Xxxxxxx 0X
XXX Packaging Company
First Amendment To Credit Agreement
This First Amendment to Credit Agreement (herein, the "Amendment") is
entered into as of January 24, 2000, between JPS Packaging Company, a Delaware
corporation (the "Company"), and Xxxxxx Trust and Savings Bank (the "Bank").
Preliminary Statements
A. The Company and the Bank entered into a certain Credit Agreement,
dated as of June 30, 1998 (the Credit Agreement, as the same has been amended
prior to the date hereof, being referred to herein as the "Credit Agreement").
All capitalized terms used herein without definition shall have the same
meanings herein as such terms have in the Credit Agreement.
B. The Company has requested that the Bank amend certain financial
covenants and make certain other amendments to the Credit Agreement, and the
Bank is willing to do so under the terms and conditions set forth in this
Amendment.
Now, Therefore, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
Section 1. Amendments.
Subject to the satisfaction of the conditions precedent set forth in
Section 2 below, the Credit Agreement shall be and hereby is amended as follows:
1.1. Section 5.1 of the Credit Agreement shall be and is hereby
amended by adding the following definition at the end thereof:
"Year 2000 Problem" means any significant risk that computer hardware,
software, or equipment containing embedded microchips essential to the
business or operations of the Company or any of its Subsidiaries will
not, in the case of dates or time periods occurring after December 31,
1999, function at least as efficiently and reliably as in the case of
times or time periods occurring before January 1, 2000, including the
making of accurate leap year calculations.
1.2. Section 6 of the Credit Agreement shall be and is hereby
amended by adding the following Section at the end thereof:
Section 6.18. Year 2000 Compliance. The Company has conducted a
comprehensive review and assessment of the computer applications of
the Company and its Subsidiaries and is making inquiry of their
material suppliers, vendors (including data
processors) and customers, with respect to any defect in computer
software, data bases, hardware, controls and peripherals related to
the occurrence of the year 2000 or the use at any time of any date
which is before, on and after December 31, 1999, in connection
therewith. Based on the foregoing review, assessment and inquiry, the
Company believes that no such defect could reasonably be expected to
have a material adverse effect on the business or financial affairs of
the Company (or of the Company and its Subsidiaries taken on a
consolidated basis).
1.3. Section 8 of the Credit Agreement shall be and is hereby amended
by adding the following Section at the end thereof:
Section 8.22. Year 2000 Assessment. The Company shall take all actions
necessary and commit adequate resources to assure that its computer-
based and other systems (and those of all Subsidiaries) are able to
effectively process dates, including dates before, on and after
January 1, 2000, without experiencing any Year 2000 Problem that could
cause a material adverse effect on the business or financial affairs
of the Company (or of the Company and its Subsidiaries taken on a
consolidated basis). At the request of the Bank, the Company will
provide the Bank with written assurances and substantiation
(including, but not limited to, the results of internal or external
audit reports prepared in the ordinary course of business) reasonably
acceptable to the Bank as to the capability of the Company and its
Subsidiaries to conduct its and their businesses and operations
before, on and after January 1, 2000, without experiencing a Year 2000
Problem causing a material adverse effect on the business or financial
affairs of the Company (or of the Company and its Subsidiaries taken
on a consolidated basis).
1.4. Sections 8.7, 8.8 and 8.9 of the Credit Agreement shall be
amended in the entirety and as so amended shall be restated as follows:
Section 8.7. Tangible Net Worth. The Company shall, at all times
during each of the periods below, maintain Tangible Net Worth at not
less than:
Tangible Net Worth
From and To and shall not be
including including less than:
November 1, 1999 December 31, 2000 $36,000,000
January 1, 2001 December 31, 2001 $36,500,000
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Section 8.8. EBITDA. (a) Quarterly Test. The Company shall, as of the
last day of each calendar month ending during any one of the periods
specified below, maintain EBITDA for the three calendar months then
ended of not less than:
From and To and EBITDA shall not
including including be less than:
12/16/99 3/15/00 $ 300,000
3/16/00 At all times thereafter $1,000,000
(b) Annual Test. The Company shall, as of December 31, 2000 and
December 31, 2001, maintain EBITDA for the fiscal year of the Company
ended on or about such date of not less than $3,300,000 and
$4,000,000, respectively.
Section 8.9. Capital Expenditures. The Company shall not, nor shall
it permit any Subsidiary to, expend or become obligated for capital
expenditures (as determined in accordance with GAAP) in an aggregate
amount during any fiscal year of the Company in excess of the amount
set forth for such year below:
For the year ending on: Capital Expenditures shall
not be more than:
12/31/00 $4,500,000
12/31/01 $5,000,000
Section 2. Conditions Precedent.
The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:
2.1. The Company and the Bank shall have executed and delivered
this Amendment.
2.2. The Bank shall have received copies (executed or certified,
as may be appropriate) of all legal documents or proceedings taken in
connection with the execution and delivery of this Amendment to the
extent the Bank or its counsel may reasonably request.
2.3. Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Bank and its counsel.
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Section 3. Representations.
In order to induce the Bank to execute and deliver this Amendment, the
Company hereby represents to the Bank that as of the date hereof the
representations and warranties set forth in Section 6 of the Credit Agreement
are and shall be and remain true and correct (except that the representations
contained in Section 6.5 shall be deemed to refer to the most recent financial
statements of the Company delivered to the Bank) and the Company is in
compliance with the terms and conditions of the Credit Agreement and no Default
or Event of Default has occurred and is continuing under the Credit Agreement or
shall result after giving effect to this Amendment.
Section 4. Miscellaneous.
4.1. The Company heretofore executed and delivered to the Bank the Security
Agreement, Mortgages, Patent Agreement and Trademark Agreement and certain other
Collateral Documents. The Company hereby acknowledges and agrees that the Liens
created and provided for by the Collateral Documents continue to secure, among
other things, the Obligations arising under the Credit Agreement as amended
hereby; and the Collateral Documents and the rights and remedies of the Bank
thereunder, the obligations of the Company thereunder, and the Liens created and
provided for thereunder remain in full force and effect and shall not be
affected, impaired or discharged hereby. Nothing herein contained shall in any
manner affect or impair the priority of the liens and security interests created
and provided for by the Collateral Documents as to the indebtedness which would
be secured thereby prior to giving effect to this Amendment.
4.2. Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Revolving Credit Note, or any other instrument or document executed in
connection therewith, or in any certificate, letter or communication issued or
made pursuant to or with respect to the Credit Agreement, any reference in any
of such items to the Credit Agreement being sufficient to refer to the Credit
Agreement as amended hereby.
4.3. The Company agrees to pay on demand all costs and expenses of or
incurred by the Bank in connection with the negotiation, preparation, execution
and delivery of this Amendment, including the fees and expenses of counsel for
the Bank.
4.4. This Amendment may be executed in any number of counterparts, and by
the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.
[Signature Page to Follow]
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This First Amendment to Credit Agreement is entered into as of the date and
year first above written.
JPS Packaging Company
By
Name
-----------------------------
Title
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Accepted and agreed to.
Xxxxxx Trust And Savings Bank
By
Name
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Title
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