EXHIBIT 2.2
JPS AUTOMOTIVE L.P.
AMENDMENT NO.1 TO
EQUITY PURCHASE AGREEMENT
BY AND AMONG
JPSGP INC.,
FOAMEX-JPS AUTOMOTIVE L.P.,
FOAMEX INTERNATIONAL INC.
AND
XXXXXXX & XXXXXX PRODUCTS CO.
Dated as of December 11, 1996
TABLE OF CONTENTS
Page
ARTICLE I. AMENDMENT OF AGREEMENT............................................. 1
Section 1.1. Definitions............................................. 1
Section 1.2. Amendment of Section 2.2. .............................. 1
Section 1.3. Amendment of Section 2.3(g)(iii)........................ 2
Section 1.4. Addition of New Section 3.1(c); Authority of FII........ 2
Section 1.5. Amendment of Section 3.3; Partnership Recapitalization.. 2
Section 1.6. Certain Litigation Matters; Schedule 3.20 and Section 10.8. 3
Section 1.7. New Section 3.33........................................ 3
Section 1.8. Correction of Schedule 5.1.............................. 3
Section 1.9. Amendment of Section 6.12. ............................. 3
Section 1.10. Amendment of Sections 8.1 and 8.6; Addition of FII ..... 4
Section 1.11. Amendment of Section 8.7; FIRPTA........................ 4
Section 1.12. Amendment of Section 8.8 ............................... 4
Section 1.13. New Section 8.14; Additional Undertaking ............... 4
Section 1.14. Amendment of Section 10.2; Limitation on Cramerton Damages 4
Section 1.15. Amendment of Article XIII .............................. 5
Section 1.16. Addition of New Article XIV ............................ 5
ARTICLE II. MISCELLANEOUS PROVISIONS ........................................ 5
Section 2.1. Effect of Amendment .................................... 5
Section 2.2. Expenses. .............................................. 5
Section 2.3. Counterparts............................................ 6
Section 2.4. Governing Law .......................................... 6
Section 2.5. Headings .............................................. 6
Section 2.6. Conflict of Terms ...................................... 6
EXHIBIT EXHIBIT NAME
D-1 Indemnity Agreement
E FIRPTA Certificates
SCHEDULE SCHEDULE NAME
I Article XIV
II SMT Pricing
The Registrant hereby undertakes to furnish supplementally a copy of any
schedule omitted herefrom as permitted by Item 601(b)(2) of Regulation
S-K to the Commission upon request.
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AMENDMENT NO.1 TO EQUITY PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO EQUITY PURCHASE AGREEMENT (the
"Amendment") is made and entered into as of December 11, 1996, by and among
JPSGP INC., a Delaware corporation ("JPSGP"), FOAMEX-JPS AUTOMOTIVE L.P., a
Delaware limited partnership ("FJPS"), FOAMEX INTERNATIONAL INC., a Delaware
corporation ("FII" and, together with JPSGP and FJPS, "Sellers"), and XXXXXXX &
XXXXXX PRODUCTS CO., a Delaware corporation ("Purchaser").
PRELIMINARY STATEMENT
WHEREAS, JPSGP, FJPS and Purchaser entered into an Equity
Purchase Agreement (the "Agreement") dated as of August 28, 1996 relating to the
purchase and sale of all of the partnership interests in JPS Automotive L.P.
(the "Company"); and
WHEREAS, the parties hereto wish to amend the Agreement in the
manner set forth in this Amendment to add FII as a Seller in the Agreement as
further set out herein and to make such other changes as are specified herein.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE
AMENDMENT OF AGREEMENT
Section 1.1 Definitions.
(a) Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed to them in the Agreement.
(b) The following definition set forth in Section 1.1
of the Agreement is amended and restated in its entirety as follows:
"Sellers" means JPSGP, FJPS, and FII.
(c) The following new definition is added to Section
1.1 of the Agreement as follows:
"FII" means Foamex International Inc.
Section 1.2. Amendment of Section 2.2.
(a) Section 2.2(a) is amended by deleting the
"." at the end of such Section, and replacing it with the following:
"and FII shall deliver to Purchaser or its designees certificates
representing a .9999% limited
partnership interest in the Company (the "New LP
Interest"), duly endorsed in blank for transfer or accompanied by
appropriate powers duly executed in blank.
(b) In order to reflect the understanding of the
parties in connection with the termination of the Company's swap
agreement, (i) Section 2.2(b) is hereby amended by changing the figure
"220,000,000 to "220,125,000" and (ii) no asset or liability relating
to such swap agreement, including without limitation any receivable
from Purchaser relating to such swap agreement, will be reflected in
either the Base Line Adjusted Net Assets or the Closing Date Adjusted
Net Assets under the Agreement.
(c) Section 2.2(b) is also amended by deleting the
phrase "of which 99% shall be paid by Purchaser to FJPS and 1% shall be
paid by the Affiliate described in Section 2.2(a) hereof to JPSGP." at
the end of such Section, and replacing it with the following: "of which
99% shall be paid by Purchaser to FJPS, .9999% shall be paid by
Purchaser to FII and .0001% shall be paid by the Affiliate described in
Section 2.2(a) hereof to JPSGP."
Section 1.3. Amendment of Section 2.3(g)(iii). The
second sentence of Section 2.3(g)(iii) is amended and restated in its entirety
as follows: "Any net payment to Sellers shall be made 99% to FJPS, 0.9999% to
FII and .0001% to JPSGP."
Section 1.4. Addition of New Section 3.1(c); Authority
of FII. A new Section 3.1(c) is added to the Agreement as follows:
(a) FII is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
FII has full corporate power and authority to execute and deliver this
Agreement, and the execution and delivery by FII of this Agreement and
the consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part of
FII, and this Agreement constitutes the legal, valid and binding
obligation of FII enforceable against FII in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy,
insolvency, moratorium, or similar laws from time to time in effect
which affect creditors' rights generally and by legal and equitable
limitations on the enforceability of specific remedies.
Section 1.5. Amendment of Section 3.3; Partnership
Recapitalization. The first two sentences of Section 3.3 are deleted and
replaced with the following:
As of August 28, 1996: (a) the partnership equity of the Company is as
follows: (i) the LP Interest, which, except as set forth on Schedule
3.3, is owned solely by
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FJPS, and (ii) the GP Interest, which is owned
solely by JPSGP, and (b) the Company has no other partners other than
FJPS and JPSGP. As of the Closing Date: (a) the partnership equity of
the Company is as follows: (i) the LP Interest, which, except as set
forth on Schedule 3.3, is owned solely by
FJPS, (ii) the New LP Interest, which is owned solely by FII, and (ii)
the GP Interest, which is owned solely by JPSGP, and (b) the Company
has no other partners other than FJPS, FII and JPSGP. FII will have at
the Closing valid and marketable title to the New LP Interest, free
and clear of any Liens, except those arising under this Agreement and
the Partnership Agreement.
Section 1.6. Certain Litigation Matters;
Schedule 3.20 and Section 10.8.
(a) Schedule 3.20 is amended by adding the following
Item 4: "4. Claim set forth in the letter of Ruff, Bond, Xxxx, Xxxx &
XxXxxx, L.L.P. to Mr. Xxxxx Xxxxx, dated October 28, 1996 and any other
claim resulting from or arising out of the Xxxxx Industries fire in
Cramerton, North Carolina which occurred on or about October 19, 1994."
(b) Section 10.8(a) is amended by deleting the
reference to "Item 2" and replacing such reference with a reference to
"Items 2 and 4."
Section 1.7. New Section 3.33. A New Section
3.33 is hereby added to the Agreement which reads in its entirety as
follows: "Section 3.33 Cramerton Claims. As of the Closing Date, to the
actual knowledge of the persons listed on Schedule 1.1, Cramerton has no
claims (including, without limitation, for money owed) against Seiren Co.
Ltd. or any Affiliates or Subsidiaries of Seiren Co. Ltd. other than (x)
as reflected on the Interim Balance Sheet, or (y) for the performance of
contracts to which Seiren is a party listed on the Schedules to the
Agreement."
Section 1.8. Correction of Schedule 5.1. Schedule 5.1 to
the Agreement is hereby amended to delete Item 8 thereof, as of the date of the
Agreement.
Section 1.9. Amendment of Section 6.12. Section
6.12(a)(ii) is amended by adding after the phrase "taking no action" the
following: ", except pursuant to the terms of this Agreement,".
Section 1.10. Amendment of Sections 8.1 and 8.6; Addition
of FII. Sections 8.1 and 8.6 are amended by adding "and FII" after "JPSGP" in
each of such Sections.
Section 1.11. Amendment of Section 8.7; FIRPTA. Section
8.7 of the Agreement is hereby amended to add the following at the end thereof:
"Sellers shall also cause Cramerton
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and Cramerton Management Corporation to deliver a certificate to Purchaser and
to Seiren Co. Ltd., Seiren U.S.A. Corporation and Seiren Automotive Textile
Corporation, dated the Closing Date, pursuant to Section 1445 of the Code
(Foreign Investment in Real Property Tax Act of 1980 affidavit) in substantially
the form of Exhibit E attached hereto."
Section 1.12. Amendment of Section 8.8. Section 8.8 of
the Agreement is hereby amended to add at the end thereof after the words "and
on such other terms as are reasonably satisfactory to Purchaser" the following:
", and such purchase pursuant to such definitive agreements shall have closed
prior to or simultaneously with the Closing."
Section 1.13. New Section 8.14; Additional Undertaking. A
new section 8.14 is hereby added to the Agreement which reads in its entirety as
follows: "Section 8.14. Additional Undertaking. Sellers will provide to Seiren
Co. Ltd., on or prior to the Closing Date, an undertaking in the form of Exhibit
D-1." Exhibit D-1 to the Agreement shall read in its entirety as set forth in
the Exhibit D-1 attached hereto. Purchaser shall cause the Company and its
Subsidiaries and Affiliates to cooperate reasonably with Sellers in connection
with the defense of any claim arising out of the indemnity agreement attached
hereto as Exhibit D-1, including, without limitation, providing access to their
personnel, books and records, and making their personnel reasonably available
for deposition and testimony. Sellers will reimburse the Company and its
Subsidiaries and Affiliates for all reasonable out-of-pocket expenses incurred
in connection with such cooperation.
Section 1.14. Amendment of Section 10.2; Limitation on
Cramerton Damages. The penultimate sentence of Section 10.2(a) of the Agreement
is hereby amended and restated to read in its entirety as follows:
"Notwithstanding anything to the contrary contained in this Agreement, but
subject to the proviso at the end of this sentence, to the extent any Damages
for which Purchaser may claim indemnity (or satisfaction of the Deductible)
pursuant to this Section 10.2 relate to a breach of any of the representations
or warranties contained in Article III (other than Section 3.5) and are due to
Damages suffered by Cramerton (which are not directly suffered by Purchaser or
the Company or any other Subsidiary of the Company other than Cramerton),
Sellers shall only be obligated to indemnify Purchaser and its Affiliates for
(or reduce the remaining portion of the Deductible by) 80% of the total
Damages suffered by Cramerton; provided, however, that if such Damages
relate to a breach which is not also a breach of the representations and
warranties of Seiren U.S.A. Corporation, Seiren Automotive Textile
Corporation and Seiren Co. Ltd. (collectively, "Seiren") in Article III
of that certain Equity Purchase Agreement, dated as of December 11, 1996
between Purchaser and Seiren, then Sellers shall be obligated to indemnify
Purchaser and its Affiliates for (or reduce the
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remaining portion of the Deductible by) 100% of the total Damages
suffered by Cramerton relating to such a breach."
Section 1.15. Amendment of Article XIII. Article XIII is
amended as follows:
(a) All references in Article XIII to "Sellers" shall
be replaced with "JPSGP and FJPS".
(b) Section 13.2 is amended by deleting from the first
sentence the phrase "is the exclusive remedy of Purchaser against
Guarantor and".
(c) Section 13.3 is amending by replacing
"hereunder" with "under this Article XIII."
Section 1.16. Addition of New Article XIV. A new Article
XIV in the form set forth as Schedule I to this Amendment is hereby added to the
Agreement.
ARTICLE II.
MISCELLANEOUS PROVISIONS
Section 2.1. Effect of Amendment. On and after the date
hereof, each reference in the Agreement to "this Agreement", "hereof",
"hereunder" or words of like import referring to the Agreement, shall mean and
be a reference to the Agreement, as amended by this Amendment. The Agreement, as
amended by this Amendment, shall continue to be in full force and effect and is
hereby in all respects ratified and confirmed.
Section 2.2. Expenses. Except as expressly set forth
herein, each party to this Amendment shall bear all of its legal, accounting,
and other expenses incurred by it or on its behalf in connection with the
transactions contemplated by this Amendment.
Section 2.3. Counterparts. This Amendment may be
executed simultaneously in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
Section 2.4. Governing Law. This Amendment shall be
governed by and construed in accordance with the internal laws of the State of
New York, without giving effect to conflicts of law principles.
Section 2.5. Headings. The headings of the several
sections of this Amendment are inserted for convenience only and shall not in
any way affect the meaning or construction of this Amendment.
Section 2.6. Conflict of Terms. In the event of any
inconsistency between the provisions of this Amendment and any
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provision of the Agreement the terms and provisions of this Amendment shall
govern and control.
[The rest of this page is intentionally left blank.]
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IN WITNESS WHEREOF, Sellers and Purchaser have executed and
delivered this Amendment as of the day and year first written above.
SELLERS: FOAMEX-JPS AUTOMOTIVE L.P.
BY: FJGP Inc.
Its: General Partner
BY: (Signature of Xxxxxx X. Xxxxx, Xx.)
Name:
Title:
JPSGP INC.
BY: (Signature of Xxxxxx X. Xxxxx, Xx.)
Name:
Title:
FOAMEX INTERNATIONAL INC.
BY:(Signature of Xxxxxx X. Xxxxx, Xx.)
Name:
Title:
PURCHASER: XXXXXXX & XXXXXX PRODUCTS CO.
BY:(Signature of J. Xxxxxxx Xxxxx)
Name: J. Xxxxxxx Xxxxx
Title: Executive Vice President
and Chief Financial Officer
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Schedule I
ARTICLE XIV
ADDITIONAL PURCHASE PRICE ADJUSTMENTS
Notwithstanding anything to the contrary contained in this Agreement,
Sellers agree to pay to Purchaser the additional purchase price adjustment
set forth in this Article XIV.
Section 14.1 Adjustment to Reflect APV Minivan SMT
Part Margin Variance.
(a) As soon as reasonably practical after June 30, 1997, Purchaser
shall prepare a report (the "Production Report") setting forth the average
cost of production (the "Production Cost") from the Closing Date through
June 30, 1997, for the foam carpet backing part (the "Part") for the
General Motors APV Minivan Program for both the long wheel base model
(the "Long Wheel Base Cost") and the short wheel base model (the "Short
Wheel Base Cost"). The Production Cost shall be limited to the net cost of
foam included in the Part and the cost of die cutting and processing the
Part, excluding attaching costs, and shall be calculated in a manner
consistent with the calculation of Production Costs prior to the Closing
Date. The Production Report shall be prepared in accordance with GAAP
applied on a basis consistent with that used by, and in accordance with
the same accounting principles, policies and practices applied by, the
Company prior to the Closing Date, and shall be accompanied by a
certificate of the chief financial officer of Purchaser to that effect.
(b) Within twenty Business Days after receipt of the Production Report,
Sellers may, by written notice to Purchaser, object to the Production
Report or the Production Costs set forth in the Production Report. If
Sellers object in good faith to the Production Report, or the Production
Costs as set forth in the Production Report, they shall within such twenty
Business Day period deliver written notice of their objection (the
"Production Objection Notice") to Purchaser: (i) objecting in good faith
to the Production Report and/or the Production Costs, (ii) setting forth
the items being disputed and the reasons therefor, and (iii) specifying
Sellers' calculation of the Production Costs. In connection with the
preparation of the Production Objection Notice, Purchaser shall xxxxx
Xxxxxxx' counsel and other representatives reasonable access to all of
the books and records of the Company.
(c) For 30 Business Days after delivery of the Production Objection
Notice, Purchaser and Sellers shall attempt to resolve all disputes
between them regarding the Production Report and the Production Costs. If
Purchaser and Sellers cannot resolve all such disputes within such 30
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Business Day period, the matters in dispute shall be determined by the
Arbiter pursuant to the procedures set forth in Section 2.3(d) and (e).
(d) Within five Business Days after the final determination of the
Production Costs, Sellers shall pay to Purchaser an amount equal to the
sum of (a) the product of (x) the number of long wheel base Parts sold
from the Closing Date through June 30, 1997, and (y) the excess, if any,
of the final Long Wheel Base Cost over $16.77, and (b) the product of (x)
the number of short wheel base Parts sold from the Closing Date through
June 30, 1997, and (y) the excess, if any, of the final Short Wheel Base
Cost over $14.55. In no event shall the amount payable pursuant to this
Section 14.1 exceed $500,000.
Section 14.2 Adjustment to Reflect APV Minivan Gross Margin Loss.
(a) As soon as reasonably practical after December 31, 1997, Purchaser
shall prepare a report (the "Minivan Report") setting forth the gross
margin less selling, general and administrative expense (which shall be
deemed to be $1,304,345) earned by the Company from the sale of carpet
systems for the General Motors APV Minivan program for calendar year 1997
(the "Minivan Income"); provided, however, that in calculating Minivan
Income: the cost of the Part (which shall be calculated consistent with
the calculation of "Total Est. SMT Cost" under the heading "Revised SMT
COST ESTIMATE - 7/11/96" on the attached Schedule II) shall be deemed to
be the lesser of (i) the actual cost of the Part, or (ii) in the case of
the long wheel base Part $17.80 if Purchaser or its Affiliates are making
the Part and $19.65 if Foamex L.P. is supplying the Part, and in the case
of the short wheel base Part $15.58 if Purchaser or its Affiliates are
making the Part and $17.22 if Foamex L.P. is supplying the Part. The
Minivan Report shall be prepared in accordance with GAAP applied on a
basis consistent with that used in, and in accordance with the same
accounting principles, policies and practices applied in, the 1995 audited
statement of operations of the Company included as Schedule 3.6(a) to the
Agreement, and shall be accompanied by a certificate of the chief
financial officer of Purchaser to that effect.
(b) Within twenty Business Days after receipt of the Minivan Report,
Sellers may, by written notice to Purchaser, object to the Minivan Report
or the Minivan Income set forth in the Minivan Report. If Sellers object
in good faith to the Minivan Report, or the Minivan Income as set forth in
the Minivan Report, they shall within such twenty Business Day period
deliver written notice of their objection (the "Minivan Objection
Notice") to Purchaser: (i) objecting in good faith to the Minivan Report
and/or the Minivan Income,
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(ii) setting forth the items being disputed and the reasons therefor, and
(iii) specifying Sellers' calculation of the Minivan Income. In connection
with the preparation of the Minivan Objection Notice, Purchaser shall
xxxxx Xxxxxxx' counsel and other representatives reasonable access to all
of the books and records of the Company.
(c) For 30 Business Days after delivery of the Minivan Objection
Notice, Purchaser and Sellers shall attempt to resolve all disputes
between them regarding the Minivan Report and the Minivan Income. If
Purchaser and Sellers cannot resolve all such disputes within such 30
Business Day period, the matters in dispute shall be determined by the
Arbiter pursuant to the procedures set forth in Section 2.3(d) and (e).
(d) Within five Business Days after the final determination of the
Minivan Income, Sellers shall pay to Purchaser an amount equal to the
amount, if any, by which the Minivan Income is less than $836,118.45. In
no event shall the amount payable pursuant to this Section 14.2 exceed
$1,200,000.
Section 14.3 Efforts. Purchaser shall cause the Company to use its
commercially reasonable efforts to minimize the Production Costs and maximize
the Minivan Income.
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