Exhibit 10.1
LOAN AND NOTE MODIFICATION AGREEMENT
This Loan and Note Modification Agreement ("AGREEMENT") is executed to
be effective as of the 26th day of April, 2002, among JPS INDUSTRIES, INC.
("BORROWER"), JPS CONVERTER AND INDUSTRIAL CORP. ("GUARANTOR A"), JPS
ELASTOMERICS CORP. ("GUARANTOR B") (Guarantor A and Guarantor B, together,
"GUARANTORS") and WACHOVIA BANK, NATIONAL ASSOCIATION (SUCCESSOR BY MERGER TO
FIRST UNION NATIONAL BANK) ("BANK") and modifies (i) that certain Revolving
Credit and Security Agreement between Borrower, Guarantors and Bank dated as of
May 9, 2001 ("LOAN AGREEMENT") and (ii) that certain Promissory Note dated as of
May 9, 2001, in the original principal amount of Thirty-five Million and no/100
Dollars ($35,000,000.00) from Borrower to Bank ("NOTE").
FACTUAL BACKGROUND
Bank currently has a $35,000,000.00 revolving line of credit loan (the
"LOAN") evidenced by the Note outstanding to Borrower. Borrower has requested a
change in certain of its financial covenants and Bank has agreed to such change
pursuant to the modifications of the terms and conditions set forth in the Loan
Agreement and Note as more particularly described below.
Any capitalized terms used but not otherwise defined herein shall have
the meaning set forth in the Loan Agreement.
NOW THEREFORE Bank, Borrower and Guarantors hereby agree as follows:
1. The Loan Agreement is hereby modified as follows:
a. The term "Bank" as defined on the title page and in
the introductory language of the Loan Agreement is
hereby redefined to mean Wachovia Bank, National
Association successor by merger to First Union
National Bank.
b. SECTION 7(a) of the Loan Agreement is hereby deleted
in its entirety and replaced with the following:
"(a) FUNDED DEBT TO EBITDA RATIO. Borrower shall at
all times maintain, on a consolidated basis, a ratio
of Funded Debt to EBITDA of not more than 2.75 to
1.00 through fiscal quarter ending January 31, 2003,
and of not more than 2.00 to 1.00 at fiscal quarter
ending April 30, 2003 and at all times thereafter.
For the purposes hereof, "Funded Debt to EBITDA"
shall mean (the sum of all Funded Debt) DIVIDED BY
(the sum of earnings before interest, taxes,
depreciation and amortization, on a rolling four
quarters basis).
FIRST AMENDMENT TO LOAN AGREEMENT
PAGE 1 OF 5
"Funded Debt" shall mean, as applied to any Person,
the (sum of all indebtedness for borrowed money
(including, without limitation, capital lease
obligations, subordinated debt (including debt
subordinated to Bank), and unreimbursed drawings
under letters of credit) or evidenced by a note,
bond, debenture or similar instrument of that Person)
LESS the (the sum of operating leases, normal
payables and accruals, deferred warranty revenues,
unfunded benefit obligations and other long term
liabilities and all cash) all as outstanding at the
point of testing. The foregoing shall be calculated
quarterly."
c. Exhibit 1 of the Loan Agreement is modified as
follows:
The definition of the term "Maximum Loan Amount" is
deleted in its entirety and replaced with the
following definition:
"Maximum Loan Amount@ means $27,000,000.00."
2. The Note is hereby modified as follows:
a. The term "Bank" as defined on the front page of the
Note is hereby redefined to mean Wachovia Bank,
National Association successor by merger to First
Union National Bank.
b. The principal amount of the Note is hereby reduced
from $35,000,000.00 to $27,000,000.00.
c. The paragraph "Interest Rate" is hereby deleted in
its entirety and replaced with the following:
"INTEREST RATE. Interest shall accrue on the unpaid
principal balance of this Note from the date of any
advances hereunder at the LIBOR Market Index Rate
plus the Applicable Margin indicated in the matrix
below, as that rate may change from day to day in
accordance with changes in the LIBOR Market Index
Rate ("Interest Rate"). "LIBOR Market Index Rate",
for any day, is the rate for 1 month U.S. dollar
deposits as reported on Telerate page 3750 as of
11:00 a.m., London time, on such day, or if such day
is not a London business day, then the immediately
preceding London business day (or if not so reported,
then as determined by Bank from another recognized
source or interbank quotation)."
FIRST AMENDMENT TO LOAN AGREEMENT
PAGE 2 OF 5
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Tier Funded Debt to EBITDA Ratio Applicable Margin
(as defined in the Loan
Agreement)
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I Less than 1.0 to 1.0 .90%
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II Greater than 1.0 to 1.0 but 1.15%
< 1.25 to 1.0
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III Greater than 1.25 to 1.0 1.25%
but < 1.50 to 1.0
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IV Greater than 1.5 to 1.0 but 1.50%
< 1.75 to 1.0
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V Greater than 1.75 to 1.0 1.75%
but < 2.0 to 1.0
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VI Greater than 2.0 to 1.0 but 2.00%
< 2.25 to 1.0
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VII Greater than 2.25 to 1.0 2.35%
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Testing shall be made based on quarterly financial
statements required to be furnished by Borrower under
SECTION 5.6(b) of the Loan Agreement and shall be
conducted upon Bank's receipt of such financial
statements from Borrower. Changes in the Interest
Rate shall become effective as of the first day of
the first month following Bank's receipt of such
financial statements (the "Change Date"). In addition
to any applicable increase in the Interest Rate
resulting from an Event of Default (as defined in the
Loan Agreement), in the event that Borrower fails
timely to comply with SECTION 5.6(b) of the Loan
Agreement, the Applicable Margin shall be 2.35% as of
the Change Date following such noncompliance, until
cured."
3. From the effective date hereof, any reference to the "Loan
Agreement" or the "Note" in any Loan Document shall mean the Loan Agreement and
the Note as amended by this Agreement.
4. Prior to or at the Closing hereof, Borrower shall meet the
pre-closing requirements set forth in this PARAGRAPH 4 and Lender shall not be
required to make any further advances on the Loan until such pre-closing
requirements are met.
a. There will be no origination or commitment fees
associated with this modification.
b. Borrower shall provide Bank with resolutions of
Borrower and each Guarantor authorizing the
modifications provided for herein and shall provide
Bank with a Secretary's Certificate of No Change as
to the Bylaws and Articles of Incorporation of
Borrower and each Guarantor since the original
closing date of the Loan.
c. Borrower shall provide Bank with such other
documents, instruments or agreements as Bank shall
deem necessary for this modification in its
reasonable discretion.
FIRST AMENDMENT TO LOAN AGREEMENT
PAGE 3 OF 5
5. Borrower and each Guarantor hereby represents and warrants that, at
the time of the execution and delivery of this Agreement it is in compliance
with all of its respective covenants set forth in the Loan Agreement and any
other Loan Documents and that the representations and warranties set forth
therein pertaining to it continue to be true and accurate. Borrower further
represents and warrants that it has been duly authorized by all necessary
corporate action to enter into and bind the Borrower with regard to this
Agreement and to execute any documents necessary to consummate the transaction
contemplated hereby.
6. Borrower and each Guarantor agrees to hold Bank harmless and
indemnify Bank and its successors and assigns from any and all claims or causes
of action arising in connection with this Agreement or otherwise related to the
Loan.
7. Borrower and each Guarantor agrees to pay all costs and expenses
arising from this Agreement including, without limitation, all expenses and fees
of Lender's legal counsel, such amounts being stated on a Statement of
Borrower's Costs dated of even date herewith.
8. Borrower and each Guarantor agrees to execute and deliver to Bank,
promptly upon request from Bank, such other and further documents as may be
reasonably necessary or appropriate to consummate the transactions contemplated
herein.
9. This Agreement may be executed in two (2) or more counterparts, each
of which shall be deemed to be an original, but all of which shall constitute
one and the same instrument.
10. This Agreement is not a novation and, except as otherwise modified
hereby, the terms and provisions of the Loan Agreement, the Note and all Loan
Documents shall remain in full force and effect and shall continue to be secured
by the Collateral with the same force, effect and priority.
11. This Agreement shall be governed by South Carolina law.
12. This Agreement reflects the complete agreement of the parties
hereto as to the matters set forth herein and supercedes all prior negotiations
and oral understandings and is hereby incorporated into the Loan Agreement as if
set forth herein.
[See Signature Page Attached]
FIRST AMENDMENT TO LOAN AGREEMENT
PAGE 4 OF 5
IN WITNESS WHEREOF, the parties have executed this Agreement under seal
to be effective as of the date first written above.
BORROWER:
JPS Industries, Inc.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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(Seal)
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its: Executive Vice President
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Date: April 26, 2002
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GUARANTORS:
JPS Converter and Industrial Corp.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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(Seal)
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its: Secretary
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Date: April 26, 2002
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JPS Elastomerics Corp.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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(Seal)
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its: Secretary
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Date: April 26, 2002
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BANK:
Wachovia Bank, National Association
(successor by merger of First Union
National Bank)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Its: Vice President
Date: 5-10-02
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FIRST AMENDMENT TO LOAN AGREEMENT
PAGE 5 OF 5