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Exhibit 10.20
EXECUTION COPY
FOURTH AMENDMENT TO
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
This Fourth Amendment to Fourth Amended and Restated Credit
Agreement dated as of October 28, 1995 (this "Amendment"), is entered into
among JPS TEXTILE GROUP, INC., a Delaware corporation (the "Company"), JPS
CARPET CORP., a Delaware corporation ("JCC"), JPS ELASTOMERICS CORP., a
Delaware corporation ("JEC"), and JPS CONVERTER AND INDUSTRIAL CORP., a
Delaware corporation ("JCIC", and together with JCC and JEC, the "Borrowing
Subsidiaries"), the FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF
(collectively referred to herein, together with their respective successors and
assigns, as the "Senior Lenders" and individually as a "Senior Lender"),
CITIBANK, N.A., in its separate capacities as agent and administrative agent
for the Senior Lenders (in such capacities, the "Agent") and General Electric
Capital Corporation, in its separate capacities as co-agent and collateral
agent for the Senior Lenders (in such capacities, the "Collateral Agent"), and
amends the Fourth Amended and Restated Credit Agreement dated as of June 24,
1994, as amended by the First Amendment to Fourth Amended and Restated Credit
Agreement dated as of November 4, 1994, the Second Amendment to Fourth Amended
and Restated Credit Agreement dated as of December 21, 1994 and the Third
Amendment to Fourth Amended and Restated Credit Agreement dated as of May 31,
1995 (as so amended and as further amended hereby, the "Credit Agreement"),
entered into among the Company, the Borrowing Subsidiaries, the Senior Lenders,
the Agent and the Collateral Agent. Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the Credit
Agreement. Each of the parties hereto agrees that from and after the Fourth
Amendment Effective Date (as defined below) JCC shall cease to be a party to
the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Company and JCC have agreed to sell and transfer
the Carpet Assets (as defined below) to Gulistan Holdings Inc., a newly-formed
Delaware corporation which is owned by certain members of the existing
management of JCC ("Holdco"), and Holdco will subsequently contribute the
Carpet Assets to Gulistan Carpet Inc., a newly-formed Delaware corporation and
a wholly-owned subsidiary of Holdco ("Subco");
WHEREAS, certain proceeds of the sale of the Carpet Assets
shall constitute "Net Cash Proceeds" and shall be applied as a mandatory
prepayment to the outstanding Revolving Loans (without a corresponding
reduction of the Commitments);
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WHEREAS, the Company and JCC have requested that the Senior
Lenders permit the Agent and the Collateral Agent to release their respective
Liens on the Carpet Assets (including, without limitation, any capital stock
which is part of such Carpet Assets);
WHEREAS, the Company and the Borrowing Subsidiaries have
requested the Senior Lenders to amend the Credit Agreement to provide, among
other things, for (i) a decrease in the Revolving Credit Facility from
$135,000,000 to $118,000,000, (ii) an amendment of certain financial covenants
and (iii) other amendments, all as more fully described herein;
NOW, THEREFORE, in consideration of the above premises, the
Company, the Borrowing Subsidiaries, the Senior Lenders, 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 4 hereof, hereby
amended as follows:
1.01 Section 1.01 of the Credit Agreement is amended to add
the following definitions thereto:
"Carpet Asset Transfer Agreement" shall mean the Asset
Transfer Agreement to be entered into among JCC, the Company, Holdco and Subco
in connection with the Carpet Sale, as the same may be amended, supplemented or
otherwise modified from time to time.
"Carpet Assets" shall mean the Transferred Assets (as defined
in the Carpet Asset Transfer Agreement).
"Carpet Guaranty" shall mean the Amended and Restated Guaranty
dated as of March 18, 1993 executed by JCC, pursuant to which JCC has
guaranteed all of the Obligations of each Borrowing Subsidiary, as the same may
be amended, supplemented or otherwise modified from time to time.
"Carpet Pledge Agreement" shall mean the Pledge Agreement
dated as of the Fourth Amendment Effective Date between JCC and the Agent, as
the same may be amended, supplemented or otherwise modified from time to time.
"Carpet Sale" shall mean the purchase by Holdco and Subco and
sale by JCC, and the assumption by Holdco and Subco of substantially all of the
liabilities associated with, the Carpet Assets, all pursuant to and in
accordance with the terms of the Carpet Asset Transfer Agreement.
"Carpet Sale Amendatory Agreement" shall mean the Amendatory
Agreement and Release dated as of the Fourth Amendment Effective Date among the
Company, JCC, the Borrowing Subsidiaries, the Agent and the Collateral Agent,
as such agreement may be amended, supplemented or otherwise modified from time
to time.
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"Carpet Security Agreement" shall mean the Security Agreement
dated as of the Fourth Amendment Effective Date among JCC, the Collateral Agent
and the Agent, as the same may be amended, supplemented or otherwise modified
from time to time.
"Carpet Stockholders Agreement" shall mean the Stockholders
Agreement to be entered into among Holdco, JCC, as a stockholder of Holdco and
the other stockholders of Holdco party thereto in connection with the Carpet
Sale, as such agreement may be amended, supplemented or otherwise modified from
time to time.
"Carpet Transaction Documents" shall mean, collectively, (i)
the Carpet Asset Transfer Agreement, (ii) the Holdco Note, (iii) the Holdco
Preferred Stock, (iv) the Holdco Warrants and (v) the Carpet Stockholders
Agreement.
"Fourth Amendment Effective Date" shall mean the date on which
the Fourth Amendment to the Credit Agreement becomes effective pursuant to the
terms thereof.
"Holdco" shall mean Gulistan Holdings Inc., a Delaware
corporation.
"Holdco Note" shall mean the promissory note in the principal
amount of $10,000,000 (plus the amount of any deferred interest thereon) made
by Holdco in favor of JCC in connection with the Carpet Sale, as such note may
be amended, supplemented or otherwise modified from time to time.
"Holdco Preferred Stock" shall mean the Series A preferred
stock of Holdco, $.01 par value per share.
"Holdco Warrants" shall mean the warrants to acquire certain
shares of the common stock of Holdco issued to JCC pursuant to the Carpet Asset
Transfer Agreement.
"Subco" shall mean Gulistan Carpet Inc., a Delaware
corporation.
1.02 Section 1.01 of the Credit Agreement is further amended
as follows:
(a) The definition of "Borrowing Subsidiaries" is deleted in
its entirety and the following definition is substituted therefor:
"Borrowing Subsidiaries" shall mean JCIC and JEC.
(b) The definition of "Collateral Documents" in Section 1.01
of the Credit Agreement is hereby amended to add the phrase "the Carpet
Security Agreement, the Carpet Pledge Agreement, the Carpet Guaranty, the
Carpet Sale Amendatory Agreement" following the phrase "the JPS Auto Security
Agreement,".
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(c) The definition of "Deed of Charge" is deleted in its
entirety.
(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)
and (D) Federal, state, local and foreign income taxes; minus (ii)
gains (or plus losses) from asset sales calculated pursuant to GAAP
for such period plus solely with respect to the last fiscal quarter of
Fiscal Year 1995 and the first three fiscal quarters of Fiscal Year
1996, the extraordinary gain not in excess of $2,800,000 related to
the Auto Sale.
(e) The definition of "Fixed Asset Portion" in Section 1.01
of the Credit Agreement is hereby deleted in its entirety and the following
definition is substituted therefor:
"Fixed Asset Portion" shall mean $25,000,000; provided,
however, the amount of the Fixed Asset Portion shall be reduced by the
aggregate amount of each of the following: (i) the amount of any cash
proceeds from sales of assets (other than Inventory) sold in the
ordinary course of business that exceed Two Million Dollars
($2,000,000) in the aggregate in any Fiscal Year, net of (A) the costs
of sale, lease, assignment or other disposition, (B) any income,
franchise, transfer or other tax liability arising from such
transaction and (C) amounts applied to the repayment of Indebtedness
(other than the Obligations) secured by a Lien on the asset disposed
of; (ii) in the event of the sale of all or substantially all of the
capital stock or assets of any Borrowing Subsidiary (to the extent
otherwise permitted hereunder) (other than in connection with the Auto
Sale or the Carpet Sale), the amount of the Fixed Asset Value of such
Borrowing Subsidiary plus fifty percent (50%) of the amount, if any,
by which the Net Cash Proceeds from such sale exceed such Fixed Asset
Value; (iii) in the event of a Permitted Disposition, an amount equal
to fifty percent (50%) of the Net Cash Proceeds from such disposition;
and (iv) the amount of Net Cash Proceeds from sales of assets (other
than in connection with a Permitted Disposition, the Auto Sale or the
Carpet Sale).
(f) The definition of "Fixed Asset Value" is deleted in its
entirety and the following definition is substituted therefor:
"Fixed Asset Value" shall mean with respect to JCIC,
$23,644,068 and with respect to JEC, $1,355,932.
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(g) The definition of "JPS-U.K." is deleted in its entirety.
(h) The definition of "Net Worth" is hereby amended (i) to
insert the phrase "and the Carpet Sale" at the end of the parenthetical in
clause (iv) thereof and (ii) to insert the phrase "other than those gains
associated with the Company's repurchase of Subordinated Indebtedness" at the
end of the parenthetical in clause (v) thereof.
(i) The definition of "Permitted Disposition" 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 or any transaction
prohibited by Section 7.07(a) and shall only include those
dispositions with respect to which each of the 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
representation and warranties set forth in subsection (a) through
(dd) of Section 4.01 ((I) except to the extent such statements
expressly are made only as of the Effective Date or (II) other than for
changes permitted or contemplated by this Agreement), 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 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
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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 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).
(j) The definition of "Revolving Credit Facility" in Section
1.01 of the Credit Agreement is hereby amended to delete the dollar amount
"$135,000,000" and substitute the dollar amount "$118,000,000" therefor.
(k) The definition of "Transaction Documents" in Section 1.01
of the Credit Agreement is hereby amended to add the phrase "the Carpet
Transaction Documents," following the phrase "the New Auto Transaction
Documents,".
1.03 Section 2.06(b)(iii) of the Credit Agreement is hereby
amended to add the phrase "or the Carpet Sale" after the phrase "from the Auto
Sale" in the third line of the proviso in the first sentence thereof.
1.04 Section 7.02(a) of the Credit Agreement is hereby
amended to delete clause (B) thereof and substitute new clauses (B) and (C)
prior to the period at the end of clause (B) thereof as follows:
,(B) JCC shall be permitted to assign any of its interests in the
Holdco Note, the Holdco Preferred Stock and the Holdco Warrants, or any of
them, to any of the Borrowing Subsidiaries; provided that the Borrowing
Subsidiary to which such interests are transferred shall enter into
documentation pledging such interests in favor of the Agent in form and
substance satisfactory to the Agent and the Collateral Agent and deliver to the
Agent, the Collateral Agent and the Senior Lenders all legal opinions and
supporting documentation requested by the Agent and the Collateral Agent in
connection therewith and (C) JCC (or any Borrowing Subsidiary to which JCC
shall have transferred any of its interests pursuant to clause (B) above) shall
be permitted to sell any of its interests in the Holdco Note, the Holdco
Preferred Stock and the Holdco Warrants, or any of them, to a Person other than
a Loan Party; provided that the Net Cash Proceeds of such sale are applied as a
mandatory prepayment in accordance with Section 2.06(b) and such sale is made
on terms satisfactory to the Requisite Senior Lenders.
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1.05 Section 7.03 of the Credit Agreement is hereby
amended to (i) delete the word "and" following the semicolon at end of clause
(vii) thereof and (ii) delete in its entirety clause (viii) thereof and
substitute the following new clauses (viii) and (ix) therefor:.
(viii) Investments held by JCC or any of the Borrowing
Subsidiaries in the Holdco Note, the Holdco Preferred Stock and the
Holdco Warrants; and
(viii) Investments held by the Company in JPS Auto and JCC.
1.06 Section 7.04(vi) of the Credit Agreement is hereby
deleted in its entirety and the following clause is substituted therefor:
(vi) Accommodation Obligations arising in connection with the
Transaction Documents, including, without limitation, (A) the Assumed
Liabilities, (B) obligations owing by the Company in connection with
its indemnification obligations under the Purchase Agreement, any of
the New Auto Transaction Documents or any of the Carpet Transaction
Documents and obligations owing by JCC or any of its transferees in
connection with its indemnification obligations under any of the
Carpet Transaction Documents, (C) any purchase price or tax
adjustments payable by the Company pursuant to the terms of the
Purchase Agreement, any of the New Auto Transaction Documents or any
of the Carpet Transaction Documents
1.07 Section 7.07(a) of the Credit Agreement is hereby
amended to insert the following phrase prior to the period at the end thereof:
; provided that the Company shall be permitted to dissolve JCC at any
time after (i) the payment or receipt of all purchase price adjustments
pursuant to Section 2.3 of the Carpet Asset Transfer Agreement and (ii)
the transfer of all remaining assets of JCC, including, without
limitation, the Holdco Note, the Holdco Preferred Stock and the Holdco
Warrants, pursuant to Section 7.02(a) on terms satisfactory to the
Agent and the Collateral Agent
1.08 The last sentence of Section 7.07(c) of the Credit
Agreement is hereby deleted in its entirety and the following sentence is
substituted therefor:
The Company agrees that JPS Auto and JCC shall not engage in any
business or own or acquire any assets (other than, in the case of JCC,
the Holdco Note, the Holdco Preferred Stock and the Holdco Warrants).
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1.09 Section 7.16 of the Credit Agreement is hereby
deleted in its entirety and the following paragraph is substituted therefor:
7.16. Amendment of Transaction Documents.
Neither the Company nor any of its Subsidiaries shall amend, modify,
terminate or supplement any of the Transaction Documents to which they
are a party without the prior written consent of the Requisite Senior
Lenders or, as otherwise provided in this Agreement, without the prior
written consent of the Agent and the Collateral Agent (which consent,
with respect to the Purchase Agreement, the New Auto Transaction
Documents and the Carpet Transaction Documents, shall not be
unreasonably withheld); provided that no such consent shall be
required for any such amendment, modification or supplement which
affects solely a non-material provision or non-material provisions of
one or more New Auto Transaction Documents or Carpet Transaction
Documents in a manner which is not adverse to the Agent, the
Collateral Agent or any of the Senior Lenders.
1.10 Section 8.01 of the Credit Agreement is hereby deleted
in its entirety and the following paragraph is substituted therefor:
8.01. Minimum Net Worth. The Net Worth 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
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Effective Date through
the third fiscal quarter
of Fiscal Year 1994 $310,000,000
The fourth fiscal quarter
of Fiscal Year 1994 268,000,000
The first fiscal quarter
of Fiscal Year 1995 210,000,000
The second fiscal quarter
of Fiscal Year 1995 209,000,000
The third fiscal quarter
of Fiscal Year 1995 208,000,000
The fourth fiscal quarter
of Fiscal Year 1995 205,000,000
The first fiscal quarter
of Fiscal Year 1996 157,435,000
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The second fiscal quarter
of Fiscal Year 1996 158,129,000
The third fiscal quarter
of Fiscal Year 1996 157,563,000
The fourth fiscal quarter
of Fiscal Year 1996 156,172,000
1.11 Section 8.02 of the Credit Agreement is hereby deleted
in its entirety and the following paragraphs are substituted therefor:
8.02. Minimum Total Interest Coverage Ratio. (A) Total
Interest 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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Effective Date through
the third fiscal quarter
of Fiscal Year 1994 1.55:1
The fourth fiscal quarter
of Fiscal Year 1994 1.60:1
The first fiscal quarter
of Fiscal Year 1995 1.65:1
The second fiscal quarter
of Fiscal Year 1995 1.55:1
The third fiscal quarter
of Fiscal Year 1995 1.60:1
The fourth fiscal quarter
of Fiscal Year 1995 1.70:1
The first fiscal quarter
of Fiscal Year 1996 1.56:1
The second fiscal quarter
of Fiscal Year 1996 1.44:1
The third fiscal quarter
of Fiscal Year 1996 1.54:1
The fourth fiscal quarter
of Fiscal Year 1996 1.48:1
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(B) 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, shall not be less than the minimum
ratio set forth opposite such fiscal quarter:
Fiscal Quarter Minimum Ratio
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Effective Date through
the third fiscal quarter
of Fiscal Year 1994 8.80:1
The fourth fiscal quarter
of Fiscal Year 1994 10.00:1
The first fiscal quarter
of Fiscal Year 1995 8.50:1
The second fiscal quarter
of Fiscal Year 1995 6.70:1
The third fiscal quarter
of Fiscal Year 1995 5.50:1
The fourth fiscal quarter
of Fiscal Year 1995 5.00:1
The first fiscal quarter
of Fiscal Year 1996 7.08:1
The second fiscal quarter
of Fiscal Year 1996 6.30:1
The third fiscal quarter
of Fiscal Year 1996 6.37:1
The fourth fiscal quarter
of Fiscal Year 1996 6.04:1
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1.12 Section 8.03 of the Credit Agreement is hereby
deleted in its entirety and the following paragraph is substituted therefor:
8.03. Minimum Fixed Charge Coverage Ratio. (A) The Minimum
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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Effective Date through
the third fiscal quarter
of Fiscal Year 1994 0.80:1
The fourth fiscal quarter
of Fiscal Year 1994 0.85:1
The first fiscal quarter
of Fiscal Year 1995 0.85:1
The second fiscal quarter
of Fiscal Year 1995 0.77:1
The third fiscal quarter
of Fiscal Year 1995 0.90:1
The fourth fiscal quarter
of Fiscal Year 1995 0.93:1
The first fiscal quarter
of Fiscal Year 1996 0.85:1
The second fiscal quarter
of Fiscal Year 1996 0.85:1
The third fiscal quarter
of Fiscal Year 1996 0.85:1
The fourth fiscal quarter
of Fiscal Year 1996 0.95:1
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(B) The Operating Company Fixed Charge 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 shall not be less than the minimum
ratio set forth opposite such fiscal quarter:
Fiscal Quarter Minimum Ratio
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Effective Date through
the third fiscal quarter
of Fiscal Year 1994 1.50:1
The fourth fiscal quarter
of Fiscal Year 1994 1.70:1
The first fiscal quarter
of Fiscal Year 1995 1.71:1
The second fiscal quarter
of Fiscal Year 1995 1.46:1
The third fiscal quarter
of Fiscal Year 1995 1.46:1
The fourth fiscal quarter
of Fiscal Year 1995 1.40:1
The first fiscal quarter
of Fiscal Year 1996 1.48:1
The second fiscal quarter
of Fiscal Year 1996 1.56:1
The third fiscal quarter
of Fiscal Year 1996 1.46:1
The fourth fiscal quarter
of Fiscal Year 1996 1.84:1
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1.13 Section 8.05 of the Credit Agreement is hereby
deleted in its entirety and the following paragraph is substituted therefor:
8.05. Minimum Current Ratio. The Current Ratio of the
Company and its Subsidiaries on a consolidated basis shall not be less
than the minimum ratio set forth opposite such fiscal quarter:
Fiscal Quarter Minimum Ratio
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Effective Date through
the third fiscal quarter
of Fiscal Year 1994 1.00:1
The fourth fiscal quarter
of Fiscal Year 1994 1.00:1
The first fiscal quarter
of Fiscal Year 1995 0.85:1
The second fiscal quarter
of Fiscal Year 1995 0.86:1
The third fiscal quarter
of Fiscal Year 1995 0.87:1
The fourth fiscal quarter
of Fiscal Year 1995 0.85:1
The first fiscal quarter
of Fiscal Year 1996 0.77:1
The second fiscal quarter
of Fiscal Year 1996 0.78:1
The third fiscal quarter
of Fiscal Year 1996 0.79:1
The fourth fiscal quarter
of Fiscal Year 1996 0.81:1
1.14 Section 8.06 of the Credit Agreement is hereby
amended to delete the dollar amount "$24,500,000" set forth below opposite
Fiscal Year 1996 and substitute the dollar amount "13,000,000" therefor.
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1.15 Section 10.08(b) of the Credit Agreement is hereby
amended to insert the following phrase prior to the period at the end of the
first sentence thereof:
; or (vii) constituting fixed assets that are financed or
refinanced by Indebtedness permitted by Sections 7.01(v) and
(x)
SECTION 2. Amendments to Schedules to Credit Agreement.
2.01 Schedule 1.01-A to the Credit Agreement is deleted in
its entirety and Exhibit A hereto shall be substituted therefor.
SECTION 3. Consent of the Senior Lenders.
(a) The Senior Lenders hereby consent to the transactions
contemplated by the Carpet Transaction Documents, including, without
limitation, the sale of substantially all of the assets of JCC, subject to
certain liabilities, to Holdco pursuant to the Carpet Asset Transfer Agreement,
and the subsequent transfer of such assets by Holdco to Subco; provided,
however, that the Net Cash Proceeds received by JCC or any Loan Party in
connection with such transactions (including, without limitation, any
adjustments to the purchase price received by JCC pursuant to Section 2.3 of
the Carpet Asset Transfer Agreement) shall be applied to the repayment of the
Obligations pursuant to Section 2.06(b) of the Credit Agreement (without a
corresponding reduction in the Commitments).
(b) The Senior Lenders hereby instruct and direct the Agent
and the Collateral Agent, upon the consummation of the transactions
contemplated by the Carpet Asset Transfer Agreement and the satisfaction of the
conditions precedent in Section 4 hereof, to release all Liens made in favor of
the Agent and/or the Collateral Agent on the Carpet Assets, to terminate the
Subsidiary Security Agreement to which JCC is party and to enter into a
replacement security agreement substantially in the form of such Subsidiary
Security Agreement, to release the Agent and the Collateral Agent as loss payee
or co-insured, as the case may be, on any insurance policies covering the
Carpet Assets, to enter into the Carpet Sale Amendatory Agreement substantially
in the form of Exhibit B hereto and to take all actions as may be appropriate
(including, without limitation, the filing of releases with respect to Uniform
Commercial Code financing statements and the termination of all blocked account
agreements) in connection therewith.
SECTION 4. Conditions Precedent to the Effectiveness of this
Amendment. Section 1.02(c) hereof shall become effective as of the date hereof
solely with respect to calculations of
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EBITDA for the last fiscal quarter of Fiscal Year 1995 on the date that the
Agent shall have received a copy of this Amendment duly executed by each Loan
Party and by the Requisite Senior Lenders. The remaining sections of this
Amendment (including, without limitation, Section 1.02(c) with respect to
calculations of EBITDA for Fiscal Year 1996) shall become effective as of the
date hereof on the date (the "Fourth 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):
4.01 (a) Certain Documents. The Agent shall have
received on or before the Fourth Amendment Effective Date all of the following,
all of which, except as otherwise specifically described below, shall be in
form and substance satisfactory to the Requisite Senior Lenders and in
sufficient copies for each of the Senior Lenders:
(i) This Amendment, executed by the Company, JCC
and each Borrowing Subsidiary, each Senior Lender, the Agent
and the Collateral Agent, together with all exhibits and
schedules thereto;
(ii) A substitute Note payable to each Senior
Lender in a principal amount equal to such Senior Lender's Pro
Rata Share of $118,000,000;
(iii) The Carpet Sale Amendatory Agreement;
(iv) The Carpet Pledge Agreement;
(v) The Carpet Security Agreement;
(vi) The Amended and Restated Contribution Agreement;
(vii) Release of Liens on the trademarks of JCC
created pursuant to the Trademark Security Agreement executed
by JCC;
(viii) Release of Liens on the stock of JPS-U.K.
created pursuant to the Deed of Charge executed by JCC;
(ix) Releases of the Real Property Collateral
Documents, as may be required as a result of the transactions
contemplated by this Amendment, for each parcel of real
property owned by JCC and set forth on Schedule 1 hereto;
(x) Executed copies of each UCC-3 termination
statement signed by the Agent and the Collateral Agent, as
appropriate to be filed in each jurisdiction set forth on
Schedule 2 hereto;
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(xi) Executed copies of each UCC-1 Financing
Statement signed by JCC, the Agent and the Collateral Agent,
as appropriate to be filed in each jurisdiction set forth on
Schedule 3 hereto;
(xii) The Holdco Note to be pledged under the
Carpet Pledge Agreement (duly endorsed in favor of the Agent);
(xiii) Stock certificates representing the Holdco
Preferred Stock and the Holdco Warrants to be pledged under
the Carpet Pledge Agreement (with stock powers and warrant
transfer documents duly executed in blank);
(xiv) A favorable opinion of Weil, Gotshal &
Xxxxxx, counsel to the Loan Parties, International Fabrics,
JPS Auto and JCC, in form and substance satisfactory to the
Requisite Senior Lenders, and a letter entitling the Agent,
the Collateral Agent and the Senior Lenders to rely on any
opinion or opinions delivered by Weil, Gotshal & Xxxxxx in
connection with the Carpet Transaction Documents;
(xv) A copy of each of the Carpet Transaction
Documents, certified as of the Fourth Amendment Effective Date
by the Secretary or an Assistant Secretary of the Company (A)
to be a true, correct and complete copy of each such document
and (B) not to have been amended or rescinded;
(xvi) A certificate of the Secretary or Assistant
Secretary of the Company dated the Fourth Amendment Effective
Date certifying (A) the names and true signatures of the
incumbent officers of the Company authorized to sign this
Amendment and all other Transaction Documents executed by the
Company in connection with this Amendment, (B) the By-Laws of
the Company as in effect on the date of such certification,
(C) the resolutions of the Company's Board of Directors
approving and authorizing the execution, delivery and
performance of this Amendment and the other Transaction
Documents executed in connection with this Amendment to which
it is a party and (D) that there have been no changes in the
Certificate of Incorporation of the Company since the date of
the most recent certification thereof by the Secretary of
State of Delaware delivered to the Agent;
(xvii) A certificate of the Secretary or Assistant
Secretary of JCC dated the Fourth Amendment Effective Date
certifying (A) the names and true signatures of the incumbent
officers of JCC authorized to sign this Amendment and the
other Transaction Documents executed in connection with this
Amendment to which it is a party, (B) the By-laws of JCC as in
effect on the date of such certification, (C) the resolutions
of JCC's Board of Directors approving and authorizing the
execution, delivery and performance of this Amendment and the
other Transaction Documents executed in
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connection with this Amendment to which it is a party and (D)
that there have been no changes in the Certificate of
Incorporation of JCC since the date of the most recent
certification thereof by the Secretary of State of Delaware
delivered to the Agent;
(xviii) A certificate of the Secretary or Assistant
Secretary of each Borrowing Subsidiary, JPS Auto and
International Fabrics dated the Fourth Amendment Effective
Date certifying (A) the names and true signatures of the
incumbent officers of such Borrowing Subsidiary, JPS Auto and
International Fabrics authorized to sign this Amendment and
the other Transaction Documents executed in connection with
this Amendment to which it is a party, (B) the By-laws of such
Borrowing Subsidiary, JPS Auto and International Fabrics as in
effect on the date of such certification, (C) the resolutions
of such Borrowing Subsidiary's, JPS Auto's and International
Fabrics' Board of Directors approving and authorizing the
execution, delivery and performance of this Amendment and the
other Transaction Documents executed in connection with this
Amendment to which it is a party and (D) that there have been
no changes in the Certificate of Incorporation of such
Borrowing Subsidiary, JPS Auto and International Fabrics since
the date of the most recent certification thereof by the
Secretary of State of Delaware delivered to the Agent;
(xix) Good Standing Certificates certified by the
Secretary of State of Delaware relating to the Company, JCC,
International Fabrics, JPS Auto and each Borrowing Subsidiary;
and
(xx) Such additional documentation as the Agent,
the Collateral Agent or the Requisite Senior Lenders may
reasonably require.
(b) Obligations Paid. The Loan Parties and JCC shall
have used the Net Cash Proceeds of the Carpet Sale to make a mandatory
prepayment of Revolving Loans (without a corresponding reduction in the
Commitments).
(c) The Carpet Sale. The Agent, the Collateral Agent and
the Requisite Senior Lenders shall be satisfied that: (i) the Carpet Asset
Transfer Agreement and all other Carpet Transaction Documents shall have been
duly approved and executed and delivered by the parties thereto in form and
substance satisfactory to the Agent, the Collateral Agent and the Senior
Lenders, (ii) all conditions precedent to closing under the Carpet Asset
Transfer Agreement and the other Carpet Transaction Documents have been met
(and no modification or waiver of any such condition shall have been made
without the consent of the Agent and the Collateral Agent) and such documents
are, or simultaneously with the execution hereof, will be in full force and
effect, (iii) the sum received by the Company and/or JCC of
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Net Cash Proceeds from the Carpet Sale shall equal at least $22,000,000, (iv)
the Carpet Sale and the transactions contemplated thereby and by this Amendment
(including, without limitation, the application of the gross proceeds and Net
Cash Proceeds of the Carpet Sale, and the application of the proceeds of the
Revolving Loans) do not and will not contravene or constitute a default under
or in respect of the Senior Notes, any Subordinated Indebtedness or any other
Indebtedness of JCC or any of the Loan Parties, (v) the Loan Parties and the
other parties to the Loan Documents and the Carpet Transaction Documents are
(and, after giving effect to the Carpet Sale and the transactions contemplated
thereby and by this Amendment, will be) in compliance with all Requirements of
Law and all material Contractual Obligations and (vi) 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 Carpet Sale and the transactions
contemplated thereby and by this Amendment.
4.02 Each of the representations and warranties made by the
Company or the Borrowing Subsidiaries in or pursuant to the Credit Agreement,
as amended by this Amendment, the Collateral Documents and the other Loan
Documents to which the Company or any of the Borrowing Subsidiaries is a party
or by which the Company or any of the Borrowing Subsidiaries is bound, shall be
true and correct in all material respects on and as of the Fourth Amendment
Effective Date (except any such representations and warranties stated to be
given as of a specific date other than the Fourth Amendment Effective Date).
4.03 All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Amendment shall be satisfactory in all respects in form
and substance to the Agent, the Collateral Agent and each of the Senior
Lenders.
4.04 No Event of Default or Potential Event of Default shall
have occurred and be continuing on the Fourth Amendment Effective Date.
SECTION 5. Representations and Warranties.
5.01 The Carpet Asset Transfer Agreement is in full force and
effect and no material breach or default of any term or provision of any Carpet
Transaction Document by any of the Company and its Subsidiaries or (to the best
knowledge of the Loan Parties) by any other party thereto has occurred (except
for such breaches or defaults thereunder that have been waived by the parties
thereto not in default with the prior consent in writing by the Agent and the
Collateral Agent (which consent shall not have been unreasonably withheld)).
Except as permitted by Section 7.16, no provision of any Carpet Transaction
Document has been waived and no Carpet Transaction Document has been amended,
supplemented or otherwise modified.
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5.02 Each Loan Party hereby represents and warrants to the
Senior Lenders that (a) as of the date hereof no Event of Default or Potential
Event of Default under the Credit Agreement shall have occurred and be
continuing and (b) all of the representations and warranties of the Loan
Parties contained in subsections 4.01(a) through (dd) of the Credit Agreement
and in any other Loan Document (as defined under the Credit Agreement) 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).
SECTION 6. Reference to and Effect on the Loan Documents.
6.01 Upon the effectiveness of this Amendment, on and
after the date hereof, each reference in the Credit Agreement to "this
Agreement", "hereunder", "hereof" or words of like import, and each reference
in the other Loan Documents to the Credit Agreement, shall mean and be a
reference to the Credit Agreement as amended hereby.
6.02 Except as specifically amended above, all of the
terms of the Credit Agreement and all other Loan Documents shall remain
unchanged and in full force and effect.
6.03 The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver
of any right, power or remedy of any Senior Lender, the Agent or the Collateral
Agent under the Credit Agreement or any of the Loan Documents, nor constitute a
waiver of any provision of the Credit Agreement or any of the Loan Documents.
SECTION 7. Costs and Expenses. Each Loan Party agrees to pay
on demand in accordance with the terms of Section 11.03 of the Credit Agreement
all costs and expenses of the Agent in connection with the preparation,
reproduction, execution and delivery of this Amendment and all other Loan
Documents entered into in connection herewith, including the reasonable fees
and out-of-pocket expenses of Sidley & Austin, counsel for the Agent with
respect thereof.
SECTION 8. 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 an original and all of which taken together shall constitute
one and the same original agreement.
SECTION 9. 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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IN WITNESS WHEREOF, this Amendment has been duly executed on
the date set forth above.
JPS TEXTILE GROUP, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Title: EVP-Finance & Secretary
JPS CARPET CORP.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Title: Vice President
JPS ELASTOMERICS CORP.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Title: Vice President
JPS CONVERTER AND INDUSTRIAL CORP.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Title: Vice President
Senior Lenders:
CITIBANK, N.A., as Agent and as a Senior Lender
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Title: Attorney in Fact
GENERAL ELECTRIC CAPITAL CORPORATION,
as Collateral Agent and as a Senior Lender
By: /s/ Xxxx Luck
-------------------------------------
Title: Vice President GE Capital
Commercial Finance, Inc.
XXXXXX FINANCIAL, INC.
By: /s/Xxxxx Xxxx
-------------------------------------
Title:
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THE BANK OF NEW YORK COMMERCIAL CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------------
Title: VP
NATIONSBANK OF GEORGIA, N.A.
By: /s/ Xxxxx X'Xxxxxx
-------------------------------------
Title: SVP
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