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                                                                   EXHIBIT 10.40

                                AMENDMENT NO. 1

         AMENDMENT NO. 1 (this "Amendment"), dated as of February 8, 1999, to
the Asset Purchase Agreement (the "Agreement"), dated as of January 11, 1999,
is by and between JPS Converter and Industrial Corp. ("Seller") and Belding
Hausman Incorporated ("Purchaser").

                                    RECITALS

         WHEREAS, Seller and Purchaser have agreed to amend the Agreement upon
the terms and conditions contained herein;

         WHEREAS, capitalized terms used herein which are not otherwise defined
herein shall have the respective meanings ascribed thereto in the Agreement.

         NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:

         1. Amendment to the Agreement. On and after the date first written
above (the "Effective Date"), the Agreement is hereby amended in its entirety
as follows:

                  (a) Definitions. Section 1.1 of the Agreement is hereby
         amended as follows:

                  (i) the definition of "Assets" is amended to read in its
         entirety as follows:

                  "Assets" means all of Seller's rights, title and interests in
and to all of the properties, assets and rights constituting the Business
(other than the Excluded Assets) on the Closing Date, consisting of the
following:

                  (a)      all Contract Rights;

                  (b)      all Owned Real Property;

                  (c)      all Fixed Assets;

                  (d) all of Seller's rights and obligations under the Personal
         Property Leases;

                  (e)      all Inventory;

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                  (f)      to the extent transferable, all Permits; and

                  (g) all Books and Records, including books of account,
records, files, invoices, manuals, sales, marketing and advertising materials,
customer and supplier files, personnel files, equipment maintenance records,
equipment warranty information, material, specifications and drawings,
equipment drawings, customer specifications, sales, distribution and purchase
correspondence, trade association memberships and all other similar data,
manuals and property, in each case relating solely to the Business;

provided, however, that the Assets shall also include all other assets located
at the Boger City Plant as of the Closing Date (other than the Excluded
Assets).

                                    (ii) the definition of "Assumed
                  Liabilities" is amended in its entirety as follows:

                           ""Assumed Liabilities" shall mean the following
                           liabilities and obligations of Seller: (i) all
                           duties and obligations under the contracts and
                           commitments set forth on Schedule 4.6 to the extent
                           that such duties and obligations accrue after the
                           Closing Date, (ii) liabilities described in Section
                           6.1 hereof in respect of the Transferred Employees
                           and (iii) all Environmental Costs and Liabilities at
                           the Boger City Plant not attributable to Seller or
                           any prior owner or operator of the Business or which
                           were not violations of Environmental Laws in effect
                           as of or prior to the Closing."

                                    (iii) the definition of "Closing Statement"
                  is amended in its entirety as follows:

                           "Closing Statement" means the audited statement
                           which shall set forth Inventory as of the Closing
                           Date, net of appropriate reserves, calculated in
                           accordance with GAAP and on a basis consistent with
                           the October 31, 1998 and 1997 Statement.

                           (b) Section 2.1(b) of the Agreement is hereby amended
                  in its entirety as follows:

                           "Purchaser hereby agrees to assume and pay, perform
                           and discharge as and when due the Assumed
                           Liabilities. Purchaser expressly shall not assume or
                           pay for the Excluded Liabilities, including, without
                           limitation, liabilities relating to (A) the Excluded
                           Assets, (B) income or franchise Taxes imposed on net
                           income or sales or real property taxes incurred by
                           Seller or relating to the Assets for any taxable
                           period ending on or prior to the Closing Date, (C)
                           any liability for purchase money debt, debt for
                           borrowed money or a guaranty in respect thereof,
                           except to the extent such liabilities are reflected
                           on the Closing Statement, (D) (1) liabilities assumed
                           by Seller pursuant to Section 6.1 hereof and (2)
                           liabilities incurred or accrued prior to the Closing
                           Date under any employee benefit plan, policy and
                           arrangement covering or providing benefits to the
                           Employees and (E) all Accounts Payable."

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                           (c) Section 2.2(a) of the Agreement is hereby
                  amended in its entirety as follows:

                                    "(a) On the Closing Date, as consideration
                           for the sale, conveyance, transfer, assignment and
                           delivery of the Assets (i) Purchaser shall pay to
                           Seller in cash an amount equal to $8,391,037 (which
                           amount includes an amount equal to $900,000 of
                           Accounts Payable to be paid by Seller) (the
                           "Purchase Price"), subject to adjustment as provided
                           in Section 2.3 hereof; and (ii) Purchaser shall
                           assume the Assumed Liabilities."

                           (d) Section 2.2 of the Agreement is hereby amended
                  to add a new Section (d) as follows:

                                    "(d) Within fifteen (15) days after the
                           Closing, Seller shall deliver to Purchaser (i) an
                           invoice for an amount equal to the net lost
                           opportunity cost incurred by (A) Seller on the one
                           hand, as a result of Seller retaining Accounts
                           Receivable as of the Closing Date, and (B) Purchaser
                           on the other hand, as a result of Seller retaining
                           the Accounts Payable in an amount equal to the lesser
                           of (i) $900,000, or Accounts payable within 30 days
                           of invoice date, in each case calculated in
                           accordance with the methodology set forth in Annex 1
                           hereto) (the "Net Lost Opportunity Price") and (ii) a
                           list of Accounts Receivable as of the Closing Date.
                           Within five (5) business days after receipt of such
                           invoice, Purchaser shall pay to Seller in cash an
                           amount equal to the Net Lost Opportunity Price, in
                           accordance with Section 2.2(b) hereof. Absent
                           manifest error in Seller's calculation of the Net
                           Lost Opportunity Price, the Net Lost Opportunity
                           Price shall be binding upon Purchaser."

                           (e) Section 2.3 of the Agreement is hereby amended 
                  to read in its entirety as follows:

                                    "(a) The Purchase Price shall be increased
                           or decreased (on a dollar for dollar basis), as the
                           case may be, for any increase or decrease in
                           Inventory as set forth on the Closing Statement, if
                           the aggregate value of Inventory as of the Closing
                           Date (net of appropriate reserves, calculated in
                           accordance with GAAP and on a basis consistent with
                           the October 31, 1998 and 1997 


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                           Statement) is: (A) greater than $3,629,541 then
                           Purchaser shall pay to Seller the amount of such
                           excess; (B) less than $3,629,541 then Seller shall
                           pay to Purchaser the amount of such difference; or
                           (C) equal to $3,629,541 then neither Seller nor
                           Purchaser shall owe any amount to the other pursuant
                           to this Section 2.3(a).

                                    (b) As soon as is reasonably practicable
                           following the Closing Date (but no later than 45
                           days following the Closing Date), Seller shall
                           prepare and deliver to Purchaser the Closing
                           Statement which shall set forth the Purchase Price
                           adjustments to be made, if any, in accordance with
                           Section 2.3(a). In connection with the preparation
                           of the Closing Statement, Purchaser shall grant
                           Seller and its accountants, counsel and other
                           representatives, full and complete access to all of
                           the books and records of the Business. The Closing
                           Statement shall be audited by Seller's accountants
                           and shall include a schedule reviewed by such
                           accountants showing the computation of Inventory as
                           of the Closing Date (net of appropriate reserves,
                           calculated in accordance with GAAP and on a basis
                           consistent with the October 31, 1998 and 1997
                           Statement), computed in accordance with the
                           definitions of such terms set forth herein.
                           Concurrently with their delivery of the Closing
                           Statement to Purchaser, Seller shall cause
                           reasonable access to be granted to Purchaser to the
                           work papers, schedules and other documents prepared
                           or used by Seller and its accountants in connection
                           with the preparation of the Closing Statement.
                           Seller shall pay all fees and expenses of its
                           accountants in connection with the preparation of
                           the Closing Statement and the computation of
                           Inventory as of the Closing Date.

                                    (c) Unless Purchaser, within 30 days after
                           receipt of the Closing Statement, gives Seller a
                           notice (the "Dispute Notice") (i) objecting in good
                           faith to the Closing Statement, (ii) setting forth
                           in reasonable detail the items being disputed and
                           the reasons therefor, and (iii) specifying that
                           Purchaser's calculation of Inventory as of the
                           Closing Date is in an amount which differs from that
                           reflected in such Closing 


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                           Statement (the entire amount of such difference
                           being hereinafter referred to as the "Adjusted
                           Amount"), the Inventory as of the Closing Date as
                           set forth in the Closing Statement and the Purchase
                           Price adjustment set forth therein shall be binding
                           and final upon the parties. If a Dispute Notice is
                           given by Purchaser, the parties shall negotiate in
                           good faith with a view to agreeing upon the
                           Inventory as of the Closing Date and the
                           corresponding amount of the adjustment required by
                           paragraph (a) of this Section 2.3. If negotiations
                           between Purchaser and Seller fail to resolve all
                           disputed items within 30 days after the Dispute
                           Notice was given to Seller, the remaining disputed
                           items shall be submitted to KPMG Peat Marwick LLP
                           (the "Arbitrator"). After affording each of Seller
                           and Purchaser and their accountants the opportunity
                           to present its position as to such determination
                           (which opportunity shall not extend for more than 30
                           days from the date the independent public
                           accountants are retained), the accounting firm
                           selected pursuant to this paragraph shall determine
                           the adjustment pursuant to paragraph (a) of this
                           Section 2.3 and such determination shall be final
                           and binding. Each party shall pay its own costs and
                           expenses in connection with the foregoing. The fees,
                           costs and expenses of the Arbitrator shall be borne
                           equally by Seller and Purchaser.

                                    (d) The amount of any Purchase Price
                           adjustment required under this Section 2.3 shall be
                           delivered to Seller or Purchaser, as the case may
                           be, with interest thereon (calculated on the basis
                           of a 360-day year comprised of twelve 30-day
                           months), from and including the Closing Date until
                           paid at an annual rate equal to the base rate of
                           interest of Citibank, N.A. (as such base rate is
                           publicly announced from time to time as the base
                           rate of such bank), at such place in the United
                           States as the party receiving such amount shall
                           designate in writing to the other party and shall be
                           paid in immediately available funds within 30 days
                           after the final determination of such Purchase Price
                           adjustment.



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                                    (e) At the Closing (or after the Closing,
                           to the extent the necessary calculations cannot be
                           made at the Closing), real property taxes, water
                           charges, sewer rents and other utility charges in
                           respect of the Business shall be prorated as of the
                           Closing Date with Seller being responsible for such
                           items relative to periods prior to the Closing Date
                           and Purchaser being responsible for such items
                           relative to periods commencing on or subsequent to
                           the Closing Date. If the Closing shall occur before
                           a new tax rate is fixed, the apportionment of real
                           property taxes shall be upon the basis of the old
                           tax rate for the preceding period applied to the
                           latest assessed valuation."

                           (f) Section 10.1(d) of the Agreement is hereby
                  amended in its entirety as follows:

                                    "(d) by Seller if Purchaser shall not have
                           obtained the commitment letter described in Section
                           6.10(b) hereof by February 10, 1999;"

                           (g) Exhibit C to the Agreement is hereby amended by
                  adding the defined term "Accounts Receivable" to Schedule 1
                  thereto.

                           (h) The Agreement is hereby amended by adding a new
                  Annex 1 to the Agreement in the form attached as Exhibit A
                  hereto. 


                           2. Choice of Law. This Amendment shall be construed
and interpreted, and the rights of the parties determined, in accordance with
the laws of the State of Delaware (without reference to the choice of law
provisions of Delaware law).

                           3. Multiple Counterparts. This Amendment may be
executed 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.

                           4. Effect of Amendment. Except as specifically
amended hereby, the Agreement remains in full force and effect in accordance
with its terms.

                            [SIGNATURE PAGE FOLLOWS]


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                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed on their respective behalf, by their respective
officers thereunto duly authorized, in multiple originals, all as of the day
and year first above written.

                               JPS CONVERTER AND INDUSTRIAL CORP.

                               By  /s/ John Sanders
                                 ----------------------------------------------
                                 Name: John Sanders
                                 Title: Vice President and Assistant Secretary

                               BELDING HAUSMAN INCORPORATED

                               By  /s/ Nancy Zarin
                                 ----------------------------------------------
                                 Name: Nancy Zarin
                                 Title: President and CEO

ACKNOWLEDGED:

JPS Textile Group, Inc.

By:   /s/ John Sanders       
   --------------------------------------------
   Name:  John Sanders
   Title: Executive Vice President - Finance
          and Chief Financial Officer



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                                   Exhibit A

                                                                        ANNEX 1

                   Calculation of Net Lost Opportunity Price

The Net Lost Opportunity Price shall be calculated in accordance with the
following methodology:

Accounts Receivable:

30/360  x  .07  x  $3,908,963 =     $22,802.28

         less

Accounts Payable:

30/360  x          .07  x  $900,000 =                $    5,250

         Net Lost Opportunity Price:                 $17,552.28

Note that the referenced level of accounts receivable ($3,908,963) is as of
October 31, 1998 and is used in this Annex 1 for illustrative purposes only. The
Net Lost Opportunity Price shall be calculated using accounts receivable as of
the Closing Date. Net Lost Opportunity Price shall be calculated using the
lesser of (x) the referenced level of accounts payable ($900,000) or (y)
accounts payable within 30 days of invoice date as of the Closing Date.

Assumptions:

1. Accounts receivable are 30 days from invoice date.

2. Accounts payable are 30 days from invoice date.

3. The interest rate is 7%.




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