered pursuant to section 4.1 (f)
as follows, and acknowledges and confirms that the Lender is relying
upon such representations and warranties in executing this Agreement
and in extending credit hereunder:

(a) Status and Power. Each of the Borrower and Holdco is a corporation
duly incorporated and organized and validly subsisting under the laws
of its jurisdiction of incorporation and is duly qualified, registered
or licensed in all jurisdictions where such qualification, registration
or licensing is required to the extent that it is material. Each of the
Borrower and Holdco has all requisite corporate capacity, power and
authority to own, hold under licence or lease its properties, to carry
on its business as now conducted and to enter into and carry out the
transactions contemplated by this Agreement and the Security.

(b) AUTHORIZATION AND ENFORCEMENT OF AGREEMENT AND SECURITY. All
necessary action, corporate or otherwise, has been taken to authorize
the execution, delivery and performance of this Agreement and the
Security by the Borrower and Holdco and each of the Borrower and Holdco
has duly executed and delivered this Agreement, the MV Share Pledge
and the Holdco Pledge, as applicable. Each of this Agreement, the MV
Share Pledge and the Holdco Pledge is a legal, valid and binding
obligation of each of the Borrower and Holdco, to the extent it is
a party thereto, enforceable against the Borrower and Holdco, as
applicable, by the Lender in accordance with its terms.

(c) COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein do not and will not conflict with, result in any
breach or violation of, or constitute a default under or under which
a Lien would be created, the terms, conditions or provisions of the
charter documents or by-laws of the Borrower or Holdco or of any
Applicable Law, or of any material agreement, lease, licence, permit
or other instrument to which either the Borrower or Holdco is a party
or is otherwise bound or by which either the Borrower or Holdco
benefits, or to which any of its property is subject, and do not
require the consent or approval of, or filing with or notice to,
any other party or any Governmental Authority.

(d) Litigation. Other than the Lincolnshire Claim, there are no
actions, suits, inquiries, claims or proceedings (whether or not
purportedly on behalf of the Borrower or Holdco) pending or threatened
against or affecting the Borrower or Holdco before any Governmental
Authority or before any private arbitrator, mediator or referee
which in any case or in the aggregate may result in any material
adverse change in the business, operations, assets, financial
condition or

<PAGE>
                              _7_

prospects of the Borrower or Holdco or in the ability of the Borrower
or Holdco to perform its obligations under this Agreement.

(e) Title to MV Shares. The Borrower is the sole beneficial and
registered owner of the MV Shares, with good and marketable title,
free from any Liens of any kind, other than the Option and the
Coattail Agreement.

(f) Title to Borrower Shares. The Borrower Shares represent all of
the issued and outstanding shares in the capital stock of the Holdco.
Holdco is the sole beneficial and registered owner of the Borrower
Shares, with good and marketable title, free from any Liens of any
kind.

(g) Compliance with Laws. Each of the Borrower and Holdco is not in
violation of any Applicable LAW relating in any way to the Borrower,
Holdco, the MV Shares, the Borrower Shares, the operation of its
respective business or its respective property or assets (including,
without limitation, the MV Shares or the Borrower Shares, as
applicable).

(h) No Default. No Default or Event of Default has occurred and is
continuing. No condition, event or act has occurred which constitutes
or which with giving of notice, lapse of time or both would constitute
a default under or in respect of any material agreement, undertaking
or instrument to which the Borrower or Holdco is party or to which
any of its respective properties or assets (including, without
limitation, the MV Shares or the Borrower Shares, as applicable) may
be subject.

(i) All Material Information Supplied. Each of the Borrower and Holdco
has provided to the Lender all material information relating to the
financial condition, business and prospects of the Borrower and all
such information is true, accurate and complete in all material
respects and omits no material fact necessary to make such information
not misleading.

3.2. Survival of Representations and Warranties. All of the
representations and warranties of the Borrower and Holdco contained
in Section 3.1 shall survive the execution and delivery of this
Agreement notwithstanding any investigation made at any time by or on
behalf of the Lender.

                            ARTICLE 4.
                     AFFIRMATIVE COVENANTS

4.1. Affirmative Covenants. The Borrower hereby covenants and agrees
with the Lender that, until the expiry of the Option, so long as there
is any Indebtedness outstanding hereunder, unless the Lender otherwise
expressly consents in writing:

(a)  Perform Obligations. The Borrower shall fully perform its
obligations under the Security Documents at the time and place and
in the manner provided herein or

<PAGE>

                                    _8_


herein, and shall otherwise comply with the terms and provisions
hereof and thereof.

(b) Payment When Due. The Borrower shall pay all sums of money
when due by it to the Lender under this Agreement.

(c) Corporate Existence. The Borrower shall maintain its corporate
existence in good standing, maintain and preserve its rights,
franchises, licences and shall not take part in any dissolution,
reorganization, amalgamation, merger, arrangement or any similar
proceeding.

(d)  Conduct of Business. The Borrower shall conduct its business
in such a manner so as to comply in all material respects with all
Applicable Laws.

(e)  Material Adverse Change. The Borrower shall promptly notify the
Lender of any material adverse change in the financial condition,
business, operations, prospects or assets of the Borrower or in its
ability to satisfy its obligations under this Agreement.

(f) Financial Reporting. The Borrower shall furnish the Lender with
the following statements, reports and certificates:

    (i) within 120 days after the end of each fiscal year of the
        Borrower, a copy of the Borrower's audited financial
        statements with respect thereto and the auditor's report
        thereon;

   (ii) within 45 days after the end of each fiscal quarter of
        the Borrower, and with [ 10] days after the end of each
        month, a copy of the Borrower's unaudited quarterly or
        monthly financial statements, as applicable with respect
        thereto; and

  (iii) such other statements, reports and information as
        the Lender may reasonably request from time to time.

(g) Notice of Default. The Borrower shall promptly notify the
Lender of the occurrence of any Default or Event of Default and
shall concurrently deliver to the Lender a detailed statement
of a senior officer of the Borrower of the steps, if any,
being taken to cure or remedy such Default or Event of Default.

(h) Change of Name or Location of Borrower. If the Borrower
changes its corporate name or changes its location, it shall
promptly notify the Lender in writing of the details of same.

(i) Disposition of Shares. The Borrower shall not dispose of, and
shall not grant to any person the right to acquire, any of the
Borrower's right, title, or interest in and to the MV Shares
except in accordance with the Option.

<PAGE>
                              -9-


                            ARTICLE 5.
                       NEGATIVE COVENANTS

5.1. NEGATIVE COVENANTS. Until the expiry of the Option, so long
as any Indebtedness under this Agreement remains unpaid, each of the
Borrower and Holdco covenants and agrees that it shall not, unless
approved by the Lender in writing (such approval not to be unreasonably
withheld or delayed):

(a) Permit the Borrower to incur indebtedness or other liabilities for
borrowed money in excess of $100,000 in the aggregate or have any
liabilities or indebtedness which are overdue and in respect of
which a demand for payment has been made, except, in any such
case, for indebtedness and liabilities owing to Holdco and its
affiliates which have been fully postponed and subordinated (in a
manner satisfactory to the Lender) to the payment in full of all
Indebtedness or indebtedness the payment of which is being contested
by the Borrower diligently and in good faith.

(b) Permit any modification, amendment or deletion to the articles
of the Borrower.

(c) Permit any subdivision, consolidation, conversion, reclassification
or modification of any kind of the outstanding shares of the Borrower.

(d) Permit any reorganization, amalgamation, statutory arrangement,
merger or joint venture of the Borrower with any other party.

(e) Permit any issuance or distribution of any shares or other security
of the Borrower or the granting of any right or option in respect
thereto.

(f) Permit the winding-up, liquidation or voluntary dissolution of
the Borrower.

(g) Permit any revocation, modification or adoption of any by-laws
of the Borrower.

(h) Permit any sale, lease, exchange or other disposition (or granting
of an option to such effect) to any third party by the Borrower or any
of the property of the Borrower having a value in excess of Cdn.$5
million, with the exception of the sale of products in the ordinary
course of business of the Borrower or any such subsidiary, as the
case may be.

(i) Permit any change in the nature of the business conducted by
the Borrower.

(j) Permit any declaration of dividends, distribution of assets or
money on any class of shares of the Borrower.

(k) Permit the sale, transfer,. assignment or disposition of, or
the creation of any Lien in or right to acquire, any of the MV Shares
or the Borrower Shares, except in accordance with the Option.

<PAGE>
                             -10-

                                ARTICLE 6.
                           RIGHT OF SET-OFF

6.1. RIGHT OF SET-OFF. Notwithstanding any other provision hereof,
if the Lender exercises its Option pursuant to provisions set out in
section 4.5(c) of the Stockholders Agreement, then, upon the making
of the required payment and deliveries at the Option Closing and the
satisfaction of all of the other provisions of section 4.5 of the
Stockholders Agreement, the Indebtedness shall be considered repaid
in full for all purposes. Neither the Borrower nor Holdco shall have
any further obligations to the Lender hereunder shall release all
of its right, title and interest in the Security, other than the
Subordinate Voting Shares acquired pursuant to the Option.

                                    ARTICLE 7.
                              DEFAULT AND REMEDIES

7.1. EVENTS OF DEFAULT. During the Exercise Period, upon the
occurrence of any one or more of the following events:

(a) the non-payment of any Indebtedness by the Borrower, whether
on account of principal, interest thereon or otherwise;

(b) default by the Borrower or Holdco in the performance or observance
of any covenant, condition or obligation contained in this Agreement
or any Security that does not require the payment of money by the Borrower
to the Lender;

(c) any representation or warranty made by the Borrower or Holdco herein
or in any officers' certificate or other document delivered to the Lender
pursuant hereto or in connection with any Security is found to be false
or incorrect in any way so as to make it materially misleading when made
or deemed to have been made;

(d) the Borrower or Holdco fails to pay to any Person any indebtedness
(other than Indebtedness) in excess of $100,000 in aggregate when due
(whether at scheduled maturity or by required payment, acceleration,
demand or otherwise) and such failure continues after any applicable
grace period.

(e) the Borrower or Holdco admits its inability to pay its debts
generally as they become due or otherwise acknowledges its insolvency;

(f) the Borrower or Holdco institutes any proceeding or takes any
corporate action or executes any agreement to authorize its
participation in or commencement of any proceeding:

 (i) seeking to adjudicate it a bankrupt or insolvent, or

(ii) seeking liquidation, dissolution, winding up, reorganization,
     arrangement, protection, relief or composition of it or any
     of its property or debt or making a proposal with respect to
     it under any law relating to bankruptcy,

<PAGE>

                                     -11-
     insolvency, reorganization or compromise of debts or
     other similar laws unless the such party is contesting
     such action in good faith;

(g) any proceeding is commenced against or affecting the
Borrower or Holdco:

    (i) seeking to adjudicate it a bankrupt or insolvent;

   (ii) seeking liquidation, dissolution, winding up,
        reorganization, arrangement, protection, relief
        or composition of it or any of its property or debt
        or making a proposal with respect to it under any law
        relating to bankruptcy, insolvency, reorganization or
        compromise of debts or other similar laws (including,
        without limitation, any reorganization, arrangements or
        compromise of debt under the BANKRUPTCY AND INSOLVENCY
        ACT (Canada) or the laws of its jurisdiction of
        incorporation); or

 (iii) seeking appointment of a receiver, trustee, agent,
       custodian or other similar official for it or for any
       substantial part of its properties and assets, including
       the MV Shares or the shares of the Borrower or any part
       thereof;

(h) any creditor of the Borrower or Holdco, or any other Person,
shall privately appoint a receive, trustee or similar official for
any part of the properties and assets of the Borrower or Holdco,
including the MW Shares or the shares of the Borrower or any part
thereof;

(i) if any execution, distress or other enforcement process,
whether by court order or otherwise, becomes enforceable
against any property of the Borrower or Holdco;

(j) if any event or proceeding is taken with respect to any part
of the MV Shares or the shares of the Borrower in any jurisdiction
outside Canada which has an effect equivalent or similar to any
of the events described in subsections (f),(g),(h) or (i);

(k) if, at any time after execution and delivery thereof, any
Security ceases to be in full force and effect (unless within five
days of notice of the same being given by the Lender to the
Borrower such Security again has full force and effect as if
it had always had full force and EFFECT) OR if any Security
is declared by a court or tribunal of competent jurisdiction
to be null and void or the validity or enforceability thereof
is contested by the Borrower or Holdco, or the Borrower or
Holdco denies in writing that it has any or further liability
or obligations under any Security;

(1) the audited financial statements of the Borrower in respect
of any fiscal year are qualified in any material respect by the
Borrower's auditors;

(m)  if members of Willett's immediate family (or trusts for
their bought cease to own (directly or indirectly) one hundred
percent of the issued and outstanding shares of Holdco free
and clear of all Liens (other than in favour of the Lender);
and

<PAGE>
                              -12-

(n) the Borrower transfers any of its MV Shares other than in
accordance with the Option and the Stockholders Agreement,

the Lender may, by notice to the Borrower, declare all indebtedness
of the Borrower to the Lender pursuant to this Agreement to be
immediately due and payable whereupon all such indebtedness shall
immediately become and be due and payable and any collateral
security, including the Security, for such indebtedness shall
immediately become enforceable without further demand or other
notice of any kind, all of which are expressly waived by the
Borrower.

7.2. Interest Ceasing to Accrue. Upon the expiry of the Option,
interest shall cease to accrue on the Principal Amount and no
accrued interest shall be payable in respect of the Loan.

7.3. EXTENSION OF MATURITY. Upon the expiry of the Option, the Loan
shall mature, and the Indebtedness hereunder shall become due and
payable, only upon delivery of a written notice by the Borrower
to the Lender specifying a date on which the Loan shall mature and
the Indebtedness shall be due and payable and the Loan shall be
deemed to mature and the Indebtedness shall be deemed to be due
and payable on such date.

7.4. REDUCTION OF INDEBTEDNESS. Upon the expiry of the Option, the
Borrower may upon delivery of a written notice to the Lender
permanently and irrevocably reduce the amount of the Loan and
the amount of the Indebtedness to the amount specified in such notice.

7.5. Purchase of Loan. Upon the expiry of the Option, Holdco may, upon
delivery of a written notice to the Lender, purchase for the aggregate
purchase price of $1.00, all of the Lender's right, title and interest
in and to the Loan, this Agreement, the Security, and any other document,
instrument, registration or security delivered or made pursuant to or
in CONNECTION with the Loan, this Agreement or the Security. The sale
of the Loan shall take place within the time period provided for in the
notice referred to in the foregoing sentence and the Lender shall
take such action and execute and deliver to Holdco such agreements,
conveyances, registrations, deeds and other documents and instruments
as Holdco may request to give effect to the provisions of this section.

                                     ARTICLE 8.
                                  MISCELLANEOUS

8.1. WAIVERS AND AMENDMENTS. No failure or delay by the Lender in
exercising any right hereunder shall operate as a waiver of such right
nor shall any single or partial exercise of any power or right
hereunder preclude its further exercise or the exercise of any
other power or right. Any waiver by the Lender of the strict observance,
performance or compliance with any term, covenant or condition of this
Agreement is not a waiver of any subsequent default and any
indulgence by the Lender with respect to any failure to strictly observe,
perform or comply with any term, COVENANT OR condition of this Agreement
is not a waiver of the entire term, covenant or condition or any
subsequent default. Any term, covenant, agreement or condition
of this Agreement may only be amended with the consent of the Borrower
and the Lender in writing or

<PAGE>
                              -13-

compliance therewith may only be waived (either generally or in a
particular instance and either retroactively or prospectively) by
the Lender in writing.

8.2. Notices. All notices and other communications which may or are
required to be given pursuant to any provision of this Agreement
shall be given or made in writing and shall be deemed to be
validly given if served personally or by telecopy, in each case
addressed to the particular party at:

   (a) If to the Borrower:

               Les Gantiers Holding B.V.
               Olympic Plaza
               Frederik Roeskestraat 123
               1076 EE Amsterdam
               The Netherlands

               Fax: 011-31-20-675-8869
               Attention: Ton Diekman

               With a copy to:

               Osler, Hoskin & Harcourt
               280 Park Avenue
               30W
               New York, NY 10017

               Fax: (212) 867-5802
               Attention: John W. Stevens

          (b) If to the Lender:

               One Maritime Plaza, Suite 2525
               San Francisco, CA 94111

               Fax: (415) 788-5302
               Attention: Kim Marvin, Managing Director


               With a copy to:

               Kirkland & Ellis
               655 15".' Street NW
               Washington, DC 20005

               Fax: (202) 879-5200
               Attention: Michael Edsall

<PAGE>

                             -14-

or at such other-a3dress of which any party may, from time to time,
advise the other parties by notice in writing given in accordance
with the foregoing. The date of receipt of any such notice shall
be deemed to be the date of delivery or telecopying thereof.

8.3.SUCCESSORS AND ASSIGNS. This Agreement shall enure to the
benefit of and shall be bindingupon the parties hereto and their
respective successors and permitted assigns.

8.4. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect any
other provision herein and, subject to the provisions of the
following paragraph, this Agreement shall be construed as if
the invalid or unenforceable provision had been omitted.

8.5. FURTHER ASSURANCES. The Borrower shall take such action
and execute and deliver to the Lender such agreements,
conveyances, deeds and other documents and instruments
as the Lender shall request, and register, file or record
the same (or a notice of financing statement in respect
thereof) in all offices where such registration; filing or
recording is, in the opinion of the Lender or the Lender's
counsel, necessary or advisable to constitute, perfect and
maintain the Security in all jurisdictions reasonably
required by the Lender, in each case within a reasonable
time after the request therefor by the Lender, and in each
case in form and substance satisfactory to the Lender
and the Lender's counsel. Whether before or after the
happening of an Event of Default, the Borrower shall at
its own expense do, make, execute or deliver, or cause to be
done, made, executed or delivered, all such further acts,
documents and things in connection with the Loan, this
Agreement and the Security as the Lender may reasonably require
from time to time for the purpose of giving effect to the
Loan, this Agreement and the Security including, without
limitation, for the purpose of facilitating the enforcement
of the Security, all immediately upon the request of the Lender.

8.6. Time. Time shall be of the essence of this Agreement.

8.7. ENTIRE AGREEMENT. This Agreement and the documents
referred to herein and delivered pursuant hereto constitute
the entire agreement between the parties hereto and supersede any
prior agreements, undertakings, declarations, representations and
understandings, both written and verbal, in respect of the subject
matter hereof and, without limiting the generality of the
foregoing, the parties hereto acknowledge and agree that
the Clairvest Loan Agreement is hereby amended, restated and
replaced in its entirety by this Agreement.

8.8. COUNTERPARTS. This Agreement may be executed by the parties
in separate counterparts and by facsimile transmission, each of
which when so executed and delivered shall be an original, but
all such counterparts shall together constitute one and the same
instrument.

8.9. Assignment. None of the parties shall be entitled to assign
or transfer the benefit of this Agreement or any advance made or
to be made hereunder or any of its rights or obligations
hereunder without the prior written consent of the other parties,
any such transfer or assignment without consent being null and
void save AND EXCEPT that the Lender shall be entitled to assign or
transfer the benefit of this Agreement and the other Security to any
of its affiliates (as such term

<PAGE>

                                       -15-

is defined in THE-SECURITIES ACT (Ontario). Upon notice thereof by
the Lender, the assignee shall have the same rights and benefits as
if it were the Lender hereunder.

8.10. RIGHT AND REMEDIES CUMULATIVE AND NOT ALTERNATIVE. The rights
and remedies provided to the Lender under this Agreement and under the
other Security Documents are cumulative and not alternative and are in
addition to and not in substitution for any other rights and remedies
which they may have hereunder or thereunder or under the laws of
Ontario or any other jurisdiction and the exercise by them or any of
them of any right or remedy arising from a default or breach of any
agreement, covenant or obligation contained in this Agreement or in
any of the other Security Documents shall not be deemed to be a waiver
of or to alter, affect or prejudice any other right or remedy to which
they may be lawfully entitled for the same default or breach.

 IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date first written above.

                                  LES GANTIERS HOLDING B.V.

                                  By:
                                  Name:
                                  Title:

                                  LES GANTIERS LIMITED

                                   By:
                                   Name:
                                   Title:

                                   AIP/CGI NB ACQUISITION CORP.

                                   By: /s/Kenneth Perreira
                                   Name: Kenneth Perreira
                                   Title: CFO

<PAGE>

                                       -15-

is defined in THE-SECURITIES ACT (Ontario). Upon notice thereof by
the Lender, the assignee shall have the same rights and benefits as
if it were the Lender hereunder.

8.10. RIGHT AND REMEDIES CUMULATIVE AND NOT ALTERNATIVE. The rights
and remedies provided to the Lender under this Agreement and under the
other Security Documents are cumulative and not alternative and are in
addition to and not in substitution for any other rights and remedies
which they may have hereunder or thereunder or under the laws of
Ontario or any other jurisdiction and the exercise by them or any of
them of any right or remedy arising from a default or breach of any
agreement, covenant or obligation contained in this Agreement or in
any of the other Security Documents shall not be deemed to be a waiver
of or to alter, affect or prejudice any other right or remedy to which
they may be lawfully entitled for the same default or breach.

 IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date first written above.

                                  LES GANTIERS HOLDING B.V.

                                  By: /s/Richard H. Willett
                                  Name: Richard H. Willett
                                  Title: Managing Director

                                  LES GANTIERS LIMITED

                                   By: /s/Richard H. Willett
                                   Name: Richard H. Willett
                                   Title: Director

                                   AIP/CGI NB ACQUISITION CORP.

                                   By:
                                   Name:
                                   Title:




<PAGE>



                                                EXHIBIT 4.8


  AMENDMENT NO. 1 TO THE AMENDED AND RESTATED LOAN AGREEMENT
=============================================================



     THIS  AMENDMENT  NO. 1 TO THE AMENDED AND RESTATED LOAN
AGREEMENT (the "AMENDMENT") among Les Gantiers Holding B.V., a
corporation governed by the laws  of  the  Netherlands   (the
"BORROWER"),  Les  Gantiers  Limited,  a corporation  governed
by  the laws  of  Jersey  ("LGL"),  and  AIP/CGI  NB Acquisition
Corp., a corporation governed by the laws of New Brunswick (the
"LENDER") is made as of October  21,  1999  (the  "EFFECTIVE
DATE"). All capitalized terms used but not defined herein shall
have the meanings given such  terms in the Amended and Restated
Loan Agreement, dated as of October 20, 1999 (the "AGREEMENT").

     WHEREAS,  on  October  20,  1999,  the  Borrower,  LGL, and
the Lender entered into the Agreement; and

     WHEREAS, the Borrower, the Lender and LGL agree to amend the
Agreement as set forth herein.

     NOW THEREFORE, in consideration of the premises set  forth
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the
Lender and LGL agree as follows:

     1.   INTEREST RATE.  Section 1.1 of the Agreement is hereby
amended by deleting the following:

          "INTEREST RATE" has the meaning ascribed thereto in
Section 2.2.

     2.   LOAN.  Section 2.1 of the Agreement is hereby amended by
deleting Section  2.1  of  the  Agreement and replacing it in its
entirety with  the following:

          2.1. LOAN. The  Borrower  unconditionally  promises to
          pay on the Maturity  Date to the Lender or to its order,
          at the  offices  at  One Maritime Plaza,  Suite  2525,
          San Francisco, California, the amount of C$13,381,477.18
         (the "PRINCIPAL AMOUNT").

     3.   INTEREST.  Section 2.2  of  the  Agreement  is  hereby
amended by deleting Section 2.2 of the Agreement and replacing it
in its entirety with the following:

          2.2 INTEREST.  No interest shall accrue on the Principal
Amount.

     4.   INTEREST  CEASING  TO  ACCRUE.   Section 7.2 of the
Agreement is hereby amended by deleting Section 7.2 in its entirety.

<PAGE>

     5.   RATIFICATION.   Except  as expressly  evidenced  or
supplemented hereby, each provision of the Agreement  shall  remain in
full  force and effect  and,  as  amended  or supplemented hereby, the
Agreement is in  all respects agreed to, ratified and confirmed by each
of the parties hereto.

     6.   EFFECTIVE DATE.  Upon  the  execution hereof by the Borrower,
the Lender and LGL, this Amendment shall become  effective  as of
October 21, 1999.

     7.   GOVERNING LAW.  This Amendment shall be governed by and
construed in accordance with the internal laws of the State of Delaware.

     8.   COUNTERPARTS.   This  Amendment may be executed in any number
of counterparts, each of which when  so  executed shall be deemed an
original, but all such counterparts shall constitute one and the same
instrument.


                               [END OF PAGE]
                         [SIGNATURE PAGE FOLLOWS]



<PAGE>
     IN WITNESS WHEREOF, the undersigned has executed this Amendment
to the Agreement as of the day and year first written above.

AIP/CGI NB ACQUISITION CORP.

   By: /s/C. Suzanne Crawford
   Name: C. Suzanne Crawford
   Title: Secretary


LES GANTIERS HOLDING B.V.

   By:
   Name:
   Title:


LES GANTIERS LIMITED

   By:
   Name:
   Title:


<PAGE>
     IN WITNESS WHEREOF, the undersigned has executed this Amendment
to the Agreement as of the day and year first written above.

AIP/CGI NB ACQUISITION CORP.

   By:
   Name:
   Title:


LES GANTIERS HOLDING B.V.

   By: /s/Richard H. Willett
   Name: Richard H. Willett
   Title: Director


LES GANTIERS LIMITED

   By: /s/Richard H. Willett
   Name: Richard H. Willett
   Title: Director


<PAGE>





                       DEBENTURE PURCHASE AGREEMENT
                =========================================
                     BETWEEN CONSOLTEX HOLDINGS, INC.
                                    AND
                         LES GANTIERS HOLDING B.V.
                                DATED AS OF
                            SEPTEMBER 29, 2000


<PAGE>

                             TABLE OF CONTENTS
                                                               Page

Section 1.  Authorization and Closing............................1
      1.1.  Authorization of the Debenture.......................1
      1.2.  Purchase and Sale of the Debenture...................2
      1.3.  The Closing..........................................2

Section 2.  Conditions of the Closing............................2
      2.1.  Conditions of Purchaser..............................2
      2.2.  Conditions of the Company............................2

Section 3.  Representations and Warranties.......................3
      3.1.  Representations and Warranties of the Purchaser......3
      3.2.  Representations and Warranties of the Company........3

Section 4.  Transfer of Restricted Securities....................4
      4.1.  General Provisions...................................4
      4.2.  Register of Securities...............................4
      4.3.  Loss, Theft or Destruction of Debenture..............4

Section 5.  Definitions..........................................5

Section 6.  Miscellaneous........................................6
      6.1.  Legend...............................................6
      6.2.  Consent to Amendments................................6
      6.3.  Survival of Representations and Warranties...........6
      6.4.  Successors and Assigns...............................6
      6.5.  Severability.........................................6
      6.6.  Counterparts.........................................6
      6.7.  Descriptive Headings, Interpretation.................6
      6.8.  Governing Law........................................6
      6.9.  Notices..............................................6
     6.10.  No Strict Construction...............................6


EXHIBITS

List of Exhibits



<PAGE>


                       DEBENTURE PURCHASE AGREEMENT


     THIS  DEBENTURE  PURCHASE  AGREEMENT  (this "AGREEMENT") is made as of
September 29, 2000, by and between Consoltex  Holdings,  Inc.,  a  Delaware
corporation  (the  "COMPANY")  and  Les  Gantiers  Holding  B.V., a company
subject  to  the  laws  of  the  Netherlands (the "PURCHASER").  Except  as
otherwise indicated herein, capitalized  terms  used  herein are defined in
Section 5 hereof.

     WHEREAS, the Purchaser is a  party to the Amended  and  Restated  Loan
Agreement,  made  as  of September 19, 1999, as amended by Amendment No. 1,
dated as of September 20,  1999  (the  "LOAN AGREEMENT"), pursuant to which
the  Purchaser,  as of the date hereof, is  obligated  to  pay  AIP/CGI  NB
Acquisition Corp.  ("AIP")  an  amount  equal  to  $9,041,538.51 (the "LOAN
AMOUNT");

     WHEREAS,  American Industrial Partners Capital Fund  II,  L.P.   shall
contribute $7,377,000 to the capital of the Company;

     WHEREAS, AIP  shall  have  exercised  its  option  (the  "OPTION")  to
purchase  all  of the multiple voting shares of Consoltex, Inc. (the "MVS")
for a purchase price equal to $12,164,538.51 (the "OPTION PRICE");

     WHEREAS, AIP  shall pay the Option Price by first setting-off against,
and in full satisfaction  of,  the  obligations  of the Purchaser under the
Loan Agreement the Loan Amount and then delivering to the Purchaser by wire
transfer to an account designated by the Purchaser the excess of the Option
Price over the Loan Amount (the "SPREAD");

     WHEREAS, in consideration of the payment of the  Spread, the Purchaser
shall deliver the MVS to AIP;

     WHEREAS,  the Purchaser desires to purchase from the  Company  with  a
portion of the Spread, and the Company intends to issue to the Purchaser, a
10.5% Convertible  Debenture  in  the  principal  amount of $2,123,000 (the
"DEBENTURE"); and

     WHEREAS, AIP and Consoltex Inc., a New Brunswick (Canada) corporation,
shall be amalgamated.

     For good and valuable consideration, the receipt  and  sufficiency  of
which are hereby acknowledged, the parties hereto agree as follows:

     Section . AUTHORIZATION AND CLOSING.

          ..   AUTHORIZATION OF THE DEBENTURE.  The Company shall authorize
the  issuance  and  sale  to  the Purchaser of the Debenture containing the
terms and conditions and in the  form  set  forth  in  EXHIBIT  A  attached
hereto.

<PAGE>

 ..   PURCHASE AND SALE OF THE DEBENTURE.  At the Closing, the Company shall
sell  to  the  Purchaser, and subject to the terms and conditions set forth
herein, the Purchaser  shall purchase from the Company the Debenture in the
aggregate principal amount of $2,123,000.00 (the "PURCHASE PRICE").

<PAGE>

          ..   THE CLOSING.   The  closing  of the purchase and sale of the
Debenture (the "CLOSING") shall take place at  the  office  of  Kirkland  &
Ellis,  655  15{th}  Street,  NW,  Washington,  DC  20005  at 10:00 a.m. on
September 29, 2000, or at such other place or on such other  date as may be
mutually  agreeable to the Company and the Purchaser.  At the Closing,  the
Company shall deliver to the Purchaser instruments evidencing the Debenture
to be purchased  by the Purchaser, payable to the order of the Purchaser or
its nominee or  registered  in  the  Purchaser's  or  its  nominee's  name,
respectively,  upon  payment  of  the  Purchase  Price  by wire transfer of
immediately available funds to an account designated by the Company.

     Section . CONDITIONS TO THE CLOSING.

          ..   CONDITIONS OF PURCHASER.  The obligation of the Purchaser to
purchase  and  pay  for  the  Debenture  at the Closing is subject  to  the
satisfaction  (or  waiver  by the Purchaser)  as  of  the  Closing  of  the
following conditions:

          )    the representations  and warranties contained in Section 3.2
hereof shall be true and correct at and  as  of  the Closing as though then
made, except to the extent of changes caused by the  transactions expressly
contemplated herein;

          )    the Company shall have simultaneously sold  to the Purchaser
the Debenture to be purchased by the Purchaser hereunder at the Closing;

<PAGE>

          )    the  purchase  of  the Debenture by the Purchaser  hereunder
shall  not be prohibited by any applicable  law  or  governmental  rule  or
regulation  and shall not subject the Purchaser to any penalty or liability
under or pursuant to any applicable law or governmental rule or regulation,
and the purchase  of  the  Debenture  by  the  Purchaser hereunder shall be
permitted  by  laws,  rules  and  regulations  of  the   jurisdictions  and
governmental  authorities and agencies to which the Purchaser  is  subject;
and

          )    AIP  shall have exercised the Option, paid the Option Price,
offset the Loan Amount against the Option Price and paid the Spread.

          ..   CONDITIONS OF THE COMPANY.  The obligation of the Company to
issue the Debenture at  the  Closing  is  subject  to  the satisfaction (or
waiver by the Company) as of the Closing of the following conditions:

          )    the representations and warranties contained  in Section 3.1
hereof  shall  be true and correct at and as of the Closing as though  then
made, except to  the extent of changes caused by the transactions expressly
contemplated herein;

<PAGE>


)    the Purchaser  shall  have delivered, or caused to be delivered on its
behalf, the Purchase Price to the Company in immediately available funds at
the Closing;

          )    the issuance of the Debenture by the Company hereunder shall
not be prohibited by any applicable  law or governmental rule or regulation
and shall not subject the Company to any  penalty  or  liability  under  or
pursuant  to any applicable law or governmental rule or regulation, and the
issuance of the Debenture shall be permitted by laws, rules and regulations
of the jurisdictions and governmental authorities and agencies to which the
Company is subject; and

          )    AIP  shall have exercised the Option, paid the Option Price,
offset the Loan Amount against the Option Price and paid the Spread.

     Section . REPRESENTATIONS AND WARRANTIES.

          ..   REPRESENTATIONS  AND  WARRANTIES  OF  THE  PURCHASER.   As a
material  inducement  to  the  Company  to enter into this Agreement and to
issue the Debenture, the Purchaser hereby represents and warrants that:

               ()  the Purchaser is a corporation  duly  organized, validly
     existing  and  in good standing under the laws of its jurisdiction  of
     incorporation and is qualified to do business in every jurisdiction in
     which its ownership  of property or conduct of business requires it to
     so qualify.  The Purchaser possesses all requisite corporate power and
     authority  and  all  material  licenses,  permits  and  authorizations
     necessary  to  own  and  operate  its  properties,  to  carry  on  its
     businesses as now conducted and presently proposed to be conducted, to
     execute, deliver and perform  this  Agreement,  and  to  carry out the
     transactions contemplated by this Agreement;

               ()  this  Agreement  has been duly and validly executed  and
     delivered by the Purchaser and this  Agreement constitutes a legal and
     binding obligation of the Purchaser, enforceable against the Purchaser
     in  accordance  with  its terms, subject  to  bankruptcy,  insolvency,
     fraudulent transfer, reorganization,  moratorium  and  similar laws of
     general applicability relating to or affecting creditors'  rights  and
     to general principles of equity;

               ()  the  execution  and  delivery  by  the Purchaser of this
     Agreement  and  the  performance by the Purchaser of  its  obligations
     hereunder will not, with  or  without the giving of notice or lapse of
     time,  or both (i) violate any provision  of  law,  statute,  rule  or
     regulation  to which the Purchaser is subject, (ii) violate any order,
     judgment or decree applicable to the Purchaser or (iii) conflict with,
     or result in  a  breach or default under, any term or condition of any
     agreement or other  instrument to which the Purchaser is a party or by
     which the Purchaser is bound; and

     ()  the Purchaser is acquiring  the  Restricted  Securities  purchased
     hereunder  or  acquired  pursuant  hereto for its own account with the
     present  intention  of  holding  such  securities   for   purposes  of
     investment, and that it has no intention of selling such securities in
     a public distribution in violation of the federal securities  laws  or
     any  applicable

<PAGE>

     state securities laws; PROVIDED that nothing contained
     herein   shall   prevent  the  Purchaser  and  subsequent  holders  of
     Restricted Securities  from transferring such securities in compliance
     with the provisions of Section 4 hereof.

          ..   REPRESENTATIONS   AND  WARRANTIES  OF  THE  COMPANY.   As  a
material inducement to the Purchaser  to  enter  into  this  Agreement  and
purchase the Debenture, the Company hereby represents and warrants that:

               ()      the Company is a corporation duly organized, validly
existing and in good standing  under  the laws of the State of Delaware and
is qualified to do business in every jurisdiction in which its ownership of
property or conduct of business requires  it  to  so  qualify.  The Company
possesses  all  requisite  corporate power and authority and  all  material
licenses, permits and authorizations  necessary  to  own  and  operate  its
properties,  to  carry  on  its  businesses  as now conducted and presently
proposed to be conducted, to execute, deliver  and  perform this Agreement,
and to carry out the transactions contemplated by this Agreement;

               ()   this Agreement has been duly and  validly  executed and
delivered by the Company and this Agreement constitutes a legal and binding
obligation  of  the  Company, enforceable against the Company in accordance
with its terms, subject  to  bankruptcy,  insolvency,  fraudulent transfer,
reorganization,  moratorium  and  similar  laws  of  general  applicability
relating  to  or  affecting creditors' rights and to general principles  of
equity; and

               ()   the  execution  and  delivery   by  the Company of this
Agreement  and the performance by the Company of its obligations  hereunder
will not, with  or  without  the giving of notice or lapse of time, or both
(i) violate any provision of law,  statute, rule or regulation to which the
Company is subject, (ii) violate any  order,  judgment or decree applicable
to the Company or (iii) conflict with, or result  in  a  breach  or default
under, any term or condition of any agreement or other instrument  to which
the Company is a party or by which the Company is bound.

     Section . TRANSFER OF RESTRICTED SECURITIES.

          ..   GENERAL   PROVISIONS.   Other  than  to  affiliates  of  the
Purchaser, the Restricted  Securities shall not be transferable without the
prior written consent of the Company.

          ..   REGISTER OF SECURITIES.   The  Company or its duly appointed
agent shall maintain a register for the Debenture,  in  which  the  Company
shall register each issue and sale of the Debenture.  The registered holder
of  the  Debenture  shall  be  treated  as  the  owner  of the Debenture so
registered and any interest thereon for all purposes until  the  Company or
its  duly appointed agent is required to record a transfer of the Debenture
on its register.  The Company or its duly appointed agent shall be required
to record  a transfer when it receives the Debenture to be transferred duly
and properly  endorsed  by the registered holder thereof or by its attorney
duly authorized in writing.   Upon  recording a transfer, the Company shall
reissue the Debenture in the name of the transferee.

 ..   LOSS, THEFT OR DESTRUCTION OF DEBENTURE.    Upon  receipt  of evidence
reasonably  satisfactory to the Company of the loss, theft, destruction  or
mutilation of  the  Debenture

<PAGE>

issued  hereunder by the Company and, in the
case of any such loss, theft or destruction,  upon  receipt of an indemnity
reasonably  satisfactory  to  the  Company,  or  in the case  of  any  such
mutilation, upon surrender and cancellation of the  Debenture, the Company,
at  its expense, will execute and deliver, in lieu of  such  lost,  stolen,
destroyed  or  mutilated Debenture, a new Debenture of like tenor and dated
as of the date of the lost, stolen, destroyed or mutilated Debenture.

     Section . DEFINITIONS.

          For the  purposes of this Agreement, the following terms have the
meanings set forth below:

          "AGREEMENT" has the meaning set forth in the preface hereof.

          "CLOSING" has the meaning set forth in Section 1.3 hereof.

          "COMPANY" has the meaning set forth in the preface hereof.

          "DEBENTURE" has the meaning set forth in the recitals hereto.

          "PERSON" means  an  individual,  a  partnership, a corporation, a
limited liability company, an association, a joint  stock company, a trust,
a joint venture, an unincorporated organization and a  governmental  entity
or any department, agency or political subdivision thereof.

          "PURCHASE PRICE" has the meaning set forth in Section 1.2 hereof.

          "PURCHASER" has the meaning set forth in the preface hereof.

          "RESTRICTED SECURITIES" means (i) the Debenture issued hereunder,
(ii) the common stock issued upon conversion of the Debenture and (iii) any
securities issued with respect to the securities referred to in clauses (i)
or  (ii)  above  by way of a stock dividend or stock split or in connection
with a combination  of  shares,  recapitalization, merger, consolidation or
other  reorganization.  As to any particular  Restricted  Securities,  such
securities  shall cease to be Restricted Securities when they have (a) been
effectively  registered  under  the  Securities  Act  and  disposed  of  in
accordance  with   the  registration  statement  covering  them,  (b)  been
distributed to the public through a broker, dealer or market maker pursuant
to Rule 144 (or any  similar  provision then in force) under the Securities
Act or become eligible for sale  pursuant  to  Rule  144(k) (or any similar
provision  then  in force) under the Securities Act or (c)  been  otherwise
transferred and new  certificates for them not bearing the legend set forth
in Section 6.1 hereof have been delivered by the Company in accordance with
Section  4  hereof.   Whenever   any  particular  securities  cease  to  be
Restricted Securities, the holder thereof shall be entitled to receive from
the Company, without expense, new  securities of like tenor not bearing the
legend set forth in Section 6.1 hereof.

          "SECURITIES ACT" means the Securities Act of 1933, as amended, or
any similar federal law then in force.

<PAGE>

"SUBSIDIARY" means any corporation,  limited liability company, partnership
or other business entity of which the  securities  having a majority of the
ordinary voting power in electing the board of directors  are,  at the time
as  of  which any determination is being made, owned by the Company  either
directly or through one or more Subsidiaries.

     Section . MISCELLANEOUS.

          ..   LEGEND.    Each   certificate   or  instrument  representing
Restricted Securities shall be imprinted with the following legend:

     "THE  SECURITY  REPRESENTED  BY  THIS INSTRUMENT  WAS  ORIGINALLY
     ISSUED ON SEPTEMBER 29, 2000, AND  HAS  NOT BEEN REGISTERED UNDER
     THE SECURITIES ACT OF 1933, AS AMENDED.   THE  TRANSFER  OF  SUCH
     SECURITY IS SUBJECT TO THE DEBENTURE PURCHASE AGREEMENT, DATED AS
     OF SEPTEMBER 29, 2000, AS AMENDED AND MODIFIED FROM TIME TO TIME,
     BETWEEN  THE  ISSUER  (THE  "COMPANY")  AND CERTAIN OTHER PARTIES
     THERETO. UPON WRITTEN REQUEST, A COPY OF SUCH CONDITIONS SHALL BE
     FURNISHED BY THE COMPANY TO THE HOLDER HEREOF WITHOUT CHARGE."

          ..   CONSENT TO AMENDMENTS.  The provisions of this Agreement may
be  amended only if the Company has obtained the  written  consent  of  the
holders of a majority of the outstanding principal amount of the Debenture.

          ..   SURVIVAL    OF    REPRESENTATIONS   AND   WARRANTIES.    All
representations and warranties contained  herein  or made in writing by any
party in connection herewith shall survive the execution  and  delivery  of
this  Agreement  and  the  consummation  of  the  transactions contemplated
hereby.

          ..   SUCCESSORS  AND  ASSIGNS.   Except  as  otherwise  expressly
provided herein, all covenants and agreements contained  in  this Agreement
by  or on behalf of any of the parties hereto shall bind and inure  to  the
benefit  of  the  respective  successors  and assigns of the parties hereto
whether so expressed or not.  In addition,  and  whether or not any express
assignment has been made, the provisions of this Agreement  which  are  for
the  Purchaser's benefit as a purchaser or holder of the Debenture are also
for the  benefit  of,  and  enforceable  by,  any  subsequent holder of the
Debenture.

          ..   SEVERABILITY.   Whenever possible, each  provision  of  this
Agreement shall be interpreted in  such manner as to be effective and valid
under applicable law, but if any provision  of this Agreement is held to be
prohibited  by or invalid under applicable law,  such  provision  shall  be
ineffective only  to  the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.

<PAGE>

 ..   COUNTERPARTS.  This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more
than one party, but all  such  counterparts taken together shall constitute
one and the same Agreement.

          ..   DESCRIPTIVE  HEADINGS;   INTERPRETATION.    The  descriptive
headings  of this Agreement are inserted for convenience only  and  do  not
constitute  a  substantive  part  of  this  Agreement.  The use of the word
"including" in this Agreement shall be by way  of  example  rather  than by
limitation.

          ..   GOVERNING   LAW.    This  Agreement  and  the  exhibits  and
schedules hereto shall be governed by,  and  construed  in accordance with,
the laws of the State of Delaware, without giving effect  to  any choice of
law  or  conflict  of  law  rules  or  provisions (whether of the State  of
Delaware or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.

          ..   NOTICES.  All notices, demands or other communications to be
given or delivered under or by reason of  the  provisions of this Agreement
shall be in writing and shall be deemed to have  been  given when delivered
personally  to the recipient, sent to the recipient by reputable  overnight
courier service  (charges  prepaid) or mailed to the recipient by certified
or registered mail, return receipt  requested  and  postage  prepaid.  Such
notices,  demands  and other communications shall be sent to the  Purchaser
and to the Company at  the  addresses  indicated  below  or  to  such other
address or to the attention of such other Person as the recipient party has
specified by prior written notice to the sending party:

          if to the Company:

               Consoltex Holdings, Inc.
               _ American Industrial Partners Capital Fund II, L.P.
               551 Fifth Avenue, Suite 3800
               New York, NY  10176
               Attention: Kim Marvin

          with a copy to:

               Kirkland & Ellis
               655 Fifteenth Street, N.W., Suite 1200
               Washington, DC  20005-5793
               Attention: Terrance L. Bessey

<PAGE>

if to the Purchaser:

               Les Gantiers Holding B.V.
               _ Les Gantiers Limited
               Olympic Plaza
               Frederik Roeskestraat 123
               1076 EE Amsterdam, The Netherlands
               Attention: Ton Diekman

          with a copy to:

               Osler, Hoskin & Harcourt
               P. O. Box 50
               1 First Canadian Place
               Toronto, Ontario M5X 1B8, Canada
               Attention: Randall Pratt

          ..   NO   STRICT   CONSTRUCTION.    The   parties   hereto   have
participated jointly in the negotiation and drafting of this Agreement.  In
the event an ambiguity or question of intent or interpretation arises, this
Agreement  shall  be construed as if drafted jointly by the parties hereto,
and no presumption  or  burden of proof shall arise favoring or disfavoring
any party by virtue of the  authorship  of  any  of  the provisions of this
Agreement.

                             [END OF DOCUMENT]
                         [SIGNATURE PAGE FOLLOWS]




<PAGE>


IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed this  Debenture
Purchase Agreement on the date first written above.

                              CONSOLTEX HOLDINGS, INC.
                                 By: /s/C. Suzanne Crawford
                                 Name: C. Suzanne Crawford
                                 Title: V-P, Legal Affairs & Corp. Secy.


                              LES GANTIERS HOLDING B.V.
                                 By:
                                 Name:
                                 Title:



<PAGE>


IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed this  Debenture
Purchase Agreement on the date first written above.

                              CONSOLTEX HOLDINGS, INC.
                                 By:
                                 Name:
                                 Title:


                              LES GANTIERS HOLDING B.V.
                                 By: /s/Aem Diehmal
                                 Name: Aem Diehmal
                                 Title: Director





<PAGE>

                             LIST OF EXHIBITS


Exhibit A - Form of Debenture


<PAGE>
                                                    EXHIBIT 4.10


                            TRANSFER AGREEMENT
                         =========================


                             EXECUTION VERSION


                            TRANSFER AGREEMENT


      THIS  AGREEMENT (the "AGREEMENT"), dated as of September 29
2000 (the "EFFECTIVE DATE"),  is  by  and  among Les Gantiers
Holding B.V., a company subject  to  the laws of the Netherlands
(the  "TRANSFEROR"),  AIP/CGI  NB Acquisition Corp.,  a
corporation  subject  to  the laws of New Brunswick, Canada
(the "TRANSFEREE"), and, for purposes of paragraph  4  hereof,
Les Gantiers  Limited,  a  company  subject  to  the  laws  of
Jersey ("LGL"), Consoltex  Inc. (formerly Consoltex Group Inc.),
a corporation subject to the laws of New Brunswick, Canada  and
The  Big  Sky  Trust,  a  trust established under the laws of
Jersey (the "TRUST").

     WHEREAS,  the  Transferor,  the  Transferee and LGL are
parties to the Amended  and Restated Loan Agreement, made  as
of  October  20,  1999,  as amended by  Amendment  No.  1,
dated  as  of  October  21, 1999 (the "LOAN AGREEMENT"),
pursuant to which the Transferor, as of the  date  hereof,  is
obligated to pay the Transferee an amount equal to $9,041,538.51
(the "LOAN AMOUNT");

     WHEREAS, the Transferor and the Transferee are parties to
that certain Stockholders   Agreement,   dated  as  of  September
9,  1999,  among  the Transferee, Consoltex Group Inc. ("CGI"),
LGL, the Transferor and the Trust(the "STOCKHOLDERS AGREEMENT");

     WHEREAS, pursuant to the  terms  of  the  Stockholders
Agreement, the Transferee acquired an option (the "OPTION") to
purchase 3,140,000 multiple voting shares of CGI (the "MV SHARES")
and desires to exercise  the  Option for a purchase price equal
to $12,164,538.51 (the "OPTION PRICE"); and

       WHEREAS, in connection with the Transferee's exercise
of the Option, the Transferor  desires to transfer, and the
Transferee desires to acquire, the MV Shares.

       For good and  valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

       OPTION EXERCISE.  This Agreement shall  serve  as the
irrevocable written notice of the Transferee to exercise the
Option and  acquire the MV Shares in accordance with the
Stockholders Agreement.  In consideration  of the  Transferee's
payment of the Option Price by (a) first reducing and
setting-off against the Option Price the  Loan  Amount
(the "SET-OFF") and then  (b) paying to the Transferor on the
date hereof by wire  transfer to accounts  designated  by the
Transferor the amount of $3,123,000, being the excess of the
Option Price  over the Loan Amount (the "CONSIDERATION"), the
Transferor hereby transfers and  assigns  to  the Transferee
the MV Shares, and the Transferee hereby accepts such transfer
and assignment.

         REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR.
The Transferor hereby represents and warrants to the Transferee
that:

          () the Transferor has full power and  authority  to
execute and deliver this Agreement and to perform its obligations
hereunder, and this Agreement has been duly executed and
delivered by the Transferor;


<PAGE>


          () the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the
performance of the Transferor's obligations hereunder will not
conflict with, or result in any violation of or default under,
any provision of any governing instrument applicable to the
Transferor, or any agreement or other instrument to which the
Transferor is a party or by which the Transferor or any  of
its  properties  are  bound,  or any judgement, decree,  order,
statute, rule or regulation applicable to the Transferor or
the Transferor's business or properties; and

          () upon the consummation of the transactions
contemplated hereby, the Transferee will receive good and valid
title to the MV Shares to be acquired by it hereunder, free and
clear of any lien, liability or encumbrance, other than any
existing liens in favor of the Transferee.

         REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREE.
The Transferee hereby represents and warrants to the Transferor
that:

          () the Transferee  has  full  power  and authority to
execute and deliver this Agreement and to perform its obligations
hereunder and this Agreement has been duly executed and
delivered by the Transferee; and

          () the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the
performance of its obligations hereunder by the Transferee will
not materially conflict with, or result in any material
violation of or default under, any provision of any governing
instrument applicable to the Transferee, or any agreement of
other instrument to which the Transferee is a party of by which
the Transferee or any of  its properties are bound, or any
decree,  order,  statute,  rule  or  regulation  applicable to
the Transferee or its business or properties.

         TERMINATION  OF  CERTAIN  AGREEMENTS. The parties
hereto agree that effective  upon  the  payment of the
Consideration  and  without any further action being required
the  following shall be terminated as of the date hereof
and shall have no further  force  and effect: (a) the Guaranty,
made as of September 9, 1999, by American Industrial  Partners
Capital Fund II, L.P. in favor of the Transferor and
(b) the Stockholders Agreement.

         PAYOFF OF LOAN AMOUNT. Each of the Transferee and the
Transferor acknowledge and agree that, effective upon the
Set-off  and  without  any further  action  being   required,
all  liabilities,  obligations  and indebtedness  owing  by
the Transferor and LGL to the Transferee under the Loan
Agreement shall be deemed  to have been satisfied in full and
the Loan Agreement shall be hereby terminated  and  of  no
further force or effect. The Transferee shall promptly deliver
to the Transferor  any  and all notes or  other instruments
in favor of the Transferee canceled and marked  "Paid in Full."


         MISCELLANEOUS. This Agreement shall  be governed by,
construed and enforced  in  accordance  with the laws of the State
of  Delaware  without regard to the conflicts of  law principles
thereof.  No amendment or waiver of this Agreement shall be
effective  without  the prior written

<PAGE>

consent of the party against whom such amendment or waiver
is  sought to be enforced. This Agreement may be executed in
one or more counterparts,  each of which is deemed to be an
original and all of which taken together constitute on and
the  same  agreement.  From time to time, at the request of
the other party hereto, each party hereto shall  execute
and deliver such additional documents and take such further
lawful action as may  be necessary or desirable to consummate
and make effective,  in the most expeditious manner
practicable, the transactions  contemplated by this Agreement.


                               [END OF PAGE]
                         [SIGNATURE PAGE FOLLOWS]




<PAGE>


IN WITNESS WHEREOF, the undersigned  have  executed this
Transfer Agreement on the date first written above.


                              TRANSFEROR:

                              LES GANTIERS HOLDING B.V.

                              By:
                                 Name:
                                 Title:


                              TRANSFEREE:

                              AIP/CGI NB ACQUISITION CORP.

                              By:/s/C. Suzanne Crawford
                              Name: C. Suzanne Crawford
                              Title: V-P, Legal Affairs and
                                     Corporate Secretary

                              FOR PURPOSES OF PARAGRAPH 4:

                              CONSOLTEX INC.


                              By:/s/C. Suzanne Crawford
                              Name: C.Suzanne Crawford
                              Title: V-P, Legal Affairs and
                                     Corporate Secretary

                              LES GANTIERS LIMITED


                              By:_________________________
                                    Name:
                                    Title:

                              THE BIG SKY TRUST

                              By:_________________________
                                    Name:
                                    Title:
<PAGE>


IN WITNESS WHEREOF, the undersigned  have  executed this
Transfer Agreement on the date first written above.


                              TRANSFEROR:

                              LES GANTIERS HOLDING B.V.

                              By:/s/Aem Diekman
                              Name: Aem Diekman
                              Title: Director


                              TRANSFEREE:

                              AIP/CGI NB ACQUISITION CORP.

                              By:
                              Name:
                              Title:

                              FOR PURPOSES OF PARAGRAPH 4:

                              CONSOLTEX INC.


                              By:
                              Name:
                              Title:


                              LES GANTIERS LIMITED


                              By: /s/illegible signature
                               Name:
                               Title: Director

                              THE BIG SKY TRUST

                               By:/s/Robert George Day
                               Name: Robert George Day
                               Title:



<PAGE>
                                                       EXHIBIT 4.11


                                 GUARANTY
                  ======================================

   This  Guaranty  (this  "Guaranty") is made as of September 29, 2000 by
Consoltex Inc., a corporation  organized  under  the laws of New Brunswick,
Canada (formerly Consoltex Group Inc.) ("Consoltex  Inc."), Consoltex (USA)
Inc.,  a New York corporation ("Consoltex USA"), The Balson-Hercules  Group
Ltd., a  Rhode  Island  corporation  ("B-H"),  and LINQ Industrial Fabrics,
Inc., a Delaware corporation ("LINQ"),  (the "Guarantors")  for the benefit
of  Les  Gantiers  Holding B.V., a company existing under the laws  of  the
Netherlands ("LGH").   Reference is made to the Convertible Debenture dated
September 29, 2000 ("the  Debenture") in the principal amount if $2,133,000
between Consoltex Holdings, Inc. (the "Company") and LGH.

     1. In the event that the Company is obligated to make a payment to LGH
and the Company does not satisfy such payment obligation (the "Obligation")
in  full  at  the  time  specified   therefor   (any  such  shortfall,  the
"Deficiency"), the Guarantors guarantee payment in  full to LGH upon demand
by  LGH  such amounts as are necessary to pay in full the  amount  of  such
Deficiency.   This  Guaranty  shall  be discharged upon satisfaction of the
Company's  Obligation  or  upon the Guarantors'  payment  in  full  of  any
Deficiency.  Notwithstanding  anything to the contrary contained herein, as
between LGH and the holders of  the  senior subordinated notes issued under
the Indenture (as defined in the Debenture), the payment obligations of the
Guarantors  hereunder  shall be PARI PASSU  with  the  payment  obligations
contained in the senior subordinated notes issued under the Indenture.

     2. (a) For purposes  of this Section 2, the following terms shall have
the following meanings:

            "CREDIT  AGREEMENT"  means  the  Amended  and  Restated  Credit
Agreement, dated as of  October  25,  1999,  by  and among, INTER ALIA, the
Company,  Consoltex  Inc.,   Consoltex  USA,  B-H and LINQ,  as  borrowers,
certain subsidiaries of the borrowers as guarantors, Bank of America, N.A.,
as U.S. Agent, National Bank of Canada, as Canadian  Agent  and the lenders
party  thereto,  as amended, modified, supplemented, amended and  restated,
refinanced or replaced heretofore and from time to time hereafter.

            "CREDIT PARTY" means each Guarantor, the Company and each other
Borrower (as defined  in  the Credit Agreement) or Guarantor (as defined in
the Credit Agreement) and each  other party granting a security interest in
Collateral (as defined in the Credit  Agreement)  to  secure payment of the
Senior  Obligations,  as  each  of  such  terms are defined in  the  Credit
Agreement.

            "SENIOR CREDITORS" means the Agents  (as  defined in the Credit
Agreement), the Lenders (as defined in the Credit Agreement), and all other
future holders (or any one of them) of the Senior Obligations.

            "SENIOR  LOAN  DOCUMENTS"  means  (i)  the  Credit   Agreement,
together  with the Loan Documents (as defined in the Credit Agreement)  and
all other documents,  instruments  and  agreements related thereto, and any
amendments, restatements, supplements or  modifications  of or with respect
to  any  of  the  foregoing,  and  (ii)  any

<PAGE>

other agreement, document  or instrument  executed  by any borrower,
guarantor  in  connection  with  the Senior Obligations, including
without limitation pursuant to a refinancing, refunding or replacement
of any of the Senior Obligations.

            "SENIOR OBLIGATIONS" means all debt or other obligations of any
nature, whether now existing  or  hereafter  arising, consisting of (i) all
principal, interest (including any interest accruing after the commencement
of any bankruptcy, insolvency, receivership or  similar proceedings and any
other  interest that would have accrued but for the  commencement  of  such
proceedings,  whether  or  not  allowed),  fees,  reimbursement obligations
arising in connection with letters of credit, indemnification  obligations,
costs and expenses payable by any or all of Credit Parties under any of the
Senior  Loan  Documents,  including without limitation all Obligations  (as
defined in the Credit Agreement)  now  and hereafter existing, and (ii) all
indebtedness of  any or all of the Credit  Parties  under  any  amendments,
modification,   renewals,   extensions,   restatements  or  loan  documents
evidencing  refinancings,  refundings  or  replacements   of   any  of  the
foregoing.

            "STANDSTILL  PERIOD"  means  the  period of time from the  date
hereof  to and including the 91st day following  the  Facility  Termination
Date (as defined in the Credit Agreement).

            "SUBORDINATED  CREDITORS"  means,  collectively,  any holder or
owner  from  time  to  time  of  any  interest  in  any of the Subordinated
Obligations.

            "SUBORDINATED TRANSACTION DOCUMENTS" means,  (i) the Debenture,
(ii)  any  PIK  Debentures  issued  pursuant  to the Debenture,  (iii)  the
Purchase Agreement, (iv) the Guaranty and (v) all  other  documents entered
into  in  connection therewith or herewith which relate to indebtedness  or
liabilities, direct or indirect, absolute or conditional, of any Guarantor,
to all or any  of  the  Subordinated Creditors, incurred thereunder and the
other  obligations evidenced  thereby  and  any  amendments,  restatements,
supplements or modifications of or with respect to any of the foregoing and
permitted hereunder.

            "SUBORDINATED  OBLIGATIONS" means the indebtedness, obligations
and liabilities of each Guarantor under any of the Subordinated Transaction
Documents.

        (b) SUBORDINATION.   The Subordinated Obligations are, and shall at
all relevant times remain, subordinated  to  the  Senior Obligations to the
extent and in the manner herein provided.  The Subordinated  Creditors will
not at any time during the Standstill Period ask, demand, sue  for,  accept
or  exercise  any remedy in respect of any security for, or take or receive
from any Guarantor  or any other Credit Party (whether, without limitation,
by demanding or receiving any payment of any Deficiency, scheduled payment,
or  mandatory  or  optional   prepayment,  of  principal,  interest,  fees,
expenses,  reimbursements, indemnification  obligations  or  other  amounts
owing thereby, exercising liens or rights of setoff, or by any other action
or manner), the whole or any part of any amounts which may now or hereafter
be owing by  any  Guarantor  or  any successors or assigns of any Guarantor
including,  without  limitation,  any   receiver,   trustee  or  debtor  in
possession  (the  term  "Guarantor"  hereinafter  shall  include  any  such
successors  or

<PAGE>

assigns  of such Guarantor), to the Subordinated  Creditors
which now or hereafter constitute  or otherwise were or will be incurred in
connection  with  the  Subordinated  Obligations   (whether   such  amounts
represent payment obligations under this Guaranty, principal or interest or
other obligations which are due or not due, direct or indirect, absolute or
contingent or obligations arising from the exercise of any redemption,  put
or  similar  right  in  respect  of  any  Subordinated  Obligations, or any
warrants  or  any  stock  issued in connection with the exercise  thereof),
including, without limitation,  the  taking  of  any instruments evidencing
such  amounts  nor any security for any of the foregoing  (other  than  the
delivery by the  Guarantors, and the receipt by the Subordinated Creditors,
of this Guaranty).

        (c) NO PAYMENT OR EXERCISE OF REMEDIES.  The Subordinated Creditors
will not at any time  during the Standstill Period, including following any
acceleration of the maturity  of  any  amount  owing  on  the  Subordinated
Obligations, take any action to enforce or collect amounts so owing against
any  Guarantor  or  other Credit Party or any security for any Subordinated
Obligation or act as  a petitioning creditor in any bankruptcy, insolvency,
reorganization,  receivership   or   similar   proceeding  (an  "Insolvency
Proceeding") filed against any Guarantor or any other Credit Party.

        (d) NO  LIENS.   During  the  Standstill  Period   no  Subordinated
Creditor  shall have a security interest or other rights in any  assets  or
property of  any  Guarantor  or  any other Credit Party as security for the
Subordinated Obligations. If any Subordinated  Creditor  shall foreclose or
realize  on,  or  otherwise  receive or come into possession of,  any  such
assets or property in violation  of  the  terms  hereof,  such Subordinated
Creditor  shall promptly deliver such assets or property, or  the  proceeds
thereof, to  the  Senior  Creditors  (such assets or property, and proceeds
thereof, being held in trust by such Subordinated  Creditor for the benefit
of  the  Senior  Creditors  until  such delivery). The provisions  of  this
paragraph 2(d) are effective irrespective  of  any  event  or  circumstance
pertaining to the time or order of acquisition, attachment or perfection of
any  security  interest or lien of the Senior Creditors or the Subordinated
Creditors in any  assets,  or  the  time or order of filing or recording of
financing statements or any other document  or  instrument  by  the  Senior
Creditors or the Subordinated Creditors.

        (e) BANKRUPTCY  DISTRIBUTIONS.   In  the event of any distribution,
division or application, partial or complete,  voluntary or involuntary, by
operation of law or otherwise, of all or any part  of  the  assets  of  any
Guarantor  or  the  proceeds thereof to creditors of any Guarantor upon any
indebtedness of any Guarantor, by reason of the liquidation, dissolution or
other winding up of any  Guarantor  or any Guarantor's business, or, in the
event of any Insolvency Proceeding, then and in any such event, any payment
or distribution of any kind or character,  either  in  cash,  securities or
other  property,  which shall be payable or deliverable to any Subordinated
Creditor upon or with  respect  to  any or all the Subordinated Obligations
shall be paid or delivered directly to the Senior Creditors for application
against the Senior Obligations, whether  due  or not due, in a manner which
the Senior Creditors, in their sole discretion,  shall  determine,  at  all
times  during  the  Standstill  Period,  and  the Senior Creditors or their
representative is hereby irrevocably authorized  and  empowered to ask for,
demand, sue for, collect, and receive and receipt for every such payment or
distribution and give acquittance therefor.

<PAGE>

        (f) RECEIPTS BY SUBORDINATED CREDITORS HELD IN  TRUST.   Should any
payment or distribution of security or proceeds thereof be received  by any
Subordinated  Creditor  constituting or otherwise received with respect  to
the  Subordinated  Obligations   during   the   Standstill   Period,   each
Subordinated  Creditor  agrees  forthwith to deliver the same to the Senior
Creditors or their representative  in  precisely  the form received (except
for the endorsement or assignment of such Subordinated  Creditor  where the
Senior  Creditors or their representative, in its or their sole discretion,
deems  same   to   be   necessary),  for  application  against  the  Senior
Obligations, whether due or not due, and until so delivered, the same shall
be held in trust by such  Subordinated  Creditor  as property of the Senior
Creditors.

        (g) CONTINUITY OF SUBORDINATION.  The provisions  of this Section 2
shall  continue  and  remain in full force and effect notwithstanding   the
occurrence at any time  and  from  time  to  time of any modification of or
affecting the Senior Obligations or the security  therefor  or  the  Credit
Parties, without notice to the Subordinated Creditors, including by way  of
example  and  not  by  limitation:  (i)  the sale, assignment, refinancing,
modification, amendment, rearrangement, postponement,  extension,  renewal,
increase,  restructuring,  acceleration or demand for payment of the Senior
Obligations in whole or in part  and  as  often as the Senior Creditors may
wish;  (ii)  the  waiver,  failure  to  enforce,   surrender,   impairment,
modification  or exchange of any of the Senior Creditors' rights under  any
of the Senior Loan  Documents;  (iii) the settlement, release (by operation
of law or otherwise), compromise, collection or liquidation, in any manner,
of any of the Senior Obligations;  or (iv) the release of any Credit Party,
or any of them, or any other endorser,  guarantor  or other person from any
liability on any of the Senior Obligations, or release  of  any  collateral
for  the  Senior Obligations, all of which events the Senior Creditors  may
take, in their  sole  discretion,  at any time and from time to time during
the Standstill Period.

     3. All  demands made upon the Guarantors  pursuant  to  this  Guaranty
shall be in writing and delivered, couriered or mailed to the Guarantors at
the following  addresses (or to such other addresses as shall be designated
by the Guarantors  in  a written notice to LGH prior to the delivery of any
notice hereunder):

               Consoltex (USA) Inc.
               1040 Sixth Avenue, 6{th} Floor
               New York, New York 10018

               Attention:  Mr. Paul J. Bamatter

All notices hereunder shall  be  effective  when  delivered,  one day after
deposit with an overnight courier service (charges prepaid) or,  if mailed,
upon  the  fifth  business day after the date deposited into the U.S.  mail
(postage prepaid and return receipt requested).

     4. The  Guarantors   hereby   waive  notice  of  acceptance  of  their
obligations  to pay the Deficiency, notice  of  any  obligation  hereunder,
notice of protest,  notice  of dishonor or nonpayment of any Obligation and
any other notice to the Guarantors.   The

<PAGE>

Guarantors hereby waive and agree not to assert or take advantage of any
rights or defenses based on any rights or defenses of the Company to the
Obligation, including any failure of consideration, any statue of
limitations or any insolvency or bankruptcy of the Company.   No invalidity,
irregularity or unenforceability of all or any part of the Obligation  shall
affect,  impair  or be a defense to this Guaranty, nor shall any other
circumstance which might otherwise constitute a defense available to, or
legal or equitable discharge  of, the Company in respect  of  any  of the
Obligation affect, impair or be a defense  to  the Obligation under this
Guaranty.   An  action may be brought hereon against the Guarantor either
in the same action  in which the Company is sued or in a separate action.

     5. The Obligation of the Guarantors under  this  Guaranty shall not be
affected  by (i) any change in the direct or indirect ownership  or  voting
interests of  the  Guarantor,  (ii)  the  effect of any foreign or domestic
laws, rules, regulations or actions of a court  or  governmental body other
than  actions  taken  specifically  in  respect of the Obligation  or  this
Guaranty, (iii) any change in the time, manner  or  place of payment of, or
in any other of, the Obligation or (iv) excepting events which constitute a
discharge  as  expressly  provided  herein, any other condition,  event  or
circumstance  which  might  otherwise  constitute   a  legal  or  equitable
discharge,  release or defense of a surety or guarantor  or  otherwise,  or
which might otherwise limit recourse against the Guarantors.

     6. Any provision of this Guaranty which is prohibited or unenforceable
in any jurisdiction  shall,  as to such jurisdiction, be ineffective to the
extent of such prohibition or  unenforceability  in  any  jurisdiction  and
shall  not  invalidate  or render unenforceable such provision in any other
jurisdiction.

     7. The Guarantors represent  and  warrant  to  LGH that the Guarantors
have all requisite power and authority and have taken  all action necessary
in order to execute, deliver and perform their obligations  under,  and  to
consummate  the transactions contemplated by, this Guaranty.  This Guaranty
has been duly  and  validly  executed  and  delivered  by the Guarantors in
accordance  with  its terms, subject to bankruptcy, insolvency,  fraudulent
transfer,  reorganization,   moratorium   and   similar   laws  of  general
applicability  relating  to or affecting creditors' rights and  to  general
equity principles.  This Guaranty  shall  be irrevocable and shall inure to
the  benefit of LGH and its successors and assigns.   No  other  person  is
intended to be a third-party beneficiary of this Guaranty.

     8. No provision of this Guaranty may be changed, waived, discharged or
terminated orally, except by an instrument in writing executed by LGH.

     9. This  Guaranty  shall in all respects be governed by, and construed
in accordance with, the internal laws and judicial decisions (as opposed to
conflict of law provisions) of the State of Delaware, including all matters
of construction, validity and performance.

<PAGE>



     IN WITNESS WHEREOF,  the undersigned have executed this Guaranty as of
the date first above written.

                           GUARANTORS:

                              CONSOLTEX INC.

                              By:/s/Paul J. Bamatter
                              Name: Paul J. Bamatter
                              Title: V.P. Finance & CFO

                              CONSOLTEX (USA) INC.

                              By:/s/Paul J. Bamatter
                              Name: Paul J. Bamatter
                              Title: V.P. Finance & CFO


                              THE BALSON-HERCULES GROUP LTD.

                              By:/s/Paul J. Bamatter
                              Name: Paul J. Bamatter
                              Title: V.P. Strategic Planning



                              LINQ INDUSTRIAL FABRICS, INC.

                              By:/s/Paul J. Bamatter
                              Name: Paul J. Bamatter
                              Title: V.P. Strategic Planning
















<PAGE>


                 ASSIGNMENT AND ASSUMPTION AGREEMENT


THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is made on this 20th day
of October, 2000

BY

Consoltex Holdings, Inc., a Delaware corporation, c/o American
Industrial Partners Capital Fund II, L.P. of 551 Fifth Avenue,
Suite 3800, New York, NY 10176, United States of America
"Consoltex"); and Les Gantiers Holding B.V., a limited company
subject to the laws of The Netherlands, of Frederik Roeskestraat
123,1076 EE Amsterdam, The Netherlands (the "Company")in favour of
Les Gantiers Limited, a limited company subject to the laws of
Jersey, of 44 The Esplanade, St. Helier,. Jersey, Channel Islands
(the "Covenantor") and is SUPPLEMENTAL to the Debenture Purchase
Agreement dated September  29, 2000,(the "Agreement") entered into
by Consoltex and the Company (all together the "Parties", each of
them a "Party")

WHEREAS

The Agreement specifies that Consoltex has issued to the Company a
10.5% Convertible Debenture in the principal amount of
USD2,123,000 (hereinafter referred to as the "Debenture");

Article 4.1 of the Agreement specifies that Consoltex should
consent to any Assignment of the Debenture;

Article 6.4 of the Agreement specifies that any holders of the
Debenture will be a party to the provisions,terms and conditions
of the Agreement;


The Covenantor is the sole shareholder of the Company;

The Covenantor has passed a Resolution of the Company in which it
is specified that the Company will repay part of the share premium
account for the Canadian Dollar equivalent of USD3,123,000;

The Company wishes to partially settle the re-payment of the share
premium account for the Canadian Dollar equivalent of
USD 2,123,000 by assigning its rights and obligations to the
Debenture by means of entering into this Assignment and Assumption
Agreement.


Page 1 of 3

<PAGE>

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT WITNESSES as follows:

The Covenantor hereby confirms that it has been given and read a
copy of the Agreement. A copy of the Agreement duly executed by
the Covenantor for acknowledgement and acceptance thereof is
attached hereto.

Pursuant to Clause 4.1 of the Agreement Consoltex consents to the
Assignment of the Debenture by signing this document in
acknowledgement.

Pursuant to Clause 4.1 and 6.4 of the Agreement, the Company
hereby assigns all of its rights to the Debenture to the
Covenantor. The Covenantor hereby (i)accepts all of the rights and
assumes all of the rights to the Debenture, pursuant to Clause
6.4 thereof, and (ii) covenants with each Party to perform and be
bound by all the terms of the Agreement that would be applicable
to the Company in the absence of this Assignment and Assumption
Agreement as if the Covenantor were one of the original parties
to the Agreement.


This Assumption Agreement is governed by and construed in
accordance with the laws of The Netherlands, without giving effect
to any choice of law or conflict of law rules and provisions
(whether of  The  Netherlands or any jurisdiction) that would
cause  the  application of the laws of any jurisdiction other than
The Netherlands.


IN WITNESS WHEREOF, this Assignment and Assumption Agreement has been
executed by the Covenantor and  the  Company  and  is  intended  to  be
and  is hereby delivered on the date first above written.


Les Gantiers Limited

 /s/ Patrick Cubitt Sowden
==========================
By:  Patrick F. Cubitt Sowden
     director of Les Gantiers Limited







 Page 2 of 3

<PAGE>
Les Gantiers Holding B.V.



/s/ R. H. Willett
============================
By: R. H. Willett - Director






For acknowledgement of and consent to the above:


Consoltex Holdings, Inc


/s/ Paul J. Bamatter
=========================
By:  Paul J. Bamatter
     V.P. Finance & C.F.O.


page 3 OF 3

<PAGE>
                                                   EXHIBIT 4.13


                          CONTRIBUTION AGREEMENT

     THIS CONTRIBUTION AGREEMENT (the "AGREEMENT") is executed by and
between Consoltex Holdings,Inc., a Delaware corporation (the
"CORPORATION"), and  American Industrial Partners Capital Fund II, L.P.,
a Delaware limited partnership ("AIP"), as of September 29, 2000.

     WHEREAS, AIP is the sole shareholder of the Corporation; and

     WHEREAS, in connection on with the restructuring of the
Corporation and its subsidiaries, AIP desires to contribute $7,377,000
(the "CONTRIBUTION") to the capital of the Corporation; and

     WHEREAS, the undersigned hereby intends that the Contribution to
the Corporation be governed by section 351 of the Internal Revenue Code
of 1986, as amended.

     NOW THEREFORE, for good and valuable consideration,the receipt and
sufficiency  of  which  are  hereby acknowledged, the parties hereto
hereby agree as follows:

     .    AIP hereby contributes the Contribution to the Corporation,
and the Corporation hereby accepts the Contribution.

     .    This Agreement shall be governed by the internal laws (and not
the law of conflicts) of the State of Delaware.

     .    No amendment or waiver of this Agreement shall be effective
without the prior written consent of the parties hereto.

     .    This Agreement may be executed in counterparts, including
faxed counterparts.

     .    This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto, their successors and assigns.

     .    There shall be no third party beneficiaries to this Agreement,
and no parties, other than the signatories hereto or their transferees,
successors or assigns shall have or be entitled to assert rights or
benefits hereunder.

                               [END OF PAGE]
                         [SIGNATURE PAGE FOLLOWS]


<PAGE>


IN  WITNESS  WHEREOF,  the  undersigned  has  executed   this  Contribution
Agreement on the date first written above.


                              AMERICAN INDUSTRIAL PARTNERS CAPITAL
                                FUND II, L.P.

                              By: AMERICAN INDUSTRIAL PARTNERS II,
                                     L.P., its general partner

                              By: AMERICAN INDUSTRIAL PARTNERS
                                     CORPORATION, its general partner



                              By: /s/ Kim A. Marvin
                                 Name: Kim A. Marvin
                                 Title: Authorized Signatory


                              CONSOLTEX HOLDINGS, INC.



                              By: /s/ C. Suzanne Crawford
                                 Name: C. Suzanne Crawford
                                 Title:  V-P, Legal Affairs &
                                         Corp. Secy.