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EXHIBIT 10
FOURTH AMENDMENT TO CREDIT FACILITY AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT FACILITY AGREEMENT dated as of
February 29, 2000 (this "Fourth Amendment") is entered into among JPS
Industries, 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"), Bank of America,
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,
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 "Fourth 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 "Fixed Asset Portion" in Section 1.01 is amended
to read in full as follows:
"Fixed Asset Portion" shall mean $37,000,000; 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),
the
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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; and (iii) in
the event of a Permitted Disposition, an amount equal to fifty percent
(50%) of the Net Cash Proceeds from such disposition; (iv) the amount
of Net Cash Proceeds from sales of assets (other than in connection
with a Permitted Disposition); (v) in the event of the receipt by any
Loan Party of any Net Cash Proceeds of Equity Issuances, the lesser of
(A) the amount of such Net Cash Proceeds and (B) $25,000,000; and
provided further, however, the Fixed Asset Portion shall be reduced on
the last day of each fiscal quarter of the Company ending during each
Fiscal Year set forth below by the amount set forth opposite such
fiscal quarter:
Fiscal Quarter Amount
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First Fiscal Quarter 2000 $3,750,000
Second Fiscal Quarter 2000 3,750,000
Third Fiscal Quarter 2000 3,750,000
Fourth Fiscal Quarter 2000 3,750,000
First Fiscal Quarter 2001 1,750,000
Second Fiscal Quarter 2001 750,000
Third Fiscal Quarter 2001 750,000
Fourth Fiscal Quarter 2001 750,000
First Fiscal Quarter 2002 750,000
Second Fiscal Quarter 2002 750,000
Third Fiscal Quarter 2002 750,000
Fourth Fiscal Quarter 2002 750,000
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 immediately preceding proviso, which
deductions from such specified amounts of reductions in said proviso
shall be made in the direct order of the dates, beginning in such
fiscal month, specified for such reductions in said proviso."
(b) The definition of "EBITDA" in Section 1.01 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
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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, (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
quarter of Fiscal Year 2000 and (H) the amount of the non-cash stock
option expense; minus (ii) gains (or plus losses) from asset sales
calculated pursuant to GAAP for such period."
(c) The definition of "Revolving Credit Facility" in Section 1.01 is
amended to read in full as follows:
"Revolving Credit Facility" shall mean the revolving credit facility
provided for in Section 2.03 not to exceed, in the aggregate at any
time outstanding, One Hundred Million Dollars ($100,000,000), less all
reductions in such amount effected pursuant to Sections 2.03 and
2.06."
(d) Section 1.01 is amended by adding a new definition for
"Availability" to be inserted after the definition "Assignment and Acceptance"
and before the definition of "Bankruptcy Code" to read as follows"
"Availability" shall mean, at any particular time, the amount by
which (i) the lesser of (A) the Commitments in effect at such time and
(B) the aggregate Borrowing Base of the Borrowing Subsidiaries at such
time (less the reserves contemplated by Section 2.03(f), and such
other reserves as the Agent, in its reasonable judgment, may establish
from time to time), exceeds (ii) the Revolving Credit Accommodations
at such time."
2.2 Article VI. Article VI of the Credit Agreement is amended by
adding a new Section 6.16 at the end thereof to read as follows:
"6.16. Real Estate Documents. On or prior to May 1, 2000, the Company
shall deliver or cause to be delivered the real estate documents set
forth on the Schedule attached hereto."
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2.3 Section 7.05. Section 7.05 of the Credit Agreement is
amended in full to read as follows:
"7.05. Restricted Junior Payments. (a) No Subsidiary of the
Company shall declare or make any Restricted Junior Payment,
except:
(i) Customary Dividends;
(ii) dividends or other distributions from the
Borrowing Subsidiaries or the Pledgors to the Company as to
which the Relevant Condition shall have been satisfied; and
(iii) dividends to the Company to support the
repurchase contemplated by Section 7.05(b) below.
(b) The Company may repurchase its common stock
from the public market in an aggregate amount of up to the sum
of (i) $4,000,000 plus (ii) 100% of the amount of the
Company's Consolidated Net Income determined at the end of
each fiscal quarter, beginning with the first fiscal quarter
of the Fiscal Year 2000 upon the delivery of financial
statements pursuant to Section 5.01(c) so long as the
cumulative amount under this subsection (ii) does not exceed
$4,000,000; provided that prior to and after giving effect to
such repurchase, no Event of Default or Potential Event of
Default has occurred and is continuing and the Borrowers have
Availability of at least $5,000,000."
2.4 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 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 22,000,000
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The first fiscal quarter of Fiscal Year 2002 22,000,000
The second fiscal quarter of Fiscal Year 2002 22,000,000
The third fiscal quarter of Fiscal Year 2002 22,000,000
The fourth fiscal quarter of Fiscal Year 2002 22,000,000
and thereafter"
2.5 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 Ratio
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The first fiscal quarter of Fiscal Year 2000 2.50 to 1.0
The second fiscal quarter of Fiscal Year 2000 2.50 to 1.0
The third fiscal quarter of Fiscal Year 2000 2.75 to 1.0
The fourth fiscal quarter of Fiscal Year 2000 2.75 to 1.0
The first fiscal quarter of Fiscal Year 2001 3.00 to 1.0
The second fiscal quarter of Fiscal Year 2001 3.00 to 1.0
The third fiscal quarter of Fiscal Year 2001 3.25 to 1.0
The fourth fiscal quarter of Fiscal Year 2001 3.25 to 1.0
The first fiscal quarter of Fiscal Year 2002 3.50 to 1.0
The second fiscal quarter of Fiscal Year 2002 3.50 to 1.0
The third fiscal quarter of Fiscal Year 2002 3.50 to 1.0
The fourth fiscal quarter of Fiscal Year 2002 3.50 to 1.0
and thereafter"
2.6 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 for the twelve month period ending on such
day, shall not be less than 1.75 to 1.0."
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 Fourth Amendment Effective Date and after giving effect to this
Fourth Amendment:
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(a) Each of the representations and warranties contained in
this Fourth 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 Fourth Amendment Effective Date, as if then made, other
than representations and warranties which expressly speak as of a
different date; and
(b) No Potential Event of Default or Event of Default has
occurred and is continuing.
4. Fourth Amendment Effective Date. This Fourth Amendment
shall become effective as of the date hereof (the "Fourth Amendment Effective
Date") when each of the following conditions shall have been satisfied:
(a) The Agent shall have received, by facsimile, counterparts
of this Fourth 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.
(b) Each of the representations and warranties contained in
this Fourth 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 Fourth Amendment Effective Date, as if then
made, other than representations and warranties which expressly speak
as of a different date.
(c) No Event of Default or Potential Event of Default shall
have occurred and be continuing on the Fourth Amendment Effective
Date.
5. Reference to and Effect on the Loan Documents.
(a) On and after the Fourth 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 Fourth
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.
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6. Fees, 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 Fourth 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.
7. Miscellaneous. The headings herein are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof.
8. Counterparts. This Fourth 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 FOURTH 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 Fourth Amendment to be executed
by their respective officers thereunto duly authorized as of the date first
above written.
JPS INDUSTRIES, INC.
By: /s/ L. ▇▇▇▇▇ ▇▇▇▇▇
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Title: Secretary
JPS CONVERTER AND INDUSTRIAL CORP.
By: /s/ L. ▇▇▇▇▇ ▇▇▇▇▇
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Title: Secretary
JPS ELASTOMERICS CORP.
By: /s/ L. ▇▇▇▇▇ ▇▇▇▇▇
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Title: Secretary
CITIBANK, N.A., as Agent, as Issuing Bank and as a
Lender
By: /S/ Miles ▇. ▇▇▇▇▇▇▇
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Vice President
BANK OF AMERICA, N.A., as Co-Agent and as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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Title: Vice President
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GENERAL ELECTRIC CAPITAL CORPORATION
By:
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Title:
THE CIT GROUP/COMMERCIAL SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Title: Vice President
FLEET CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President
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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 Fourth
Amendment to the 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/ L. ▇▇▇▇▇ ▇▇▇▇▇
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Title: Secretary
JPS AUTO INC.
By: /s/ L. ▇▇▇▇▇ ▇▇▇▇▇
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Title: Secretary
INTERNATIONAL FABRICS, INC.
By: /s/ L. ▇▇▇▇▇ ▇▇▇▇▇
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Title: Secretary
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