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EXHIBIT 10.1
FIFTH AMENDMENT TO
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
This Fifth Amendment to Fourth Amended and Restated Credit Agreement dated
as of May 6, 1996 (this "Amendment"), is entered into among JPS TEXTILE GROUP,
INC., a Delaware corporation (the "Company"), JPS ELASTOMERICS CORP., a
Delaware corporation ("JEC"), and JPS CONVERTER AND INDUSTRIAL CORP., a
Delaware corporation ("JCIC", and together with JEC, the "Borrowing
Subsidiaries"), JPS AUTO INC., a Delaware corporation, JPS CARPET CORP., a
Delaware corporation, INTERNATIONAL FABRICS, INC., a Delaware corporation, the
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (collectively
referred to herein, together with their respective successors and assigns, as
the "Senior Lenders" and individually as a "Senior Lender"), CITIBANK, N.A., in
its separate capacities as agent and administrative agent for the Senior
Lenders (in such capacities, the "Agent") and GENERAL ELECTRIC CAPITAL
CORPORATION, in its separate capacities as co-agent and collateral agent for
the Senior Lenders (in such capacities, the "Collateral Agent"), and amends the
Fourth Amended and Restated Credit Agreement dated as of June 24, 1994, as
amended by the First Amendment to Fourth Amended and Restated Credit Agreement
dated as of November 4, 1994, the Second Amendment to Fourth Amended and
Restated Credit Agreement dated as of December 21, 1994, the Third Amendment to
Fourth Amended and Restated Credit Agreement dated as of May 31, 1995 and the
Fourth Amendment to Fourth Amended and Restated Credit Agreement dated as of
October 28, 1995 (as so amended, the "Credit Agreement"), entered into among
the Company, the Borrowing Subsidiaries, the Senior Lenders, the Agent and the
Collateral Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to them in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Company has advised the Agent and the Collateral Agent that
in connection with a possible financial restructuring of the Company, (i)
certain holders of the Subordinated Indebtedness have requested the Company to
reimburse them for the reasonable fees, expenses and customary indemnities of a
financial advisor and a single counsel to be engaged to represent such holders
and (ii) the Company intends to engage a financial advisor to assist it in such
financial restructuring;
WHEREAS, (a) the Company is requesting the Requisite Senior Lenders to
waive the provisions of the Credit Agreement that would otherwise prevent (i)
the Company (A) from engaging a financial advisor with respect to a possible
financial restructuring of the Company, (B) from paying the reasonable fees,
expenses and customary indemnities thereof or of a
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financial advisor with respect to a possible financial restructuring of the
Company engaged by the holders of Subordinated Indebtedness (or any informal
committee thereof), (C) from paying the reasonable fees and expenses of counsel
to the Company or (D) from paying the reasonable fees and expenses of one
counsel to such holders (or such committee) incurred in connection with such
restructuring, or (ii) the Borrowing Subsidiaries from paying cash dividends to
the Company in an amount sufficient to enable the Company to make any payment
permitted by clause (i) above, and (b) subject to the provisions of Section
2.01 below, the Requisite Senior Lenders are willing to agree to such waivers;
WHEREAS, the parties hereto have agreed to amend the Credit Agreement,
among other things, (i) to amend the definition of Borrowing Base to limit the
maximum amount of the Borrowing Base that is allocable to Eligible Inventory to
$22,000,000 at any time, (ii) to shorten the Revolving Credit Termination Date
from December 1, 1996 to November 1, 1996 and (iii) to increase the applicable
interest rate margin on Base Rate Loans and Eurodollar Rate Loans by 0.25% per
annum;
NOW, THEREFORE, in consideration of the above premises, the Company, the
Borrowing Subsidiaries, the Senior Lenders party hereto, the Agent and the
Collateral Agent agree as follows:
SECTION 1. Amendment to the Credit Agreement. The Credit Agreement is,
effective as determined pursuant to Section 3 hereof, hereby amended as
follows:
1.01 Section 1.01 of the Credit Agreement is amended as follows:
(a) The definition of "Borrowing Base" is amended in its entirety as
follows:
"Borrowing Base" shall mean at any time, with respect to any Borrowing
Subsidiary, an amount equal to the sum of (i) up to eighty-five percent
(85%) of the Net Face Amount of Eligible Receivables of such Borrowing
Subsidiary at such time and (ii) the lesser of (A) $22,000,000 and (B) the
sum of (I) up to fifty-five percent (55%) of Eligible Yarn Inventory of
such Borrowing Subsidiary at such time, (II) up to fifty-five percent
(55%) of Eligible Raw Materials of such Borrowing Subsidiary at such time,
(III) up to twenty-five percent (25%) of Eligible Work in Process of such
Borrowing Subsidiary at such time, and (IV) up to fifty percent (50%) of
Eligible Finished Goods of such Borrowing Subsidiary at such time.
(b) The definition of "Revolving Credit Termination Date" is amended in
its entirety as follows; provided, however, the amendment contained in this
Section 1.01(b) shall not become
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effective unless and until the Agent has received, in addition to the other
documents required to be delivered pursuant to Section 3.01(a) hereof, a copy
of this Amendment executed by each Senior Lender:
"Revolving Credit Termination Date" shall mean the earlier of
(i) November 1, 1996 and (ii) the date of termination of the
Commitments pursuant to Section 9.02(a) or Section 11.13.
1.02 The last sentence of Section 2.04(a)(i) of the Credit Agreement is
amended in its entirety as follows:
The Loans shall bear interest, subject to Section 2.04(d) and
paragraph (ii) below, as follows:
(A) If a Base Rate Loan, then at a rate per annum equal to
the sum of (I) 1.25% plus (II) the Base Rate as in effect from time
to time as interest accrues; and
(B) If a Eurodollar Rate Loan, then at a rate per annum equal
to the sum of (I) 2.75% plus (II) the Eurodollar Rate determined
for the applicable Eurodollar Interest Period.
1.03 Article VI of the Credit Agreement is amended by inserting the
following new Section 6.15 at the end thereof:
6.15 Retention Agreements. By no later than June 14, 1996,
the Company and the Borrowing Subsidiaries shall have entered into
retention agreements on reasonable terms, including appropriate
stay bonuses, with key executives of the Company and the borrowing
Subsidiaries, which retention agreements (i) shall be in form and
substance satisfactory to the Agent and the Collateral Agent in
their sole judgment exercised reasonably and (ii) shall be assumed
or guaranteed by each of the Borrowing Subsidiaries.
SECTION 2. Consent of the Requisite Senior Lenders.
2.01 By their execution of this Amendment, the undersigned, which
constitute the Requisite Senior Lenders, hereby (a) waive the provisions of the
Credit Agreement that would otherwise prevent (i) the Company from paying the
reasonable fees and expenses of counsel to the Company or (ii) the Company (A)
from engaging a financial advisor with respect to a possible financial
restructuring of the Company, (B) from paying the reasonable fees, expenses and
customary indemnities thereof or of a financial advisor with respect to a
possible financial restructuring of the Company engaged to represent the
holders of Subordinated Indebtedness (or any informal committee thereof) or (C)
from paying the reasonable fees and expenses of
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one counsel to such holders (or such committee) incurred in connection with
such restructuring, and (b) waive the provisions of the Credit Agreement that
would otherwise prevent the Borrowing Subsidiaries from paying cash dividends
to the Company in an amount sufficient to enable the Company to make any
payment of fees, expenses and indemnities referred to in clause (a) above;
provided that the aggregate amount of cash dividends made in respect of the
fees and expenses referred to in clause (a)(ii) above shall not exceed
$1,250,000.
2.02 Solely for purposes of making the representations and warranties
pursuant to Section 3.02(b)(i) of the Credit Agreement and Sections 3.02 and 4
of this Amendment, the Requisite Senior Lenders hereby acknowledge with respect
to the representation contained in Section 4.01(l) of the Credit Agreement the
matters identified in the last paragraph of its Notice of Borrowing delivered
to the Agent on April 29, 1996, it being understood that in making such
acknowledgment, the Requisite Senior Lenders are not waiving any rights or
remedies that the Agent, the Collateral Agent or such Senior Lenders may now
have or may have in the future relating to the matters identified in such
paragraph.
SECTION 3. Conditions Precedent to the Effectiveness of this Amendment.
This Amendment shall become effective as of the date hereof on the date (the
"Fifth Amendment Effective Date") when the following conditions precedent have
been satisfied (unless waived by the Requisite Senior Lenders or unless the
deadline for delivery has been extended by the Agent):
3.01 (a) Certain Documents. The Agent shall have received on or before
the Fifth Amendment Effective Date all of the following, all of which, except
as otherwise specifically described below, shall be in form and substance
satisfactory to the Requisite Senior Lenders and in sufficient copies for each
of the Senior Lenders:
(i) This Amendment, executed by the Company, each Borrowing
Subsidiary, JPS Auto, JCC and International Fabrics and Senior Lenders
constituting the Requisite Senior Lenders;
(ii) A favorable opinion of Weil, Gotshal & Manges LLP, counsel to
the Company;
(iii) A certificate of the Secretary or Assistant Secretary of the
Company dated the Fifth Amendment Effective Date certifying (A) the names
and true signatures of the incumbent officers of the Company authorized
to sign this Amendment, (B) the resolutions of the Company's Board of
Directors approving and authorizing the execution, delivery and
performance of this Amendment and (C) that there have been no changes in
the Certificate of Incorporation or By-Laws of the Company since the
Effective Date;
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(iv) A certificate of the Secretary or Assistant Secretary of each
Borrowing Subsidiary dated the Fifth Amendment Effective Date certifying
(A) the names and true signatures of the incumbent officers of such
Borrowing Subsidiary authorized to sign this Amendment and the other
documents to be executed in connection with this Amendment, (B) the
resolutions of such Borrowing Subsidiary's Board of Directors approving
and authorizing the execution, delivery and performance of this Amendment
and the other documents to be executed in connection with this Amendment
and (C) that there have been no changes in the Certificate of
Incorporation or By-Laws of such Borrowing Subsidiary since the Effective
Date;
(v) A certificate of the Secretary or Assistant Secretary of each
of JPS Auto, JCC and International Fabrics dated the Fifth Amendment
Effective Date certifying (A) the names and true signatures of the
incumbent officers of such Person authorized to sign this Amendment, (B)
the resolutions of such Person's Board of Directors approving and
authorizing the execution, delivery and performance of this Amendment and
(C) that there have been no changes in the Certificate of Incorporation
or By-Laws of such Person since the Effective Date;
(vi) Good Standing Certificates certified by the Secretary of State
of Delaware relating to the Company, each Borrowing Subsidiary, JPS Auto,
JCC and International Fabrics; and
(vii) Such additional documentation as the Agent, the Collateral
Agent or the Requisite Senior Lenders may reasonably require.
(b) Fees Paid. The Company and the Borrowing Subsidiaries shall have paid
all fees required to be paid to the Agent, the Collateral Agent and/or the
Senior Lenders on or prior to the Fifth Amendment Effective Date.
3.02 Each of the representations and warranties made by the Company or
the Borrowing Subsidiaries in or pursuant to the Credit Agreement, as amended
by this Amendment, the Collateral Documents and the other Loan Documents to
which the Company or any of the Borrowing Subsidiaries is a party or by which
the Company or any of the Borrowing Subsidiaries is bound, shall be true and
correct in all material respects on and as of the Fifth Amendment Effective
Date (except any such representations and warranties stated to be given as of a
specific date other than the Fifth Amendment Effective Date and except the
matters referenced in Section 2.02 above).
3.03 All corporate and other proceedings, and all documents, instruments
and other legal matters in connection with the transactions contemplated by
this Amendment shall be
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satisfactory in all respects in form and substance to the Agent, the Collateral
Agent and the Requisite Senior Lenders.
3.04 No Event of Default or Potential Event of Default shall have
occurred and be continuing on the Fifth Amendment Effective Date.
SECTION 4. Representations and Warranties. Each Loan Party hereby
represents and warrants to the Senior Lenders that (a) as of the date hereof no
Event of Default or Potential Event of Default under the Credit Agreement shall
have occurred and be continuing and (b) all of the representations and
warranties of the Loan Parties contained in subsections 4.01(a) through (dd) of
the Credit Agreement and in any other Loan Document continue to be true and
correct as of the date of execution hereof in all material respects, as though
made on and as of such date (unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct as of such earlier date, and except the matters referenced in Section
2.02 above).
SECTION 5. Reference to and Effect on the Loan Documents.
5.01 Upon the effectiveness of this Amendment, on and after the date
hereof, each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof" or words of like import, and each reference in the other
Loan Documents to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby.
5.02 Except as specifically amended above, all of the terms of the Credit
Agreement and all other Loan Documents shall remain unchanged and in full force
and effect.
5.03 The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Senior Lender, the Agent or the Collateral Agent under
the Credit Agreement or any of the Loan Documents, nor constitute a waiver of
any provision of the Credit Agreement or any of the Loan Documents.
SECTION 6. Costs and Expenses. Each Loan Party agrees to pay on demand
in accordance with the terms of Section 11.03 of the Credit Agreement all costs
and expenses of the Agent and the Collateral Agent in connection with the
preparation, reproduction, execution and delivery of this Amendment and all
other Loan Documents entered into in connection herewith, including the
reasonable fees and out-of-pocket expenses of Sidley & Austin, counsel for the
Agent and the Collateral Agent with respect thereof.
SECTION 7. Execution in Counterparts. This Amendment may be executed and
delivered in any number of counterparts and
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by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original and all of which taken
together shall constitute one and the same original agreement.
SECTION 8. Release of Lender Parties. Each of the Loan Parties, JPS
Auto, JCC and International Fabrics, for itself and on behalf of each of its
Subsidiaries and Affiliates and each of its employees, officers and directors,
and each of their respective predecessors, successors and assigns
(collectively, the "Releasors"), does hereby forever and unconditionally (i)
release, discharge and acquit the Agent, the Collateral Agent and each of the
Lenders, and each of their respective parent corporations, Subsidiaries and
Affiliates, and each of their respective officers, directors, shareholders,
employees, attorneys, agents and servants, and each their respective
predecessors, successors, heirs and assigns (collectively, the "Lender
Parties"), of and from any and all claims of every type, kind, nature,
description or character, known and unknown, whensoever arising out of any
actions or omissions of the Lender Parties, or any of them, occurring at any
time up to and through the date hereof, which in any way arise out of, are
connected with or relate to the Loan Documents (collectively, "Claims"), and
(ii) agree not to bring any action in any judicial, administrative or other
proceeding against the Lender Parties, or any of them, alleging any such Claim
or otherwise arising in connection with any such Claim, or support any
shareholder of any Releasor in any such action brought by such shareholder.
SECTION 9. Consent. By its signature below, each of JPS Auto, JCC and
International Fabrics consents to this Amendment in its capacity as a guarantor
under the JPS Auto Guaranty, the Carpet Guaranty and the International Fabrics
Guaranty, respectively, and each hereby affirms its obligations under such
guaranties and under each of the other Loan Documents to which it is a party.
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SECTION 10. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the law of the State of New York.
IN WITNESS WHEREOF, this Amendment has been duly executed on the date set
forth above.
JPS TEXTILE GROUP, INC.
By: /S/David H. Taylor
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Title: EVP - Finance and Secretary
JPS ELASTOMERICS CORP.
By: /S/David H. Taylor
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Title: Vice President
JPS CONVERTER AND INDUSTRIAL CORP.
By: /S/David H. Taylor
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Title: Vice President
JPS AUTO INC.
By: /S/David H. Taylor
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Title: Vice President
JPS CARPET CORP.
By: /S/David H. Taylor
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Title: Vice President
INTERNATIONAL FABRICS, INC.
By: /S/David H. Taylor
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Title: Vice President
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Senior Lenders:
CITIBANK, N.A., as Agent and as a
Senior Lender
By: /s/Brenda Cotsen
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Title: Attorney-in-fact
GENERAL ELECTRIC CAPITAL
CORPORATION, as Collateral Agent and
as a Senior Lender
By: /s/Rick Luck
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Title: Vice President, G E Capital
Commercial Finance, Inc., Being duly
authorized
HELLER FINANCIAL, INC.
By: /s/John D. Calabro
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Title: Senior Vice President
THE BANK OF NEW YORK COMMERCIAL
CORPORATION
By: /s/Michael Lustbader
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Title: Vice President
NATIONSBANK OF GEORGIA, N.A.
By: /s/David J. Sapp
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Title: Vice President
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