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EXHIBIT 10.38
FIRST AMENDMENT TO CREDIT FACILITY AGREEMENT
THIS FIRST AMENDMENT TO CREDIT FACILITY AGREEMENT dated as of October 30,
1998 (this "FIRST 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 the same may be amended and 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 "First 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 1999, (i) in the case of Base Rate Loans, 0% and (ii) in the
case of Eurodollar Rate Loans, 2.00%; and (y) at all times thereafter, (iii) in
the case of Base Rate Loans, the applicable rate per annum set forth below
under the heading "Base Rate Margin" and (iv) 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 EURODOLLAR RATE
COVERAGE RATIO BASE RATE MARGIN MARGIN
-------------- ---------------- ---------------
if >=2.50 to 1 0% 1.75%
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if >=2.00 to 1 but <2.50 to 1 0% 2.00%
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if >=1.50 to 1 but <2.00 to 1 0% 2.25%
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if <1.50 to 1 0.25% 2.50%
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(b) The definition of "Fixed Asset Portion" is amended by adding to
the end thereof the following additional provisos:
"; and provided, further, however, in addition to the reduction in the
Fixed Asset Portion contemplated by the preceding provisos, the Fixed Asset
Portion shall be further reduced by $833,000 on the last day of each fiscal
month of the Company ending during Fiscal Year 1999 commencing with the
fiscal month ending on December 5, 1998; and provided, further, however, in
the event that a Borrowing Subsidiary receives any cash proceeds or Net
Cash Proceeds referred to in clauses (i) through (iv) above during any
fiscal month, the amount of such cash proceeds and Net Cash Proceeds shall,
to the extent that the Fixed Asset Portion is reduced by such amount
pursuant to said clauses, be deducted from the amount of reductions in the
Fixed Asset Portion specified in the two immediately preceding provisos,
which deductions from such specified amounts of reductions in said provisos
shall be made in the direct order of the dates, beginning in such fiscal
month, specified for such reductions in said provisos"
(c) The definition of "Unused Commitment Fee Rate" is amended as
follows:
(i) within the definition of "Unused Commitment Fee Rate", the
grid setting forth the Unused Commitment Fee Rate for certain ratio
ranges is amended to read in full as follows:
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FIXED CHARGE UNUSED
COVERAGE RATIO COMMITMENT FEE
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if >=2.5 to 1 0.25%
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is <2.5 to 1 0.375%
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(ii) the term "Leverage Ratio", in each place it appears, is
replaced with the term "Fixed Charge Coverage Ratio".
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
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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 fourth fiscal quarter of Fiscal Year 1998 27,000,000
The first fiscal quarter of Fiscal Year 1999 24,000,000
The second fiscal quarter of Fiscal Year 1999 23,000,000
The third fiscal quarter of Fiscal Year 1999 23,000,000
The fourth fiscal quarter of Fiscal Year 1999 26,000,000
The first fiscal quarter of Fiscal Year 2000 28,000,000
The second fiscal quarter of Fiscal Year 2000 30,000,000
The third fiscal quarter of Fiscal Year 2000 31,000,000
The fourth fiscal quarter of Fiscal Year 2000 33,000,000
The first fiscal quarter of Fiscal Year 2001 37,000,000
The second fiscal quarter of Fiscal Year 2001 37,000,000
The third fiscal quarter of Fiscal Year 2001 38,000,000
The fourth fiscal quarter of Fiscal Year 2001 39,000,000
The first fiscal quarter of Fiscal Year 2002 40,000,000
The second fiscal quarter of Fiscal Year 2002 41,000,000
The third fiscal quarter of Fiscal Year 2002 42,000,000
and thereafter
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 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 fourth fiscal quarter of Fiscal Year 1998 3.5 to 1.
The first fiscal quarter of Fiscal Year 1999 3.2 to 1.
The second fiscal quarter of Fiscal Year 1999 3.0 to 1.
The third fiscal quarter of Fiscal Year 1999 3.0 to 1.
The fourth fiscal quarter of Fiscal Year 1999 3.0 to 1.
The first fiscal quarter of Fiscal Year 2000 3.0 to 1.
The second fiscal quarter of Fiscal Year 2000 3.5 to 1.
and thereafter
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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 fourth fiscal quarter of Fiscal Year 1998 N/A
The first fiscal quarter of Fiscal Year 1999 N/A
The second fiscal quarter of Fiscal Year 1999 N/A
The third fiscal quarter of Fiscal Year 1999 1.20 to 1
The fourth fiscal quarter of Fiscal Year 1999 1.30 to 1
The first fiscal quarter of Fiscal Year 2000 1.40 to 1
The second fiscal quarter of Fiscal Year 2000 1.40 to 1
The third fiscal quarter of Fiscal Year 2000 1.40 to 1
The fourth fiscal quarter of Fiscal Year 2000 1.40 to 1
The first fiscal quarter of Fiscal Year 2001 1.40 to 1
The second fiscal quarter of Fiscal Year 2001 1.40 to 1
The third fiscal quarter of Fiscal Year 2001 1.40 to 1
The fourth fiscal quarter of Fiscal Year 2001 1.40 to 1
The first fiscal quarter of Fiscal Year 2002 1.50 to 1
The second fiscal quarter of Fiscal Year 2002 1.55 to 1
The third fiscal quarter of Fiscal Year 2002
and thereafter 1.55 to 1
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:
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Fiscal Year Maximum Amount
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1998 25,000,000
1999 10,000,000
2000 20,000,000
2001 20,000,000
2002 20,000,000
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, 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.
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 First Amendment Effective Date and after giving effect to this First
Amendment:
(a) Each of the representations and warranties contained in this First
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
First 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. First Amendment Effective Date. This First Amendment shall
become effective as of the date hereof (the "First Amendment Effective Date")
when each of the following conditions shall have been satisfied:
(a) The Agent shall have received, by facsimile, counterparts hereof
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.
(b) Each of the representations and warranties contained in this First
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 First Amendment Effective Date, as if
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then made, other than representations and warranties which expressly
speak as of a different rate.
(c) No Event of Default or Default shall have occurred and be
continuing on the First Amendment Effective Date.
5. Reference to and Effect on the Loan Documents.
(a) On and after the First 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 First 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. Costs and Expenses. 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 First Amendment and all other Loan Documents entered into
in connection herewith, including, without limitation, the reasonable fees,
expenses and disbursements of Sidley & Austin, counsel for the Agent with
respect to any of the foregoing.
7. Miscellaneous. The headings herein are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof.
8. Counterparts. This First 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 FIRST 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 First 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: Vice President
JPS CONVERTER AND INDUSTRIAL CORP.
By: /s/ Xxxx X. Xxxxxxx, Xx.
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Title: Vice President
JPS ELASTOMERICS CORP.
By: /s/ Xxxx X. Xxxxxxx, Xx.
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Title: Vice President
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, Xx.
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Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Duly Authorized Signatory
XXXXXX FINANCIAL, INC.
By: /s/ Xxxx X. Xxxxxxx
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Title: Vice President
BNY FINANCIAL CORPORATION
By: /s/ Xxx Xxxxxx
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Title: SVP
BANKBOSTON, N.A.
By: /s/ Xxxx X. Xxxx
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Title: Managing Director
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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 First
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: Vice President
JPS AUTO INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
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Title: Vice President
INTERNATIONAL FABRICS, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
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Title: Vice President
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