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EXHIBIT 10.2
EIGHTH AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
This Eighth Amendment to Fourth Amended and Restated Credit
Agreement dated as of September 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 Auto"),
JPS CARPET CORP., a Delaware corporation ("JCC"), INTERNATIONAL FABRICS, INC.,
a Delaware corporation ("International Fabrics"), 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 capacity as
agent for the Senior Lenders hereunder (in such capacity, the "Agent"), and
GENERAL ELECTRIC CAPITAL CORPORATION, in its separate capacity as co-agent and
collateral agent for the Senior Lenders (in such capacity, 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, the Fourth Amendment to Fourth Amended and Restated Credit Agreement
dated as of October 28, 1995, the Fifth Amendment to Fourth Amended and
Restated Credit Agreement dated as of May 6, 1996 (the "Fifth Amendment"), the
Sixth Amendment to Fourth Amended and Restated Credit Agreement dated as of May
15, 1996 and the Seventh Amendment to Fourth Amended and Restated Credit
Agreement dated as of July 22, 1996 (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 shall have the meanings ascribed to them in the Credit
Agreement. References in this Agreement to lines and words in the Credit
Agreement are references to the Conformed/Composite Copy of the Credit
Agreement attached hereto as Exhibit A.
W I T N E S S E T H:
WHEREAS, the Company and the Borrowing Subsidiaries have
requested the Agent, the Collateral Agent and the Senior Lenders to amend
certain terms of the Credit Agreement, in particular to extend the Revolving
Credit Termination Date as currently provided for under the Credit Agreement;
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WHEREAS, to induce the Agent, the Collateral Agent and the
Senior Lenders to enter into this Amendment, the Company and each of the
Borrowing Subsidiaries have agreed, among other things, in their capacities as
guarantors under the Company Guaranty and the Subsidiary Guaranties, as the
case may be, to amend the above Guaranties and/or to reaffirm their respective
obligations under such guaranties;
WHEREAS, JEC has requested the Senior Lenders (i) to consent
to the sale by JEC of the fixed assets, Receivables and Inventory (net of
account payables) of its Rubber Products Group division which is engaged in the
design, production and marketing of rubber and synthetic elastic used in
apparel products, diaper products and specialty applications (the "Rubber
Products Sale") and (ii) to amend, among other things, the provisions of
Section 2.06(b)(iii) of the Credit Agreement to provide that the Commitments
will not be permanently reduced by the amount of Net Cash Proceeds arising from
the Rubber Products Sale;
NOW, THEREFORE, in consideration of the above premises, the
Company, the Borrowing Subsidiaries, the other Subsidiaries of the Company
party hereto, 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 to
add the following definitions thereto:
(a) "Bankruptcy Court" shall mean the bankruptcy court
exercising competent jurisdiction over the Case or a particular
proceeding in the Case, as the case may be.
(b) "Case" shall mean any proceeding commenced by the
Company under chapter 11 of the Bankruptcy Code.
(c) "Debt Holders" shall mean the holders of the
Subordinated Indebtedness of the Company.
(d) "Effective Date of Reorganization" shall mean the
first date on which the Plan of Reorganization shall have become
effective in accordance with its terms.
(e) "Extension Amendatory Agreement" shall mean the
Amendatory Agreement dated as of September 6, 1996 among the Company,
the Borrowing Subsidiaries, JPS Auto, JCC, International Fabrics, the
Senior Lenders, the Agent and the Collateral Agent, providing, among
other things, for the amendment and/or affirmation of the obligations
under certain of the Loan Parties and certain Subsidiaries of the Loan
Parties under certain of the Collateral Documents.
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(f) "Extension Amendment" shall mean the Amendment to the
Credit Agreement dated as of September 6, 1996 among the Company, the
Borrowing Subsidiaries, JPS Auto, JCC, International Fabrics, the
Senior Lenders, the Agent and the Collateral Agent.
(g) "Extension Event of Default" shall mean any of the
following Events of Default (x) occurring upon the commencement and
during the continuation of the Case: (i) an Event of Default solely
with respect to the Company (and not the Borrowing Subsidiaries) (a)
under Section 9.01(a), (b) under Sections 9.01(b) or 9.01(d) arising
solely as a result of the Company's compliance with a direction or
order of the Bankruptcy Court made at any time during the continuation
of the Case (but not including directions or orders of the Bankruptcy
Court made in response to motions initiated or otherwise supported by
the Company) and (c) arising solely as a result of the Company's
failure to comply with any covenant contained in Articles VI (other
than Section 6.16) and VII or in the Company's other Loan Documents
due to the operation of the provisions of the Bankruptcy Code (and the
rules promulgated in connection therewith) to the extent the effect of
such provisions is (1) to prohibit the Company from complying with
such covenants or (2) to permit the Company to take action or actions
which may be in violation of such covenants, which, in each case,
would not, in the aggregate, in the judgment of the Agent and the
Requisite Senior Lenders, have a material adverse effect upon (A) the
condition (financial or otherwise), operations, performance,
properties or prospects of any of the Borrowing Subsidiaries, (B) the
ability of any of the Borrowing Subsidiaries to perform under the Loan
Documents or (C) the rights and remedies of the Senior Lenders, the
Agent or the Collateral Agent under the Loan Documents against the
Borrowing Subsidiaries or their respective assets, (ii) any Event of
Default under Section 9.01(e) (a) arising in respect of a
cross-default to other Indebtedness of the Company or (b) arising in
respect of a cross-default to other Indebtedness of any of the
Borrowing Subsidiaries under any of the leases listed in subsection
(A) of Schedule 4.01(e) hereto, but only to the extent that the
exercise of remedies by the other parties to such leases as a result
of such cross-default or cross-defaults does not, in the aggregate, in
the judgment of the Agent and the Requisite Senior Lenders, have a
material adverse effect upon (1) the condition (financial or
otherwise), operations, performance, properties or prospects of any of
the Borrowing Subsidiaries, (2) the ability of any of the Borrowing
Subsidiaries to perform under the Loan Documents or (3) the rights and
remedies of the Senior Lenders, the Agent or the Collateral Agent
under the Loan Documents against the Borrowing Subsidiaries or their
respective assets, (iii) an Event of Default with respect to the
Company (and not the
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Borrowing Subsidiaries) under Section 9.01(f) arising solely from the
filing of an involuntary petition against the Company under the
Bankruptcy Code, which petition has not been either dismissed or
converted to a voluntary petition within 30 days, (iv) an Event of
Default with respect to the Company (and not the Borrowing
Subsidiaries) under Section 9.01(g) arising solely as a result of the
commencement or continuation of the Case, and (v) an Event of Default
under Section 9.01(q) to the extent such Event of Default (a) arises
solely as a result of the commencement and continuation of the Case or
(b) relates solely to a material adverse effect upon (1) the condition
(financial or otherwise), operations, performance, properties or
prospects of the Company, (2) the ability of the Company to perform
under the Loan Documents or (3) the rights and remedies of the Senior
Lenders, the Agent or the Collateral Agent under the Loan Documents
against the Company or (y) at any time, an Event of Default under
Section 9.01(e) resulting from the failure of the Company to make any
payment when due on the Subordinated Indebtedness.
(h) "Extension Potential Event of Default" shall mean an
event which, with the giving of notice or the lapse of time, or both,
would constitute an Extension Event of Default.
(i) "Rubber Products Sale" shall mean the sale by JEC of
the fixed assets, Receivables and Inventory (net of account payables)
of its Rubber Products Group division to an Affiliate of M-TEC
Corporation.
(j) "Stipulation" shall have the meaning ascribed to such
term in Section 6.16.
1.02 Section 1.01 of the Credit Agreement is further amended
as follows:
(a) the definition of "Claim" is deleted in its entirety and
the following definition is substituted therefor:
"Claim" shall mean, as to any Person, (a) any right
to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or
unsecured; or (b) any right to an equitable remedy for breach
of performance if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured.
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(b) the definition of "Consolidated Operating Company Fixed
Charges" is deleted in its entirety and the following definition is
substituted therefor:
"Consolidated Operating Company Fixed Charges" shall
mean, for any period, the amounts for such period of (i)
Consolidated Operating Company Cash Interest Expense, plus
(ii) scheduled payments of principal on Other Indebtedness of
the Borrowing Subsidiaries (including the principal component
of Capital Lease obligations), plus (iii) cash dividends paid
by any of the Borrowing Subsidiaries (except for dividends
permitted pursuant to Section 7.05).
(c) the definition of "Current Ratio" is deleted in its
entirety and the following definition is substituted therefor:
"Current Ratio" shall mean, at any time, the ratio of
(i) Current Assets to (ii) Current Liabilities minus
liabilities in respect of management fees payable to Odyssey
Investors, Inc. and/or Odyssey, minus accrued interest on the
Subordinated Indebtedness.
(d) the definition of "EBITDA" is deleted in its entirety and
the following definition is substituted therefor:
"EBITDA" shall mean, for any period, (i) the sum of
the amounts for such period of (A) Consolidated Net Income,
(B) depreciation, amortization expense and other non-cash
charges, (C) consolidated interest expense (including fees for
Letters of Credit), (D) Federal, state, local and foreign
income taxes, (E) warranty receipts to the extent not included
in Consolidated Net Income and (F) expenses of the Company for
management fees payable to Odyssey Investors, Inc. and/or
Odyssey and advisor fees described in Section 7.05 (a) through
(e); minus (ii) gains (or plus losses) from asset sales
calculated pursuant to GAAP for such period; plus (iii)
increases (or minus decreases) in the valuation allowance on
Investments in the Capital Stock of Holdco and the Holdco
Note.
(e) the definition of "Loan Documents" is amended to add
the words ", the Extension Amendment, the Extension Amendatory
Agreement" prior to the word "and" in the third line thereof.
(f) the definition of "Net Worth" is deleted in its
entirety and the following definition is substituted therefor:
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"Net Worth (Adjusted)" shall mean, at any time, (i)
total consolidated assets of the Company and its Subsidiaries;
plus (ii) impairment losses in respect of long-lived assets
recorded in accordance with Financial Accounting Standards
121, plus (iii) costs not in excess of $5,000,000 associated
with the closing of the Dunean plant, minus (iv) total assets
of Newsub, minus (v) Investment of the Company in the Capital
Stock of Holdco and the Holdco Note, minus (vi) Investment in
the ITM Joint Venture, minus (vii) goodwill, minus (viii)
total consolidated liabilities of the Company and its
Subsidiaries; plus (ix) Subordinated Indebtedness (including,
without limitation, accrued interest); plus (x) liabilities in
respect of management fees payable by the Company to Odyssey
Investors, Inc. and/or Odyssey, minus (xi) cumulative gains
from asset sales; minus (xii) cumulative extraordinary gains.
(g) the definition of "Operating Company Fixed Charge
Coverage Ratio" is deleted in its entirety and the following
definition is substituted therefor:
"Operating Company Fixed Charge Coverage Ratio" shall
mean, with respect to any period, the ratio of (i) cumulative
EBITDA for such period, minus Capital Expenditures, excluding
Financed Capital Expenditures (as defined in Section 8.06),
made or incurred by the Borrowing Subsidiaries and their
respective Subsidiaries during such period, minus cash
payments (other than any such payments made by or on behalf of
Newsub) for income taxes to (ii) Consolidated Operating
Company Fixed Charges for such period.
(h) the definition of "Permitted Dispositions" is deleted
in its entirety and the following definition is substituted therefor:
"Permitted Dispositions" shall mean (i) Permitted
Financings and (ii) sales of fixed assets other than in the
ordinary course of business permitted pursuant to the first
sentence of Section 7.02(a), including sales that occur in
connection with sale and leaseback transactions; provided,
however, the Net Cash Proceeds of the transactions in both
clauses (i) and (ii) above collectively shall not exceed
Thirty Five Million Dollars ($35,000,000) in the aggregate
since March 18, 1993 without the prior written consent of the
Requisite Senior Lenders; provided, further, a Permitted
Disposition shall not include the Auto Sale, the Carpet Sale,
the Rubber Products Sale or any transaction prohibited by
Section 7.07(a) and shall only include those dispositions with
respect to which each of the
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following conditions shall have been met: (A) the Agent and
the Collateral Agent shall have received such landlord or
mortgagee waivers, documents and agreements as the Agent and
the Collateral Agent have reasonably deemed necessary to
permit the Agent and the Collateral Agent to protect and
enforce their respective Liens on Collateral; (B) all
representations and warranties set forth in subsection (a)
through (dd) of Section 4.01 (except for (1) representations
and warranties which expressly speak only as of a different
date, (2) changes permitted or contemplated by this Agreement,
(3) during the pendency of the Case, those representations and
warranties applicable to the Company (and in the case of
clause (u), the Company and its Subsidiaries) contained in (a)
clauses (a), (b)(i), (e), (f), (g), (k), (l), (m), (o) and (u)
of Section 4.01, (b) clauses 5(c), 5(d) and 5(f) of the
Company Pledge Agreement, and (c) clause 3(f)(ii) of the
Company Security Agreement, to the extent that such
representations and warranties are not true and correct solely
as a result of the commencement and continuation of the Case
and the events and transactions contemplated thereby) and (4)
from and after the effective date of the Extension Amendment,
those representations and warranties applicable to the Company
contained in clauses (e), (k), (l) and (o) of Section 4.01,
solely as a result of the Company's inability to make any
payments under the Subordinated Indebtedness when due) shall
have been true, correct and complete in all material respects
as of the date of such disposition; (C) on the date of such
disposition, no Event of Default or Potential Event of Default
(other than an Extension Event of Default or Extension
Potential Event of Default) shall have occurred and be
continuing or would result from the consummation of such
disposition; and (D) the Net Cash Proceeds of such disposition
shall have been applied to the repayment of the Obligations
pursuant to Section 2.06(b); provided, further, (a) in the
event any Loan Party would receive Net Cash Proceeds in excess
of an aggregate amount of Ten Million Dollars ($10,000,000)
from the sale of any fixed assets pursuant to the first
sentence of Section 7.02(a) (other than in connection with a
sale and leaseback transaction) in a single transaction or
series of related transactions, such Loan Party shall have
submitted the documentation for such disposition to the Senior
Lenders and shall have obtained the prior written consent of
the Requisite Senior Lenders to such disposition and (b) in
the event of a Permitted Financing or a sale of fixed assets
in connection with a sale and leaseback transaction by a
Borrowing Subsidiary, such Borrowing Subsidiary shall have
submitted the documentation for such disposition to the
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Senior Lenders and shall have obtained the prior written
consent of the Requisite Senior Lenders to such disposition,
but only if the Net Cash Proceeds of such disposition and all
prior dispositions of such type (other than the Auto Sale and
the Carpet Sale) received by such Borrowing Subsidiary since
March 18, 1993 exceed in the aggregate (I) for JEC, Ten
Million Dollars ($10,000,000) and (II) for JCIC, Twenty-Five
Million Dollars ($25,000,000).
(i) the definition of "Plan of Reorganization" is deleted in
its entirety and the following definition is substituted therefor:
"Plan of Reorganization" shall mean a plan of
reorganization for the Company filed in connection with the
Case, as amended or modified from time to time.
(j) the definition of "Revolving Credit Termination Date"
is deleted in its entirety and the following definition is substituted
therefor:
"Revolving Credit Termination Date" shall
mean the earlier of (i) March 1, 1997 and (ii) the date of
termination of the Commitments pursuant to Section 9.02(a) or
Section 11.13; provided, however, that in the event the
Company commences the Case, the "Revolving Credit Termination
Date" shall mean the earliest to occur of (x) November 1,
1997, (y) the Effective Date of Reorganization and (z) the
date of termination of the Commitments pursuant to Section
9.02(a) or Section 11.13.
(k) the definition of "Transaction Costs" is deleted in
its entirety and the following definition is substituted therefor:
"Transaction Costs" shall mean the fees,
costs and expenses payable by the Company or any Borrowing
Subsidiary, pursuant hereto or in connection herewith or in
respect hereof and the fees, costs and expenses payable by the
Company or any Borrowing Subsidiary in connection with (i) the
preparation, negotiation and execution of the Extension
Amendment and the other Loan Documents executed in connection
therewith, (ii) the commencement and continuation of the Case,
(iii) any restructuring of the Company pursuant to the terms
of the Plan of Reorganization or otherwise and (iv) the
preparation, filing and confirmation of the Plan of
Reorganization pursuant to section 1129 of the Bankruptcy
Code.
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1.013 Section 2.03(d) of the Credit Agreement is deleted
in its entirety and the following is substituted therefor:
(d) Use of Proceeds of Revolving Loans and Use of Letters
of Credit. The proceeds of the Revolving Loans shall be used by each
Borrowing Subsidiary for the payment of Transaction Costs and other
fees and expenses permitted to be paid pursuant to Section 7.05
incurred by the Company (but only to the extent such payments are made
from the proceeds of dividends made by the Borrowing Subsidiaries to
the Company in accordance with Section 7.05) and the Borrowing
Subsidiaries, for working capital in the ordinary course of business
and for other lawful and permitted corporate purposes, in each case to
the extent not otherwise prohibited hereunder. Letters of Credit may
be used for the purpose of supporting certain Permitted Existing
Indebtedness and in support of working capital in the ordinary course
of business and for other lawful and permitted corporate purposes to
the extent not otherwise prohibited hereunder; provided, however,
Letters of Credit shall not be used for the purpose of providing
credit support for Indebtedness or Operating Leases of the Company and
its Subsidiaries other than those Letters of Credit set forth on
Schedule 2.03(d). The proceeds of Capex Loans shall be used solely for
the purposes specified in the definition of "Capex Loan".
1.04 Section 2.04(a)(i) of the Credit Agreement is deleted in
its entirety and the following section is substituted therefor:
(a) Rate of Interest. (i) All Loans shall bear
interest on the unpaid principal amount thereof from the date made
until paid in full at a fluctuating rate determined from time to time
by reference to the Base Rate or the Eurodollar Rate. 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) 1.0% 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) 2.5% plus (II) the Eurodollar Rate
determined for the applicable Eurodollar Interest Period.
1.015 Section 2.04(c)(i) of the Credit Agreement is amended to
add the words "(other than an Extension Event of Default or Extension Potential
Event of Default)" after the words "Potential Event of Default" in the last
line thereof.
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1.016 Section 2.04(d) of the Credit Agreement is amended to add
the words "Extension Events of Default and" following the words "except for" in
the parenthetical in the fourth line thereof.
1.017 Section 2.06(b)(iii) of the Credit Agreement is amended
to add the words ", Rubber Products Sale" following the words "Auto Sale" in
the seventh line thereof.
1.018 Section 2.07(b) of the Credit Agreement is amended to add
the words "(other than an Extension Event of Default)" after the words "Event
of Default" (i) in the second line thereof and (ii) in the eighth line thereof.
1.019 Section 2.07 of the Credit Agreement is further amended
by adding the following paragraph to the end thereof:
(f) Payments by Borrowing Subsidiaries. During the
pendency of the Case, any payment of principal, interest, fees or
other amounts required to be paid by the Company under the Loan
Documents (including amounts payable under Section 2.06(b)) that is
not paid, may be paid by one or more of the Borrowing Subsidiaries in
respect of such Subsidiary's obligations under its Subsidiary
Guaranty.
1.10 Subsection 3.02(b)(i) of the Credit Agreement is deleted
in its entirety and the following subsection is substituted therefor:
(i) Representations and Warranties. All
of the representations and warranties of the Loan Parties contained in
Sections 4.01(a) through (dd) and in any other Loan Document (except
for (A) representations and warranties which expressly speak only as
of a different date, (B) changes permitted or contemplated by this
Agreement, (C) during the pendency of the Case, those representations
and warranties applicable to the Company (and in the case of clause
(u), the Company and its Subsidiaries) contained in (1) clauses (a),
(b)(i), (e), (f), (g), (k), (l), (m), (o) and (u) of Section 4.01, (2)
clauses 5(c), 5(d) and 5(f) of the Company Pledge Agreement, and (3)
clause 3(f)(ii) of the Company Security Agreement, to the extent that
such representations and warranties are not true and correct solely as
a result of the commencement and continuation of the Case and the
events and transactions contemplated thereby) and (D) from and after
the effective date of the Extension Amendment, those representations
and warranties applicable to the Company contained in clauses (e),
(k), (l) and (o) of Section 4.01, solely as a result of the Company's
inability to make any payments under the Subordinated Indebtedness
when due) shall be true and correct in all
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material respects on and as of such Funding Date, as though made on
and as of such date;
1.11 Subsection 3.02(b)(ii) of the Credit Agreement is amended
to add the phrase "(other than an Extension Event of Default or Extension
Potential Event of Default)" after the words "Event of Default" in the second
line thereof.
1.12 Section 3.02(b)(iv) of the Credit Agreement is amended to
add the phrase ", it being hereby acknowledged, understood and agreed that the
commencement and continuation of the Case shall not in and of themselves be
deemed material by the Agent or the Collateral Agent" immediately after the
words "taken as a whole" at the end thereof.
1.13 Section 4.01(i) of the Credit Agreement is amended to
delete such Section in its entirety and substitute the following therefor:
(i) Commencement and Continuation of the Case. Except as
set forth in Schedule 4.01(i), the commencement and continuation of
the Case (and the transactions and events contemplated thereby) do not
and will not contravene, conflict with, or result in a breach of,
constitute (with or without notice, or lapse of time or both) a
default under, or require the termination of, or require the approval
or consent of any Person under, any Transaction Document or any other
Contractual Obligation to which the Company or any Borrowing
Subsidiary may be bound.
1.14 Section 4.01(r) of the Credit Agreement is amended to add
the following words immediately prior to the period at the end thereof: "or, in
the case of the Company during the pendency of the Case, where the failure to
comply with any Requirement of Law results from the Company's compliance with
the Bankruptcy Code or an order of the Bankruptcy Court".
1.15 Section 4.01(x) of the Credit Agreement is amended to
delete such Section in its entirety and substitute the words "(x)
[Intentionally Omitted]" therefor.
1.16 Section 4.01(bb) of the Credit Agreement is amended to
add the words "and Schedule 4.01(i)" after the phrase "Schedule 4.01(e)" on the
second line thereof.
1.17 Section 4.02 of the Credit Agreement is amended to delete
the parenthetical phrase beginning in the seventh line thereof in its entirety
and substitute the following parenthetical phrase therefor:
(except for (a) representations and warranties which expressly
speak only as of a different date, (b) changes permitted or
contemplated by this Agreement, (c) during the
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pendency of the Case, those representations and warranties applicable
to the Company (and in the case of clause (u), the Company and its
Subsidiaries) contained in (1) clauses (a), (b)(i), (e), (f), (g),
(k), (l), (m), (o) and (u) of Section 4.01, (2) clauses 5(c), 5(d) and
5(f) of the Company Pledge Agreement, and (3) clause 3(f)(ii) of the
Company Security Agreement, to the extent that such representations
and warranties are not true and correct solely as a result of the
commencement and continuation of the Case and the events and
transactions contemplated thereby) and (d) from and after the
effective date of the Extension Amendment, those representations and
warranties applicable to the Company contained in clauses (e), (k),
(l) and (o) of Section 4.01, solely as a result of the Company's
inability to make any payments under the Subordinated Indebtedness
when due);
1.18 Section 5.01(c) of the Credit Agreement is amended to add
the words "or, if the Case has been commenced, qualified solely by reference to
the Case and indicating that Extension Events of Default or Extension Potential
Events of Default have occurred" after the last word thereof.
1.19 Section 5.01(d) of the Credit Agreement is amended to add
the words "(other than any event or condition that constitutes an Extension
Event of Default or Extension Potential Event of Default)" after the phrase
"existed or exists" on the seventeenth line thereof.
1.20 Section 5.01(f) of the Credit Agreement is amended to add
the following immediately prior to the period at the end thereof:
; provided, however, in the case of any event or condition that
constitutes an Extension Event of Default or Extension Potential Event
of Default, such Loan Party need only provide an Officer's Certificate
setting forth the existence of such event or condition.
1.21 Subsection 5.02(c) of the Credit Agreement is amended to
add the phrase "(other than an Extension Event of Default)" after the words
"Event of Default" in the fifth line thereof.
1.22 Section 5.03 of the Credit Agreement is amended to delete
such Section in its entirety and substitute the following therefor:
5.03. Shareholders and Debt Holders. The Company shall deliver
or cause to be delivered to the Agent and the Collateral Agent (with
copies to the Agent sufficient for each Senior Lender) updates of
Schedule 4.01(j)-2 and, to the extent known to the Company, lists of
the Debt Holders
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at such times as the Agent, the Collateral Agent or the Requisite
Senior Lenders may reasonably request.
1.23 Article V of the Credit Agreement is amended to add the
following sections to the end thereof:
5.05 Information During the Case. During the pendency of the
Case, the Company shall (a) provide the Agent and the Collateral Agent
and counsel thereto with (i) copies of all reports provided by the
Company to the United States Trustee with jurisdiction over the Case,
or to any official committee appointed in the Case, simultaneously
with the Company's delivery of such reports to the United States
Trustee or any such committee, as the case may be, and (ii) copies of
the Plan of Reorganization and any related disclosure statement or
solicitation materials and (b) use reasonable efforts to provide
drafts of all pleadings to be filed by the Company at least five (5)
Business Days prior to the filing thereof.
5.06 Restricted Junior Payments. Together with the delivery of
the financial statements referred to in Section 5.01(a), the Borrowing
Subsidiaries shall deliver to the Agent and the Collateral Agent (with
copies to the Agent sufficient for each Senior Lender), an Officer's
Certificate setting forth the total amount of the Restricted Junior
Payments made by the Borrowing Subsidiaries to the Company pursuant to
Section 7.05 since the effective date of the Extension Amendment (with
such additional information relating to such payments as may
reasonably be requested by the Agent and the Collateral Agent).
1.24 Article VI is amended to add the following section to the
end thereof:
6.16 Stipulation. Immediately upon commencement of the Case,
the Company and the Agent shall jointly file with the Bankruptcy Court
a stipulation and application to grant to the Senior Lenders adequate
protection pursuant to sections 361 and 363 of the Bankruptcy Code
(the "Stipulation"), which Stipulation shall be in form and substance
mutually acceptable to the Company, the Agent and the Collateral
Agent. The Company agrees to request a hearing to approve the
Stipulation immediately upon the filing thereof and agrees to support
vigorously and in good faith the entry of an order of the Bankruptcy
Court approving the Stipulation. So long as no Event of Default or
Potential Event of Default (other than an Extension Event of Default
or Extension Potential Event of Default) has occurred and is
continuing, the Agent and the Collateral Agent agree to support
vigorously and in good faith the entry of an order of the Bankruptcy
Court approving the Stipulation.
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1.25 Section 7.01(ix) of the Credit Agreement is deleted in
its entirety and replaced with the following:
(ix) Indebtedness of any Loan Party to any other Loan Party;
provided, however, that (A) the maker of any loan resulting in the
incurrence of such Indebtedness shall not be insolvent at the time
such loan was made or rendered insolvent as a result of the making of
such loan, (B) such loan shall have been made in compliance with all
Requirements of Law and (C) the proceeds of such loan, if made to the
Company, shall be used solely for the purposes permitted by Section
7.05; and
1.26 Section 7.05 of the Credit Agreement is deleted in its
entirety and the following is substituted therefor:
7.05. Restricted Junior Payments. Neither Borrowing Subsidiary
nor any of their respective Subsidiaries, nor any other Subsidiary
party hereto, shall declare or make any Restricted Junior Payment,
except dividends or other distributions from the Borrowing
Subsidiaries to the Company, but only to the extent that such amounts
are used by the Company solely for the purpose of paying (a) the
reasonable fees and expenses of counsel to the Company, (b) the
reasonable fees, expenses and customary indemnities of a financial
advisor of the Company, if engaged, (c) the reasonable fees, expenses
and customary indemnities of a financial advisor to the Debt Holders
of the Company (or an informal committee thereof), if engaged with
respect to a possible financial restructuring of the Company, (d) the
reasonable fees and expenses of a single counsel to such Debt Holders
(or such committee) incurred in connection with such restructuring,
(e) other reasonable fees and expenses incurred in connection with
such restructuring, (f) ordinary course operating expenses of the
Company, including, without limitation, management fees payable to
Odyssey Investors, Inc. and/or Odyssey to the extent permitted to be
paid pursuant to Section 7.06, and (g) taxes (including interest,
penalties and legal expenses relating to such payments); provided,
however, that in no event shall the aggregate amount of dividends or
distributions made pursuant to clauses (b), (c), (d), (e), (f) and,
solely after the commencement of the Case, (g) of this Section 7.05,
together with any loans for the purposes specified in such clauses
made by the Borrowing Subsidiaries to the Company pursuant to Section
7.01(ix), exceed $7,200,000 during the term of the Revolving Credit
Facility.
1.27 Section 7.06 is amended to delete clause (i) of the
proviso thereto in its entirety and substitute the following therefor:
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(i) Odyssey Investors, Inc. and/or Odyssey and their respective
successors and assigns a management fee not to exceed One Million
Dollars ($1,000,000) for each Fiscal Year (prorated for any portion of
any Fiscal Year), payable annually in arrears, so long as at the time
of each such payment there exists no Event of Default or Potential
Event of Default (other than an Extension Event of Default or an
Extension Potential Event of Default) and no Event of Default or
Potential Event of Default (other than an Extension Event of Default
or an Extension Potential Event of Default) would be caused as a
result of the making of such payment; provided, however, after the
effective date of the Extension Amendment, the Company shall be only
permitted to pay up to $450,000 of the management fee payable in
respect of Fiscal Year 1996 when such fee becomes due and payable and
shall not be permitted to pay any remaining portion of such fee until
the earlier to occur of (A) the second Business Day after the Agent's
and the Collateral Agent's receipt of the financial statements
referred to in Section 5.01(b) in respect of the second fiscal quarter
of Fiscal Year 1997 and (B) the consummation of a financial
restructuring of the Company on terms acceptable to the Agent and the
Collateral Agent
1.28 Section 7.11(a) is amended to add the words ", except for
changes to the Subordinated Indebtedness approved by the Requisite Senior
Lenders in connection with an overall financial restructuring of the Company"
after the final word thereof.
1.29 Section 7.17 of the Credit Agreement is amended to add
the words "or, in the event the Case is commenced, the settlement or payment of
Claims of the Company in the Case, as approved by the Bankruptcy Court and the
Requisite Senior Lenders" after the final word thereof.
1.30 Article VII of the Credit Agreement is further amended to
add the following section to the end thereof:
7.20 Bank Accounts. Neither Borrowing Subsidiary will, or will
permit its respective Subsidiaries to, deposit or transfer the
proceeds of any Revolving Loan into a bank account maintained by the
Company, except for the purpose of making payments to the Company
permitted under Section 7.05 and, prior to the commencement of the
Case, as contemplated in that letter dated July 29, 1996 addressed to
the Company from Wachovia Bank of South Carolina, N.A. (the "Wachovia
Letter"). Prior to the commencement of the Case, the Loan Parties
shall either terminate the Wachovia Letter or amend the terms thereof
so that the Loan Parties will be in compliance with this Section 7.20.
In the event the Wachovia Letter is terminated and the Loan Parties
desire to open similar bank accounts at another financial institution,
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Schedule 4.01(cc) shall be deemed amended to include such additional
accounts provided such additional accounts are at financial
institutions acceptable to the Agent and the Collateral Agent.
1.31 Section 8.01 of the Credit Agreement is deleted in its
entirety and the following paragraph is substituted therefor:
8.01. Minimum Net Worth. The Net Worth (Adjusted) of the
Company and its Subsidiaries on a consolidated basis on the last day
of each month of each fiscal quarter set forth below shall not be less
than the minimum amount set forth opposite such fiscal quarter:
Fiscal Quarter Minimum Amount
-------------- --------------
The fourth fiscal quarter
of Fiscal Year 1996 $100,000,000
The first fiscal quarter
of Fiscal Year 1997 100,000,000
The second fiscal quarter
of Fiscal Year 1997 100,000,000
The third fiscal quarter
of Fiscal Year 1997 100,000,000
The fourth fiscal quarter
of Fiscal Year 1997 105,000,000
1.32 Section 8.02 of the Credit Agreement is deleted in its
entirety and the following paragraph is substituted therefor:
8.02. Minimum Total Operating Company Interest Coverage Ratio.
Total Operating Company Interest Coverage Ratio of the Borrowing
Subsidiaries on a consolidated basis, as determined as of the last day
of each fiscal quarter set forth below for the twelve month period
ending on such day (or if the period beginning on July 28, 1996 and
ending on the last day of such fiscal quarter is less than
twelve months, such shorter period), shall not be less than the
minimum ratio set forth opposite such fiscal quarter:
Fiscal Quarter Minimum Ratio
-------------- -------------
The fourth fiscal quarter
of Fiscal Year 1996 3.40:1
The first fiscal quarter
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of Fiscal Year 1997 3.50:1
The second fiscal quarter
of Fiscal Year 1997 3.85:1
The third fiscal quarter
of Fiscal Year 1997 3.90:1
The fourth fiscal quarter
of Fiscal Year 1997 4.00:1
1.33 Section 8.03 of the Credit Agreement is deleted in its
entirety and the following paragraph is substituted therefor:
8.03. Minimum Operating Company Fixed Charge Coverage Ratio.
The Operating Company Fixed Charge Coverage Ratio of the Borrowing
Subsidiaries and their respective Subsidiaries on a consolidated
basis, as determined as of the last day of each fiscal quarter set
forth below for the twelve month period ending on such day (or if the
period beginning on July 28, 1996 and ending on the last day of such
fiscal quarter is less than twelve months, such shorter period), shall
not be less than the minimum ratio set forth opposite such fiscal
quarter:
Fiscal Quarter Minimum Ratio
-------------- -------------
The fourth fiscal quarter
of Fiscal Year 1996 1.45:1
The first fiscal quarter
of Fiscal Year 1997 1.45:1
The second fiscal quarter
of Fiscal Year 1997 1.25:1
The third fiscal quarter
of Fiscal Year 1997 1.15:1
The fourth fiscal quarter
of Fiscal Year 1997 1.20:1
1.34 Section 8.05 of the Credit Agreement is deleted in its
entirety and the following paragraph is substituted therefor:
8.05. Minimum Current Ratio. The Current Ratio shall not be
less than the minimum ratio set forth opposite such fiscal quarter:
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Fiscal Quarter Minimum Ratio
The fourth fiscal quarter
of Fiscal Year 1996 0.80:1
The first fiscal quarter
of Fiscal Year 1997 0.80:1
The second fiscal quarter
of Fiscal Year 1997 0.80:1
The third fiscal quarter
of Fiscal Year 1997 0.80:1
The fourth fiscal quarter
of Fiscal Year 1997 0.80:1
1.35 Section 8.06 of the Credit Agreement is deleted in its
entirety and the following paragraph is substituted therefor:
8.06. Maximum Capital Expenditures. Capital Expenditures made
or incurred by the Company and its Subsidiaries on a consolidated
basis for any Fiscal Year shall not exceed in the aggregate the
maximum amount set forth below opposite such Fiscal Year:
Fiscal Year Maximum Amount
1996 $13,000,000
1997 24,000,000;
provided, however, that, notwithstanding anything contained in this
Agreement to the contrary, in Fiscal Years 1996 and 1997 the Company
and its Subsidiaries shall not be permitted to make or incur Capital
Expenditures which are financed with the proceeds of external
financing ("Financed Capital Expenditures") in an aggregate amount
which exceeds $10,000,000 on a consolidated basis in any such Fiscal
Year; and provided, further, that the terms of any external financing
the proceeds of which are used by the Company and/or its Subsidiaries
to make or incur Capital Expenditures (other than the loan and
security agreement dated as of October 30, 1991, as amended through
the Effective Date, between The CIT Group/Equipment Financing, Inc.
and JCIC) shall be in form and substance satisfactory to the Requisite
Senior Lenders.
1.36 Section 8.07 of the Credit Agreement is deleted in its
entirety and the following paragraph is substituted therefor:
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8.07. Maximum Cash Payments of Warranty Liabilities. Cash
payments for Warranty Liabilities made by the Borrowing Subsidiaries
and their respective Subsidiaries on a consolidated basis for any
Fiscal Year shall not exceed in the aggregate the maximum amount set
forth below opposite such Fiscal Year:
Fiscal Year Maximum Amount
----------- --------------
1996 $4,300,000
1997 4,000,000
1.37 Section 9.01 of the Credit Agreement is amended to add
the proviso "; provided, however, that the Borrowing Subsidiaries shall not be
deemed to be in default under this Agreement or any of the other Loan Documents
solely as a result of the occurrence and continuance of an Extension Event of
Default or Extension Potential Event of Default" after the word "Agreement" in
the third line thereof.
1.38 Section 9.01(g) of the Credit Agreement is amended to add
the following parenthetical immediately after the final word thereof:
(other than a resolution adopted by the Board of Directors of the
Company authorizing the commencement of the Case and the transactions
contemplated thereby)
1.39 Section 9.01(r) of the Credit Agreement is deleted in its
entirety.
1.40 Section 9.01 of the Credit Agreement is further amended
by renaming paragraph "(s)" of such section paragraph "(r)" and adding the
following new paragraphs following renamed paragraph (r) at the end thereof:
(s) Violation of Stipulation. Any violation of the
Stipulation (other than as a result of a modification thereof as
approved by the Bankruptcy Court which modification, if initiated or
supported by the Company, shall have been approved by the Requisite
Senior Lenders) occurs during the pendency of the Case.
(t) Case Status. The Case, if commenced, is converted to
a proceeding under chapter 7 of the Bankruptcy Code, or is terminated
or dismissed prior to the Effective Date of Reorganization.
(u) Substantive Consolidation. Any motion or pleading is filed
or supported by the Company or, if filed by any other party in
interest, is granted, (i) seeking to substantively consolidate the
Company with the Borrowing
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Subsidiaries or (ii) the granting of which would materially adversely
affect the rights and remedies of the Agent, the Collateral Agent or
the Senior Lenders under the Loan Documents against the Borrowing
Subsidiaries or their respective assets.
(v) Senior Lenders' Claims. The claim of the Senior Lenders in
respect of the Company Guaranty, or the Lien of the Company Pledge
Agreement or the Company Security Agreement or any other Collateral
Document to which the Company is a party, is disallowed, subordinated,
avoided or determined to be void by the Bankruptcy Court, or any
motion or other pleading seeking such relief is filed by the Company
or supported by the Company, except for the disallowance of
duplicative claims or claims of the Senior Lenders resulting from the
incorrect calculation of amounts owing to the Senior Lenders under the
Credit Agreement.
1.41 Section 9.02(a) of the Credit Agreement is amended (i) to
add the words "(other than an Extension Event of Default)," after the words "of
Default" in the second line thereof, and (ii) to add the words "(other than an
Extension Event of Default)," after the words "Event of Default" in the
sixteenth line thereof.
1.42 Section 9.02(b) of the Credit Agreement is amended to add
the words "(other than an Extension Event of Default)" after the words "Event
of Default" in the third line thereof.
1.43 Section 10.08(a) of the Credit Agreement is amended to
add the words "or after" after the words "prior to" in the fourth line thereof.
1.44 Section 11.03(b) of the Credit Agreement is amended to
add the words "(other than an Extension Event of Default") after the words
"Event of Default" in the seventh line thereof.
1.45 Section 11.04 of the Credit Agreement is amended to add
the words ", the Extension Amendment, the Extension Amendatory Agreement and
any other document or instrument executed in connection therewith," after the
parenthetical phrase ending on the thirty-first line thereof.
1.46 Section 11.06 of the Credit Agreement is amended to add
the words "(other than an Extension Event of Default") after the words "Event
of Default" in the fifth line thereof.
1.47 Section 11.23 of the Credit Agreement is amended to add
the following proviso after the words "of such Borrowing Subsidiary" in the
seventh line thereof:
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; provided, however, that, from and after the date the Case is
commenced, all notices of a Borrowing Subsidiary to be delivered
hereunder shall be delivered by such Borrowing Subsidiary and not by
the Company.
1.48 Schedule 2.03(d) of the Credit Agreement is deleted in
its entirety and replaced with Schedule 2.03(d) attached hereto.
1.49 A new Schedule 4.01(i), in the form of Schedule 4.01(i)
attached hereto, shall be added to the Credit Agreement.
1.50 Each of Exhibit 3 (Form of Notice of Borrowing), Exhibit
4 (Form of Notice of Continuation/Conversion) and Exhibit 10 (Form of Request
for Release of Receivables) is amended to (a) add the words "other than an
Extension Event of Default" after the words "Event of Default" in each place
where such words appear in such Exhibit, and (b) add the words "other than an
Extension Event of Default or an Extension Potential Event of Default" after
the words "Event of Default or Potential Event of Default" in each place where
such words appear in such Exhibit.
SECTION 2. Consent of the Senior Lenders. The Senior Lenders
(i) hereby consent pursuant to Section 7.02 of the Credit Agreement, to the
Rubber Products Sale, and (ii) hereby authorize, pursuant to Section
10.08(b)(vi) of the Credit Agreement, the Collateral Agent in connection with
the Rubber Products Sale to release its Lien on the fixed assets, Receivables
and Inventory being sold pursuant to the Rubber Products Sale; provided,
however, the consents provided for in this Section 2, of this Amendment shall
only become effective upon the satisfaction of the following conditions
precedent (in addition to the conditions precedent contained in Section 3
below):
(A) the Agent shall have received, concurrently with the
consummation of the Rubber Products Sale, at least $4,000,000 in Net
Cash Proceeds arising from the consummation of such sale for
application to the Obligations in accordance with Section 2.06(b)(iii)
of the Credit Agreement;
(B) the Agent and the Collateral Agent shall have received
copies of all documentation evidencing the Rubber Products Sale and
such documentation shall be in form and substance satisfactory to the
Agent and the Collateral Agent; and
(C) the Rubber Products Sale shall have been consummated on or
prior to October 31, 1996.
In the event that the Rubber Products Sale shall not have been consummated by
October 31, 1996, then the amendments made to the
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Credit Agreement in Section 1.01(i) and 1.07 hereof and the addition of the
words ", Rubber Products Sale" in the definition of "Permitted Dispositions"
amended pursuant to Section 1.02(h) hereof shall in each case be deleted in
their entirety.
SECTION 3. Conditions Precedent to the Effectiveness of this
Agreement. This Amendment shall become effective as of the date hereof on the
date (the "Extension 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):
3.1 The Agent shall have received all of the following, each
fully executed and in form and substance satisfactory to the Agent and the
Requisite Senior Lenders (except where otherwise indicated), in sufficient
copies for each Senior Lender:
(a) this Amendment (executed by the Company, the
Borrowing Subsidiaries, the Senior Lenders, the Agent and the
Collateral Agent);
(b) the Extension Amendatory Agreement (executed
by the Company, the Borrowing Subsidiaries, JPS Auto, JCC,
International Fabrics, the Senior Lenders, the Agent and the
Collateral Agent);
(c) a certificate of the Secretary or Assistant
Secretary of the Company dated the Extension 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 the
transactions contemplated hereby, it being understood that the
commencement and continuation of the Case is not a transaction
contemplated hereby, and (C) that there have been no changes in the
Certificate of Incorporation or By-Laws of the Company since the
Effective Date;
(d) a certificate of the Secretary or Assistant
Secretary of each Borrowing Subsidiary dated the Extension 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
transactions contemplated hereby and (C) that there have been no
changes in the Certificate of Incorporation or By-Laws of such
Borrowing Subsidiary since the Effective Date;
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(e) a certificate of the Secretary or Assistant
Secretary of each other Subsidiary of the Company party hereto dated
the Extension 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 the transactions contemplated hereby
and (C) that there have been no changes in the Certificate of
Incorporation or By-Laws of such Person since the Effective Date;
(f) amendments to the Real Property Collateral
Documents, and such other related documents and agreements, including,
without limitation, title endorsements, as the Agent may reasonably
request;
(g) a written opinion of Weil, Gotshal & Manges,
LLP, special counsel to the Company and the Borrowing Subsidiaries, in
form and substance reasonably satisfactory to the Agent and the
Requisite Senior Lenders and their respective counsel;
(h) such other notices, documents and agreements
as are reasonably requested by the Agent or any of the Senior Lenders
relating to the transactions contemplated by this Amendment.
3.2 The Company shall have delivered to the Agent and the
Collateral Agent, and the Agent, the Collateral Agent and the Requisite Senior
Lenders shall have approved, (a) updated monthly financial projections for the
Company and its Subsidiaries through the end of fiscal year 1996 and for fiscal
year 1997 (as updated from time to time, the "Projections"), (b) a business
plan of the Company and its Subsidiaries for fiscal years 1996 and 1997, (c)
such assurances as may be requested to confirm the tax, legal and business
assumptions made in the Projections, and (d) such other financial information
as the Agent, the Collateral Agent or the Senior Lenders may reasonably
request.
3.3 The Agent, the Collateral Agent and the Requisite Senior
Lenders shall have been satisfied that (i) the Company and its Subsidiaries
have made adequate provision for the payment of all fees, expenses, indemnities
and other liabilities to be incurred by the Company and its Subsidiaries in
connection with the transactions contemplated by this Amendment, including,
without limitation, the commencement and continuation of the Case (the
"Transactions"), and (ii) the Maximum Amount of Obligations exceeds the
Revolving Credit Accommodations outstanding on the Extension Amendment
Effective Date by no less than $15,000,000.
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3.4 The Liens of the Agent and the Collateral Agent securing
the Obligations for the benefit of the Senior Lenders shall be or continue to
be perfected and of first priority.
3.5 Each of the representations and warranties made by the
Company or any of the Borrowing Subsidiaries in or pursuant to the Credit
Agreement, as amended by this Amendment, 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 Extension Amendment Effective Date (except any such
representations and warranties stated to be given on a specific date other than
the Extension Amendment Effective Date).
3.6 The Agent, the Collateral Agent and the Requisite Senior
Lenders shall be satisfied as to compliance by the Company and the Borrowing
Subsidiaries and the other parties to the Transactions with applicable laws,
regulations and orders (including all securities laws) and applicable
Contractual Obligations (other than obligations arising under those agreements
and instruments evidencing the Subordinated Indebtedness) deemed material by
the Agent, the Collateral Agent and the Requisite Senior Lenders.
3.7 There shall exist no action, suit, investigation,
litigation or proceeding pending or threatened in any court or before any
arbitrator or governmental instrumentality that (i) could have a Material
Adverse Effect or (ii) purports to affect any of the Transactions.
3.8 All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Amendment shall be satisfactory in all respects in form
and substance to the Agent and the Requisite Senior Lenders.
3.9 The Agent and the Senior Lenders shall be satisfied that
all documents and instruments set forth on Schedule 4.01(i) attached hereto,
including, without limitation, the loan and security agreement dated as of
October 30, 1991, as amended through the Extension Amendment Effective Date,
between The CIT Group/Equipment Financing, Inc. and JCIC, will not be
negatively impacted by any Extension Event of Default.
3.10 No Event of Default or Potential Event of Default shall
have occurred and be continuing on the Extension Amendment Effective Date
(other than an Extension Potential Event of Default).
3.11 The Company shall have paid to the Agent for the benefit
of the Senior Lenders all fees and expenses due and
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payable under the Credit Agreement and in connection with the this Amendment,
including, without limitation, an amendment fee of 0.25% of each Senior
Lender's Revolving Credit Commitment payable to each such Senior Lender on the
date of execution of this Amendment by each of the Senior Lenders.
3.12 No Senior Lender shall have withdrawn or otherwise
terminated its Revolving Credit Commitment.
3.13 There shall be no material adverse change in the
condition (financial or otherwise), performance, operations, properties or
prospects of the Borrowing Subsidiaries, individually, or the Company and its
Subsidiaries, taken as a whole, in the judgment of the Agent, the Collateral
Agent and the Requisite Senior Lenders, from the date of the most recent
audited financial information delivered to the Agent, the Collateral Agent and
the Senior Lenders pursuant to the Credit Agreement, except for those matters
referenced in Section 2.02 of the Fifth Amendment.
SECTION 4. Representations and Warranties. Each Borrowing
Subsidiary hereby represents and warrants to the Senior Lenders that (a) as of
the date hereof no Event of Default or Potential Event of Default shall have
occurred and be continuing (after giving effect to the amendment to the Credit
Agreement contained in Section 1 hereof) and (b) all of the representations and
warranties of the Borrowing Subsidiaries 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 of the Fifth Amendment).
SECTION 5. Reference to and Effect on the Loan Documents.
5.1 Upon the effectiveness of this Amendment, on and after the
date hereof, each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" 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.
5.2 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.
5.3 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
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any of the Loan Documents, nor constitute a waiver of any provision of the
Credit Agreement or any of the Loan Documents.
SECTION 6. Releases. In further consideration of the Senior
Lenders' execution of this Amendment, each of the Company, the Borrowing
Subsidiaries and each of the other Subsidiaries of the Company party hereto
hereby releases the Agent, the Collateral Agent and the Senior Lenders and
their respective affiliates, officers, employees, directors, agents and
attorneys (collectively, the "Releasees") from any and all claims, demands,
liabilities, responsibilities, disputes, causes of action (whether at law or
equity) and obligations of every nature whatsoever, whether liquidated or
unliquidated, known or unknown, matured or unmatured, fixed or contingent, that
the Company or any of the Borrowing Subsidiaries may have against the Releasees
which arise from or relate to any actions or inactions that the Releasees may
have taken prior to the date hereof with respect to the Obligations, any
Collateral, the Credit Agreement, any Loan Document and any third parties
liable in whole or in part for the Obligations. For purposes of the release
contained in this section, the terms "Company," and "Borrowing Subsidiary"
shall mean and include the Company's and each Borrowing Subsidiary's respective
successors and assigns, including, without limitation, any trustees acting on
behalf of such parties.
SECTION 7. GE Notice Address. The notice address for General
Electric Capital Corporation, in its individual capacity and in its capacity as
the Collateral Agent, is hereby changed to the following:
201 High Ridge Road
Stamford, Connecticut 06927-5100
Attention: Rick Luck
Telecopy: (203) 316-7893
with a copy to:
Sidley & Austin
875 Third Avenue
New York, New York 10022
Attention: Daniel S. Dokos, Esq.
Telecopy: (212) 906-2021
SECTION 8. Certification of Conformed/Composite Copy of Credit
Agreement. The parties hereto each acknowledge and agree that the
Conformed/Composite Copy of the Credit Agreement attached to this Amendment as
Exhibit A accurately reflects the Credit Agreement as amended through July 22,
1996, and adopts such Conformed/Composite Copy as the operative agreement of
the parties thereto, as amended by this Amendment.
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SECTION 9. Costs and Expenses. Each Borrowing Subsidiary
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, including the reasonable fees and out-of-pocket expenses of
Sidley & Austin, counsel for the Agent with respect thereto.
SECTION 10. Execution in Counterparts. This Amendment may be
executed and delivered in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken together shall
constitute one and the same original agreement.
SECTION 11. Governing Law. This Amendment shall be governed by
and construed in accordance with the laws of the State of New York.
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SECTION 12. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose.
IN WITNESS WHEREOF, this Amendment has been duly executed on
the date set forth above.
JPS TEXTILE GROUP, INC.
By:/s/ David H. Taylor
--------------------------
Title: EVP - Finance & Secretary
JPS ELASTOMERICS CORP.
By:/s/ David H. Taylor
--------------------------
Title: Vice President
JPS CONVERTER AND INDUSTRIAL CORP.
By:/s/ David H. Taylor
---------------------------
Title: Vice President
JPS AUTO INC.
By:/s/ David H. Taylor
----------------------------
Title: Vice President
JPS CARPET CORP.
By:/s/ David H. Taylor
-----------------------------
Title: Vice President
INTERNATIONAL FABRICS, INC.
By:/s/ David H. Taylor
-----------------------------
Title: Vice President
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29
Senior Lenders:
CITIBANK, N.A., as Agent and as a
Senior Lender
By:/s/ Brenda Cotsen
--------------------------------
Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION, as Collateral Agent
and as a Senior Lender
By:/s/ Rick Luck
-------------------------------------------
Title: Vice President GE Capital Commercial
Finance, Inc., Being Duly Authorized
HELLER FINANCIAL, INC.
By:/s/ Frank Ross
---------------------------------
Title:
THE BANK OF NEW YORK COMMERCIAL CORPORATION
By:/s/ Michael Lustbader
--------------------------------
Title: VP
NATIONSBANK OF GEORGIA, N.A.
By:/s/ Brian R. O'Falla
--------------------------------
Title: SVP
-29-