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EXHIBIT 10
EXECUTION COPY
SECOND AMENDMENT TO CREDIT FACILITY AGREEMENT
THIS SECOND AMENDMENT TO CREDIT FACILITY AGREEMENT dated as of April
30, 1999 (this "Second Amendment") is entered into among JPS Textile Group,
Inc. (the "Company"), JPS Elastomerics Corp. and JPS Converter and Industrial
Corp. (together, the "Borrowing Subsidiaries"), Citibank, N.A. ("Citibank"), as
agent and collateral agent (the "Agent"), NationsBank, N.A., as co-agent (the
"Co-Agent"), and the Lenders, and relates to that certain Credit Facility
Agreement dated as of October 9, 1997 (as amended by the First Amendment to
Credit Facility Agreement dated as of October 30, 1998, and as further amended,
restated, supplemented or modified from time to time, the "Credit Agreement")
among the Company, the Borrowing Subsidiaries, the Agent, the Co-Agent and the
Lenders.
W I T N E S S E T H:
WHEREAS, the Company and the Borrowing Subsidiaries have requested
that the Lenders, the Agent and the Co-Agent agree to amend the Credit
Agreement as provided for herein;
NOW, THEREFORE, in consideration of the above premises, the Company,
the Borrowing Subsidiaries, the Agent, the Co-Agent and the Lenders agree as
follows:
1. Definitions. Capitalized terms used and not otherwise defined
herein have the meanings assigned to them in the Credit Agreement.
2. Amendments to the Credit Agreement. Upon the "Second Amendment
Effective Date" (as defined in Section 4 below), the Credit Agreement is hereby
amended as follows:
2.1 Section 1.01. Section 1.01 of the Credit Agreement is amended as
follows:
(a) The definition of "Applicable Margin" is amended to read in full
as follows:
"Applicable Margin" means (x) for all periods ending on or before the
end of Fiscal Year 2000, (i) in the case of Base Rate Loans, 0.75% and (ii) in
the case of Eurodollar Rate Loans, 2.25%; and (y) at all times thereafter, (i)
in the case of Base Rate Loans, the applicable rate per annum set forth below
under the heading "Base Rate Margin" and (ii) in the case of Eurodollar Rate
Loans, the applicable rate per annum set forth below under the heading
"Eurodollar Rate Margin":
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FIXED CHARGE BASE RATE MARGIN EURODOLLAR RATE
COVERAGE RATIO MARGIN
-------------------------------- ---------------- ---------------
if >= 3.25 to 1 0.25% 1.75%
if >= 2.50 to 1 but < 3.25 to 1 0.50% 2.00%
if >= 2.00 to 1 but < 2.50 to 1 0.75% 2.25%
if < 2.00 to 1 1.00% 2.50%
(b) The definition of "EBITDA" is amended to read in full as follows:
"EBITDA" shall mean, for any period, with respect to the Company and
its Subsidiaries on a consolidated basis during such period, all of the
following as determined in conformity with GAAP, (i) the sum of the amounts for
such period of (A) Consolidated Net Income, (B) depreciation, amortization
expense (including amortization of excess reorganization value) and other
non-cash charges identified to the Agent by the Company and reasonably
acceptable to the Agent, (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, (F)
Transaction Costs (and other reorganization expenses incurred prior to the
Effective Date) to the extent deducted in the calculation of Consolidated Net
Income and (G) for the period from the second fiscal quarter of Fiscal Year
1999 through and including the first fiscal quarter of Fiscal Year 2000,
Restructuring Expenses incurred from the beginning of the period being measured
through and including the second fiscal quarter of Fiscal Year 1999, up to (x)
48,500,000 for each of the second and third fiscal quarters of Fiscal Year 1999
and (y) $29,300,000 for each of the fourth fiscal quarter of Fiscal Year 1999
and the first fiscal year quarter of Fiscal Year 2000; minus (ii) gains (or
PLUS losses) from asset sales calculated pursuant to GAAP for such period.
(c) The following definition of "Cash Restructuring Expenses" is
added in proper alphabetical order:
"Cash Restructuring Expenses" shall mean the aggregate of all fees,
costs and expenses payable by the Company or any Borrowing Subsidiary in cash
or other consideration in connection with the Restructuring.
(d) The following definition of "Non-Cash Restructuring Expenses" is
added in proper alphabetical order:
"Non-Cash Restructuring Expenses" shall mean the aggregate of all
fees, costs and expenses payable by the Company or any Borrowing Subsidiary in
connection with a Restructuring other than Cash Restructuring Expenses.
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(e) The following definition of "Restructuring" is added in proper
alphabetical order:
"Restructuring" shall mean any activities associated with the
downsizing or exiting in whole or in part of a business or market segment or
manufacturing facility.
(f) The following definition of "Restructuring Expenses" is added in
proper alphabetical order:
"Restructuring Expenses" shall mean Cash Restructuring Expenses and
Non-Cash Restructuring Expenses.
2.2 Section 8.01. Section 8.01 of the Credit Agreement is amended
to read in full as follows:
8.01. Minimum EBITDA. EBITDA of the Company and its 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, shall not be less than the minimum amount set forth opposite
such fiscal quarter:
Fiscal Quarter Minimum Amount
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The second fiscal quarter of Fiscal Year 1999 20,000,000
The third fiscal quarter of Fiscal Year 1999 18,000,000
The fourth fiscal quarter of Fiscal Year 1999 18,000,000
The first fiscal quarter of Fiscal Year 2000 18,000,000
The second fiscal quarter of Fiscal Year 2000 18,000,000
The third fiscal quarter of Fiscal Year 2000 20,000,000
The fourth fiscal quarter of Fiscal Year 2000 22,000,000
The first fiscal quarter of Fiscal Year 2001 22,000,000
The second fiscal quarter of Fiscal Year 2001 22,000,000
The third fiscal quarter of Fiscal Year 2001 22,000,000
The fourth fiscal quarter of Fiscal Year 2001 25,000,000
The first fiscal quarter of Fiscal Year 2002 25,000,000
The second fiscal quarter of Fiscal Year 2002 25,000,000
The third fiscal quarter of Fiscal Year 2002 25,000,000
The fourth fiscal quarter of Fiscal Year 2002
and thereafter 27,500,000
2.3 Section 8.02. Section 8.02 of the Credit Agreement is amended to
read in full as follows:
8.02. Minimum Interest Coverage Ratio. The Interest Coverage
Ratio of the Company and its Subsidiaries on a consolidated basis,
as determined as of the last day
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of each fiscal quarter for the twelve month period ending on such day, shall not
be less than the minimum ratio set forth opposite such fiscal quarter.
Fiscal Quarter Minimum Amount
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The second fiscal quarter of Fiscal Year 1999 1.5 to 1.
The third fiscal quarter of Fiscal Year 1999 2.50 to 1.
The fourth fiscal quarter of Fiscal Year 1999 2.50 to 1.
The first fiscal quarter of Fiscal Year 2000 2.50 to 1.
The second fiscal quarter of Fiscal Year 2000 2.50 to 1.
The third fiscal quarter of Fiscal Year 2000 2.75 to 1.
The fourth fiscal quarter of Fiscal Year 2000 3.50 to 1.
2.4 Section 8.03. Section 8.03 of the Credit Agreement is amended to
read in full as follows:
8.03. Minimum Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio of the Company and its 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, shall not be less than the
minimum ratio set forth opposite such fiscal quarter:
Fiscal Quarter Minimum Ratio
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The third fiscal quarter of Fiscal Year 1999 0.90 to 1
The fourth fiscal quarter of Fiscal Year 1999 1.40 to 1
The first fiscal quarter of Fiscal Year 2000 1.75 to 1
The second fiscal quarter of Fiscal Year 2000 1.75 to 1
The third fiscal quarter of Fiscal Year 2000 2.00 to 1
and thereafter
2.5 Section 8.04. Section 8.04 of the Credit Agreement is amended to
read in full as follows:
8.04. 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
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1999 8,000,000
2000 5,000,000
2001 10,000,000
2002 10,000,000;
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provided, however, if the maximum amount set forth above opposite any
Fiscal Year exceeds the amount of Capital Expenditures made or incurred by
the Company and its Subsidiaries on a consolidated basis for such Fiscal
Year, then Capital Expenditures made or incurred by the Company and its
Subsidiaries on a consolidated basis for the next Fiscal Year may exceed
the maximum amount set forth above opposite such next Fiscal Year (but not
subsequent Fiscal Years) by the amount of such excess from the immediately
preceding Fiscal Year; provided further, however, that, notwithstanding
anything contained in this Agreement to the contrary, (i) Capital
Expenditures made or incurred by the Company and its Subsidiaries on a
consolidated basis (x) for Fiscal Year 1999 shall not in any event exceed
$8,000,000, and (y) for Fiscal Year 2000 shall not in any event exceed
$5,000,000; and (ii) the terms of any external financing (other than any
Permitted Financing) incurred after the Effective Date pursuant to Section
7.01(v), the proceeds of which are used by the Company and/or its
Subsidiaries to make or incur Capital Expenditures shall be in form and
substance satisfactory to the Requisite Lenders.
2.6 New Section 8.05. A new Section 8.05 is added to the Credit
Agreement, which shall read in full as follows:
8.05. Maximum Cash Restructuring Expenses. Cash Restructuring
Expenses made or incurred by the Company and its Subsidiaries on a
consolidated basis for Fiscal Year 1999 shall not exceed in the
aggregate $16,000,000.
3. Representations and Warranties. Each of the Borrowers hereby
represents and warrants to each Lender, the Agent and the Co-Agent that, as of
the Second Amendment Effective Date and after giving effect to this Second
Amendment:
(a) Each of the representations and warranties contained in this
Second Amendment, the Credit Agreement as amended hereby and the other
Loan Documents are true and correct in all material respects on and as
of the Second Amendment Effective Date, as if then made, other than
representations and warranties which expressly speak as of a different
date; and
(b) No Default or Event of Default has occurred and is continuing.
4. Second Amendment Effective Date. This Second Amendment shall
become effective as of the date hereof (the "Second Amendment Effective Date")
when each of the following conditions shall have been satisfied:
(a) The Agent shall have received, by facsimile, counterparts of this
Second Amendment executed by the Company, each Borrowing Subsidiary,
the Agent, the Co-Agent and the Requisite Lenders, and acknowledged by
each of JCC, JPS Auto and International Fabrics.
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(a) The Agent shall have received all fees and other amounts required
to be paid in connection with this Second Amendment, including, without
limitation, as required pursuant to Section 6(a) of this Second Amendment.
(c) Each of the representations and warranties contained in this
Second Amendment, the Credit Agreement as amended hereby and the other Loan
Documents shall be true and correct in all material respects on and as of
the Second Amendment Effective Date, as if then made, other than
representations and warranties which expressly speak as of a different date.
(d) No Event of Default or Default shall have occurred and be
continuing on the Second Amendment Effective Date.
5. Reference to and Effect on the Loan Documents.
(a) On and after the Second Amendment Effective Date, each reference
in the Credit Agreement as amended hereby 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.
(b) 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.
(c) The execution, delivery and effectiveness of this Second Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Lender, the Agent or the Co-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.
6. Fees, Costs and Expenses.
(a) The Company and the Borrowing Subsidiaries jointly and severally
agree to pay on the Second Amendment Effective Date, to the Administrative Agent
for the account of the Lenders who have executed and delivered this Second
Amendment on or before June 7, 1999, in proportion to such Lenders' respective
Pro Rata Shares, a non-refundable fee equal to 0.25% of the aggregate amount of
the Commitments held by such Lenders, provided that such fee shall be refunded
in full if this Second Amendment has not been executed by the Requisite Lenders
on or before June 7, 1999.
(b) The Company and the Borrowing Subsidiaries jointly and severally
agree to pay upon demand in accordance with the terms of Section 11.03 of the
Credit Agreement all reasonable costs and expenses of the Agent in connection
with the preparation, reproduction, negotiation, execution and delivery of this
Second Amendment and all other Loan Documents entered into in connection
herewith, including, without limitation, the reasonable fees, expenses and
disbursements of legal counsel for the Agent with respect to any of the
foregoing.
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7. Miscellaneous. The headings herein are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof.
8. Counterparts. This Second Amendment may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered by facsimile shall be an original,
but all of which shall together constitute one and the same instrument.
9. GOVERNING LAW. THIS SECOND AMENDMENT SHALL BE INTERPRETED, AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO AND TO THE CREDIT AGREEMENT AS
AMENDED HEREBY DETERMINED, IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the Agent, the Co-Agent, the Lenders, the Company
and the Borrowing Subsidiaries have caused this Second Amendment to be executed
by their respective officers thereunto duly authorized as of the date first
above written.
JPS TEXTILE GROUP, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
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Title: EVP & CFO
JPS CONVERTER AND INDUSTRIAL CORP.
By: /s/ Xxxx X. Xxxxxxx, Xx.
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Title: VP
JPS ELASTOMERICS CORP.
By: /s/ Xxxx X. Xxxxxxx, Xx.
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Title: VP
CITIBANK, N.A., as Agent, as Issuing Bank and as a
Lender
By: /s/ Xxxxxx X. Xxxxxx
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Title: Vice President
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NATIONSBANK, N.A., as Co-Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxx
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Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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Title: Duly Authorized Signatory
XXXXXX FINANCIAL, INC.
By:
---------------------------------
Title:
BNY FINANCIAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Title: Vice President
BANKBOSTON, N.A.
By: /s/ Xxxx X. Xxxx
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Title: Managing Dir.
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ACKNOWLEDGMENT
Reference is hereby made to (i) the Guaranty dated as of March 18, 1993
executed by JPS Carpet Corp., (ii) the Guaranty dated as of March 18, 1993
executed by JPS Auto Inc., and (iii) the Guaranty dated as of August 5, 1993
executed by International Fabrics, Inc., each as amended as of October 9, 1997
(each, as so amended, a "Guaranty") in favor of the Agent and the Lenders. Each
of the undersigned hereby consents to the terms of the foregoing Second
Amendment to Credit Facility Agreement, and agrees that the terms thereof shall
not affect in any way its obligations and liabilities under each such Guaranty
or any other Loan Document (as defined therein), all of which obligations and
liabilities shall remain in full force and effect and each of which is hereby
reaffirmed.
JPS CARPET CORP.
By: /s/ Xxxx X. Xxxxxxx, Xx.
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Title: VP
JPS AUTO INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
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Title: VP
INTERNATIONAL FABRICS, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
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Title: VP
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