<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
Commission file numbers 1-11432; 1-11436
FOAMEX L.P.
FOAMEX CAPITAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 05-0475617
Delaware 22-3182164
- ------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1000 Columbia Avenue
Linwood, PA 19061
- -------------------- -----
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (610) 859-3000
--------------
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) have been subject to such
filing requirements for the past 90 days.
YES __X__ NO _____
Foamex Capital Corporation meets the conditions set forth in General Instruction
H (1) (a) and (b) of Form 10-Q and is therefore filing this form with the
reduced disclosure format.
The number of shares of Foamex Capital Corporation's common stock outstanding as
of August 1, 1996 was 1,000.
Page 1 of 25
Exhibit List on Page 18 of 25
<PAGE>
FOAMEX L.P.
FOAMEX CAPITAL CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. Financial Information:
Item 1. Financial Statements
Foamex L.P.
----------
Condensed Consolidated Statements of Operations - Thirteen Week and Twenty-Six
Week Periods Ended June 30, 1996 and July 2, 1995 3
Condensed Consolidated Balance Sheets as of June 30, 1996 and December 31, 1995 4
Condensed Consolidated Statements of Cash Flows - Twenty-Six Week Periods
Ended June 30, 1996 and July 2, 1995 5
Notes to Condensed Consolidated Financial Statements 6
Foamex Capital Corporation
--------------------------
Balance Sheets as of June 30, 1996 and December 31, 1995 11
Notes to Balance Sheets 12
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 13
Part II. Other Information 18
Exhibit List 18
Signatures 25
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FOAMEX L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
<TABLE>
<CAPTION>
13 Week Periods Ended 26 Week Periods Ended
--------------------- ---------------------
June 30, July 2, June 30, July 2,
1996 1995 1996 1995
-------- ------- -------- -------
(thousands)
<S> <C> <C> <C> <C>
NET SALES $ 240,447 $ 215,350 $ 459,578 $ 434,670
COST OF GOODS SOLD 202,280 182,152 385,380 368,808
--------- --------- --------- ---------
GROSS PROFIT 38,167 33,198 74,198 65,862
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 13,526 14,323 27,127 27,198
--------- --------- --------- ---------
INCOME FROM OPERATIONS 24,641 18,875 47,071 38,664
INTEREST AND DEBT ISSUANCE EXPENSE 10,311 11,442 20,724 22,567
OTHER INCOME, NET 337 166 537 338
--------- --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS
BEFORE PROVISION FOR INCOME TAXES 14,667 7,599 26,884 16,435
PROVISION FOR INCOME TAXES 2,999 974 3,718 2,121
--------- --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS 11,668 6,625 23,166 14,314
--------- --------- --------- ---------
DISCONTINUED OPERATIONS:
OPERATING LOSS FROM DISCONTINUED
OPERATIONS, NET OF INCOME TAX
BENEFITS (567) (161) (230) (498)
LOSS ON DISPOSAL OF DISCONTINUED
OPERATIONS (39,297) -- (39,297) --
--------- --------- --------- ---------
LOSS FROM DISCONTINUED OPERATIONS (39,864) (161) (39,527) (498)
--------- --------- --------- ---------
NET INCOME (LOSS) $ (28,196) $ 6,464 $ (16,361) $ 13,816
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
3
<PAGE>
FOAMEX L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1996 1995
-------- -----------
(thousands)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,438 $ 638
Accounts receivable, net 137,175 113,583
Inventories 79,780 89,952
Other current assets 21,897 22,101
--------- ---------
Total current assets 241,290 226,274
PROPERTY, PLANT AND EQUIPMENT, NET 169,323 169,111
COST IN EXCESS OF ASSETS ACQUIRED, NET 89,706 91,165
DEBT ISSUANCE COSTS, NET 17,629 18,703
NET ASSETS OF DISCONTINUED OPERATIONS 44,017 85,237
OTHER ASSETS 12,868 17,325
--------- ---------
TOTAL ASSETS $ 574,833 $ 607,815
========= =========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Short-term borrowings $ 4,175 $ 2,199
Current portion of long-term debt 8,496 8,511
Accounts payable 64,697 67,658
Accounts payable to related parties 7,976 11,731
Accrued interest 9,293 9,591
Accrued restructuring charges 12,831 18,732
Other accrued liabilities 43,005 41,434
--------- ---------
Total current liabilities 150,473 159,856
--------- ---------
LONG-TERM DEBT 429,848 433,956
--------- ---------
OTHER LIABILITIES 28,963 26,563
--------- ---------
COMMITMENTS AND CONTINGENCIES -- --
--------- ---------
PARTNERS' EQUITY (DEFICIT):
General partner 29 404
Limited partners 28,080 46,080
Note receivable from partner (47,971) (44,444)
Other (14,589) (14,600)
--------- ---------
Total partners' equity (deficit) (34,451) (12,560)
--------- ---------
TOTAL LIABILITIES AND PARTNERS' EQUITY (DEFICIT) $ 574,833 $ 607,815
========= =========
</TABLE>
The accompanying notes are an integral part of the
condensed consolidated financial statements.
4
<PAGE>
FOAMEX L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
<TABLE>
<CAPTION>
26 Week Periods Ended
-------------------------
June 30, July 2,
1996 1995
----------- ----------
(thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $(16,361) $ 13,816
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 10,711 11,264
Amortization of debt issuance costs and debt discount 1,433 1,325
Loss on disposition of discontinued operations 39,297 --
Other operating activities (597) 1,405
Changes in operating assets and liabilities (22,533) (14,061)
Changes in discontinued operations 1,931 (6,288)
-------- --------
Net cash provided by operating activities 13,881 7,461
-------- --------
INVESTING ACTIVITIES:
Capital expenditures (7,798) (9,814)
Acquisition, net of cash acquired -- (7,185)
Other investing activities 1,399 669
Discontinued operations investing activities (900) (3,021)
-------- --------
Net cash used for investing activities (7,299) (19,351)
-------- --------
FINANCING ACTIVITIES:
Net proceeds from short-term borrowings 1,976 4
Net proceeds from revolving loans -- 6,000
Repayment of long-term debt (4,272) (4,810)
Distributions to partners (2,478) (2,241)
Other financing activities (8) (83)
-------- --------
Net cash used for financing activities (4,782) (1,130)
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,800 (13,020)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 638 19,974
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,438 $ 6,954
======== ========
</TABLE>
The accompanying notes are an integral part of the
condensed consolidated financial statements.
5
<PAGE>
FOAMEX L.P. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet as of December 31, 1995 has been
condensed from the audited consolidated balance sheet at that date. The
condensed consolidated balance sheet as of June 30, 1996, and the condensed
consolidated statements of operations for the twenty-six week periods ended June
30, 1996 and July 2, 1995 and the condensed consolidated cash flows for the
twenty-six week periods ended June 30, 1996 and July 2, 1995 have been prepared
by Foamex L.P. and subsidiaries and have not been audited by Foamex L.P.'s
independent accountants. In the opinion of management, all adjustments,
consisting only of normal recurring adjustments, considered necessary for a fair
presentation of the consolidated financial position, results of operations and
cash flows have been included. In addition, the consolidated financial
statements have been restated to reflect the contribution of Foamex Latin
America, Inc. ("Latin America") by Foamex International Inc. ("Foamex
International") as further discussed in Note 4.
In October 1995, the Board of Directors of Foamex International approved a
plan to evaluate the potential reduction of long-term debt with substantially
all of the proceeds from the sale of the home comfort products segment of
Perfect Fit Industries, Inc. ("Perfect Fit") (which comprises substantially all
of the assets of Perfect Fit). On August 1, 1996, Foamex L.P. completed the sale
of Perfect Fit and received approximately $43.4 million of estimated net
proceeds, subject to post-closing adjustments. The condensed consolidated
financial statements have been restated for sidcontinued operations and includes
a net loss of approximately $39.3 million associated with the sale of Perfect
Fit. (See Note 2 below.) Foamex L.P. used $12.0 million from the proceeds of the
sale to repay term loan borrowings, and intends to use the remaining proceeds to
redeem or repurchase its outstanding indebtedness.
Certain information and note disclosures normally included in the financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted in accordance with the rules and regulations of
the Securities and Exchange Commission. These condensed consolidated financial
statements should be read in conjunction with Foamex L.P.'s 1995 consolidated
financial statements and notes thereto as set forth in Foamex L.P.'s Annual
Report on Form 10-K for the fiscal year ended December 31, 1995.
2. DISCONTINUED OPERATIONS
Foamex L.P. completed a transaction on August 1, 1996 in which it sold the
outstanding common stock of Perfect Fit, a wholly-owned subsidiary, for an
adjusted sale price of approximately $45.4 million, subject to post-closing
adjustments. In addition, Perfect Fit made approximately $2.0 million of
payments against its intercompany loan with Foamex L.P.The sale included
substantially all of the net assets of the home comfort products business
segment with a net book value of approximately $81.9 million. Actual and
estimated transaction expenses related to the sale totaled approximately $2.0
million. Foamex L.P. has recorded a loss for discontinued operations of
approximately $39.3 million relating to the sale of Perfect Fit. A valuations
allowance has been provided for the capital loss relating to the sale of Perfect
Fit since Foamex L.P. has determined that capital gain taxable income will more
likely not be sufficient to fully recognize the deferred tax asset relating to
the capital loss carry-foward.
7
<PAGE>
FOAMEX L.P. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
2. DISCONTINUED OPERATIONS (continued)
Summary operating results of Foamex L.P.'s discontinued operations were as
follows:
<TABLE>
<CAPTION>
13 Week Periods Ended 26 Week Periods Ended
--------------------- ---------------------
June 30, July 2, June 30, July 2,
1996 1995 1996 1995
-------- ------- -------- -------
(thousands)
<S> <C> <C> <C> <C>
Sales $ 24,935 $ 23,805 $ 50,097 $ 47,850
Gross profit 3,915 3,853 8,165 8,126
Income (loss) from operations (101) 444 1,123 1,196
Interest and debt issuance expense 1,190 1,209 2,384 2,392
Loss from discontinued operations
before income taxes (1,639) (765) (1,609) (1,195)
Benefit for income taxes (1,072) (604) (1,379) (697)
Loss from discontinued operations,
net of income taxes (567) (161) (230) (498)
</TABLE>
Net assets of Foamex L.P.'s discontinued operations (excluding
intercompany net assets) at June 30, 1996 and December 31, 1995 are as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- ------------
(thousands)
<S> <C> <C>
Current assets $29,932 $31,177
Property, plant and equipment, net 22,312 22,618
Cost in excess of assets acquired, net 39,827 40,333
Other assets 126 306
------- -------
Total assets 92,197 94,434
------- -------
Current liabilities 8,883 9,197
------- -------
Total liabilities 8,883 9,197
------- -------
Net assets $83,314 $85,237
======= =======
</TABLE>
7
<PAGE>
FOAMEX L.P. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
3. INVENTORIES
The components of inventories consist of:
June 30, December 31,
1996 1995
----------- ----------
(thousands)
Raw materials and supplies $39,687 $49,963
Work-in-process 13,939 14,451
Finished goods 26,154 25,538
------- -------
Total $79,780 $89,952
======= =======
4. RELATED PARTY TRANSACTIONS
In April 1996, Foamex International contributed the foam products operations
of Latin America to Foamex L.P. The contribution was accounted for in a manner
similar to a pooling of interest since the entities are under common control.
Accordingly, all periods presented have been restated to reflect the results of
operations and financial position of Latin America. Net sales and net income of
the separate companies for the periods preceding the contribution were:
<TABLE>
<CAPTION>
Foamex L.P. Latin America Eliminations Combined
----------- ------------- ------------ --------
26 Week Period Ended July 2, 1995: (thousands)
<S> <C> <C> <C> <C>
Net sales $431,942 $3,039 $(311) $434,670
======== ======= ====== ========
Net income (loss) $ 14,192 $ (376) $ - $ 13,816
======== ======= ====== ========
</TABLE>
Foamex L.P. has an $87.9 million principal amount note due 2006 from its 98%
limited partner, Foamex-JPS Automotive L.P. ("FJPS"), for $35.3 million (the
"FJPS Note"). The original issue discount of $52.6 million is being amortized
using the weighted average to maturity method over the life of the issue. No
cash interest is payable on the FJPS Note prior to July 2000; rather the FJPS
Note accretes on a daily basis and compounds semiannually at the rate of 15.50%
per annum through June 1996; 15.75% per annum thereafter through June 1997; and
16.00% per annum thereafter through June 2000. Interest will be due semiannually
in cash at 16.00% per annum from July 2000 through the maturity date. The FJPS
Note and related transactions have been classified in partners' equity (deficit)
since the companies are related. Also, the accretion of $3.5 million and $3.0
million for the twenty-six week periods ended June 30, 1996 and July 2, 1995
have been reflected as a direct increase in the FJPS Note and the partners'
capital accounts, thereby excluded from the condensed consolidated statements of
operations.
Foamex L.P. has a supply agreement (the "Supply Agreement") with Foamex
International. Pursuant to the terms of the Supply Agreement, at the option of
Foamex L.P., Foamex International will purchase certain raw materials, which are
necessary for the manufacture of Foamex L.P.'s products, and resell such
materials to Foamex L.P. at a price equal to net cost plus reasonable out of
pocket expenses. Management believes that the terms of the Supply Agreement are
no less favorable than those which Foamex L.P. could have obtained from an
unaffiliated third party. During the thirteen week periods ended June 30, 1996
and July 2, 1995, Foamex L.P. purchased approximately $30.0 million and $22.3
million, respectively, of raw materials under the Supply Agreement. During the
twenty-six week periods ended June 30, 1996 and July 2, 1995, Foamex L.P.
purchased approximately $54.1 million and $49.1 million, respectively, of raw
materials under the Supply Agreement. As of June 30, 1996 and December 31, 1995,
Foamex L.P. had accounts payable to Foamex International of approximately $8.6
million and $11.7 million, respectively, associated with the Supply Agreement.
8
<PAGE>
FOAMEX L.P. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
4. RELATED PARTY TRANSACTIONS (continued)
On July 7, 1996, Trace International Holdings, Inc. ("Trace Holdings") issued
to Foamex L.P. a promissory note for $4.4 million in principal amountplus
accrued interest of $0.4 million, , which is an extension of a promissory note
of Trace Holdings that was due in July 1996. The promissory note is due and
payable on demand or, if no demand is made, on July 7, 1997 and bears interest
at 9.5% payable quarterly in arrears commencing October 1, 1996. The promissory
note is included in the other component of partners' equity (deficit).
5. ENVIRONMENTAL MATTERS
Foamex L.P. has reported to appropriate state authorities that it has found
soil and groundwater contamination in excess of state standards at three
facilities and soil contamination in excess of state standards at four other
facilities. Foamex L.P. has begun remediation and is conducting further
investigations into the extent of the contamination at these facilities and,
accordingly, the extent of the remediation that may ultimately be required. As
of June 30, 1996, Foamex L.P. has environmental accruals of $1.3 million for the
remaining potential remediation costs for these facilities based on engineering
estimates.
Federal regulations require that by 1998 all underground storage tanks
("USTs") be removed or upgraded in most states to meet applicable standards.
Foamex L.P., like many other companies engaged in manufacturing, has USTs that
will require removal. Due to the age of many of Foamex L.P.'s approximately
twelve storage tanks, leakage has occurred from a few of these USTs resulting in
soil and possibly groundwater contamination. Foamex L.P. has accrued costs of
$0.5 million based on engineering estimates that the cost of removing the tanks
and remediation costs associated therewith ranges from approximately $0.4
million to $1.1 million. However, the full extent of contamination and,
accordingly, the actual cost of such remediation cannot be predicted with any
degree of certainty at this time. Foamex L.P. believes that its USTs do not pose
a significant risk of environmental liability because of Foamex L.P.'s
monitoring practices for USTs and conditional approval for permanent in-place
closure for certain USTs. However, there can be no assurance that such USTs will
not result in significant environmental liability in the future. Foamex L.P. has
been designated as a Potentially Responsible Party ("PRP") by the United States
Environmental Protection Agency (the "EPA") with respect to eleven sites, with
an estimated total liability to Foamex L.P. for the eleven sites of less than
approximately $0.2 million. Estimates of total cleanup costs and fractional
allocations of liability are generally provided by the EPA or the committee of
PRP's with respect to the specified site. In each case, the participation of
Foamex L.P. is considered to be immaterial.
As of June 30, 1996, the aggregate environmental liability amounts to $6.1
million, $1.4 million of which is included in current liabilities. In addition,
Foamex L.P. has a receivable of $0.7 million, net of an allowance of
approximately $1.0 million relating to potential disagreements regarding the
scope of indemnification for environmental liabilities from former partners of
Foamex L.P., which is included in current assets. Foamex L.P. believes that
realization of the receivables established for indemnification is probable.
Although it is possible that new information or future developments could
require Foamex L.P. to reassess its potential exposure relating to all pending
environmental matters, management believes that, based upon all currently
available information, the resolution of such environmental matters will not
have a material adverse effect on Foamex L.P.'s operations, financial position,
capital expenditures or competitive position. The possibility exists, however,
that new environmental legislation and/or environmental regulations may be
adopted, or other environmental conditions may be found to exist, that may
require expenditures not currently anticipated and that may be material.
9
<PAGE>
FOAMEX L.P. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
6. LITIGATION
As of August 1, 1996, Foamex L.P. and Trace Holdings were two of multiple
defendants in actions filed on behalf of approximately 4,400 persons in various
United States federal and state courts and one Canadian provincial court by
recipients of breast implants, some of which allege substantial damages, but
most of which allege unspecified damages for personal injuries of various types.
Five of these cases seek to allege claims on behalf of all breast implant
recipients or other allegedly affected parties, but no class has been approved
or certified by the court. In addition, three cases have been filed alleging
claims on behalf of approximately 2,600 residents of Australia, New Zealand,
England, and Ireland. During 1995, Foamex L.P. and Trace Holdings were granted
summary judgments and dismissed as defendants from all cases in the federal
courts of the United States and the state courts of California. Appeals for
these decisions were withdrawn and the decisions are final. In addition, two of
the cases filed on behalf of approximately 900 foreign plaintiffs were dismissed
on the grounds that the cases could not be brought in the United States courts.
This decision is subject to appeal. Foamex L.P. believes that the number of
suits and claimants may increase. Although breast implants do not contain foam,
certain silicone gel implants were produced using a polyurethane foam covering
fabricated by independent distributors or fabricators from bulk foam purchased
from Foamex L.P. or Trace Holdings. Neither Foamex L.P. nor Trace Holdings
recommended, authorized or approved the use of its foam for these purposes.
While it is not feasible to predict or determine the outcome of these actions,
based on management's present assessment of the merits of pending claims, after
consultation with the general counsel of Trace Holdings, management believes
that the disposition of matters that are pending or that may reasonably be
anticipated to be asserted should not have a material adverse effect on either
Foamex L.P.'s or Trace Holdings' consolidated financial position or results of
operations. In addition, Foamex L.P. is also indemnified by Trace Holdings for
any such liabilities relating to foam manufactured prior to the capitalization
of Foamex L.P. in October 1990. Although Trace Holdings has paid Foamex L.P.'s
litigation expenses, pursuant to such indemnification, and management believes
Trace Holdings will be in a position to continue to pay such expenses, there can
be no assurance that Trace Holdings will be able to provide such
indemnification. Based on information available at this time with respect to the
potential liability, Foamex L.P. believes that the proceedings should not
ultimately result in any liability that would have a material adverse effect on
the financial position or results of operations of Foamex L.P. If management's
assessment of Foamex L.P.'s liability with respect to these actions is
incorrect, such actions could have a material adverse effect on Foamex L.P.
Foamex L.P. is one of multiple defendants in actions alleging bodily injury
and diminution in property value as a result of alleged violations of Tennessee
hazardous waste regulations at Foamex L.P.'s Morristown, Tennessee facilities.
Recticel Foam Corporation ("RFC") has indemnified Foamex L.P. with respect to
losses arising from certain events, such as this alleged violation, that had
occurred prior to October 2, 1990. Based on information available at this time
with respect to the potential liability, after consultation with the general
counsel of Trace Holdings, Foamex L.P. believes that the proceedings should not
ultimately result in any liability that would have a material adverse effect on
the financial position or results of operations of Foamex L.P. If management's
assessment of Foamex L.P.'s liability with respect to these actions is
incorrect, such actions could have a material adverse effect on Foamex L.P.
Foamex L.P. is party to various other lawsuits, both as defendant and
plaintiff, arising in the normal course of business. It is the opinion of
management that the disposition of these lawsuits will not individually or in
the aggregate, have a material adverse effect on the financial position or
results of operations of Foamex L.P. If management's assessment of Foamex L.P.'s
liability with respect to these actions is incorrect, such actions could have a
material adverse effect on Foamex L.P.'s consolidated financial position.
10
<PAGE>
FOAMEX CAPITAL CORPORATION
(A Wholly-Owned Subsidiary of Foamex L.P.)
BALANCE SHEETS (unaudited)
June 30, December 31,
ASSETS 1996 1995
------- -----------
(thousands)
CASH $1 $1
=== ===
LIABILITIES AND STOCKHOLDER'S EQUITY
COMMITMENTS AND CONTINGENCIES $-- $--
--- ---
STOCKHOLDER'S EQUITY:
Common stock, par value $.01 per share;
1,000 shares authorized, issued and outstanding -- --
Additional paid-in capital 1 1
--- ---
TOTAL STOCKHOLDER'S EQUITY $1 $1
=== ===
The accompanying notes are an integral part of the balance sheets.
11
<PAGE>
FOAMEX CAPITAL CORPORATION
(A Wholly-Owned Subsidiary of Foamex L.P.)
NOTES TO BALANCE SHEETS (unaudited)
1. ORGANIZATION
Foamex Capital Corporation ("FCC'), a wholly-owned subsidiary of Foamex
L.P., was formed for the sole purpose of obtaining financing from external
sources.
2. COMMITMENTS AND CONTINGENCIES
FCC is a joint obligor on the following borrowings of Foamex L.P.:
9 1/2% Senior Secured Notes due 2000 ("Senior Secured Notes")
The $116.7 million principal amount Senior Secured Notes were issued on
June 3, 1993 and bear interest at the rate of 9 1/2% payable semiannually on
each June 1 and December 1. The Senior Secured Notes mature on June 1, 2000. In
December 1993, in conjunction with Foamex International Inc's. ("Foamex
International") initial public offering, Foamex L.P. defeased $43.3 million of
Senior Secured Notes. The Senior Secured Notes are collateralized by a
first-priority lien on substantially all of the assets of Foamex L.P. except for
receivables, real estate and fixtures. The Senior Secured Notes may be redeemed
at the option of Foamex L.P., in whole or in part, at any time on or after June
1, 1998, initially at 101.583% of their principal amount, plus accrued interest,
and declining to 100% on or after June 1, 1999. The Senior Secured Notes have
been guaranteed, on a senior secured basis, by General Felt Industries, Inc.
("General Felt") and, on a senior unsecured basis, by Foamex International.
11 1/4% Senior Notes due 2002 ("Senior Notes")
The $150.0 million principal amount Senior Notes bear interest at the rate
of 11 1/4% payable semiannually on each April 1 and October 1. The Senior Notes
mature on October 1, 2002. The Senior Notes may be redeemed at the option of
Foamex L.P., in whole or in part, at any time on or after October 1, 1997,
initially at 104.219% of their principal amount, plus accrued interest, and
declining to 100% on or after October 1, 2000. The Senior Notes have been
guaranteed, on a senior basis, by General Felt and Foamex
International.
11 7/8% Senior Subordinated Debentures due 2004 ("Subordinated Debentures")
The $126.0 million principal amount Subordinated Debentures bear interest
at the rate of 11 7/8% payable semiannually on each April 1 and October 1. The
Subordinated Debentures mature on October 1, 2004. The Subordinated Debentures
may be redeemed at the option of Foamex L.P., in whole or in part, at any time
on or after October 1, 1997, initially at 105.938% of their principal amount,
plus accrued interest, and declining to 100% on or after October 1, 2002. The
Subordinated Debentures are subordinated in right of payment to all senior
indebtedness, including the Senior Secured Notes and the Senior Notes. The
Subordinated Debentures have been guaranteed, on a senior subordinated basis, by
General Felt, Perfect Fit, and Foamex International.
11 7/8% Senior Subordinated Debentures, Series B ("Series B Debentures")
The $7.0 million principal amount Series B Debentures were issued July 30,
1993 by Foamex L.P. in an exchange offer to holders of senior subordinated
debentures issued in connection with the acquisition of General Felt on March
23, 1993. The Series B Debentures have terms substantially similar to the
Subordinated Debentures, except that holders of the Series B Debentures are
entitled to receive proceeds from an asset sale only if any proceeds remain
after an offer to repurchase has been made to the holders of the Subordinated
Debentures. The Series B Debentures have been guaranteed on a senior
subordinated basis by General Felt and Perfect Fit.
12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Foamex L.P. is one of the largest manufacturers of flexible polyurethane
foam and foam products in North America and currently operates in the
polyurethane foam products business segment. The following discussion should be
read in conjunction with the condensed consolidated financial statements and
related notes thereto of Foamex L.P. included in this report.
In October 1995, the Board of Directors of Foamex International Inc.
("Foamex International") approved a plan to evaluate the potential reduction of
long-term debt with substantially all of the proceeds from the sale of the home
comfort products segment of Perfect Fit Industries, Inc. ("Perfect Fit") (which
comprises substantially all of the assets of Perfect Fit). On August 1, 1996,
Foamex L.P. completed the sale of Perfect Fit and received approximately $43.4
million of estimated net proceeds, subject to post-closing adjustments. The
condensed consolidated financial statements have been restated for discontinued
operations and include a net loss of approximately $39.3 million associated with
the sale of Perfect Fit. Foamex L.P. used $12.0 million from the proceeds of the
sale to repay term loan borrowings and intends to use the remaining proceeds to
redeem or repurchase its outstanding indebtedness. (See the notes to the
condensed consolidated financial statements for further discussion.)
In October 1995, the Board of Directors of Foamex International also
approved an operational plan to improve the profitability of Foamex L.P.'s foam
products segment. The operational plan consists of (i) reducing layers of
management through organizational realignment, (ii) the consolidation of
thirteen foam production, fabrication or branch locations, (iii) implementing
additional procedures to reduce manufacturing costs, including process redesign
to eliminate non-value added operations, (iv) reducing selling, general and
administrative expenses through cost containment and (v) reducing inventory
levels through improved forecasting and the effect of the plant consolidations.
The operational plan and other actions are expected to result in estimated
annualized savings in excess of $50.0 million, with expected savings in 1996 of
approximately $30.0 million of which it is estimated that Foamex L.P. realized
approximately $11.0 million of savings under the operational plan through June
30, 1996. The consolidation of the thirteen foam production, fabrication or
branch locations (referred to above) are collectively referred to herein as the
restructuring plan. As of June 30, 1996, Foamex L.P. has closed twelve locations
included in the restructuring plan and it is expected that the restructuring
plan will be substantially completed by year end. There can be no assurance that
Foamex L.P. will be able to successfully implement the foregoing.(1)
Foamex L.P.'s automotive foam customers are predominantly automotive
original equipment manufacturers or other automotive suppliers. As such, the
sales of these product lines are directly related to the overall level of
passenger car and light truck production in North America. Also, Foamex L.P.'s
sales are sensitive to sales of new and existing homes, changes in personal
disposable income and seasonality. Foamex L.P. typically experiences two
seasonally slow periods during each year, in early July and in late December,
due to scheduled plant shutdowns and holidays.
13 Week Period Ended June 30, 1996 Compared to 13 Week Period Ended July 2, 1995
- --------------------------------------------------------------------------------
Results of Operations
Net sales for 1996 were $240.4 million as compared to $215.4 million in
1995 an increase of $25.0 million or 11.6%. Carpet cushion net sales for 1996
increased 7.1% to $76.8 million from $71.7 million in 1995 primarily
- ----------
(1) This paragraph contains forward-looking statements and should be read in
conjunction with the discussion regarding forward-looking statements set
forth on Page 5 of Foamex L.P.'s Annual Report on Form 10-K.
13
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
due to increased selling prices and an increase in net sales volume of certain
carpet cushion products. Cushioning foam net sales for 1996 increased 11.8% to
$83.5 million from $74.7 million in 1995 primarily due to increased net sales
volume of bedding related products and increased selling prices. Automotive foam
net sales for 1996 increased 21.3% to $63.2 million from $52.1 million in 1995
primarily due to a continued increase in net sales of tri-laminates and
composite headliners. Technical foam net sales remained constant at $16.9
million for 1996 and 1995 primarily due to increased selling prices offset by a
decrease in volume associated with customer inventory adjustments.
Gross profit as a percentage of net sales increased to 15.9% for 1996 from
15.4% in 1995 primarily due to selling price increases and improved material and
production efficiencies.
Income from operations increased to $24.6 million for 1996 from $18.9
million in 1995 primarily due to improved gross profit margins as discussed
above and a decrease of $0.8 million in selling, general and administrative
expenses for 1996 as compared to 1995 primarily due to reductions in salary,
traveling, and professional costs.
Income from continuing operations increased to $11.7 million for 1996 from
$6.6 million for 1995 primarily due to the reasons cited above and a decrease in
interest and debt issuance expense. The decrease in interest and debt issuance
expense was primarily due to favorable results from interest rate swap
agreements and a reduction in long-term debt outstanding.
The loss from discontinued operations totaling #39.9 million in 1996 is
the result of the sale of Perfect Fit which was completed on August 1, 1996.
See notes to condensed consolidated financial statements for further discussion.
Operating results for 1996 are expected to be influenced by various
internal and external factors. These factors include, among other things, (i)
the implementation of an operational plan to improve the profitability of the
foam products segment, (ii) the completion of the consolidation of thirteen foam
production, fabrication or branch locations (iii) the potential reduction
of long-term debt with substantially all of the proceeds from the possible sale
of the home comfort products segment, (iv) additional raw material price
increases, if any, by Foamex L.P.'s chemical suppliers and (v) Foamex L.P.'s
success in passing on selling price increases to recover previous raw material
cost increases.(1)
26 Week Period Ended June 30, 1996 Compared to 26 Week Period Ended July 2, 1995
- --------------------------------------------------------------------------------
Results of Operations
Net sales for 1996 were $459.6 million as compared to $434.7 million in 1995 for
an increase of $24.9 million or 5.7%. Carpet cushion net sales were $140.3
million for 1996 as compared to $139.6 million for 1995 primarily due to
increased selling prices late in the second quarter of 1996 offset by a decrease
in net sales volume in the first quarter of 1996. Cushioning foam net sales for
1996 increased 9.4% to $166.0 million from $151.7 million in 1995 primarily due
to increased net sales volume of bedding related products, increased selling
prices and the April 1995 acquisition of a company which manufactures cushioning
products. Automotive foam net sales for 1996 increased 7.8% to $119.3 million
from $110.7 million in 1995 primarily due to a continued increase in net sales
of tri-laminates and composite headliners. Technical foam net sales for 1996
increased 4.0% to $34.0 million from $32.7 million in 1995 primarily due to
increased selling prices and increased net sales volume.
Gross profit as a percentage of net sales increased to 16.1% for 1996 from
15.2% in 1995 primarily due to selling price increases and improved material and
production efficiencies.
- ----------
(1) This paragraph contains forward-looking statements and should be read in
conjunction with the discussion regarding forward-looking statements set
forth on Page 5 of Foamex L.P.'s Annual Report on Form 10-K.
14
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Income from operations increased to $47.1 million for 1996 from $38.7
million in 1995 primarily due to improved gross profit margins as discussed
above. Selling, general and administrative expenses for 1996 were constant with
1995 at $27.2 million primarily due to to reductions in salary, traveling and
professional costs offset by increases during the first quarter of 1996
associated with management realignment in the Operational Plan.
Income from continuing operations increased to $23.2 million for 1996 from
$14.3 million in 1995 primarily due to the reasons cited above and a decrease in
interest and debt issuance expense of $1.8 million. The decrease in interest and
debt issuance expense was primarily due to favorable results from interest rate
swap agreements and a reduction in long-term debt outstanding.
The loss from discontinued operations totaling $39.9 million in 1996 is
the result of the sale of Perfect Fit which was completed on August 1, 1996.
See notes to condensed consolidated financial statements for further
discussions.
Operating results for 1996 are expected to be influenced by various
internal and external factors. These factors include, among other things, (i)
the implementation of an operational plan to improve the profitability of the
foam products segment, (ii) the completion of the consolidation of thirteen foam
production, fabrication or branch locations, (iii) the potential reduction of
long-term debt with substantially all of the proceeds from the sale of the home
comfort products segment, (iv) additional raw material price increases, if any,
by Foamex L.P.'s chemical suppliers and (v) Foamex L.P.'s success in passing on
selling price increases to recover previous raw material cost increases.(1)
Foamex Capital Corporation ("FCC")
FCC is solely a co-issuer of certain indebtedness of Foamex L.P. and FCC
has no other material operations.
Liquidity and Capital Resources
Liquidity
---------
Foamex L.P.'s operating cash requirements consist principally of working
capital requirements, scheduled payments of principal and interest on
outstanding indebtedness and capital expenditures. Foamex L.P. believes that
cash flow from operating activities, cash on hand and periodic borrowings under
its revolving credit agreement, if necessary, will be adequate to meet the
operating cash requirements. The ability to meet operating cash requirements
could be impaired if Foamex L.P. were to fail to comply with any of the
covenants contained in the Foamex L.P. credit facility (the "Foamex L.P. Credit
Facility") and such noncompliance was not cured by Foamex L.P. or waived by the
lenders. Foamex L.P. was in compliance with the covenants of the Foamex L.P.
Credit Facility as of June 30, 1996 and expects to be in compliance for the
foreseeable future. The ability of Foamex L.P. to make distributions to Foamex
International is restricted by the terms of its financing agreements.
Cash and cash equivalents increased $1.8 million during 1996 to $2.4
million at June 30, 1996 from $0.6 million at December 31, 1995 primarily due to
improved operating results offset by capital expenditures and scheduled debt
repayments. Working capital increased $24.4 million for 1996 to $90.8 million at
June 30, 1996 from $66.4 million at December 31, 1995. The net operating assets
and liabilities (comprised of accounts receivable, inventories and accounts
payable) increased $16.4 million to $152.3 million at June 30, 1996 from $135.9
million at December 31, 1995 primarily due to an increase in accounts receivable
and a decrease in accounts payable offset by a decrease in inventories. The
increase in accounts receivable was primarily due to an increase in net sales
for June 1996 as compared to December 1995. The decrease in inventories was the
result of facilities being closed during 1996 associated with the restructuring
plan. The decrease in accounts payable was primarily associated with the
reduction in inventories for the closed facilities.
- ----------
(1) This paragraph contains forward-looking statements and should be read in
conjunction with the discussion regarding forward-looking statements set
forth on Page 5 of Foamex L.P.'s Annual Report on Form 10-K.
15
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Cash Flow from Operating Activities
-----------------------------------
Cash flow from operating activities was $13.9 million and $7.5 million in
1996 and 1995, respectively. Cash flow from operating activities increased for
1996 as compared to 1995 primarily due to improved operating results offset by
an increased use of cash by operating assets and liabilities.
Cash Flow from Investing Activities
-----------------------------------
During 1996, Foamex L.P. spent approximately $7.8 million on capital
expenditures and expects to maintain spending for capital expenditures at this
level for the foreseeable future.
Cash Flow from Financing Activities
-----------------------------------
As of June 30, 1996, there were no outstanding revolving credit borrowings
under the Foamex L.P. Credit Facility with unused availability of approximately
$34.8 million. Borrowings by Foamex Canada Inc. as of June 30, 1996 were $4.2
million under a revolving credit agreement with unused availability of
approximately $0.2 million.
Interest Rate Swap Agreements
Foamex L.P. enters into interest rate swaps to lower funding costs and/or
to manage interest costs and exposure to changing interest rates. Foamex L.P.
does not hold or issue financial instruments for trading purposes. Foamex L.P.
has an interest rate swap agreement with a notional amount of $150.0 million
through June 2000. Under the swap agreement, Foamex L.P. is obligated to make
variable payments based on LIBOR in exchange for fixed payments at a rate of
5.81% per annum by the swap partner payable semiannually in arrears. Interest
expense will be subject to fluctuations in LIBOR. Foamex L.P. is exposed to
credit loss in the event of nonperformance by the swap partner; however, the
occurrence of this event is not anticipated.
Also, Foamex L.P. has an interest rate swap agreement, as amended, for a
notional amount of $150.0 million through December 1999. Under this agreement,
Foamex L.P. has made variable payments based on LIBOR with a cap of 5.5% and a
floor of 4.75% per annum for the six months ended in June 1995, variable
payments based on LIBOR with a floor of 4.75% per annum for the six months ended
in December 1995 and fixed payments at a rate of 5.81% per annum for the six
months ended in June 1996 and is obligated to make fixed payments at a rate of
5.81% per annum, for the remainder of the agreement, in exchange for variable
payments by the swap partner at the rate of LIBOR plus 0.80% per annum for the
six months ended in June 1995, LIBOR plus 0.72% per annum for the six months
ended in December 1995, LIBOR plus 2.45% per annum for the six months ended in
June 1996, LIBOR plus 2.39% per annum for the six months ended in December 1996,
the lower of 12.34% per annum less LIBOR or 7.34% per annum for the six months
ended in June 1997 and December 1997 and 12.34% per annum less LIBOR for the
remainder of the term of the agreement, payable semiannually in arrears. The
swap partner has the ability to terminate the swap agreement in December 1997.
Foamex L.P. is exposed to credit loss in the event of nonperformance by the swap
partner; however, the occurrence of this event is not anticipated. Interest
expense will be subject to fluctuations in LIBOR. The effect of the two interest
rate swaps described above was a favorable adjustment to interest expense of
$1.1 million and $0.2 million for the thirteen weeks ended June 30, 1996 and
July 2, 1995, respectively, and $1.9 million and $0.7 million for the twenty-six
week periods ended June 30, 1996 and July 2, 1995, respectively.
16
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Environmental Matters
Foamex L.P. is subject to extensive and changing environmental laws and
regulations. Expenditures to date in connection with Foamex L.P.'s compliance
with such laws and regulations did not have a material adverse effect on
operations, financial position, capital expenditures or competitive position.
The amount of liabilities recorded by Foamex L.P. in connection with
environmental matters as of June 30, 1996 was $6.1 million. In addition, as of
June 30, 1996, Foamex L.P. has receivables of $0.7 million, net of $0.1 million
allowance relating to potential disagreements regarding the scope of
indemnification for environmental liabilities from former partners. Although it
is possible that new information or future developments could require Foamex
L.P. to reassess its potential exposure to all pending environmental matters,
including those described in the footnotes to Foamex L.P.'s condensed
consolidated financial statements, management believes that, based upon all
currently available information, the resolution of all such pending
environmental matters will not have a material adverse effect on Foamex L.P.'s
operations, financial position, capital expenditures or competitive position.
The possibility exists, however, that new environmental legislation and/or
environmental regulations may be adopted, or other environmental conditions may
be found to exist, that may require expenditures not currently anticipated and
that may be material.
Inflation and Other Matters
There was no significant impact on Foamex L.P.'s operations as a result of
inflation for the periods presented. In some circumstances, market conditions or
customer expectations may prevent Foamex L.P. from increasing the price of its
products to offset the inflationary pressures that may increase its costs in the
future.
Subsequent Event: Sale of Perfect Fit
On August 1, 1996, Foamex L.P. consummated the sale of Perfect Fit for
gross proceeds of $45.4 million, subject to post-closing adjustments. Foamex
L.P. used $12.0 million of the proceeds to repay term loan borrowings under the
Foamex L.P. Credit Facility; and presently intends to use the remaining net
proceeds to reduce or repurchase indebtedness of Foamex L.P.
17
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Reference is made to the description of the legal proceedings
contained in the Foamex L.P. Annual Report on Form 10-K for the fiscal
year ended December 31, 1995 and in Foamex L.P. Quarterly Report
for the fiscal quarter ended March 31, 1996.
The information from Notes 5 and 6 of the condensed consolidated
financial statements of Foamex L.P. and subsidiaries as of June 30,
1996 (unaudited) is incorporated herein by reference.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3.1(a) - Restated Certificate of Incorporation of Foamex International.
3.2(a) - By-laws of Foamex International.
3.3(a) - Fourth Amended and Restated Agreement of Limited Partnership
of Foamex L.P., dated as of December 14, 1993, by and among
FMXI and Trace Foam, as general partners, and Foamex
International, as a limited partner (the "Partnership
Agreement").
3.4(n) - First Amendment to the Fourth Amendment and Restated
Agreement of Limited Partnership of Foamex L.P., dated June 28,
1994.
3.5(a) - Certificate of Incorporation of FMXI.
3.6(a) - By-laws of FMXI.
3.7(e) - Certificate of Incorporation of FCC.
3.8(e) - By-laws of FCC.
3.9(c) - Certificate of Incorporation of GFI Acquisition Corp.
3.10(c) - Certificate of Amendment to the Certificate of Incorporation of
GFI Acquisition Corp.
3.11(c) - Certificate of Amendment to the Certificate of Incorporation of
General Felt.
3.12(n) - Certificate of Incorporation of Perfect Fit.
3.13(n) - By-laws of Perfect Fit.
4.1(b) - Indenture, dated as of June 3, 1993, among Foamex L.P. and
FCC, as joint and several obligors, General Felt, as Guarantor,
and Shawmut Bank, National Association ("Shawmut"), as trustee,
relating to $160,000,000 principal amount of 9 1/2% Senior
Secured Notes due 2000, including form of Senior Secured Note.
18
<PAGE>
4.2(a) - First Supplemental Indenture, dated as of November 18, 1993,
among Foamex International and FCC, as Issuers, General Felt
and Perfect Fit, as Guarantors and Shawmut, as trustee,
relating to the Senior Secured Notes.
4.3(a) - Second Supplemental Indenture, dated as of December 14, 1993,
among Foamex L.P. and FCC, as Issuers, Foamex International,
General Felt, and Perfect Fit, as Guarantors and Shawmut, as
trustee, relating to the Senior Secured Notes.
4.3.1 - Third Supplemental Indenture, dated as of August 1, 1996, by
and among Foamex L.P. and Foamex Capital Corporation, as
Issuers, Foamex International Inc., as parent guarantor,
General Felt Industries, Inc., as guarantor, Perfect Fit
Industries, Inc., as withdrawing guarantor, and Fleet National
Bank, as Trustee, relating to the Senior Secured Notes.
4.4(b) - Company Pledge Agreement, dated as of June 3, 1993, by Foamex
L.P. in favor of Shawmut, as trustee for the holders of the
Senior Secured Notes.
4.5(b) - Company Pledge Agreement, dated as of June 3, 1993, by FCC in
favor of Shawmut, as trustee for the holders of the Senior
Secured Notes.
4.6(b) - Subsidiary Pledge Agreement, dated as of June 3, 1993, by
General Felt in favor of Shawmut, as trustee for the holders of
the Senior Secured Notes.
4.7(b) - Company Security Agreement, dated as of June 3, 1993, by Foamex
L.P. and FCC in favor of Shawmut, as trustee for the holders
of the Senior Secured Notes.
4.8(a) - Foamex L.P. Pledge Agreement, dated November 18, 1993, in
connection with the Senior Secured Notes.
4.9(b) - Subsidiary Security Agreement, dated as of June 3, 1993, by
General Felt in favor of Shawmut, as trustee for the holders
of the Senior Secured Notes.
4.10(b) - Collateral Assignment of Patents and Trademarks, dated as of
June 3, 1993, by Foamex L.P. in favor of Shawmut, as trustee
for the holders of the Senior Secured Notes.
4.11(b) - Collateral Assignment of Patents and Trademarks, dated as of
June 3, 1993, by FCC in favor of Shawmut, as trustee for the
holders of the Senior Secured Notes.
4.12(b) - Collateral Assignment of Patents and Trademarks, dated as of
June 3, 1993, by General Felt in favor of Shawmut, as trustee
for the holders of the Senior Secured Notes.
4.13(a) - Pledge Agreement of Perfect Fit, dated November 18, 1993,
in connection with the Senior Secured Notes.
4.14(c) - Indenture, dated as of October 13, 1992, among Foamex L.P.,
FCC, and The Connecticut National Bank, as trustee, relating
to $150,000,000 principal amount of 11 1/4% Senior Notes due
2002, including form of Senior Note.
4.15(d) - First Supplemental Indenture, dated as of March 23, 1993,
among Foamex L.P. and FCC, as joint and several obligors,
General Felt, as Guarantor, and Shawmut Bank Connecticut,
National Association (formerly The Connecticut National Bank)
("Shawmut Connecticut"), as trustee, relating to the Senior
Notes.
4.16(a) - Second Supplemental Indenture, dated as of November 18, 1993,
among Foamex L.P. and FCC, as Issuers, General Felt, and
Perfect Fit, as Guarantors and Shawmut Connecticut, as trustee,
relating to the Senior Notes.
4.17(a) - Third Supplemental Indenture, dated as of December 14, 1993,
among Foamex L.P. and FCC, as Issuers, Foamex International,
General Felt, and Perfect Fit, as Guarantors and Shawmut
Connecticut, as trustee, relating to the Senior Notes.
4.17.1 - Fifth Supplemental Indenture, dated as of August 1, 1996, by
and among Foamex L.P. and Foamex Capital Corporation, as
Issuers, Foamex International Inc., as parent guarantor,
General Felt Industries, Inc., as guarantor, Perfect Fit
Industries, Inc., as withdrawing guarantor, and Fleet National
Bank, as Trustee, relating to the Senior Notes.
4.18(m) - Fourth Supplemental Indenture, dated as of October 31, 1994,
among Foamex L.P. and FCC as Issuers, Foamex International as
Parent Guarantor, General Felt, and Perfect Fit as Guarantors
and Shawmut Connecticut, as Trustee, relating to the Senior
Notes.
19
<PAGE>
4.19(c) - Indenture, dated as of October 13, 1992, among Foamex L.P.,
FCC, and Shawmut Bank, ("Shawmut"), as trustee, relating to
$126,000,000 principal amount of 117/8% Senior Subordinated
Debentures due 2004, including form of Senior Subordinated
Debenture.
4.20(d) - First Supplemental Indenture, dated as of March 23, 1993,
among Foamex L.P. and FCC, as joint and several obligors,
General Felt, as Guarantor, and Shawmut, as trustee, relating
to the Senior Subordinated Debentures.
4.21(a) - Second Supplemental Indenture, dated as of November 18, 1993,
among Foamex L.P. and FCC, as Issuers, General Felt and Perfect
Fit, as Guarantors and Shawmut, as trustee, relating to the
Senior Subordinated Debentures.
4.21.1 - Fourth Supplemental Indenture, dated as of August 1, 1996, by
and among Foamex L.P. and Foamex Capital Corporation, as
Issuers, Foamex International Inc., as parent guarantor,
General Felt Industries, Inc., as guarantor, Perfect Fit
Industries, Inc., as withdrawing guarantor, and Fleet National
Bank, as Trustee, relating to the Subordinated Debentures.
4.22(b) - Third Supplemental Indenture, dated as of December 14, 1993,
among Foamex L.P. and FCC, as Issuers, Foamex International,
General Felt, and Perfect Fit, as Guarantors and Shawmut, as
trustee, relating to the Senior Subordinated Debentures.
4.23(i) - Indenture, dated as of June 28, 1994, among FJPS and FJCC, as
Issuers, Trace Holdings, as guarantor, and Shawmut Connecticut,
as trustee, relating to $116,745,000 principal amount of Senior
Secured Discount Debentures due 2004, including form of Senior
Secured Discount Debenture.
4.24(m) - Pledge Agreement, dated as of June 28, 1994, made by FJPS in
favor of Shawmut, as collateral agent for the holders of the
Senior Secured Discount Debentures.
4.25(i) - Senior Note, dated June 28, 1994, in the aggregate principal
amount of $87,943,103.14 due July 1, 2006, executed by FJPS to
Foamex L.P.
4.26(m) - Pledge Agreement, dated as of June 28, 1994, among FJPS in
favor of Foamex L.P. to secure its obligations under its Senior
Note due 2006.
4.27(m) - Pledge Agreement, dated as of June 28, 1994, made by
JPS Automotive L.P. in favor of Foamex L.P. to
secure FJPS's obligations under its Senior Note due 2006.
4.28 - Commitment letter, dated July 9, 1996, from The Bank of Nova
Scotia to Foamex Canada.
4.29(d) - Agreement of Undertaking, dated as of December 31, 1991,
between Foamex L.P. and The Bank of Nova Scotia.
4.30 - Third Amended and Restated Credit Agreement, dated as of July
30, 1996, among Foamex L.P., General Felt, Trace
Foam, FMXI, Citibank, N.A., The Bank of Nova Scotia, the
institutions from time to time parties thereto as lenders, the
institutions parties thereto as issuing banks and Citibank,
N.A. and The Bank of Nova Scotia, as Administrative Agents (the
"Credit Agreement").
4.31(a) - Guaranties, dated November 18, 1993, executed by each of
Foamex L.P., General Felt and Perfect Fit, as guarantor,
respectively, in favor of Citibank, N.A., as Administrative
Agent, for the ratable benefit of the lenders and the issuing
banks, guaranteeing the obligations of one another under the
Credit Agreement.
4.32(a) - Guaranty, dated November 18, 1993, executed by FCC in favor
of Citibank, N.A., as Administrative Agent, for the ratable
benefit of the lenders and the issuing banks, guaranteeing the
obligations of Foamex L.P., General Felt and Perfect Fit under
the Credit Agreement.
4.33(i) - Amended and Restated Guaranty, dated as of June 28, 1994,
executed by Foamex International in favor of Citibank, N.A. and
The Bank of Nova Scotia, as Administrative Agents, for the
ratable benefit of the lenders and the issuing banks under the
Credit Agreement.
4.34(p) - First Amendment to Amended and Restated Guaranty, dated June
30, 1995, executed by Foamex International in favor of
Citibank, N.A. and The Bank of Nova Scotia, as Administrative
Agents, for the ratable benefit of the lenders and the issuing
banks under the Credit Agreement.
4.35(p) - Second Amendment to Amended and Restated Guaranty, dated
February 27, 1996, executed by Foamex International in favor of
Citibank, N.A. and The Bank of Nova Scotia, as Administrative
Agents, for the ratable benefit of the lenders and the issuing
banks under the Credit Agreement.
20
<PAGE>
4.36(a) - Security Agreements, dated November 18, 1993, executed by
each of Foamex L.P., General Felt, Perfect Fit, and FCC,
respectively, and Citibank N.A., as Administrative Agent for
the lenders and the issuing banks under the Credit Agreement.
4.37(i) - Amendatory Agreement, dated as of June 28, 1994, among Foamex
L.P., General Felt, Perfect Fit, FCC, and Citibank, N.A., as
collateral agent under the Credit Agreement.
4.37.1 - Amendatory Agreement, dated as of July 30, 1996, among Foamex
L.P., General Felt Industries, Inc., Foamex Capital
Corporation, and Citibank N.A., as collateral agent under the
Credit Agreement.
4.38(a) - Intercreditor Agreement, dated as of November 18, 1993, by
and between Citibank, N.A., as Administrative Agent under the
Credit Agreement and Shawmut, as trustee under the Foamex L.P.
Senior Secured Note Indenture.
4.39(a) - Subordinated Promissory Note, dated as of May 6, 1993, in the
original principal amount of $7,014,864 executed by Foamex L.P.
to Rallis.
4.40(a) - Marely Loan Commitment Agreement, dated as of December 14,
1993, by and between Foamex International and Marely.
4.41(a) - DLJ Loan Commitment Agreement, dated as of December 14, 1993,
by and between Foamex International and DLJ Funding.
4.42 - Promissory Note, dated July 7, 1996, in the aggregate
principal amount of $4,372,516, executed by Trace Holdings to
Foamex L.P.
10.1(b) - Interest Rate and Currency Exchange Agreement, dated as of
June 14, 1993, among Foamex L.P., FCC, and Salomon Brothers
Holdings Company Inc ("Salomon Holdings").
10.2(m) - Swap Agreement, dated as of March 31, 1994, and amended in
November 1994, by and between Foamex L.P. and Citibank, N.A.
10.3(p) - Amended Confirmation Letter Agreement, dated as of February
2, 1996, by and between Foamex L.P. and Citibank, N.A.
10.4(b) - Revised Swap Transaction Letter Agreement, dated as of June
10, 1993, among Foamex L.P., FCC and Salomon Holdings.
10.5(d) - Reimbursement Agreement, dated as of March 23, 1993, between
Trace Holdings and General Felt.
10.6(d) - Shareholder Agreement, dated December 31, 1992, among
Recticel, s.a., Recticel Holding Noord B.V., Foamex L.P.,
Beamech Group Limited, LME-Beamech, Inc., James Brian Blackell,
and Prefoam AG relating to foam technology sharing arrangement.
10.7(e) - Asset Transfer Agreement, dated as of October 2, 1990,
between Trace Holdings and the Foamex L.P. (the "Trace Holdings
Asset Transfer Agreement").
10.8(e) - First Amendment, dated as of December 19, 1991, to the Trace
Holdings Asset Transfer Agreement.
10.9(e) - Amended and Restated Guaranty, dated as of December 19, 1991,
made by Trace Foam in favor of Foamex L.P.
10.10(e) - Asset Transfer Agreement, dated as of October 2, 1990,
between RFC and Foamex L.P. (the "RFC Asset Transfer
Agreement").
10.11(e) - First Amendment, dated as of December 19, 1991, to the RFC
Asset Transfer Agreement.
10.12(e) - Schedule 5.03 to the RFC Asset Transfer Agreement (the "5.03
Protocol").
10.13(d) - The 5.03 Protocol Assumption Agreement, dated as of October
13, 1992, between RFC and Foamex L.P.
10.14(d) - Letter Agreement between Trace Holdings and Recticel
regarding the Recticel guaranty, dated as of July 22, 1992.
10.15(e) - Supply Agreement between Recticel s.a., formerly known as
Gechem s.a., and Foamex L.P., dated as of August 1, 1991.
10.16(i) - Supply Agreement, dated June 28, 1994, between Foamex L.P.
and Foamex International.
21
<PAGE>
10.17(i) - First Amended and Restated Tax Sharing Agreement, dated as of
December 14, 1993, among Foamex L.P., Trace Foam, FMXI, and
Foamex International.
10.18(i) - Tax Sharing Agreement, dated as of June 28, 1994, among FJPS
and Foamex International.
10.19(d) - Trace Foam Management Agreement between Foamex L.P. and Trace
Foam, dated as of October 13, 1992.
10.20(i) - Affirmation Agreement re: Management Agreement, dated as of
December 14, 1993 between Foamex L.P. and Trace Foam.
10.21(d) - Agreement and Plan of Merger, dated as of March 11, 1993,
among Foamex L.P., GFI Acquisition, Inc. and General Felt.
10.22(c) - Agreement and Plan of Merger, dated as of March 1, 1993,
among Great Western, Rallis, Foamex L.P. and Kyoto Merger, Inc.
10.23(e) - Salaried Incentive Plan of Foamex L.P. and Subsidiaries.
10.24(e) - Trace Holdings 1987 Nonqualified Stock Option Plan.
10.25(e) - Equity Growth Participation Program.
10.26(e) - Foamex L.P. Salaried Retirement Plan (formerly known as the
Foamex L.P. Products, Inc. Salaried Employee Retirement Plan),
as amended, effective July 1, 1984.
10.27(m) - General Felt Industries, Inc. Retirement Plan for Salaried
Employees, effective as of January 1, 1995.
10.28(e) - Foamex L.P. 401(k) Savings Plan dated January 1, 1989.
10.29(o) - Foamex/GFI 401(k) Savings Plan dated July 1, 1995.
10.30(a) - Foamex International's 1993 Stock Option Plan.
10.31(a) - Foamex International's Non-Employee Director Compensation Plan.
10.32(a) - Employment Agreement, dated as of May 6, 1993, by and between
Foamex L.P. and Rallis.
10.33(f) - Employment Agreement, dated as of February 1, 1994, by and
between Foamex L.P. and William H. Bundy.
10.34(p) - Employment Agreement, dated as of July 26, 1995, by and
between Foamex L.P. and Salvatore J. Bonanno.
10.35(a) - Stock Exchange Agreement, dated as of October 25, 1993, among
Perfect Fit, the stockholders which are parties thereto, Foamex
International and Foamex L.P. (the "Perfect Fit Stock Exchange
Agreement").
10.36(a) - Amendment No. 1 to the Perfect Fit Stock Exchange Agreement,
dated November 18, 1993.
10.37(a) - 1993 Recticel Master Agreement, dated as of November 4, 1993,
by and among Trace Holdings, Trace Foam, RFC, Foamex
International, Recticel s.a., MGM, FCD Sub and Foamex L.P.
10.38(a) - Exchange Agreement, dated as of December 14, 1993, by and
between Foamex International and RFC.
10.39(a) - Withdrawal Agreement, dated as of December 14, 1993, by and
between Foamex L.P. and RFC.
10.40(a) - 1993 Agreement of Terms, dated as of November 4, 1993, by and
among Trace Holdings, Trace Foam, Foamex L.P., Foamex
International, and GBNY.
10.41(a) - 1993 Marely Master Agreement, dated as of November 4, 1993,
by and among Foamex International, Trace Holdings, Trace Foam,
Foamex L.P., and Marely.
10.42(a) - Exchange Agreement, dated as of December 14, 1993, by and
between Foamex International and Marely.
10.43(a) - Warrant Exchange Agreement, dated as of December 14, 1993, by
and between Foamex International and Marely.
10.44(a) - Redemption and Withdrawal Agreement, dated as of December 14,
1993, by and between Foamex L.P. and Marely.
10.45(a) - 1993 DLJ Master Agreement, dated as of November 4, 1993, by
and among Foamex International, Trace Holdings, Trace Foam, DLJ
Funding, and Foamex L.P.
10.46(a) - Exchange Agreement, dated as of December 14, 1993, by and
between Foamex International and DLJ Funding.
10.47(a) - Warrant Exchange Agreement, dated as of December 14, 1993, by
and between Foamex International and DLJ Funding.
22
<PAGE>
10.48(a) - Redemption and Withdrawal Agreement, dated as of December 14,
1993, by and between Foamex L.P. and DLJ Funding.
10.49(a) - 1993 Rallis Master Agreement, dated as of November 4, 1993,
by and among Foamex International, Trace Holdings, Trace Foam,
Rallis, and Foamex L.P.
10.50(a) - Exchange Agreement, dated as of December 14, 1993, by and
between Foamex International and Rallis.
10.51(a) - Partial Redemption Agreement, dated as of December 14, 1993,
by and between Foamex L.P. and Rallis.
10.52(c) - Exchange Agreement Regarding Admission of Limited Partner and
Put Option, dated as of May 1, 1993, among Rallis, Pegasus
Properties, Foamex L.P., and Trace Holdings.
10.53(a) - Amended and Restated Put Option Agreement, dated as of
December 14, 1993, by and between Trace Holdings and Rallis.
10.54(a) - Exchange Agreement, dated as of December 14, 1993, by and
between Foamex International and Trace Holdings.
10.55(a) - Redemption and Withdrawal Agreement, dated as of December 14,
1993, by and between Foamex L.P. and Trace Holdings.
10.56(a) - Exchange Agreement, dated as of December 14, 1993, by and
between Foamex International and Trace Foam.
10.57(a) - Withdrawal Agreement, dated as of December 14, 1993, by and
between Foamex L.P. and Trace Foam.
10.58(a) - Exchange Agreement, dated as of December 14, 1993, by and
between Foamex International and FCD Sub.
10.59(a) - Redemption and Withdrawal Agreement, dated as of December 14,
1993, by and between Foamex L.P. and FCD Sub.
10.60(a) - Release and Termination Agreement, dated as of December 14,
1993, by and among Trace Holdings, Trace Foam, Foamex L.P.,
RFC, Marely, DLJ, MGM, FCD Sub, Recticel s.a., SGB, GBNY, and
Wilmington Trust Company.
10.61(f) - Stock Purchase Agreement, dated as of December 23, 1993, by
and among Transformacion de Espumas y Fieltros, S. A., the
stockholders which are parties thereto, and Foamex L.P.
10.62(q) - Agreement and Plan of Merger, as amended, dated June 11, 1996,
by and among PFI Subsidiary, Inc., PRL Acquisition Corp.,
Jody B. Vitale, Perfect Fit, General Felt, and Foamex L.P.
- ----------
(a) Incorporated herein by reference to the Exhibit to Foamex International's
Registration Statement on Form S-1, Registration No. 33-69606.
(b) Incorporated herein by reference to the Exhibit to the Registration
Statement of Foamex L.P. and FCC on Form S-4, Registration No. 33-65158.
(c) Incorporated herein by reference to the Exhibit to the Registration
Statement of Foamex L.P., FCC and General Felt on Form S-1, Registration
Nos. 33-60888, 33-60888-01, and 33-60888-02.
(d) Incorporated herein by reference to the Exhibit to the Form 10-K Statement
of Foamex L.P. and FCC for fiscal 1992.
(e) Incorporated herein by reference to the Exhibit to the Registration
Statement of Foamex L.P. and FCC on Form S-1, Registration Nos. 33-49976
and 33-49976-01.
(f) Incorporated herein by reference to the Exhibit to the Form 10-K of Foamex
International for fiscal 1993.
(g) Incorporated herein by reference to the Exhibit to JPS Automotive L.P.'s
Registration Statement on Form S-1, Registration No. 33-75510.
23
<PAGE>
(h) Incorporated by reference to the Exhibit to the Form 10-Q of Foamex
International for the quarterly period ended July 3, 1994.
(i) Incorporated herein by reference to the Exhibit to the Registration
Statement of FJPS, FJCC and Foamex International on Form S-4, Registration
No. 33-82028.
(j) Incorporated herein by reference to the Exhibit to the quarterly report on
Form 10-Q of JPS Automotive L.P. and JPS Automotive Products Corp. for the
fiscal quarter ended October 2, 1994.
(k) Incorporated herein by reference to the Exhibit to the quarterly report on
Form 10-Q of Foamex L.P. and Foamex L.P. Capital Corporation, and General
Felt Industries, Inc. for the fiscal quarter ended October 2, 1994.
(l) Incorporated herein by reference to the Exhibit to the Registration
Statement on Form S-1 of Foamex International, Registration No. 33-85488.
(m) Incorporated herein by reference to the Exhibit to the Form 10-K of Foamex
International for fiscal 1994.
(n) Incorporated herein by reference to the Exhibit to the Form 10-K of Foamex
L.P. for fiscal 1994.
(o) Incorporated herein by reference to the Exhibit to the Form 10-Q of Foamex
L.P. for the quarterly period ended July 2, 1995.
(p) Incorporated herein by reference to the Exhibit to the Form 10-K of Foamex
L.P. for fiscal 1995.
(q) Incorporated herein by reference to the Exhibit to the Form 8-K of
Foamex L.P. dated June 11, 1996.
Certain instruments defining the rights of security holders have
been excluded herefrom in accordance with Item 601(b)(4)(iii) of Regulation S-K.
The registrant hereby agrees to furnish a copy of any such instrument to the
Commission upon request.
(b) Foamex L.P. filed the following Current Reports on Form 8-K:
Form 8-K reporting an event that occurred on June 11, 1996
(execution of Perfect Fit Merger Agreement.)
Form 8-K reporting an event that occurred on August 1, 1996
(sale of Perfect Fit including pro forma financial information).
24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
FOAMEX L.P.
By: FMXI, INC.
General Partner
Date: August 14, 1996 By: /s/ Kenneth R. Fuette
---------------------------------
Kenneth R. Fuette
Chief Financial Officer and
Chief Accounting Officer
FOAMEX CAPITAL CORPORATION
Date: August 14, 1996 By: /s/ Kenneth R. Fuette
---------------------------------
Kenneth R. Fuette
Chief Financial Officer and
Chief Accounting Officer
25
<PAGE>
Exhibit 4.3.1
================================================================================
FOAMEX L.P. AND FOAMEX CAPITAL CORPORATION, as Issuers
FOAMEX INTERNATIONAL INC., as Parent Guarantor
GENERAL FELT INDUSTRIES, INC., as Guarantor, and
PERFECT FIT INDUSTRIES, INC., as Withdrawing Guarantor
AND
FLEET NATIONAL BANK
as Trustee
------------------------
THIRD SUPPLEMENTAL INDENTURE
Dated as of August 1, 1996
------------------------
$160,000,000
9-1/2% Senior Secured Notes
due 2000
================================================================================
<PAGE>
THIRD SUPPLEMENTAL INDENTURE
THIS THIRD SUPPLEMENTAL INDENTURE (the "Third Supplemental Indenture"),
dated as of August 1, 1996, by and among Foamex L.P., a Delaware limited
partnership ("Foamex"), Foamex Capital Corporation, a Delaware corporation
wholly-owned by Foamex ("FCC"; Foamex and FCC collectively referred to as the
"Issuers"), Foamex International Inc., a Delaware corporation ("FII"), as Parent
Guarantor, General Felt Industries, Inc., a Delaware corporation wholly-owned by
Foamex ("GFI"), as Guarantor, Perfect Fit Industries Inc., a Delaware
corporation ("PFI"), as Withdrawing Guarantor, and Fleet National Bank (formerly
known as Shawmut Bank, N.A.), as trustee (the "Trustee").
WHEREAS, Foamex, FCC, GFI and the Trustee executed an indenture, dated
as of June 3, 1993 (the "Original Indenture"), relating to the Issuers' 9-1/2%
Senior Secured Notes due 2000 (the "Securities"); and
WHEREAS, Foamex, FCC, GFI, PFI and the Trustee amended the Original
Indenture by entering into a First Supplemental Indenture dated as of November
18, 1993 in order to add PFI as a Guarantor in accordance with Section 4.07 and
Section 9.01(2) of the Original Indenture; and
WHEREAS, Foamex, FCC, FII, GFI, PFI and the Trustee further amended the
Original Indenture, as supplemented by the First Supplemental Indenture, by
entering into a Second Supplemental Indenture, (the Original Indenture, as
supplemented by the First Supplemental Indenture and the Second Supplemental
Indenture, the "Indenture"), dated as of December 14, 1993 in order to add FII
as a Parent Guarantor in accordance with Section 9.01(4) and Section 11.02 of
the Indenture; and
WHEREAS, Article 9.01 of the Indenture provides for the execution and
delivery by Foamex, FCC, any Guarantor and the Trustee of one or more
supplemental indentures, without the consent of the Holders (as defined in the
Indenture) of the Securities, for the purposes specified therein; and
WHEREAS, in compliance with the terms of the Indenture (including
Section 4.10 thereof), GFI desires to sell all of the common stock of PFI to a
person that is not an Affiliate (as defined in the Indenture) of Foamex,
pursuant to that certain Merger Agreement, dated as of June 11, 1996, by and
among PFI Subsidiary, Inc., a Delaware corporation, PFI Acquisition Corp., a
North Carolina corporation, Jody B. Vitale, PFI, GFI and Foamex; and
<PAGE>
WHEREAS, Foamex, FCC, FII, GFI, PFI and the Trustee desire to amend the
Indenture without the consent of any Securityholder to unconditionally release
and discharge PFI from all its obligations as a Guarantor under the Indenture,
in accordance with Section 12.05 of the Indenture; and
WHEREAS, all conditions precedent provided for in the Indenture
relating to this Third Supplemental Indenture have been complied with;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, Foamex and FCC, jointly and severally, FII, as Parent Guarantor,
GFI, as Guarantor, PFI, as Withdrawing Guarantor, and the Trustee for the
benefit of each other and for the equal and ratable benefit of the Holders of
the Securities agree as follows:
ARTICLE I.
RELEASE AND DISCHARGE
Section 1.1 Release of PFI as a Guarantor. PFI is hereby
unconditionally released and discharged from all of its obligations as a
Guarantor under the Indenture and any Collateral Document to which it is a
party.
Section 1.2 Release of Collateral. The Trustee hereby releases all of
its liens, claims, right, title and interest in and to the 237,564 shares of PFI
evidenced by certificate 16 held by the Trustee pursuant to the Supplement dated
January 3, 1994 to that certain Subsidiary Pledge Agreement, dated June 3, 1993,
between GFI and the Trustee.
Section 1.3 Further Assurances. Upon the request of PFI at any time
after the date hereof, Trustee shall forthwith execute and deliver such further
instruments of release, direction or authorization and other documents as may be
reasonably requested in order to effectuate the purposes of this Agreement.
ARTICLE II.
AMENDMENT OF ARTICLE 1
Section 2.1 Definitional Amendments.
(a) The following definitions contained in Section 1.01 of Article 1 of
the Indenture are hereby amended and restated in their entity as follows:
"Guarantor" means GFI and any other issuer of a Subsidiary
Guaranty.
<PAGE>
"Subsidiary Guaranty" means, individually and collectively,
the Guaranty of GFI pursuant to the terms of Article 12 hereof and any other
Guaranty of the Securities pursuant to Article 12 hereof.
(b) The definition of the term "PFI" is hereby deleted from the
Indenture.
Section 2.2 Mutatis Mutandis Effect. The Indenture is hereby amended
mutatis mutandis to reflect the amendment of each of the defined terms
incorporated in the Indenture pursuant to Section 2.1 above.
ARTICLE III.
MISCELLANEOUS
Section 3.1 Counterparts.
This Third Supplemental Indenture may be executed in counterparts, each
of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
Section 3.2 Severability.
In the event that any provision in this Third Supplemental Indenture
shall be held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 3.3 Headings.
The article and section headings herein are for convenience only and
shall not effect the construction hereof.
Section 3.4 Successors and Assigns.
Any covenants and agreements in this Third Supplemental Indenture by
Foamex, FCC, FII, GFI PFI and the Trustee shall bind their successors and
assigns, whether so expressed or not.
Section 3.5 GOVERNING LAW.
THIS THIRD SUPPLEMENTAL INDENTURE, SHALL BE DEEMED TO BE A CONTRACT
UNDER THE INTERNAL LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE.
<PAGE>
Section 3.6 Effect of Third Supplemental Indenture.
Except as amended by this Third Supplemental Indenture, the terms and
provisions of the Indenture shall remain in full force and effect.
Section 3.7 Trustee.
The Trustee accepts the modifications of the Trust effected by this
Third Supplemental Indenture, but only upon the terms and conditions set forth
in the Indenture. Without limiting the generality of the foregoing, the Trustee
assumes no responsibility for the correctness of the recitals herein contained,
which shall be taken as the statements of Foamex, FCC, FII, GFI and PFI, and the
Trustee shall not be responsible or accountable in any way whatsoever for or
with respect to the validity or execution or sufficiency of this Third
Supplemental Indenture, and the Trustee makes no representation with respect
thereto.
Section 3.8 Definitions.
Capitalized terms used but not defined herein shall have the respective
meanings ascribed to them in the Indenture.
[The remaining portion of this page is intentionally left blank.]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be executed by their duly authorized representative as
of the date hereof.
ATTEST: FOAMEX CAPITAL CORPORATION
_______________________ By: /s/ Philip N. Smith, Jr.
---------------------------------
Name: Philip N. Smith, Jr.
Title: Vice President
ATTEST: FOAMEX L.P.
_______________________ By: FMXI, INC.
its Managing General Partner
By: /s/ Philip N. Smith, Jr.
---------------------------------
Name: Philip N. Smith, Jr.
Title: Vice President
ATTEST: FOAMEX INTERNATIONAL INC.
_______________________ By: /s/ Barry Zimmerman
---------------------------------
Name: Barry Zimmerman
Title: Vice President
ATTEST: FLEET NATIONAL BANK
as Trustee
_______________________ By: /s/ Gerald P. Beezley
---------------------------------
CORPORATE TRUST OFFICER Name: Gerald P. Beezley
Title: Vice President
ATTEST: GENERAL FELT INDUSTRIES, INC.
____________________ By: /s/ Barry Zimmerman
---------------------------------
Name: Barry Zimmerman
Title: Vice President
<PAGE>
ATTEST: PERFECT FIT INDUSTRIES, INC.
____________________ By: /s/ Barry Zimmerman
---------------------------------
Name: Barry Zimmerman
Title: Vice President
<PAGE>
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Philip N. Smith, Jr. the Vice
President of FOAMEX CAPITAL CORPORATION, known to me to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that the same was the act of the said Foamex Capital Corporation, and that
he executed the same as the act of such corporation with the authority of the
board of directors for the purposes and consideration therein expressed and in
the capacity therein stated.
/s/ Christopher Tung
-------------------------------
Notary Public, State of New York
Printed Name:__________________
My Commission Expires:
- ---------------------
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Philip N. Smith, Jr. the Vice
President of FMXI, INC., the Managing General Partner of Foamex L.P., a Delaware
limited partnership, known to me to be the person and officer whose name is
subscribed to the foregoing instrument, and acknowledged to me that the same was
the act of the said FMXI, Inc., and that he executed the same as the act of such
corporation with the authority of the board of directors for the purposes and
consideration therein expressed and in the capacity therein stated.
/s/ Christopher Tung
-------------------------------
Notary Public, State of New York
Printed Name:__________________
My Commission Expires:
- ---------------------
<PAGE>
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Barry Zimmerman the Vice
President of FOAMEX INTERNATIONAL INC., known to me to be the person and officer
whose name is subscribed to the foregoing instrument, and acknowledged to me
that the same was the act of the said Foamex International Inc., and that he
executed the same as the act of such corporation with the authority of the board
of directors for the purposes and consideration therein expressed and in the
capacity therein stated.
/s/ Christopher Tung
-----------------------------
Notary Public, State of New York
Printed Name:__________________
My Commission Expires:
- ---------------------
COMMONWEALTH OF MASSACHUSETTS
COUNTY OF SUFFOLK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Gerald P. Beezley, Vice
President of FLEET NATIONAL BANK (formerly known as Shawmut Bank, N.A.), known
to me to be the person and officer whose name is subscribed to the foregoing
instrument, and acknowledged to me that the same was the act of the said bank
and that he executed the same as the act of such bank for the purposes and
consideration therein expressed and in the capacity therein stated.
/s/ Jane M. Bishop
----------------------------------
Notary Public, State of Massachusetts
Printed Name:_____________________
My Commission Expires:
- ---------------------
<PAGE>
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Barry Zimmerman the Vice
President of GENERAL FELT INDUSTRIES, INC., known to me to be the
person and officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that the same was the act of the said General Felt
Industries, Inc., and that he executed the same as the act of such corporation
with the authority of the board of directors for the purposes and consideration
therein expressed and in the capacity therein stated.
/s/ Christopher Tung
--------------------------------
Notary Public, State of New York
Printed Name:___________________
My Commission Expires:
- ---------------------
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Barry Zimmerman, Vice
President, of PERFECT FIT INDUSTRIES, INC., known to me to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that the same was the act of the said Perfect Fit Industries, Inc., and
that he executed the same as the act of such corporation with the authority of
the board of directors for the purposes and consideration therein expressed and
in the capacity therein stated.
/s/ Christopher Tung
--------------------------------
Notary Public, State of New York
Printed Name:___________________
My Commission Expires:
- ---------------------
<PAGE>
================================================================================
FOAMEX L.P. AND FOAMEX CAPITAL CORPORATION, as Issuers
FOAMEX INTERNATIONAL INC., as Parent Guarantor
GENERAL FELT INDUSTRIES, INC., as Guarantor, and
PERFECT FIT INDUSTRIES, INC., as Withdrawing Guarantor
AND
FLEET NATIONAL BANK
as Trustee
-----------------------------
FIFTH SUPPLEMENTAL INDENTURE
Dated as of August 1, 1996
-----------------------------
$150,000,000
11-1/4% Senior Notes
due 2002
================================================================================
<PAGE>
FIFTH SUPPLEMENTAL INDENTURE
THIS FIFTH SUPPLEMENTAL INDENTURE (the "Fifth Supplemental Indenture"),
dated as of August 1, 1996, by and among Foamex L.P., a Delaware limited
partnership ("Foamex"), Foamex Capital Corporation, a Delaware corporation
wholly-owned by Foamex ("FCC"; Foamex and FCC collectively referred to as the
"Issuers"), Foamex International Inc., a Delaware corporation ("FII"), as Parent
Guarantor, General Felt Industries, Inc., a Delaware corporation wholly-owned by
Foamex ("GFI"), as Guarantor, Perfect Fit Industries Inc., a Delaware
corporation ("PFI"), as Withdrawing Guarantor, and Fleet National Bank (formerly
known as The Connecticut National Bank), as trustee (the "Trustee").
WHEREAS, Foamex, FCC and the Trustee executed an indenture, dated as of
October 13, 1992 (the "Original Indenture"), relating to the Issuers' 11-1/4%
Senior Notes due 2002 (the "Securities"); and
WHEREAS, Foamex, FCC, GFI, and the Trustee amended the Original
Indenture by entering into a First Supplemental Indenture dated as of March 23,
1993 in order to add GFI as a Guarantor in accordance with Section 4.07 and
Section 9.01(2) of the Original Indenture; and
WHEREAS, Foamex, FCC, GFI, PFI and the Trustee further amended the
Original Indenture, as supplemented by the First Supplemental Indenture, by
entering into a Second Supplemental Indenture, dated as of November 18, 1993 in
order to add PFI as a Guarantor in accordance with Section 4.07 and Section
9.01(2) of the Original Indenture, as supplemented by the First Supplemental
Indenture; and
WHEREAS, Foamex, FCC, FII, GFI, PFI and the Trustee further amended the
Original Indenture, as supplemented by the First Supplemental Indenture and the
Second Supplemental Indenture, by entering into a Third Supplemental Indenture,
dated as of December 14, 1993 in order to add FII as a Parent Guarantor in
accordance with Section 9.01(4) and Section 11.02 of the Original Indenture, as
supplemented by the First Supplemental Indenture and the Second Supplemental
Indenture; and
WHEREAS, Foamex, FCC, FII, GFI, PFI and the Trustee further amended the
Original Indenture, as supplemented by the First Supplemental Indenture, the
Second Supplemental Indenture and the Third Supplemental Indenture, by entering
into a Fourth Supplemental Indenture (the Original Indenture, as supplemented by
the First Supplemental Indenture, the Second Supplemental Indenture, the Third
Supplemental Indenture and the Fourth Supplemental Indenture, the "Indenture"),
<PAGE>
dated as of October 31, 1994 in order to grant liens on certain real property of
Foamex and GFI in favor of the Trustee in accordance with Section 9.01(4) of the
Indenture; and
WHEREAS, Article 9.01 of the Indenture provides for the execution and
delivery by Foamex, FCC, any Guarantor and the Trustee of one or more
supplemental indentures, without the consent of the Holders (as defined in the
Indenture) of the Securities, for the purposes specified therein; and
WHEREAS, in compliance with the terms of the Indenture (including
Section 4.10 thereof), GFI desires to sell all of the common stock of PFI to a
person that is not an Affiliate (as defined in the Indenture) of Foamex,
pursuant to that certain Merger Agreement, dated as of June 11, 1996, by and
among PFI Subsidiary, Inc., a Delaware corporation, PFI Acquisition Corp., a
North Carolina corporation, Jody B. Vitale, PFI, GFI and Foamex; and
WHEREAS, Foamex, FCC, FII, GFI, PFI and the Trustee desire to amend the
Indenture without the consent of any Securityholder to unconditionally release
and discharge PFI from all its obligations as a Guarantor under the Indenture,
in accordance with Section 11.03 of the Indenture; and
WHEREAS, all conditions precedent provided for in the Indenture
relating to this Fifth Supplemental Indenture have been complied with;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, Foamex and FCC, jointly and severally, FII, as Parent Guarantor,
GFI, as Guarantor, PFI, as Withdrawing Guarantor, and the Trustee for the
benefit of each other and for the equal and ratable benefit of the Holders of
the Securities agree as follows:
ARTICLE I.
RELEASE AND DISCHARGE
Section 1.1 Release of PFI as a Guarantor. PFI is hereby
unconditionally released and discharged from all of its obligations as a
Guarantor under the Indenture.
Section 1.2 Further Assurances. Upon the request of PFI at any time
after the date hereof, Trustee shall forthwith execute and deliver such further
instruments of release, direction or authorization and other documents as may be
requested in order to effectuate the purposes of this Agreement.
-2-
<PAGE>
ARTICLE II.
AMENDMENT OF ARTICLE 1
Section 2.1 Definitional Amendments.
(a) The following definitions contained in Section 1.01 of Article 1 of
the Indenture are hereby amended and restated in their entity as follows:
"Guarantor" means GFI and any other issuer of a Subsidiary
Guaranty.
"Subsidiary Guaranty" means, individually and collectively, the
Guaranty of GFI pursuant to the terms of Article 11 hereof and any other
Guaranty of the Securities pursuant to Article 11 hereof.
(b) The definition of the term "PFI" is hereby deleted from the
Indenture.
Section 2.2 Mutatis Mutandis Effect. The Indenture is hereby amended
mutatis mutandis to reflect the amendment of each of the defined terms
incorporated in the Indenture pursuant to Section 2.1 above.
ARTICLE III.
MISCELLANEOUS
Section 3.1 Counterparts.
This Fifth Supplemental Indenture may be executed in counterparts, each
of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
Section 3.2 Severability.
In the event that any provision in this Fifth Supplemental Indenture
shall be held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 3.3 Headings.
The article and section headings herein are for convenience only and
shall not effect the construction hereof.
-3-
<PAGE>
Section 3.4 Successors and Assigns.
Any covenants and agreements in this Fifth Supplemental Indenture by
Foamex, FCC, FII, GFI, PFI and the Trustee shall bind their successors and
assigns, whether so expressed or not.
-4-
<PAGE>
Section 3.5 GOVERNING LAW.
THIS FIFTH SUPPLEMENTAL INDENTURE, SHALL BE DEEMED TO BE A CONTRACT
UNDER THE INTERNAL LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE.
Section 3.6 Effect of Fifth Supplemental Indenture.
Except as amended by this Fifth Supplemental Indenture, the terms and
provisions of the Indenture shall remain in full force and effect.
Section 3.7 Trustee.
The Trustee accepts the modifications of the Trust effected by this
Fifth Supplemental Indenture, but only upon the terms and conditions set forth
in the Indenture. Without limiting the generality of the foregoing, the Trustee
assumes no responsibility for the correctness of the recitals herein contained,
which shall be taken as the statements of Foamex, FCC, FII, GFI and PFI, and the
Trustee shall not be responsible or accountable in any way whatsoever for or
with respect to the validity or execution or sufficiency of this Fifth
Supplemental Indenture, and the Trustee makes no representation with respect
thereto.
Section 3.8 Definitions.
Capitalized terms used but not defined herein shall have the respective
meanings ascribed to them in the Indenture.
[The remaining portion of this page is intentionally left blank.]
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Fifth
Supplemental Indenture to be executed by their duly authorized representative as
of the date hereof.
ATTEST: FOAMEX CAPITAL CORPORATION
/s/ XXXXXX S. King By: /s/ Phillip N. Smith, Jr.
- ---------------------------- --------------------------------
Name: Philip N. Smith, Jr.
Title: Vice President
ATTEST: FOAMEX L.P.
/s/ XXXXXX S. King By: FMXI, INC.
- ---------------------------- its Managing General Partner
By: /s/ Philip N. Smith
--------------------------------
Name: Philip N. Smith, Jr.
Title: Vice President
ATTEST: FOAMEX INTERNATIONAL INC.
/s/ XXXXXX S. King By: /s/ Barry Zimmerman
- ---------------------------- --------------------------------
Name: Barry Zimmerman
Title: Vice President
ATTEST: FLEET NATIONAL BANK
as Trustee
/s/ Susan C. Merker By: /s/ Michael M. Hopkins
- ---------------------------- --------------------------------
Susan C. Merker Name: Michael M. Hopkins
Assistant Vice President Title: Vice President
ATTEST: GENERAL FELT INDUSTRIES, INC.
/s/ XXXXXX S. King By: /s/ Barry Zimmerman
- ---------------------------- --------------------------------
Name: Barry Zimmerman
Title: Vice President
-6-
<PAGE>
ATTEST: PERFECT FIT INDUSTRIES, INC.
/s/ XXXXXX S. King By: /s/ Barry Zimmerman
- ----------------------------- --------------------------------
Name: Barry Zimmerman
Title: Vice President
-7-
<PAGE>
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Philip N. Smith, Jr. the
Vice President of FOAMEX CAPITAL CORPORATION, known to me to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that the same was the act of the said Foamex Capital Corporation, and
that he executed the same as the act of such corporation with the authority of
the board of directors for the purposes and consideration therein expressed and
in the capacity therein stated.
/s/ Christopher Tung
---------------------------------
Notary Public, State of _________
Printed Name:____________________
CHRISTOPHER TUNG
Notary Public, State of New York
My Commission Expires: No. 01TU5033911
Qualified in New York County
___________________________ Commission Expires Sept. 26, 1996
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Philip N. Smith, Jr. the
Vice President of FMXI, INC., the Managing General Partner of Foamex L.P., a
Delaware limited partnership, known to me to be the person and officer whose
name is subscribed to the foregoing instrument, and acknowledged to me that the
same was the act of the said FMXI, Inc., and that he executed the same as the
act of such corporation with the authority of the board of directors for the
purposes and consideration therein expressed and in the capacity therein stated.
/s/ Christopher Tung
---------------------------------
Notary Public, State of _________
Printed Name:____________________
CHRISTOPHER TUNG
Notary Public, State of New York
My Commission Expires: No. 01TU5033911
Qualified in New York County
___________________________ Commission Expires Sept. 26, 1996
<PAGE>
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Barry Zimmerman the
Vice President of FOAMEX INTERNATIONAL INC., known to me to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that the same was the act of the said Foamex International Inc., and that
he executed the same as the act of such corporation with the authority of the
board of directors for the purposes and consideration therein expressed and in
the capacity therein stated.
/s/ Christopher Tung
---------------------------------
Notary Public, State of _________
Printed Name:____________________
CHRISTOPHER TUNG
Notary Public, State of New York
My Commission Expires: No. 01TU5033911
Qualified in New York County
___________________________ Commission Expires Sept. 26, 1996
STATE OF CONNECTICUT
COUNTY OF HARTFORD
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Michael M. Hopkins, Vice
President of FLEET NATIONAL BANK (formerly known as The Connecticut National
Bank), known to me to be the person and officer whose name is subscribed to the
foregoing instrument, and acknowledged to me that the same was the act of the
said bank and that he executed the same as the act of such bank for the purposes
and consideration therein expressed and in the capacity therein stated.
/s/ Susan P. McNally
---------------------------------
Notary Public, State of _________
Printed Name:____________________
SUSAN P. McNALLY
Notary Public
My Commission Expires: No. 01TU5033911
MY COMM. EXPIRES MARCH 31, 2000
___________________________
<PAGE>
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Barry Zimmerman the
Vice President of GENERAL FELT INDUSTRIES, INC., known to me to be the person
and officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that the same was the act of the said General Felt
Industries, Inc., and that he executed the same as the act of such corporation
with the authority of the board of directors for the purposes and consideration
therein expressed and in the capacity therein stated.
/s/ Christopher Tung
---------------------------------
Notary Public, State of _________
Printed Name:____________________
CHRISTOPHER TUNG
Notary Public, State of New York
My Commission Expires: No. 01TU5033911
Qualified in New York County
___________________________ Commission Expires Sept. 26, 1996
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Barry Zimmerman, Vice
President of PERFECT FIT INDUSTRIES, INC., known to me to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that the same was the act of the said Perfect Fit Industries, Inc., and
that he executed the same as the act of such corporation with the authority of
the board of directors for the purposes and consideration therein expressed and
in the capacity therein stated.
/s/ Christopher Tung
---------------------------------
Notary Public, State of _________
Printed Name:____________________
CHRISTOPHER TUNG
Notary Public, State of New York
My Commission Expires: No. 01TU5033911
Qualified in New York County
___________________________ Commission Expires Sept. 26, 1996
<PAGE>
================================================================================
FOAMEX L.P. AND FOAMEX CAPITAL CORPORATION, as Issuers
FOAMEX INTERNATIONAL INC., as Parent Guarantor
GENERAL FELT INDUSTRIES, INC., as Guarantor, and
PERFECT FIT INDUSTRIES, INC., as Withdrawing Guarantor
AND
FLEET NATIONAL BANK
as Trustee
----------
FOURTH SUPPLEMENTAL INDENTURE
Dated as of August 1, 1996
----------
$126,000,000
11-7/8% Senior Subordinated Debentures
due 2004
================================================================================
<PAGE>
FOURTH SUPPLEMENTAL INDENTURE
THIS FOURTH SUPPLEMENTAL INDENTURE (the "Fourth Supplemental
Indenture"), dated as of August 1, 1996, by and among Foamex L.P., a Delaware
limited partnership ("Foamex"), Foamex Capital Corporation, a Delaware
corporation wholly-owned by Foamex ("FCC"; Foamex and FCC collectively referred
to as the "Issuers"), Foamex International Inc., a Delaware corporation ("FII"),
as Parent Guarantor, General Felt Industries, Inc., a Delaware corporation
wholly-owned by Foamex ("GFI"), as Guarantor, Perfect Fit Industries Inc., a
Delaware corporation ("PFI"), as Withdrawing Guarantor, and Fleet National Bank
(formerly known as Shawmut Bank, N.A.), as trustee (the "Trustee").
WHEREAS, Foamex, FCC and the Trustee executed an indenture, dated as of
October 13, 1992 (the "Original Indenture"), relating to the Issuers' 11-7/8%
Senior Subordinated Debentures due 2004 (the "Securities"); and
WHEREAS, Foamex, FCC, GFI, and the Trustee amended the Original
Indenture by entering into a First Supplemental Indenture, dated as of March 23,
1993 in order to add GFI as a Guarantor in accordance with Section 4.07 and
Section 9.01(2) of the Original Indenture; and
WHEREAS, Foamex, FCC, GFI, PFI and the Trustee further amended the
Original Indenture, as supplemented by the First Supplemental Indenture, by
entering into a Second Supplemental Indenture, dated as of November 18, 1993 in
order to add PFI as a Guarantor in accordance with Section 4.07 and Section
9.01(2) of the Original Indenture, as supplemented by the First Supplemental
Indenture; and
WHEREAS, Foamex, FCC, FII, GFI, PFI and the Trustee further amended the
Original Indenture, as supplemented by the First Supplemental Indenture and the
Second Supplemental Indenture, by entering into a Third Supplemental Indenture
(the Original Indenture, as supplemented by the First Supplemental Indenture,
the Second Supplemental Indenture and the Third Supplemental Indenture, the
"Indenture"), dated as of December 14, 1993 in order to add FII as a Parent
Guarantor in accordance with Section 9.01(4) and Section 11.02 of the Indenture;
and
WHEREAS, Article 9.01 of the Indenture provides for the execution and
delivery by Foamex, FCC, any Guarantor and the Trustee of one or more
supplemental indentures, without the consent of the Holders (as defined in the
Indenture) of the Securities, for the purposes specified therein; and
<PAGE>
WHEREAS, in compliance with the terms of the Indenture (including
Section 4.10 thereof), GFI desires to sell all of the common stock of PFI to a
person that is not an Affiliate (as defined in the Indenture) of Foamex,
pursuant to that certain Merger Agreement, dated as of June 11, 1996, by and
among PFI Subsidiary, Inc., a Delaware corporation, PFI Acquisition Corp., a
North Carolina corporation, Jody B. Vitale, PFI, GFI and Foamex; and
WHEREAS, Foamex, FCC, FII, GFI, PFI and the Trustee desire to amend the
Indenture without the consent of any Securityholder to unconditionally release
and discharge PFI from all its obligations as a Guarantor under the Indenture,
in accordance with Section 12.17 of the Indenture; and
WHEREAS, all conditions precedent provided for in the Indenture
relating to this Fourth Supplemental Indenture have been complied with;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, Foamex and FCC, jointly and severally, FII, as Parent Guarantor,
GFI, as Guarantor, PFI, as Withdrawing Guarantor, and the Trustee for the
benefit of each other and for the equal and ratable benefit of the Holders of
the Securities agree as follows:
ARTICLE I.
RELEASE AND DISCHARGE
Section 1.1 Release of PFI as a Guarantor. PFI is hereby
unconditionally released and discharged from all of its obligations as a
Guarantor under the Indenture.
Section 1.2 Further Assurances. Upon the request of PFI at any time
after the date hereof, Trustee shall forthwith execute and deliver such further
instruments of release, direction or authorization and other documents as may be
requested in order to effectuate the purposes of this Agreement.
ARTICLE II.
AMENDMENT OF ARTICLE 1
Section 2.1 Definitional Amendments.
(a) The following definitions contained in Section 1.01 of Article 1 of
the Indenture are hereby amended and restated in their entity as follows:
"Guarantor" means GFI and any other issuer of a Subsidiary
Guaranty.
-2-
<PAGE>
"Subsidiary Guaranty" means, individually and collectively,
the Guaranty of GFI pursuant to the terms of Article 12 hereof and any other
Guaranty of the Securities pursuant to Article 12 hereof.
(b) The definition of the term "PFI" is hereby deleted from the
Indenture.
Section 2.2 Mutatis Mutandis Effect. The Indenture is hereby amended
mutatis mutandis to reflect the amendment of each of the defined terms
incorporated in the Indenture pursuant to Section 2.1 above.
ARTICLE III.
MISCELLANEOUS
Section 3.1 Counterparts.
This Fourth Supplemental Indenture may be executed in counterparts,
each of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
Section 3.2 Severability.
In the event that any provision in this Fourth Supplemental Indenture
shall be held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 3.3 Headings.
The article and section headings herein are for convenience only and
shall not effect the construction hereof.
Section 3.4 Successors and Assigns.
Any covenants and agreements in this Fourth Supplemental Indenture by
Foamex, FCC, FII, GFI, PFI and the Trustee shall bind their successors and
assigns, whether so expressed or not.
Section 3.5 GOVERNING LAW.
THIS FOURTH SUPPLEMENTAL INDENTURE, SHALL BE DEEMED TO BE A CONTRACT
UNDER THE INTERNAL LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE.
-3-
<PAGE>
Section 3.6 Effect of Fourth Supplemental Indenture.
Except as amended by this Fourth Supplemental Indenture, the terms and
provisions of the Indenture shall remain in full force and effect.
Section 3.7 Trustee.
The Trustee accepts the modifications of the Trust effected by this
Fourth Supplemental Indenture, but only upon the terms and conditions set forth
in the Indenture. Without limiting the generality of the foregoing, the Trustee
assumes no responsibility for the correctness of the recitals herein contained,
which shall be taken as the statements of Foamex, FCC, FII, GFI and PFI, and the
Trustee shall not be responsible or accountable in any way whatsoever for or
with respect to the validity or execution or sufficiency of this Fourth
Supplemental Indenture, and the Trustee makes no representation with respect
thereto.
Section 3.8 Definitions.
Capitalized terms used but not defined herein shall have the respective
meanings ascribed to them in the Indenture.
[The remaining portion of this page is intentionally left blank.]
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Supplemental Indenture to be executed by their duly authorized representative as
of the date hereof.
ATTEST: FOAMEX CAPITAL CORPORATION
____________________ By:/s/ Philip N. Smith, Jr.
-------------------------------
Name: Philip N. Smith, Jr.
Title: Vice President
ATTEST: FOAMEX L.P.
____________________ By: FMXI, INC.
its Managing General Partner
By:/s/ Philip N. Smith, Jr.
-------------------------------
Name: Philip N. Smith, Jr.
Title: Vice President
ATTEST: FOAMEX INTERNATIONAL INC.
____________________ By:/s/ Philip N. Smith, Jr.
-------------------------------
Name: Philip N. Smith, Jr.
Title: Vice President
ATTEST: FLEET NATIONAL BANK
as Trustee
____________________ By: /s/ /s/ Barry Zimmerman
-------------------------------
Name: /s/ Barry Zimmerman
Title: Vice President
ATTEST: GENERAL FELT INDUSTRIES, INC.
____________________ By: /s/ Gerald P. Breezley
-------------------------------
Name: Gerald P. Breezley
Title: Vice President
-5-
<PAGE>
ATTEST: PERFECT FIT INDUSTRIES, INC.
____________________ By: /s/ Barry Zimmerman
-------------------------------
Name: Barry Zimmerman
Title: Vice President
-6-
<PAGE>
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Philip N. Smith, Jr. the Vice
President of FOAMEX CAPITAL CORPORATION, known to me to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that the same was the act of the said Foamex Capital Corporation, and that
he executed the same as the act of such corporation with the authority of the
board of directors for the purposes and consideration therein expressed and in
the capacity therein stated.
/s/ Christopher Tung
---------------------------------
Notary Public, State of New York
Printed Name:____________________
My Commission Expires:
- ---------------------
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Christopher Tung the Vice
President of FMXI, INC., the Managing General Partner of Foamex L.P., a Delaware
limited partnership, known to me to be the person and officer whose name is
subscribed to the foregoing instrument, and acknowledged to me that the same was
the act of the said FMXI, Inc., and that he executed the same as the act of such
corporation with the authority of the board of directors for the purposes and
consideration therein expressed and in the capacity therein stated.
/s/ Christopher Tung
---------------------------------
Notary Public, State of New York
Printed Name:____________________
My Commission Expires:
- ---------------------
<PAGE>
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Barry Zimmerman the Vice
President of FOAMEX INTERNATIONAL INC., known to me to be the person and officer
whose name is subscribed to the foregoing instrument, and acknowledged to me
that the same was the act of the said Foamex International Inc., and that he
executed the same as the act of such corporation with the authority of the board
of directors for the purposes and consideration therein expressed and in the
capacity therein stated.
/s/ Barry Zimmerman
-------------------------------
Notary Public, State of New York
Printed Name:__________________
My Commission Expires:
- ---------------------
COMMONWEALTH OF MASSACHUSETTS
COUNTY OF SUFFOLK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Gerald P. Breezley, Vice
President, of FLEET NATIONAL BANK (formerly known as Shawmut Bank, N.A.), known
to me to be the person and officer whose name is subscribed to the foregoing
instrument, and acknowledged to me that the same was the act of the said bank
and that he executed the same as the act of such bank for the purposes and
consideration therein expressed and in the capacity therein stated.
/s/ Jane M. Bishop
--------------------------------------
Notary Public, State of Massachusetts
Printed Name:_________________________
My Commission Expires:
- ---------------------
<PAGE>
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Barry Zimmerman the Vice
President of GENERAL FELT INDUSTRIES, INC., known to me to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that the same was the act of the said General Felt Industries, Inc., and
that he executed the same as the act of such corporation with the authority of
the board of directors for the purposes and consideration therein expressed and
in the capacity therein stated.
/s/ Barry Zimmerman
--------------------------------
Notary Public, State of New York
Printed Name:___________________
My Commission Expires:
- ---------------------
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said
State and County, on this day personally appeared Barry Zimmerman, Vice
President of PERFECT FIT INDUSTRIES, INC., known to me to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that the same was the act of the said Perfect Fit Industries, Inc., and
that he executed the same as the act of such corporation with the authority of
the board of directors for the purposes and consideration therein expressed and
in the capacity therein stated.
/s/ Barry Zimmerman
--------------------------------
Notary Public, State of New York
Printed Name:___________________
My Commission Expires:
- ---------------------
<PAGE>
Exhibit 4.28
<PAGE>
Page 1
TERMS AND CONDITIONS
CREDIT NUMBER: 1 AUTHORIZED AMOUNT: $6,000,000
- ----------------- ------------------------------
TYPE
Operating
PURPOSE
General operating requirements
CURRENCY
Canadian dollars
AVAILMENT
The Borrower may avail the credit by way of Direct advances evidenced
by a Grid Note and/or Bankers' Acceptances in Canadian dollars (in
multiples of $100,000 and having terms of maturity of 30 to 360 days
without grace).
INTEREST RATE
The Bank's Prime Lending Rate from time to time, plus 1/2% per annum,
payable monthly.
BANKERS' ACCEPTANCE FEE
The Bank's Commercial Bankers' Acceptance Fee, (subject to revision at
any time), plus 1/2% per annum, subject to a minimum fee of $100 per
transaction, payable at the time of each acceptance.
REPAYMENT
Advances are repayable on demand.
CREDIT NUMBER: 2 AUTHORIZED AMOUNT: $15,000
- ----------------- ---------------------------
TYPE
Standby Letters of Credit
PURPOSE
To facilitate requirements of:
Etobicoke Hydro - Expires June 3, 1997.
CURRENCY
Canadian dollars
<PAGE>
Page 2
AVAILMENT
The Borrower may avail the credit by way of Standby Letter of Credit.
COMMISSION
1/2% per annum, calculated on the issue amount, based on increments of
30 days or multiples thereto, from date of issuance to expiry date.
Periods of less than 30 days will be counted as a thirty day increment.
The amount is subject to the Bank's minimum fee as well as revision at
any time and is payable upon issuance.
SPECIFIC SECURITY
Reimbursement Agreement for Standby Letter of Credit.
GENERAL SECURITY, TERMS, AND CONDITIONS APPLICABLE TO ALL CREDITS
GENERAL SECURITY
The following security, evidenced by documents in form satisfactory to
the Bank and registered or recorded as required by the Bank, is to be
provided prior to any advances or availment being made under the
Credits:
Bankers' Acceptance Agreement.
General Assignment of Book Debts.
Security Agreement over all inventories.
Security under Section 427 of the Bank Act with appropriate
insurance coverage assigned to the Bank.
General Security Agreement over all present and future
personal property with appropriate insurance coverage, loss if
any, payable to the Bank.
Postponement Agreement from Foamex L.P. covering an amount of
$1,000,000 supported by respective promissory note.
GENERAL CONDITIONS
Until all debts and liabilities under the Credits have been discharged
in full, the following conditions will apply in respect of the Credits:
Combined Operating loan, Bankers' Acceptances and Standby
Letters of Credit are not to exceed 75% of good quality
accounts receivable (excluding accounts over 90 days, offsets
and intercompany accounts) plus 75% of finished goods
inventory and 50% of work-in-process inventory. Advances
against inventory are limited to $1,000,000.
The ratio of current assets to current liabilities is to be
maintained at all times at 1.25:1 or better.
The ratio of Debt (including deferred taxes) to Tangible Net
Work (TNW) is not to exceed 2:1.
<PAGE>
Page 3
Tangible Net Worth (TNW) is to be maintained in excess of
$8,500,000 at all times.
TNW is defined as the sum of share capital, earned and
contributed surplus and postponed funds less (i) amounts due
from officers/affiliates, excluding those amounts classified
as current trade receivables under Generally Accepted
Accounting Principles, (ii) investments in affiliates, and
(iii) intangible assets as defined by the Bank.
Without the Bank's prior written consent which shall not be
unreasonably withheld:
Guarantees or other contingent liabilities in excess
of $1,000,000 in the aggregate are not to be entered
into and assets are not be to further encumbered.
No change in ownership is permitted.
No mergers, acquisitions or change in the Borrower's
line of business are permitted.
The Bank acknowledges that mergers and
reorganizations in conjunction with any company or
companies controlled directly or indirectly by Foamex
L.P. shall be permitted without the Bank's consent
provided that any such merger or reorganization shall
not adversely affect the Bank's security position
and/or the financial condition of the Borrower. The
Borrower shall give the Bank at least 21 business
days advance notice in writing of any such merger or
reorganization.
No redemption of preferred shares is permitted.
Substantially all banking business is to be conducted
with the Bank.
GENERAL BORROWER REPORTING CONDITIONS
Until all debts and liabilities under the Credits have been discharged
in full, the Borrower will provide the Bank with the following:
Annual Audited Financial Statements within 120 days of the
Borrower's fiscal year end, duly signed.
Annual Audited Financial Statements of Foamex L.P. within 120
days of the company's fiscal year end, duly signed.
Quarterly Interim Financial Statements of the Borrower,
prepared in accordance with Canadian G.A.A.P., within 45 days
of period end, duly signed.
A Statement of Security monthly, to include information on
inventory, accounts receivable, accounts payable and
outstanding cheques, within 20 days of period end, duly
signed.
Aged Listing of Accounts Receivable upon request.
FEE
Annual Renewal Fee $1,000.
<PAGE>
Page 4
SCHEDULE A
ADDITIONAL TERMS AND CONDITIONS APPLICABLE
TO ALL CREDITS
Calculation and Payment of Interest
1. Interest on loans/advances made in Canadian dollars will be calculated
on a daily basis and payable monthly on the 22nd day of each month
(unless otherwise stipulated by the Bank). Interest shall be payable
not in advance on the basis of a calendar year for the actual number of
days elapsed both before and after demand of payment or default and/or
judgment.
Interest on Overdue Interest
2. Interest on overdue interest shall be calculated at the same rate as
interest on the loans/advances in respect of which interest is overdue,
but shall be compounded monthly and be payable on demand, both before
and after demand and judgment.
Calculation and Payment of Bankers' Acceptance Fee
3. The fee for the acceptance of each Bankers' Acceptance will be payable
on the face amount of each Bankers' Acceptance at the time of
acceptance of each draft calculated on the basis of a calendar year for
the actual number of days elapsed from and including the date of
acceptance to the due date of the draft.
Environment
4. The Borrower agrees:
(a) to comply with all applicable laws and requirements of any
federal, provincial, or any other governmental authority
relating to the environment and the operation of the business
activities of the Borrower;
(b) to allow the Bank access during normal business hours to the
business premises of the Borrower to monitor and inspect all
property and business activities of the Borrower with respect
to the Borrower's compliance with all applicable environmental
laws and regulations;
(c) to notify the Bank of any change in current, normal business
activity conducted by the Borrower which involves the use or
handling of hazardous materials or wastes which increases the
environmental liability of the Borrower in any material
manner;
(d) to notify the Bank of any proposed material change in the use
or occupation of the property of the Borrower prior to any
change occurring;
(e) to provide the Bank with written notice within ten (10)
business days of the Borrower having knowledge of any
environmental problem and any hazardous materials or
substances which may have a material adverse effect on the
property, equipment, or business activities of the Borrower
and with any other environmental information requested by the
Bank;
(f) to conduct all environmental remedial activities in compliance
with applicable requirements of any federal, provincial, or
any other governmental authority relating to the environment
which a commercially reasonable person would perform in
similar circumstances to meet its environmental
responsibilities and if the Borrower receives from the Bank a
written notification of the Borrower's failure to conduct such
environmental remedial activities for thirty (30) days after
receipt of such written notification from the Bank, then the
Bank may perform such activities; and
<PAGE>
Page 5
(g) to pay for any environmental investigations, assessments or
remedial activities with respect to any property of the
Borrower that may be performed for or by the Bank.
If the Borrower notifies the Bank of any specified activity or change
or provides the Bank with any information pursuant to subsections (c),
(d), or (e), or if the Bank receives any environmental information from
other sources, the Bank, in its sole discretion, may decide that an
adverse change in the environmental condition of the Borrower or any of
the property, equipment, or business activities of the Borrower has
occurred which decision will constitute, in the absence of manifest
error, conclusive evidence of the adverse change. Following this
decision being made by the Bank, the Bank shall give written
notification to the Borrower of the Bank's decision concerning the
adverse change, which shall take effect thirty (30) days after the
Borrower's receipt of such written notification, if the Borrower has
not initiated the activities necessary to correct the adverse change
condition.
If the Bank is required to incur expenses for compliance or to verify
the Borrower's compliance with applicable environmental or other
regulations, the Borrower shall indemnify the Bank in respect of such
expenses, which will constitute further advances by the Bank to the
Borrower under this Agreement.
Periodic Review
5. The obligation of the Bank to make further advances or other
accommodation available under any Credits of the Borrower under which
the indebtedness or liability of the Borrower is payable on demand, is
subject to periodic review and to no adverse change occurring in the
financial condition of the Borrower or any guarantor.
Evidence of Indebtedness
6. The Bank's accounts, books and records constitute, in the absence of
manifest error, conclusive evidence of the advances made under this
Credit, repayments on account thereof and the indebtedness of the
Borrower to the Bank.
Acceleration
7. (a) All indebtedness and liability of the Borrower to the Bank
payable on demand, is repayable by the Borrower to the Bank
at any time on demand;
(b) All indebtedness and liability of the Borrower to the Bank not
payable on demand, shall, at the option of the Bank, become
immediately due and payable, the security held by the Bank
shall immediately become enforceable, and the obligation of
the Bank to make further advances or other accommodation
available under the Credits shall terminate, if any one of the
following Events of Default occurs:
(i) the Borrower or any guarantor fails to make when due,
whether on demand or at a fixed payment date, by
acceleration or otherwise, any payment of interest,
principal, fees, commissions or other amounts payable
to the Bank;
(ii) there is a breach by the Borrower of any other terms
or condition contained in this Commitment Letter or
in any other agreement to which the Borrower and the
Bank are parties;
(iii) any default occurs under any security listed
in this Commitment Letter under the headings
"Specific Security" or "General Security" or
under any other credit, loan or security
agreement to which the Borrower is a party;
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Page 6
(iv) any bankruptcy, reorganization, compromise,
arrangement, insolvency or liquidation proceedings or
other proceedings for the relief of debtors are
instituted by or against the Borrower and, if
instituted against the Borrower, are allowed against
or consented to by the Borrower or are not dismissed
or stayed within 60 days after such institution;
(v) a receiver is appointed over any property of the
Borrower or any judgement or order or any process of
any court becomes enforceable against the Borrower or
any property of the Borrower or any creditor takes
possession of any property of the Borrower;
(vi) any adverse change occurs in the financial condition
of the Borrower or any guarantor of the Borrower.
Costs
8. All costs, including legal and appraisal fees incurred by the Bank
relative to security and other documentation, shall be for the account
of the Borrower and may be charged to the Borrower's deposit account
when submitted.
<PAGE>
EXHIBIT 4.30
EXECUTION COPY
================================================================================
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 30, 1996
among
FOAMEX L.P.
GENERAL FELT INDUSTRIES, INC.
TRACE FOAM COMPANY, INC.
FMXI, INC.
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS ISSUING BANKS
and
CITIBANK, N.A.
and
THE BANK OF NOVA SCOTIA
as Administrative Agents
================================================================================
<PAGE>
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This Third Amended and Restated Credit Agreement dated as of
July 30, 1996 (as amended, supplemented or modified from time to time, the
"Agreement") among Foamex L.P., a Delaware limited partnership ("Foamex"),
General Felt Industries, Inc., a Delaware corporation ("GFI"; and together with
Foamex, the "Borrowers"), Trace Foam Company, Inc. (formerly `21' Foam Company,
Inc.), a Delaware corporation and general partner of Foamex ("Trace Foam"),
FMXI, Inc., a Delaware corporation and general partner of Foamex ("FMXI"), the
institutions from time to time a party hereto as Lenders, whether by execution
of this Agreement or an Assignment and Acceptance, the institutions from time to
time a party hereto as Issuing Banks, whether by execution of this Agreement or
an Assignment and Acceptance, Citibank, N.A., a national banking association
("Citibank"), in its capacity as the documentation and collateral agent for the
Lenders and the Issuing Banks hereunder (in such capacity, the "Collateral
Agent") and The Bank of Nova Scotia ("Scotiabank"), in its capacity as funding
agent for the Lenders and Issuing Banks (in such capacity, the "Funding Agent";
together with the Collateral Agent, the "Administrative Agents") amends and
restates in its entirety that certain Second Amended and Restated Credit
Agreement dated as of June 28, 1994 (the "Existing Credit Agreement") among
Foamex, GFI, Perfect Fit Industries, Inc., a Delaware corporation ("PFI"), Trace
Foam, FMXI, the Lenders, the Issuing Banks and the Administrative Agents. Each
of the parties hereto and, by its signature below, PFI, agrees that from and
after the Effective Date (as defined below) PFI shall cease to be a party to
this Agreement.
W I T N E S S E T H:
WHEREAS, Foamex and GFI desire to sell their Equity Interests
in PFI pursuant to the PFI Merger Agreement (as defined herein) and Foamex and
GFI have requested that the Administrative Agents and the Lenders agree to amend
the Existing Credit Agreement in order, among other things, (i) to permit the
consummation of the PFI Merger, (ii) to remove PFI as a party to this Agreement
and (iii) to release PFI from its obligations under the other Loan Documents to
which it is a party;
WHEREAS, Foamex, GFI, Trace Foam, FMXI, the Lenders, the
Issuing Banks and the Administrative Agents have agreed to amend and restate the
Existing Credit Agreement and to provide for such amendments on the terms set
forth herein which Agreement shall become effective upon satisfaction of certain
conditions precedent set forth herein;
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NOW, THEREFORE, in consideration of the above premises each of
the Borrowers, Trace Foam, FMXI, the Lenders, the Issuing Banks and the
Administrative Agents agree as follows:
ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms. The following terms used in this
Agreement shall have the following meanings, applicable both to the singular and
the plural forms of the terms defined:
"Accommodation Obligation" means any Contractual Obligation,
contingent or otherwise, of one Person with respect to any Indebtedness,
obligation or liability of another, if the primary purpose or intent thereof by
the Person incurring the Accommodation Obligation is to provide assurance to the
obligee of such Indebtedness, obligation or liability of another that such
Indebtedness, obligation or liability will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders thereof
will be protected (in whole or in part) against loss in respect thereof
including, without limitation, direct and indirect guarantees, endorsements
(except for collection or deposit in the ordinary course of business), notes
co-made or discounted, recourse agreements, take-or-pay agreements, keep-well
agreements, agreements to purchase or repurchase such Indebtedness, obligation
or liability or any security therefor or to provide funds for the payment or
discharge thereof, agreements to maintain solvency, assets, level of income, or
other financial condition, and agreements to make payment other than for value
received.
"Acquisition Transaction Documents" means the JPS Automotive
Acquisition Agreement, the JPS Automotive Senior Note Indenture, the JPS
Automotive Senior Notes, the Discount Debenture Indenture, the Discount
Debentures, the Foamex International Warrants, the New Partners Note Purchase
Agreement, the New Partners Note, the New Partners Note Collateral Documents,
the Foamex International Supply Agreement and all documents evidencing the
Acquisition Transactions.
"Acquisition Transactions" means the JPS Automotive
Acquisition, the issuance of the JPS Automotive Senior Notes, the issuance of
the Discount Debentures and the Foamex International Warrants, the New Partners
Loan, the New Partners Investment and the transactions contemplated by each of
the foregoing.
"Administrative Agents" has the meaning ascribed to such term
in the preamble and their respective successors pursuant to Section 12.07.
"Affiliate", as applied to any Person, means any other
Person that directly or indirectly controls, is controlled by, or
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<PAGE>
is under common control with, that Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to vote ten percent
(10%) or more of the Securities having voting power for the election of
directors of such Person or otherwise to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
Securities or by contract or otherwise.
"Agreement" has the meaning ascribed to such term in
the preamble.
"Amendatory Agreement" means the Amendatory Agreement among
the Borrowers, FCC and the Collateral Agent dated as of even date herewith, as
such agreement may be amended, modified or supplemented from time to time.
"Applicable Base Rate Margin" means, as of any date, a rate
equal to one percent (1.0%) per annum.
"Applicable Eurodollar Rate Margin" means, as of any date, a
rate equal to three percent (3.0%) per annum.
"Applicable Lending Office" means, with respect to a
particular Lender, its Eurodollar Lending Office in respect of provisions
relating to Eurodollar Rate Loans and its Domestic Lending Office in respect of
provisions relating to Base Rate Loans.
"Approved Investments" has the meaning ascribed to such
term in Section 11.03(a).
"Assignment and Acceptance" means an Assignment and Acceptance
attached hereto and made a part hereof (with blanks appropriately completed)
delivered to the Funding Agent in connection with an assignment of a Lender's
interest under this Agreement in accordance with the provisions of Section
13.01.
"Availability" means, at any particular time, the amount by
which the Maximum Revolving Credit Amount at such time exceeds the Revolving
Credit Obligations at such time.
"Availability Reserves" means, with respect to either
Borrower, as of two (2) Business Days after the date of written notice of any
determination thereof to such Borrower by the Collateral Agent, or to such
Borrower and the Collateral Agent by the Requisite Lenders, such amounts as the
Collateral Agent, or the Requisite Lenders, as the case may be, in the exercise
of its or their sole discretion exercised in a commercially reasonable manner,
may from time to time establish against the Availability. So long as Foamex has
any obligations under the Canada
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<PAGE>
Undertaking, an Availability Reserve shall be established against the
Availability in the maximum amount of such obligations.
"Bankruptcy Code" means Title 11 of the United States
Code (11 U.S.C. Sections 101 et seq.), as amended from time to time,
and any successor statute.
"Base Eurodollar Rate" means, with respect to any Euro-dollar
Interest Period applicable to a Borrowing of Eurodollar Rate Loans, an interest
rate per annum determined by the Funding Agent to be the average (rounded upward
to the nearest whole multiple of one-sixteenth of one percent (0.0625%) per
annum if such average is not such a multiple) of the rates per annum at which
deposits in Dollars are offered by the principal office of each of the Reference
Banks in London, England to major banks in the London interbank market at
approximately 11:00 a.m. (London time) on the Eurodollar Interest Rate
Determination Date for such Eurodollar Interest Period for a period equal to
such Eurodollar Interest Period and in an amount substantially equal to the
amount of such Reference Bank's Eurodollar Rate Loan and for a period equal to
such Eurodollar Interest Period.
"Base Rate" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall at
all times be equal to the highest of:
(i) the rate of interest announced publicly by
Scotiabank in New York, New York from time to time, as
Scotiabank's base rate; and
(ii) the sum (adjusted to the nearest one quarter of one
percent (0.25%) or, if there is no nearest one quarter of one percent
(0.25%), to the next higher one quarter of one percent (0.25%)) of
(A) one half of one percent (0.50%) per annum plus (B) the rate per
annum obtained by dividing (I) the latest three-week moving average of
secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market
banks, such three-week moving average (adjusted to the basis of a year
of 360 days) being determined weekly on each Monday (or, if such day is
not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday (or, if such day is not
a Business Day, on the next preceding Business Day) by Scotiabank on
the basis of such rates reported by certificate of deposit dealers to,
and published by, the Federal Reserve Bank of New York, or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by Scotiabank from three (3) New
York certificate of deposit dealers of recognized standing selected by
Scotiabank, by (II) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period by the
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<PAGE>
Federal Reserve Board (or any successor) for determining the maximum
reserve requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for Scotiabank in
respect of liabilities which consist of or which include (among other
liabilities) three-month Dollar nonpersonal time deposits in the United
States plus (C) the average during such three-week period of the annual
assessment rates estimated by Scotiabank for determining the then
current annual assessment payable by Scotiabank to the Federal Deposit
Insurance Corporation (or any successor) for insuring Dollar deposits
of Scotiabank in the United States; and
(iii) the sum of (A) one half of one percent (0.50%) per annum
plus (B) the Federal Funds Rate in effect from time to time during such
period.
"Base Rate Loans" means all Loans which bear interest at a
rate determined by reference to the Base Rate as provided in Section 4.01(a).
"Benefit Plan" means a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of which
either Borrower or any ERISA Affiliate is, or within the immediately preceding
six (6) years was, an "employer" as defined in Section 3(5) of ERISA.
"Blue Book" means the report generated and distributed
primarily internally with respect to the financial performance of the Borrowers
and their Subsidiaries substantially in the form of the report attached hereto
as Exhibit L.
"Borrowers" has the meaning assigned thereto in the
preamble.
"Borrowing" means a borrowing consisting of Loans of the same
type made, continued or converted on the same day.
"Borrowing Base" means, as of any date of determination, with
respect to either Borrower, an amount equal to eighty percent (80%) of the face
amount of Eligible Receivables of such Borrower (net of maximum discounts,
allowances, retainage and any other amounts deferred with respect thereto). For
purposes of this definition, Eligible Receivables of either Borrower, as of any
date of determination, shall be determined after deduction of all Eligibility
Reserves then effective with respect thereto.
"Borrowing Base Certificate" means, with respect to either
Borrower, a certificate substantially in the form attached hereto as Exhibit B
setting forth Eligible Receivables of such Borrower.
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<PAGE>
"Business Activity Report" means (i) a Notice of
Business Activities Report from the State of New Jersey Division
of Taxation, or (ii) a Minnesota Business Activity Report from
the Minnesota Department of Revenue.
"Business Day" means a day, in the applicable local time,
which is not a Saturday or Sunday or a legal holiday and on which banks are not
required or permitted by law or other governmental action to close (i) in New
York, New York and (ii) in the case of Eurodollar Rate Loans, in London, England
and (iii) in the case of letter of credit transactions for a particular Issuing
Bank, in the place where its office for issuance or administration of the
pertinent Letter of Credit is located.
"Business Plan" means the Business Plans of Foamex and GFI
delivered to the Administrative Agents on May 6, 1996 and each subsequent
Business Plan of either Borrower delivered after the Effective Date to the
Administrative Agents pursuant to Section 7.01(f).
"Canada Undertaking" means Agreement of Undertaking dated
December 31, 1991 between Foamex and Scotiabank in respect of certain
Accommodation Obligations made by Foamex on behalf of Foamex Canada.
"Capital Expenditures" means, for any period, the aggregate of
all expenditures of Foamex or its Subsidiaries on a consolidated basis (whether
payable in cash or other Property or accrued as a liability (but without
duplication)) during such period that, in conformity with GAAP, are required to
be included in fixed asset accounts as reflected in the consolidated balance
sheets of Foamex or its Subsidiaries; provided, however, (i) Capital
Expenditures shall include, whether or not such a designation would be in
conformity with GAAP, (A) that portion of Capital Leases which is capitalized on
the consolidated balance sheet of Foamex and its Subsidiaries and (B)
expenditures for Equipment which is purchased simultaneously with the trade-in
of existing Equipment owned by either Foamex or any of its Subsidiaries, to the
extent the gross purchase price of the purchased Equipment exceeds the book
value of the Equipment being traded in at such time; and (ii) Capital
Expenditures shall exclude, whether or not such a designation would be in
conformity with GAAP, expenditures made in connection with the replacement or
restoration of Property, to the extent reimbursed or financed from insurance or
condemnation proceeds which do not result in a permanent reduction in the
Revolving Loan Commitments pursuant to Section 3.01.
"Capital Lease", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
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<PAGE>
"Cash Collateral" means cash or Cash Equivalents held by the
Collateral Agent, any of the Issuing Banks or any of the Lenders as security for
the Obligations.
"Cash Collateral Account" means an interest bearing account at
Citibank's offices in New York, New York in which Cash Collateral of either
Borrower shall be deposited. The Cash Collateral Account shall be under the sole
dominion and control of the Collateral Agent, provided that all amounts
deposited therein shall be held by the Collateral Agent for the benefit of the
Administrative Agents, the Lenders and the Issuing Banks and shall be subject to
the terms of Section 11.03.
"Cash Equivalents" means (i) marketable direct obligations
issued or unconditionally guaranteed by a Federal Governmental Authority and
backed by the full faith and credit of the United States government; (ii)
domestic and Eurodollar certificates of deposit and time deposits, bankers'
acceptances and floating rate certificates of deposit issued by any Lender or
any commercial bank organized or licensed under the laws of the United States,
any state thereof, the District of Columbia, any foreign bank, or its branches
or agencies (fully protected against currency fluctuations), which, at the time
of acquisition, are rated A-1 (or better) by Standard & Poor's Corporation or
P-1 (or better) by Moody's Investors Services, Inc.; and (iii) commercial paper,
other than commercial paper issued by Foamex or any of its Affiliates, which is
at the time of acquisition rated A-1 (or better) by Standard & Poor's
Corporation or P-1 (or better) by Moody's Investors Services, Inc.; provided,
that (x) the maturities of such Cash Equivalents shall not exceed 90 days and
(y) such Cash Equivalents shall be maintained in investment and other accounts
of the Collateral Agent.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Sections 9601 et seq., any
amendments thereto, any successor statutes, and any regulations or legally
enforceable guidance promulgated thereunder.
"Change of Control" means any event pursuant to which (i)
another Person is substituted for FMXI as the managing general partner of
Foamex, whether by agreement with FMXI, as a result of bankruptcy of FMXI or
otherwise, (ii) another Person in addition to FMXI and Trace Foam becomes a
general partner of Foamex, (iii) FMXI or Trace Foam withdraws as general partner
of Foamex pursuant to the Partnership Agreement or otherwise, (iv) Marshall S.
Cogan ceases (a) to control at least fifty-one percent (51%) of the Equity
Interests in TIHI entitled to elect a majority of the board of directors or (b)
to legally and beneficially own, directly or indirectly and of record, at least
thirty percent (30%) of the issued and outstanding Equity Interests in TIHI, (v)
TIHI ceases to legally and beneficially
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<PAGE>
own, directly or indirectly and of record, one hundred percent (100%) of the
issued and outstanding Equity Interests in Trace Foam, whether due to the sale
of Trace Foam or any of its parent entities, foreclosure upon the stock of Trace
Foam or otherwise, (vi) TIHI and Trace Foam cease to legally and beneficially
own and control, directly or indirectly and of record, at least thirty percent
(30%) of the voting Equity Interests in Foamex International, (vii) any Person
or group of Persons (within the meaning of Section 13 or 14 of the Securities
Exchange Act) other than TIHI and its wholly-owned Subsidiaries has acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of the Equity Interests in
Foamex International in the aggregate amount in excess of thirty percent (30%),
(viii) there is a sale, transfer or other assignment or disposition of any of
the Equity Interests (A) in New Partners by Foamex International or FJGP, Inc.
or (B) in Foamex by any of New Partners, FMXI or Trace Foam, (ix) Foamex ceases
to own and control 100% of the issued and outstanding Equity Interests in either
FCC or GFI, (x) Foamex International ceases to own and control 100% of the
issued and outstanding Equity Interests in FJGP, Inc. or FMXI, or (xi) during
any period of two consecutive calendar years, individuals who at the beginning
of such period constituted the Board of Directors of the Managing General
Partner (or Foamex, if Foamex is a corporation) or FCC, as the case may be, or
whose nomination for election by the shareholders of the Managing General
Partner (or Foamex, if Foamex is a corporation) or FCC, as the case may be, was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the directors of the Managing General Partner (or
Foamex, if Foamex is a corporation) or FCC, as the case may be, then in office.
"Citibank" means Citibank, N.A., a national banking
association.
"Claim" means any claim or demand, by any Person, of
whatsoever kind or nature for any alleged Liabilities and Costs, whether based
in contract, tort, implied or express warranty, strict liability, criminal or
civil statute, Permit, ordinance or regulation, common law or otherwise.
"Collateral" means all Property and interests in Property now
owned or hereafter acquired by either Borrower upon which a Lien is granted to
the Collateral Agent or any Lender or Issuing Bank under any of the Loan
Documents.
"Commercial Letter of Credit" means any documentary letter of
credit issued by an Issuing Bank pursuant to Section 2.03 for the account of
either Borrower which is drawable upon presentation of documents evidencing the
sale or shipment of
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<PAGE>
goods purchased by such Borrower in the ordinary course of its
business.
"Commitment Termination Date" has the meaning ascribed
to such term in Section 2.01(e).
"Compliance Certificate" has the meaning ascribed to
such term in Section 7.01(d).
"Concentration Account" means, with respect to either
Borrower, the account of the Collateral Agent at its office at 399 Park Avenue,
New York, New York into which all funds from the Lockbox Accounts of such
Borrower shall be deposited.
"Consolidated Cash Interest Expense" means, for any period,
total interest expense, whether paid or accrued (without duplication) (including
the interest component of Capital Leases), of Foamex and its Subsidiaries on a
consolidated basis, including, without limitation, all bank fees, commissions,
discounts and other fees and charges owed with respect to letters of credit and
net costs (and reduction for net benefits) under Interest Rate Contracts, but
excluding, however, amortization of discount, interest paid in property other
than cash or any other interest expense not payable in cash, all as determined
in conformity with GAAP.
"Consolidated Fixed Charges" means, for any period, the sum of
the amounts for such period of (i) Consolidated Cash Interest Expense and (ii)
scheduled payments of principal on the Term Loans and other Indebtedness of
Foamex and its Subsidiaries (including the principal component of Capital Lease
obligations).
"Consolidated Net Income" means, for any period, the net
earnings (or loss) after taxes of Foamex and its Subsidiaries on a consolidated
basis for such period taken as a single accounting period determined in
conformity with GAAP.
"Constituent Documents" means, (i) with respect to any
corporation, (A) the articles/certificate of incorporation (or the equivalent
organizational documents) of such corporation, (B) the by-laws (or the
equivalent governing documents) of such corporation and (C) any document setting
forth the designation, amount and/or relative rights, limitations and
preferences of any class or series of such corporation's Equity Interests and
(ii) with respect to any partnership (whether limited or general), (A) the
certificate of partnership (or equivalent filings), (B) the partnership
agreement (or the equivalent organizational documents) of such partnership and
(C) any document setting forth the designation, amount and/or relative rights,
limitation and preferences of any of such partnership's Equity Interests.
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"Contaminant" means any pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls (PCBs), or any hazardous
or toxic constituent thereof as these terms are defined in federal, state or
local laws or regulations.
"Contractual Obligation", as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument to which that Person is a party or by which
it or any of its properties is bound, or to which it or any of its properties is
subject.
"Cure Loans" has the meaning ascribed to such term in
Section 3.02(b)(v)(C).
"Customary Permitted Liens" means
(i) Liens (other than Liens in favor of the PBGC) with respect
to the payment of Taxes, assessments or governmental charges in all
cases which are not yet due or which are being contested in good faith
by appropriate proceedings and with respect to which adequate reserves
or other appropriate provisions are being maintained in accordance with
GAAP;
(ii) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP;
(iii) Liens (other than any Lien in favor of the PBGC)
incurred or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other
types of social security benefits or to secure the performance of bids,
tenders, sales, contracts (other than for the repayment of borrowed
money), surety, appeal and performance bonds and contractual landlord
liens; provided that (A) all such Liens do not in the aggregate
materially detract from the value of Foamex or its Subsidiaries' assets
or Property or materially impair the use thereof in the operation of
their respective businesses, and (B) all Liens of attachment or
judgment and Liens securing bonds to stay judgments or in connection
with appeals do not secure at any time an aggregate amount exceeding
$1,000,000; and
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(iv) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of real property which do not materially
interfere with the ordinary conduct of the business of Foamex or any of
its Subsidiaries.
"Discount Debentures" means the Series A Senior Secured
Discount Debentures due 2004 (and to the extent the terms are substantially
identical thereto, Series B Senior Secured Discount Debentures) issued by New
Partners and Foamex-JPS Capital Corporation the gross proceeds of which do not
exceed $60,000,000, and governed by the terms of the Discount Debenture
Indenture.
"Discount Debenture Indenture" means the Indenture dated as of
June 28, 1994 among New Partners, Foamex-JPS Capital Corporation and Foamex
International, as guarantor, and Shawmut Bank Connecticut, National Association,
as Trustee, as such agreement may be amended, supplemented or otherwise modified
from time to time.
"Discount Debenture Offering Memorandum" means the Offering
Memorandum of New Partners, Foamex-JPS Capital Corporation and Foamex
International in connection with the issuance by New Partners, Foamex-JPS
Capital Corporation and Foamex International of Units consisting of the Discount
Debentures and the Foamex International Warrants, including all financial
statements included therein and all exhibits thereto and any document
incorporated by reference therein (together with any amendments thereof or
supplements thereto).
"DOL" means the United States Department of Labor and any
Person succeeding to the functions thereof.
"Dollars" and "$" mean the lawful money of the United
States.
"Domestic Lending Office" means, with respect to any Lender,
such Lender's office, located in the United States, specified as the "Domestic
Lending Office" under its name on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such other United
States office of such Lender as it may from time to time specify by written
notice to the Borrowers and the Funding Agent.
"EBITDA" means, for any period, (i) the sum of the amounts for
such period of (A) Consolidated Net Income, (B) consolidated depreciation,
amortization expense and other non-cash charges, (C) consolidated interest
expense, (D) Federal, state, local and foreign income taxes provided for by
Foamex, GFI, Foamex Canada, Foamex Fibers and, after Foamex's acquisition
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of the Foamex Mexico Group, Foamex Mexico Group and (E) solely with respect to
the fourth quarter of Fiscal Year 1995, the reserve taken during such quarter of
approximately $42 million; minus (ii) gains (or plus losses) from extraordinary
asset sales calculated pursuant to GAAP for such period to the extent such gains
or losses were included in the calculation of Consolidated Net Income; minus
interest or investment income. EBITDA shall exclude (x) the effect of any gain
or loss resulting from the consummation of the PFI Merger and (y) any EBITDA of
PFI from and after the date during the second fiscal quarter of Fiscal Year 1996
on which PFI was classified as a discontinued operation.
"Effective Date" means the first date on which all of the
conditions precedent set forth in Section 5.01 hereof shall be satisfied or
waived by the Lenders, but in no event shall such date be later than August 31,
1996.
"Eligibility Reserves" means, with respect to either Borrower,
as of two (2) Business Days after the date of written notice of any
determination thereof to such Borrower by the Collateral Agent, or to such
Borrower and the Collateral Agent by the Requisite Lenders, such amounts as the
Collateral Agent, or the Requisite Lenders, as the case may be, in the exercise
of its or their sole discretion, may from time to time establish against the
gross amount of Eligible Receivables of such Borrower to reflect risks or
contingencies arising after the Effective Date which may affect Eligible
Receivables.
"Eligible Assignee" means (i) a Lender or any Affiliate
thereof; or (ii) a finance company, insurance company, bank, other financial
institution or fund, reasonably acceptable to the Administrative Agents and
Foamex.
"Eligible Receivables" means, with respect to either Borrower,
each Receivable of such Borrower which, when scheduled to the Collateral Agent
and at all times thereafter, is not, except as otherwise agreed by the
Collateral Agent in its sole discretion, of any of the following types:
(i) it is due or unpaid more than thirty (30) days (or, in the
case of Receivables of Foamex, where the account debtor is General
Motors Corporation, Ford Motor Company or Chrysler Corporation, sixty
(60) days) after the date of the due date indicated in the original
invoice issued by Foamex with respect to the sale giving rise thereto;
or
(ii) it arises out of a sale not made in the ordinary course
of such Borrower's business or a sale to a Person which is an Affiliate
of such Borrower or controlled by an Affiliate of such Borrower; or
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(iii) it fails to meet or violates any warranty,
representation or covenant contained in this Agreement or any of the
other Loan Documents relating directly or indirectly to the Receivables
of such Borrower; or
(iv) the account debtor is also such Borrower's supplier or
creditor and the Receivable is or may become subject to any general
right of setoff by the account debtor, and such account debtor has not
entered into an agreement with the Collateral Agent with respect to the
waiver of rights of setoff which is in form and substance satisfactory
to the Collateral Agent, or the account debtor has disputed liability
with respect to such Receivable, or made any claim with respect to any
other Receivable due from such account debtor to such Borrower, in
which case the Receivable shall be ineligible to the extent of such
dispute, claim or setoff; or
(v) the account debtor has filed a petition for bankruptcy or
any other petition for relief under the Bankruptcy Code or any similar
statute, made an assignment for the benefit of creditors, or if any
petition or other application for relief under the Bankruptcy Code or
any similar statute has been filed against the account debtor, or if
the account debtor has failed, suspended its business operations,
become insolvent, suffered a receiver or a trustee to be appointed for
any of its assets or affairs, or is generally failing to pay its debts
as they become due; or
(vi) the sale is to an account debtor (other than General
Motors (Canada), Ford Motor Company or Chrysler Corporation) located
outside of the United States or the Canadian Provinces of Alberta,
British Columbia, Manitoba, Ontario and Saskatchewan, unless the
account debtor's obligations (or that portion of such obligations which
is acceptable to the Collateral Agent) with respect to such sale is
secured by a letter of credit issued to such Borrower in the name of
"Foamex L.P.", as beneficiary, in the case of Foamex, or in the name of
"General Felt Industries, Inc.", as beneficiary, in the case of GFI,
guaranty or eligible bankers' acceptance having terms, and from such
issuers and confirmation banks, as are acceptable to the Collateral
Agent; or
(vii) the sale is on a bill-and-hold, guaranteed
sale, sale-and-return, sale on approval, consignment,
or any other repurchase or return basis; or
(viii) the Collateral Agent believes, in the
exercise of its reasonable credit judgment, or the
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Requisite Lenders believe, in the exercise of their reasonable credit
judgment, that collection of such Receivable is insecure or that such
Receivable may not be paid as and when due and payable by reason of the
account debtor's financial inability to pay; or
(ix) the account debtor is the United States of America or any
department, agency or instrumentality thereof unless such Borrower
assigns its right to payment of the Receivable with such Governmental
Authority to the Collateral Agent in accordance with the terms of the
Assignment of Claims Act of 1940, as amended (31 U.S.C. ss. 3727); or
(x) the goods, the sale of which has given rise to such
Receivable, have not been shipped and delivered to and accepted by the
account debtor or the services, the performance of which has given rise
to such Receivable, have not been performed by such Borrower and
accepted by the account debtor; or
(xi) the Receivable(s) of the respective account debtor
exceed(s) a credit limit determined by the Collateral Agent, in the
exercise of its reasonable credit judgment, or determined by the
Requisite Lenders, in the exercise of their reasonable credit judgment,
at any time or times hereafter, in which case such Receivable(s) shall
be ineligible to the extent such Receivable(s) exceed(s) such limit; or
(xii) the Collateral Agent does not have a senior, perfected
security interest in such Receivable or such Receivable is subject to a
Lien which is not permitted under Section 9.03; or
(xiii) the account debtor is located in the state of New
Jersey or Minnesota and such Borrower has not filed and maintained
effective (unless such Borrower demonstrates to the Collateral Agent's
reasonable satisfaction that such Borrower is exempt from the
requirements for such filing) a current Business Activity Report with
the appropriate Governmental Authority in the states of Minnesota and
New Jersey, as applicable; or
(xiv) the sale is to an account debtor with respect to which
fifty percent (50%) or more of all Receivables owing by such account
debtor are unpaid for more than thirty (30) days, or sixty (60) days in
respect of such Receivables of Foamex owing by General Motors
Corporation and Ford Motor Company to Foamex, after the due date(s)
indicated in the original
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invoice(s) with respect to the sale giving rise
thereto; or
(xv) the Receivable is evidenced by chattel paper
or instruments; or
(xvi) the Receivable arises out of a transaction in connection
with which such Borrower has obtained a bond or other undertaking by a
surety with respect to such Borrower's performance of its obligations
to the account debtor.
"Environmental, Health or Safety Requirements of Law" means
all valid and enforceable Requirements of Law derived from or relating to
federal, state and local laws or regulations relating to or addressing the
environment, health or safety, including but not limited to any law, regulation,
or order relating to the use, handling, or disposal of any Contaminant, any law,
regulation, or order relating to Remedial Action, and any law, regulation, or
order relating to workplace or worker safety and health, as such Requirements of
Law are promulgated by the specifically authorized agency responsible for
administering such Requirements of Law.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for any (i) liabilities under any Environmental, Health or Safety
Requirement of Law, or (ii) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"Equipment" means, with respect to either Borrower, all of
such Borrower's present and future (i) equipment and fixtures, including,
without limitation, machinery, manufacturing, distribution and office equipment,
assembly systems, tools, appliances, furniture and vehicles, (ii) other tangible
personal Property (other than such Borrower's Inventory), and (iii) any and all
accessions, parts and appurtenances attached to any of the foregoing or used in
connection therewith, and any substitutions therefor and replacements, products
and proceeds thereof.
"Equity Interests", with respect to any Person, means any
capital stock issued by such Person, regardless of class or designation, or any
limited or general partnership interest in such Person, regardless of
designation, and all warrants, options, purchase rights, conversion or exchange
rights, voting rights, calls or claims of any character with respect thereto.
"ERISA" means the Employee Retirement Income Security Act of
1974, any amendments thereto, any successor statutes, and any regulations or
guidance promulgated thereunder.
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"ERISA Affiliate" means (i) any corporation which is a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Internal Revenue Code) as either Borrower; (ii) a partnership or
other trade or business (whether or not incorporated) which is under common
control (within the meaning of Section 414(c) of the Internal Revenue Code) with
either Borrower; and (iii) solely for purposes of liability under Section
412(c)(11) of the Internal Revenue Code, the Lien created under Section 412(n)
of the Internal Revenue Code, or for tax imposed for failure to meet minimum
funding standards under Section 4971 of the Internal Revenue Code, a member of
the same affiliated service group (within the meaning of Section 414(m) of the
Internal Revenue Code) as either Borrower, any corporation described in clause
(i) above or any partnership or trade or business described in clause (ii)
above.
"Eurodollar Affiliate" means, with respect to each Lender, the
Affiliate of such Lender (if any) set forth below such Lender's name under the
heading "Eurodollar Affiliate" on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such Affiliate of a
Lender as it may from time to time specify by written notice to the Borrowers
and the Funding Agent.
"Eurodollar Interest Payment Date" means (i) with respect to
any Eurodollar Rate Loan, the last day of each Eurodollar Interest Period
applicable to such Loan and (ii) with respect to any Eurodollar Rate Loan having
a Eurodollar Interest Period in excess of three (3) calendar months, the last
day of each three (3) calendar month interval during such Eurodollar Interest
Period.
"Eurodollar Interest Period" has the meaning ascribed
to such term in Section 4.02(b).
"Eurodollar Interest Rate Determination Date" has the meaning
ascribed to such term in Section 4.02(c).
"Eurodollar Lending Office" means, with respect to any Lender,
the office or offices of such Lender (if any) set forth below such Lender's name
under the heading "Eurodollar Lending Office" on the signature pages hereof or
on the Assignment and Acceptance by which it became a Lender or such office or
offices of such Lender as it may from time to time specify by written notice to
the Borrowers and the Funding Agent.
"Eurodollar Rate" means, with respect to any Eurodollar
Interest Period applicable to a Eurodollar Rate Loan, an interest rate per annum
obtained by dividing (i) the Base Eurodollar Rate applicable to that Eurodollar
Interest Period by (ii) a percentage equal to one hundred percent (100%) minus
the Eurodollar Reserve Percentage in effect on the relevant Eurodollar Interest
Rate Determination Date.
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"Eurodollar Rate Loans" means those Loans outstanding which
bear interest at a rate determined by reference to the Eurodollar Rate and the
Applicable Eurodollar Rate Margin as provided in Section 4.01(a).
"Eurodollar Reserve Percentage" means, for any day, that
percentage which is in effect on such day, as prescribed by the Federal Reserve
Board for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York, New York with
deposits exceeding five billion Dollars in respect of "Eurocurrency Liabilities"
(or in respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Rate Loans is determined or
any category of extensions of credit or other assets which includes loans by a
non-United States office of any bank to United States residents).
"Event of Default" means any of the occurrences set forth in
Section 11.01 after the expiration of any applicable grace period and the giving
of any applicable notice, in each case as expressly provided in Section 11.01.
"Existing Credit Agreement" has the meaning ascribed
thereto in the preamble.
"Fair Market Value" means, with respect to any asset of any
Person, the value of the consideration obtainable in a sale of such asset in the
open market, assuming a sale by a willing seller to a willing purchaser dealing
at arm's length and arranged in an orderly manner over a reasonable period of
time, each having reasonable knowledge of the nature and characteristics of such
asset, neither being under any compulsion to act, determined (a) in good faith
by the board of directors of such Person or (b) in an appraisal of such asset,
provided that such appraisal was performed relatively contemporaneously with
such sale by an independent third party appraiser and the basic assumptions
underlying such appraisal have not materially changed between the date thereof
and the date of such sale.
"FCC" means Foamex Capital Corporation, a Delaware
corporation.
"FCC Guaranty" means the Guaranty dated as of November 18,
1993 executed by FCC in favor of the Administrative Agents, the Lenders and the
Issuing Banks pursuant to which FCC guarantees all of the Obligations, as the
same may be amended, supplemented or otherwise modified from time to time.
"FCC Security Agreement" means the Security Agreement dated as
of November 18, 1993 between FCC and the Collateral Agent, pursuant to which FCC
grants to the Collateral Agent a
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Lien on all its Receivables, as such agreement may be amended, supplemented or
modified from time to time.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day in New York, New York, for the next
preceding Business Day) in New York, New York by the Federal Reserve Bank of New
York, or if such rate is not so published for any day which is a Business Day in
New York, New York, the average of the quotations for such day on such
transactions received by the Administrative Agents from three federal funds
brokers of recognized standing selected by the Administrative Agents.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any Governmental Authority succeeding to its
functions.
"Fiscal Month" means the fiscal month of each Borrower, which
shall be the four- or five-week period (or, in some instances, six-week period
at the end of a Fiscal Year) ending on the Sunday nearest to the last day of a
calendar month during a Fiscal Year.
"Fiscal Year" means the fiscal year of each Borrower, which
shall be the 52- or 53-week period ending on the Sunday nearest to December 31
of each calendar year.
"Fixed Charge Coverage Ratio" means, with respect to any
period, the ratio of (i) EBITDA for such period, minus Capital Expenditures paid
during such period, minus charges for federal, state, local and foreign income
taxes actually paid during such period, minus payments made to the partners of
Foamex during such period pursuant to the Tax Sharing Agreement and payments
made to any Affiliate of Foamex to the extent permitted to be made under Section
9.04 or 9.06 to (ii) Consolidated Fixed Charges for such period.
"FMXI" means FMXI, Inc., a Delaware corporation and
wholly-owned Subsidiary of Foamex International.
"Foamex" has the meaning ascribed thereto in the
preamble.
"Foamex Canada" means Foamex Canada Inc., a corporation
incorporated under the Canada Business Corporations Act.
"Foamex Exports" means Foamex Exports Co., Inc., a corporation
incorporated under the laws of the Virgin Islands of the United States of
America.
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"Foamex Fibers" means Foamex Fibers, Inc., a Delaware
corporation and a wholly-owned Subsidiary of GFI.
"Foamex Guaranty" means the Guaranty dated as of November 18,
1993 executed by Foamex in favor of the Administrative Agents, the Lenders and
the Issuing Banks pursuant to which Foamex guarantees all of the Obligations of
GFI, as the same may be amended, supplemented or otherwise modified from time to
time.
"Foamex International" means Foamex International Inc.,
a Delaware corporation.
"Foamex International Guaranty" means the Amended and Restated
Guaranty dated as of June 28, 1994 executed by Foamex International in favor of
the Administrative Agents, the Lenders and the Issuing Banks pursuant to which
Foamex International guarantees all of the Obligations of GFI and Foamex, as the
same may be amended, supplemented or otherwise modified from time to time.
"Foamex International Loan" means the loan made by Foamex
International to Foamex and evidenced by the promissory note dated as of April
4, 1994 in the maximum principal amount equal to $4,995,000.
"Foamex International Supply Agreement" means the Supply
Agreement dated as of June 23, 1994 among Foamex and Foamex International with
respect to the purchase and resale by Foamex International to Foamex of certain
raw materials, as the same may be amended, supplemented or otherwise modified
from time to time.
"Foamex International Warrants" mean the Warrants to purchase
600,000 shares of common stock, par value $0.01 per share of Foamex
International issued in connection with the sale of the Discount Debentures.
"Foamex Mexico Group" means, collectively, (i) Foamex Latin
America, Inc., a Delaware corporation, (ii) Foamex Mexico, Inc., a Delaware
corporation, (iii) Foamex Mexico II, Inc., a Delaware corporation, (iv) Grupo
Foamex de Mexico, S.A. de C.V., a Mexican corporation, (v) TEFSA, (vi) Foamex de
Mexico, S.A. de C.V., a Mexican corporation, and (vii) Colchones y de Todo en
Espuma, S.A. de C.V., a Mexican corporation.
"Foamex Security Agreement" means the Security Agreement dated
as of November 18, 1993 between Foamex and the Collateral Agent, pursuant to
which Foamex grants to the Collateral Agent a Lien on all its Receivables, as
such agreement may be amended, supplemented or modified from time to time.
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"Foreign Employee Benefit Plan" means any employee benefit
plan as defined in Section 3(3) of ERISA which is maintained or contributed to
for the benefit of the employees of either Borrower or any of its Subsidiaries
or any of its ERISA Affiliates and is not covered by ERISA pursuant to ERISA
Section 4(b)(4).
"Foreign Pension Plan" means any employee benefit plan as
defined in Section 3(3) of ERISA which (i) is maintained or contributed to for
the benefit of employees of either Borrower or any of Borrowers' Subsidiaries or
any of its ERISA Affiliates, (ii) is not covered by ERISA pursuant to Section
4(b)(4) of ERISA, and (iii) under applicable local law, is required to be funded
through a trust or other funding vehicle.
"Funded Debt" means, to the extent the following would be
reflected on a balance sheet of Foamex and its Subsidiaries on a consolidated
basis prepared in accordance with GAAP, the principal amount of all Indebtedness
of Foamex and its Subsidiaries in respect of borrowed money, evidenced by debt
securities, debentures, acceptances, notes or other similar instruments, in
respect of Capital Lease Obligations, in respect of Reimbursement Obligations or
in respect of the deferred purchase price of property or services, except
accounts payable and accrued expenses arising in the ordinary course of
business. The amount of Funded Debt attributable to Revolving Loans as of any
date in a fiscal quarter shall be determined by taking the average daily
outstanding amount of Revolving Loans during the fiscal quarter immediately
preceding such fiscal quarter.
"Funded Debt to Net Worth Ratio" means, as of any date of
determination, the ratio of (i) Funded Debt, as of such date, to (ii) the Net
Worth, as of such date, of Foamex and its Subsidiaries on a consolidated basis.
"Funding Date" means, with respect to any Revolving Loan, the
date of the funding of such Revolving Loan, and with respect to any Swing Loan,
the date of the funding of such Swing Loan.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accounting Standards Board or in such
other statements by such other entity as may be in general use by significant
segments of the accounting profession as in effect on the date hereof (unless
otherwise specified herein as in effect on another date or dates).
"General and Limited Partners' Agreement" means the Amended
and Restated General and Limited Partners' Agreement dated as of October 13,
1992 among Trace Foam, Recticel Foam Corporation, FCD Sub, Inc., TIHI and the
Collateral Agent, as
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such agreement may be amended, supplemented or otherwise modified
from time to time.
"General Partners" means, collectively, Trace Foam, as general
partner, and the Managing General Partner.
"GFI" has the meaning ascribed thereto in the preamble.
"GFI Guaranty" means the Guaranty dated as of November 18,
1993 executed by GFI in favor of the Administrative Agents, the Lenders and the
Issuing Banks pursuant to which GFI guarantees all of the Obligations of Foamex,
as the same may be amended, supplemented or otherwise modified from time to
time.
"GFI Intercompany Note" means that certain unsecured Amended
and Restated Revolving Promissory Note made by GFI in favor of Foamex dated as
of June 3, 1993 in an aggregate principal amount of up to $35,000,000, as
amended, supplemented, modified, refinanced, refunded or replaced from time to
time, which note has been pledged to the Trustee under the Senior Secured Note
Indenture pursuant to the Senior Secured Note Collateral Documents.
"GFI L/C Sublimit" means $10,000,000.
"GFI Security Agreement" means the Security Agreement dated as
of November 18, 1993 between GFI and the Collateral Agent, pursuant to which GFI
grants to the Collateral Agent a Lien on all its Receivables, as such agreement
may be amended, supplemented or modified from time to time.
"GFI Sublimit" means $25,000,000.
"GFI Supplemental Indenture (Senior)" means the Supplemental
Indenture to the Senior Note Indenture dated as of March 23, 1993 among GFI,
FCC, Foamex and Shawmut Bank Connecticut, National Association (formerly The
Connecticut National Bank), as Trustee.
"GFI Supplemental Indenture (Subordinated)" means the
Supplemental Indenture to the Subordinated Debenture Indenture dated as of March
23, 1993 among GFI, FCC, Foamex and Shawmut Bank, N.A., as Trustee.
"Governmental Authority" means any nation or government, any
federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Holder" means any Person entitled to enforce any of
the Obligations, whether or not such Person holds any evidence of
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Indebtedness, including, without limitation, each Administrative Agent, each
Lender and each Issuing Bank.
"Indebtedness", as applied to any Person, means, at any time,
(without duplication) (a) all indebtedness, obligations or other liabilities of
such Person (i) for borrowed money or evidenced by debt securities, debentures,
acceptances, notes or other similar instruments, and any accrued interest, fees
and charges relating thereto, (ii) under profit payment agreements or in respect
of obligations to redeem, repurchase or exchange any Securities of such Person
or to pay dividends in respect of any stock, (iii) with respect to letters of
credit issued for such Person's account, (iv) to pay the deferred purchase price
of property or services, except accounts payable and accrued expenses arising in
the ordinary course of business as presently conducted, (v) in respect of
Capital Leases, or (vi) which are Accommodation Obligations; (b) all
indebtedness, obligations or other liabilities of such Person or others secured
by a Lien (other than Customary Permitted Liens) on any property of such Person,
whether or not such indebtedness, obligations or liabilities are assumed by such
Person, all as of such time; (c) all indebtedness, obligations or other
liabilities of such Person in respect of Interest Rate Contracts and foreign
exchange contracts, net of liabilities owed to such Person by the counterparties
thereon; and (d) all preferred Equity Interests in such Person subject to
mandatory redemption upon the occurrence of any contingency (but only to the
extent such contingency has occurred).
"Intercompany Promissory Note" means an unsecured note, in
form and substance satisfactory to the Administrative Agents, made by either
Borrower in favor of the other Borrower the obligations under which have been
subordinated to the payment in full of the Obligations on terms and conditions
satisfactory to the Requisite Lenders; provided, however, that any Intercompany
Promissory Note evidencing loans or advances of "Excess Proceeds" (as defined in
the Senior Secured Note Indenture) shall be subordinated to the prior payment in
full of the Obligations on terms and conditions substantially identical to the
terms and conditions of the GFI Intercompany Note.
"Interest Coverage Ratio" means, with respect to any period,
the ratio of (i) the sum of (a) EBITDA for such period, to (ii) Consolidated
Cash Interest Expense for such period.
"Interest Rate Contracts" means interest rate exchange, swap,
collar or cap or similar agreements providing interest rate protection.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, any
successor statute and any regulations or guidance promulgated thereunder.
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"Inventory" means, with respect to either Borrower, all of
such Borrower's present and future (i) inventory, (ii) goods, merchandise and
other personal Property furnished or to be furnished under any contract of
service or intended for sale or lease, and all goods consigned by such Borrower
and all other items which have previously constituted Equipment but are then
currently being held for sale or lease in the ordinary course of such Borrower's
business, (iii) raw materials, work-in-process and finished goods, (iv)
materials and supplies of any kind, nature or description used or consumed in
such Borrower's business or in connection with the manufacture, production,
packing, shipping, advertising, finishing or sale of any of the Property
described in clauses (i) through (iii) above, (v) goods in which such Borrower
has a joint or other interest to the extent of such Borrower's interest therein
or right of any kind (including, without limitation, goods in which such
Borrower has an interest or right as consignee), and (vi) goods which are
returned to or repossessed by such Borrower; in each case whether in the
possession of such Borrower, a bailee, a consignee, or any other Person for
sale, storage, transit, processing, use or otherwise, and any and all documents
for or relating to any of the foregoing.
"Investment" means, with respect to any Person, (i) any
purchase or other acquisition by that Person of Securities, or of a beneficial
interest in Securities, issued by any other Person, (ii) any purchase by that
Person of all or substantially all of the assets of a business conducted by
another Person, and (iii) any direct or indirect loan, advance (other than
prepaid expenses, accounts receivable, advances to employees and similar items
made or incurred in the ordinary course of business as presently conducted) or
capital contribution by that Person to any other Person, including all
Indebtedness to such Person arising from a sale of property by such Person other
than in the ordinary course of its business. The amount of any Investment shall
be the original cost of such Investment, plus the cost of all additions thereto
less the amount of any return of capital or principal to the extent such return
is in cash with respect to such Investment without any adjustments for increases
or decreases in value or write-ups, write-downs or write-offs with respect to
such Investment.
"Investment Account" means an account of each Borrower at
Citibank's offices in New York, New York into which certain payments,
prepayments and cash proceeds may be transferred in accordance with Section
3.02(b). Each Investment Account shall be under the sole dominion and control of
the Collateral Agent; provided that all amounts deposited therein shall be held
by the Collateral Agent for the benefit of the Administrative Agents, the
Lenders and the Issuing Banks and shall be subject to the terms of Section
11.03.
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"IPO Supplemental Indenture (Senior)" means the Third
Supplemental Indenture to the Senior Note Indenture dated as of December 14,
1993 among PFI, GFI, FCC, Foamex, Foamex International and Shawmut Bank
Connecticut, National Association (formerly The Connecticut National Bank), as
Trustee.
"IPO Supplemental Indenture (Senior Secured)" means the Second
Supplemental Indenture to the Senior Secured Note Indenture dated as of December
14, 1993 among FCC, Foamex, GFI, PFI, Foamex International and Shawmut Bank,
National Association,
as Trustee.
"IPO Supplemental Indenture (Subordinated)" means the Third
Supplemental Indenture to the Subordinated Debenture Indenture dated as of
December 14, 1993 among PFI, GFI, FCC, Foamex, Foamex International and Shawmut
Bank, N.A., as Trustee.
"IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.
"Issuing Banks" means Citibank, Scotiabank and each other
Lender approved by the Administrative Agents and the Borrowers who has agreed to
become an Issuing Bank for the purpose of issuing Letters of Credit pursuant to
Section 2.03.
"JPS Automotive" means JPS Automotive Products Corp., a
Delaware corporation.
"JPS Automotive Acquisition" means the acquisition of
certain assets of JPS Auto Inc., JPS Converter and Industrial
Corp., and the Equity Interest in Cramerton Automotive Products,
L.P. and Cramerton Management Corp. by JPS Automotive from JPS
Textile Group, Inc. and certain of its subsidiaries on June 28,
1994 pursuant to the JPS Automotive Acquisition Agreement.
"JPS Automotive Acquisition Agreement" means the Asset
Purchase Agreement dated as of May 25, 1994 among JPS Textile Group, Inc., JPS
Auto Inc., JPS Converter and Industrial Corp., JPS Automotive and Foamex
International, as the same may be amended, supplemented or otherwise modified
from time to time.
"JPS Automotive Credit Agreement" means the Amended and
Restated Credit Agreement dated as of October 5, 1994 among JPS Automotive, JPS
Partners, the lenders and issuing banks party thereto and Citibank and
Scotiabank as administrative agents, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"JPS Automotive Senior Notes" means the 11 1/8% Senior Notes
due 2001 issued by JPS Automotive in the aggregate principal amount of
$180,000,000 and governed by the terms of the JPS Automotive Senior Note
Indenture.
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"JPS Automotive Senior Note Indenture" means the Indenture
dated as of June 28, 1994 between JPS Automotive and Shawmut Bank Connecticut,
National Association, as Trustee, as such agreement may be amended, supplemented
or otherwise modified from time to time.
"JPS Automotive Senior Note Registration Statement" means the
Registration Statement on Form S-1 (Registration No. 33-75510) of JPS Automotive
filed with the Securities and Exchange Commission on March 24, 1994, in
connection with the issuance of 11 1/8% Senior Notes due 2001 of JPS Automotive,
including all financial statements and all exhibits thereto and any document
incorporated by reference therein (together with any amendments thereof or
supplements thereto).
"JPS Partners" means JPS Automotive L.P., a Delaware
limited partnership.
"L/C Sublimit" means $15,000,000.
"Lender" means Citibank, Scotiabank and the other financial
institutions on the signature pages hereof together with their respective
successors and assigns (including, without limitation, any Replacement Lender)
and the Swing Bank.
"Letter of Credit" means any Commercial Letter of
Credit or Standby Letter of Credit.
"Letter of Credit Fee" has the meaning ascribed to such
term in Section 4.03(b).
"Letter of Credit Obligations" means, at any particular time,
the sum of (i) all outstanding Reimbursement Obligations at such time, plus (ii)
the aggregate undrawn face amount of all outstanding Letters of Credit at such
time, plus (iii) the aggregate face amount of all Letters of Credit requested by
the Borrowers at such time but not yet issued (unless the request for an
unissued Letter of Credit has been denied pursuant to Section 2.03(c)(i)).
"Letter of Credit Reimbursement Agreement" means, with respect
to a Letter of Credit, such form of application therefor and form of
reimbursement agreement therefor (whether in a single or several documents,
taken together) as the Issuing Bank from which such letter of credit is
requested may employ in the ordinary course of business for its own account,
with such modifications thereto as may be agreed upon by the Issuing Bank and
the Borrower for whose account such letter of credit was issued and as are not
materially adverse (in the judgment of the Issuing Bank) to the interests of the
Lenders; provided, however, in the event of any conflict between the terms of
any Letter of Credit Reimbursement Agreement and this Agreement, the terms of
this Agreement shall control.
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"Letters" means, collectively, the letter dated
November 8, 1994 and the letter dated November 10, 1994, each
addressed to Citibank, N.A. from Karl H. Winters of TIHI.
"Liabilities and Costs" means all liabilities, obligations,
responsibilities, losses, damages, personal injury, death costs, punitive
damages, economic damages, consequential damages, treble damages, intentional,
willful or wanton injury or damage to the environment, natural resources or
public health or welfare, costs and expenses (including, without limitation,
attorney, expert and consulting fees and costs of investigation, feasibility or
Remedial Action studies), fines, penalties and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past, present or
future.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, conditional sale agreement, deposit arrangement,
security interest, encumbrance, lien (statutory or other), preference, priority
or other security agreement or preferential arrangement of any kind or nature
whatsoever in respect of any property of a Person, whether granted voluntarily
or imposed by law, and includes the interest of a lessor under a Capital Lease
or under any financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement or similar notice
(other than a financing statement filed by a "true" lessor or consignor pursuant
to Section 9-408 of the UCC), naming the owner of such property as debtor,
under the UCC or other comparable law of any jurisdiction.
"Limited Partner" means New Partners, in its capacity
as a limited partner of Foamex.
"Loan Account" has the meaning ascribed to such term in
Section 3.05(b).
"Loan Documents" means this Agreement, the Notes, the Foamex
Security Agreement, the GFI Security Agreement, the FCC Security Agreement, the
Foamex Guaranty, the GFI Guaranty, the FCC Guaranty, the Foamex International
Guaranty, the Amendatory Agreement, the PFI Merger Amendatory Agreement, the
Lockbox Agreements, the General and Limited Partners' Agreement, the TIHI
Subordination Agreement, the Rallis Subordination Agreement, Interest Rate
Contracts to which any Lender or any Affiliate of a Lender is a party (other
than the Interest Rate Contract entered into between Citibank and Foamex
pursuant to the Master Agreement dated March 31, 1994 between such parties),
foreign exchange contracts to which any Lender or any Affiliate of a Lender is a
party, the fee letters referred to in Section 4.03, and all other instruments,
agreements and written Contractual Obligations between either Borrower or any
Subsidiary of either Borrower (other than Foamex Canada) and any of the
Administrative Agents, any Lender or any Issuing Bank delivered to either of the
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Administrative Agents, such Lender or such Issuing Bank pursuant to or in
connection with this Agreement.
"Loan Parties" means, collectively, the Borrowers, the
General Partners, FCC and Foamex International.
"Loans" means Term Loans, Revolving Loans, Base Rate
Loans, Eurodollar Rate Loans and Swing Loans.
"Lockbox Account" has the meaning ascribed to such term
in Section 3.06(a).
"Lockbox Agreement" means a lockbox agreement executed by each
Lockbox Bank, the Borrower party thereto and the Collateral Agent as such
agreement may be amended, modified or supplemented from time to time.
"Lockbox Bank" means, with respect to either Borrower, each
bank that has executed a Lockbox Agreement and has been confirmed by the
Collateral Agent not to be in uncertain financial condition, into which such
Borrower deposits proceeds of Collateral and identified as such on Schedule
1.01.2.
"Management Agreement" means the Trace Foam Management
Agreement dated as of October 13, 1992 between Foamex and Trace Foam as the same
may be amended, supplemented or otherwise modified from time to time, including
the Affirmation Agreement dated as of December 14, 1993 among Foamex, Trace Foam
and FMXI affirming the Management Agreement.
"Managing General Partner" means FMXI.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U and Regulation G.
"Material Adverse Effect" means a material adverse effect upon
(i) the condition (financial or otherwise), business, performance, properties,
operations, assets or prospects of either Borrower, or Foamex and its
Subsidiaries, taken as a whole, (ii) the ability of any Loan Party to perform
its obligations under the Loan Documents, or (iii) the ability of the Lenders,
the Issuing Banks or the Collateral Agent to enforce the Loan Documents.
"Maximum Revolving Credit Amount" means, at any particular
time, an amount equal to (i) the lesser of (A) the Revolving Loan Commitments at
such time and (B) the excess of the aggregate Borrowing Base of the Borrowers at
such time over the principal amount of the Term Loans outstanding at such time
less (ii) the Availability Reserves in effect at such time.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA which is, or within the
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immediately preceding six (6) years was, contributed to by either Borrower or
any ERISA Affiliate.
"Net Cash Proceeds of Sale" means (i) proceeds received by
Foamex or any of its Subsidiaries in cash from the sale, lease, assignment or
other disposition of any Property, other than Property subject to a Lien
permitted by Section 9.03 in favor of the Trustee under the Senior Secured Note
Indenture or the Trustee under the Senior Note Indenture and other than sales of
inventory in the ordinary course of business, net of (A) the costs of sale,
assignment or other disposition, (B) any income, franchise, transfer or other
tax liability arising from such transaction (including payments made or to be
made pursuant to the Tax Sharing Agreement and after taking into account any
available tax credits or deductions arising from such transaction) and (C)
amounts applied to the repayment of Indebtedness (other than the Obligations)
secured by a Lien permitted by Section 9.03 (other than Liens in favor of the
Trustee under the Senior Secured Note Indenture or the Trustee under the Senior
Note Indenture) on the asset disposed of, if such net proceeds arise from any
individual sale, assignment or other disposition or from any group of related
sales, assignments or other dispositions; and (ii) proceeds of insurance on
account of the loss of or damage to any such Property or Properties, and
payments of compensation for any such Property or Properties taken by
condemnation or eminent domain. "Net Cash Proceeds of Sale" shall not include
(x) rental income arising from Foamex's sublease of office space to Foamex
International and TIHI at 375 Park Avenue, New York, New York and (y) rental
income not in excess of $1,000,000 in any Fiscal Year arising from the lease or
sublease by Foamex and its Subsidiaries of Real Property to other Persons (to
the extent such lease or sublease is otherwise permitted hereunder).
"Net Worth" means, at any time, with respect to any Person (i)
total consolidated assets of such Person minus (ii) total consolidated
liabilities of such Person (it being understood that Equity Interests in such
Person shall not constitute liabilities except to the extent such Equity
Interests are Indebtedness). Assets and liabilities shall be determined in
accordance with GAAP, except that Investments in and moneys due from Affiliates
of either Borrower (other than Foamex, in the case of GFI, and other than its
wholly-owned Subsidiaries, permitted Investments in Prefoam AG, a Swiss
corporation, and the TIHI Loan, in the case of Foamex) shall be excluded from
total consolidated assets of such Borrower (other than trade receivables due
from Affiliates incurred in the ordinary course of business less than sixty (60)
days past due).
"New Partners" means Foamex-JPS Automotive L.P., a
Delaware limited partnership.
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"New Partners Investment" means, collectively, (i) the
contribution by the New Partners of all the proceeds of the New Partners Loan
and a portion of the proceeds of the Discount Debentures in the aggregate amount
of up to $100,000,000 to JPS Partners in exchange for a 99% limited partnership
interest in JPS Partners and (ii) the subsequent contribution by JPS Partners of
all such proceeds received from New Partners to JPS Automotive in exchange for
100% of the capital stock of JPS Automotive.
"New Partners Loan" means the loan, not in excess of a
principal amount of $40,000,000 made by Foamex to New Partners pursuant to the
New Partners Note Purchase Agreement and evidenced by the New Partners Note.
"New Partners Note" means that certain Senior Note due 2006
dated June 28, 1994 in the principal amount not in excess of $40,000,000 issued
by New Partners in favor of Foamex.
"New Partners Note Collateral Documents" means (i) the Pledge
Agreement dated as of June 28, 1994 between New Partners and Foamex, pursuant to
which New Partners pledges to Foamex the limited partner interest in JPS
Partners held by New Partners to secure the obligations of New Partners under
the New Partners Note and (ii) the Pledge Agreement dated as of June 28, 1994
between JPS Partners and Foamex, pursuant to which JPS Partners pledges to
Foamex the shares of JPS Automotive held by JPS Partners to secure the
obligations of New Partners under the New Partners Note, as such agreements may
be amended, supplemented or otherwise modified from time to time.
"New Partners Note Purchase Agreement" means the Note Purchase
Agreement dated as of June 28, 1994 between New Partners and Foamex pursuant to
which New Partners issues the New Partners Note in favor of Foamex.
"1993 Subordinated Debentures" means the Senior Subordinated
Debentures (Series A and B) issued by FCC and Foamex in the aggregate principal
amount of up to $7,000,000 and governed by the terms of the 1993 Subordinated
Debenture Indenture.
"1993 Subordinated Debenture Indenture" means the Indenture
dated as of March 23, 1993 among Foamex, FCC, GFI as Guarantor and U.S. Trust
Company of Texas, N.A., as Trustee, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"1995 Restructuring Dispositions" means the anticipated sale
or sublease of certain real property and the sale of certain Equipment
identified to the Collateral Agent in a letter addressed to the Collateral Agent
dated December 29, 1995 to be made in connection with the "1995 Restructuring
Reserve" contemplated in the business plan submitted by Foamex to the
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Collateral Agent dated December 29, 1995 and revised on February 6, 1996.
"Non Pro Rata Loan" has the meaning ascribed to such
term in Section 3.02(b)(v).
"Notes" means collectively the Revolving Loan Notes,
Term Loan Notes and the Swing Loan Notes.
"Notice of Borrowing" means a Notice of Borrowing
substantially in the form attached hereto as Exhibit D.
"Notice of Conversion/Continuation" means a Notice of
Conversion/Continuation substantially in the form attached hereto as Exhibit E
with respect to a proposed conversion or continuation of a Loan pursuant to
Section 4.01(c).
"Obligations" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by either Borrower to either
Administrative Agent, any Lender, any Issuing Bank, any Affiliate of either
Administrative Agent, any Lender or any Issuing Bank, or any Person entitled to
indemnification pursuant to Section 13.03 of this Agreement, of any kind or
nature, present or future, whether or not evidenced by any note, guaranty or
other instrument, arising under this Agreement, the Notes or any other Loan
Document, whether or not for the payment of money, whether arising (i) under or
in connection with any cash management services provided by the Administrative
Agents or an Affiliate of the Administrative Agents, (ii) by reason of an
extension of credit, opening or amendment of a Letter of Credit or payment of
any draft drawn thereunder, loan, guaranty, indemnification, Interest Rate
Contract, foreign exchange contract or (iii) in any other manner, whether direct
or indirect (including those acquired by assignment), absolute or contingent,
due or to become due, now existing or hereafter arising and however acquired.
The term includes, without limitation, all interest, charges, expenses, fees,
attorneys' fees and disbursements and any other sum chargeable to either
Borrower under this Agreement or any other Loan Document.
"Officer's Certificate" means, (i) as to a corporation, a
certificate executed on behalf of such corporation by (A) the chairman or
vice-chairman of its board of directors (if an officer of such corporation) or
(B) its president, any of its vice-presidents, its chief financial officer, or
its treasurer, (ii) as to a partnership, a certificate executed on behalf of
such partnership by (A), if a limited partnership, by its general partner (and
if the general partner is a corporation by the appropriate individual indicated
in (i) above) and (B), if other than a limited partner, by a partner (and if
such partner is a corporation by the appropriate individual indicated in (i)
above).
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"Operating Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person as lessee which
is not a Capital Lease.
"OSHA" means the Occupational Safety and Health Act of 1970,
any amendments thereto, any successor statutes and any regulations or guidance
promulgated thereunder.
"Other Indebtedness" means all of the Indebtedness of
Foamex or any of its Subsidiaries other than the Obligations.
"Partnership Agreement" means the Fourth Amended and Restated
Agreement of Limited Partnership of Foamex L.P. dated as of December 14, 1993
among Trace Foam, Foamex International and FMXI, as amended by the First
Amendment thereto dated as of June 28, 1994, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"Pending Proceeds" has the meaning ascribed to such
term in Section 3.01(b)(i).
"Permits" means any permit, approval, authorization license,
variance, or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Permitted Existing Accommodation Obligations" means
those Accommodation Obligations of Foamex or any of its Subsidiaries identified
as such on Schedule 1.01.3.
"Permitted Existing Indebtedness" means the Indebtedness of
Foamex and its Subsidiaries (other than Permitted Subordinated Indebtedness)
identified as such on Schedule 1.01.4.
"Permitted Existing Investments" means those Investments of
either Borrower identified as such on Schedule 1.01.5.
"Permitted Existing Liens" means the Liens on assets of either
Borrower identified as such on Schedule 1.01.6.
"Permitted Subordinated Indebtedness" means Indebtedness
evidenced by, or in respect of, principal and interest on (i) the Subordinated
Debentures in a principal amount not exceeding $126,000,000 (including the
Accommodation Obligations of GFI under the GFI Supplemental Indenture
(Subordinated)), (ii) the 1993 Subordinated Debentures in a principal amount not
exceeding $7,000,000 (including the Accommodation Obligations of GFI under the
1993 Subordinated Debenture Indenture), (iii) any note made by Foamex in favor
of Foamex Canada pursuant to Section 9.01(vii), in each case, until such time as
such notes, debentures or indentures are retired,
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(iv) the Rallis Subordinated Note in a principal amount not exceeding
$7,014,864, (v) any Rallis Claim (as defined in the Rallis Subordination
Agreement) and (vi) any Subordinated Claim (as defined in the TIHI Subordination
Agreement).
"Person" means any natural person, corporation, limited
partnership, general partnership, joint stock company, joint venture,
association, company, trust, bank, trust company, land trust, business trust,
limited liability company or other organization, whether or not a legal entity,
and any Governmental Authority.
"PFI" has the meaning ascribed thereto in the preamble.
"PFI Guaranty" means the Guaranty dated as of November 18,
1993 executed by PFI in favor of the Administrative Agents, the Lenders and the
Issuing Banks pursuant to which PFI guarantees all of the Obligations of Foamex
and GFI, as the same may be amended, supplemented or otherwise modified from
time to time.
"PFI Guaranty Release Amount" means an amount equal to the
greater of (i) $12,000,000 and (ii) 80% of the book value of the Receivables of
PFI as indicated on the most recent Borrowing Base Certificate delivered to the
Administrative Agents pursuant to Section 7.02 to be paid to the Lenders in
respect of PFI's guaranty of the Term Loans under the PFI Guaranty in connection
with the release by the Administrative Agents, the Lenders and the Issuing Banks
of PFI's obligations under the PFI Guaranty and the Collateral Agent's release
of its Lien on the Collateral (as defined in the PFI Security Agreement)
immediately prior to the consummation of the PFI Merger.
"PFI Intercompany Note" means that certain unsecured
Promissory Note made by PFI in favor of Foamex dated as of November 18, 1993 in
an aggregate principal amount of up to $50,315,234.63, as amended, supplemented,
modified, refinanced, refunded or replaced from time to time.
"PFI Merger" means the Merger (as defined in the PFI
Merger Agreement).
"PFI Merger Agreement" means the Agreement and Plan of Merger
dated as of June 11, 1996 by and among PFI Subsidiary, Inc., PFI Acquisition
Corp., Jody B. Vitale, PFI, GFI, and Foamex, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"PFI Merger Amendatory Agreement" shall mean the Amendatory
Agreement dated as of the Effective Date among the Borrowers, Foamex
International, FCC, PFI and the Collateral Agent, as such agreement may be
amended, supplemented or otherwise modified from time to time.
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"PFI Merger Documents" means the PFI Merger Agreement and the
other documents entered into in connection with the transactions contemplated
thereby.
"PFI Merger Proceeds" means the proceeds received by GFI in
cash from the PFI Merger, net of (A) transaction costs and (B) any income,
franchise, transfer or other tax liability arising from the PFI Merger
(including payments made or to be made pursuant to the Tax Sharing Agreement and
after taking into account any available tax credits or deductions arising from
such transaction). The PFI Merger Proceeds shall not include the PFI Guaranty
Release Amount.
"PFI Security Agreement" means the Security Agreement dated as
of November 18, 1993 between PFI and the Collateral Agent, pursuant to which PFI
grants to the Collateral Agent a Lien on all its Receivables, as such agreement
may be amended, supplemented or modified from time to time.
"Plan" means an employee benefit plan defined in Section 3(3)
of ERISA in respect of which either Borrower or any ERISA Affiliate is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"Potential Event of Default" means an event which, with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default.
"Proceeds of Issuance of Equity Interests or Indebtedness"
means net cash proceeds received by Foamex or any of its Subsidiaries at any
time from and after June 28, 1994 on account of the issuance of (i) any Equity
Interest in Foamex or any such Subsidiary other than any Equity Interest in GFI
or Foamex Canada issued to Foamex or (ii) Indebtedness (other than Indebtedness
permitted under Section 9.01 as in effect on June 28, 1994) of Foamex and/or any
of its Subsidiaries, in each case net of all transaction costs and underwriters'
discounts with respect thereto.
"Process Agent" has the meaning ascribed to such term
in Section 13.17(a)(i).
"Property" means any and all real property or personal
property, whether tangible or intangible, plant, building, facility, structure,
underground storage tank or unit, Equipment, Inventory, general intangibles,
Receivables, Equity Interests, Securities, account, deposit, claim, right or
other asset owned, leased or operated by Foamex or any of its Subsidiaries, as
applicable, (including any surface water thereon or adjacent thereto, and soil
and groundwater thereunder).
"Pro Rata Share" means, with respect to any Lender
(including, without limitation, the Swing Bank), the percentage
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obtained by dividing (i) the sum of such Lender's Revolving Loan Commitment and
the outstanding balance of the Term Loans made by such Lender (in each case, as
reduced or adjusted from time to time in accordance with the provisions of this
Agreement) by (ii) the aggregate amount of all Revolving Loan Commitments and
the outstanding balance of all Term Loans (in each case, as reduced or adjusted
from time to time in accordance with the provisions of this Agreement).
"Protective Advance" has the meaning ascribed to such
term in Section 12.09.
"Rallis" means John Rallis.
"Rallis Subordinated Note" means the Subordinated Promissory
Note in the principal amount of $7,014,864 made by Foamex in favor of Rallis
dated May 6, 1993.
"Rallis Subordination Agreement" means the Rallis
Subordination Agreement dated as of December 14, 1993 between Rallis and the
Collateral Agent, as such agreement may be amended, supplemented or modified
from time to time.
"RCRA" means the Resource Conservation and Recovery Act of
1976, 42 U.S.C. Sections 6901 et seq., any amendments thereto, any successor
statutes, and any regulations or legally enforceable guidance promulgated
thereunder.
"Receivables" means, with respect to any Person or entity, all
of the following property and interests in property of such Person or entity,
whether now existing or existing in the future or hereafter acquired or arising:
(i) accounts, (ii) accounts receivable, including, without limitation, all
rights to payment created by or arising from sales of goods, leases of goods or
the rendition of services no matter how evidenced, whether or not earned by
performance, (iii) all unpaid seller's or lessor's rights including, without
limitation, rescission, replevin, reclamation and stoppage in transit, relating
to any of the foregoing or arising therefrom, (iv) all rights to any goods or
merchandise represented by any of the foregoing after creation of the foregoing,
including, without limitation, returned or repossessed goods, (v) all reserves
and credit balances with respect to any such accounts receivable or account
debtors, (vi) all letters of credit, security or guarantees for any of the
foregoing, (vii) all insurance policies or reports relating to any of the
foregoing, (viii) all collection or deposit accounts relating to any of the
foregoing, (ix) all proceeds of any of the foregoing, and (x) all books and
records relating to any of the foregoing.
"Reference Banks" means Citibank and Scotiabank.
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"Register" has the meaning ascribed to such term in
Section 13.01(c).
"Regulation G" means Regulation G of the Federal Reserve Board
as in effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board
as in effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board
as in effect from time to time.
"Reimbursement Date" has the meaning ascribed to such
term in Section 2.03(d)(i)(A).
"Reimbursement Obligations" means, as to either Borrower, the
aggregate non-contingent reimbursement or repayment obligations of such Borrower
with respect to amounts drawn under Letters of Credit.
"Related Obligations" has the meaning ascribed to such
term in Section 12.09(e).
"Release" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any Property, including the
movement of Contaminants through or in the air, soil, surface water, groundwater
or Property.
"Remedial Action" means actions required to (i) clean up,
remove, treat or in any other way address Contaminants in the indoor or outdoor
environment; (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants; or (iii) investigate and determine if a
remedial response is needed and to design such a response and post-remedial
investigation, monitoring, operation and maintenance and care.
"Replacement Lender" has the meaning ascribed to such
term in Section 3.07.
"Reportable Event" means any of the events described in
Section 4043 of ERISA for which notice as required thereunder has not been
waived.
"Requirements of Law" means, as to any Person, the Constituent
Document or other organizational or governing documents of such Person, and any
law, rule or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, the Securities Act, the Securities Exchange Act,
Regulations G, U and X, ERISA,
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the Fair Labor Standards Act and any certificate of occupancy, zoning ordinance,
building or land use requirement or Permit or labor or employment, rule or
regulation and including any Environmental Health or Safety Requirements of Law.
"Requisite Lenders" means Lenders whose Pro Rata Shares, in
the aggregate, equal or exceed fifty-one percent (51%); provided, however, that,
in the event any of the Lenders shall have failed to fund its Pro Rata Share of
any Revolving Loan requested by either Borrower which such Lenders are obligated
to fund under the terms of this Agreement without delivering to the Funding
Agent written notice of the failure of such Borrower to satisfy the conditions
set forth in Section 5.02 and (i) any such failure to fund has not been cured or
(ii) such conditions have been satisfied, then, for so long as such failure to
fund continues, "Requisite Lenders" means Lenders (excluding all Lenders whose
failure to fund their respective Pro Rata Shares of such Revolving Loans have
not been so cured) whose Pro Rata Shares represent, equal or exceed fifty-one
percent (51%) of the aggregate Pro Rata Shares of such Lenders; provided,
further, however, that, in the event that the Revolving Loan Commitments have
been terminated pursuant to the terms of this Agreement, "Requisite Lenders"
means Lenders (without regard to such Lenders' performance of their respective
obligations hereunder) whose aggregate ratable shares (stated as a percentage)
of the aggregate outstanding principal balance of all Loans and Letter of Credit
Obligations are greater than or equal to fifty-one percent (51%).
"Restricted Junior Payment" means (i) any dividend or
distribution, direct or indirect, on account of any Equity Interests in Foamex
or any of its Subsidiaries now or hereafter outstanding, except in the case of
such Subsidiaries, a dividend payable solely in shares of that class of stock or
in any junior class of stock to the holders of that class, provided that the
issuance of such stock or junior class of stock is not an incurrence of
Indebtedness, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Equity
Interests in Foamex or any of its Subsidiaries now or hereafter outstanding,
(iii) any payment or prepayment of principal of, premium, if any, or interest,
fees or other charges on or with respect to, and any redemption, purchase,
retirement, defeasance, sinking fund or similar payment and any claim for
rescission with respect to, any Permitted Subordinated Indebtedness, (iv) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
Equity Interests in Foamex or any of its Subsidiaries now or hereafter
outstanding and (v) any payment made by Foamex to the General Partners or the
Limited Partner pursuant to the Tax Sharing Agreement, the Management Agreement
or the Foamex International Supply Agreement.
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"Revolving Credit Obligations" means, at any particular time,
the sum of (i) the outstanding principal amount of the Revolving Loans at such
time, plus (ii) the Letter of Credit Obligations at such time, plus (iii) the
Swing Loan Obligations at such time.
"Revolving Loan" has the meaning ascribed to such term
in Section 2.01(a).
"Revolving Loan Commitment" means, with respect to any Lender,
the obligation of such Lender to make Revolving Loans and to participate in
Letters of Credit pursuant to the terms and conditions of this Agreement, and
which shall not exceed the principal amount set forth opposite such Lender's
name under the heading "Revolving Loan Commitment" on the signature pages hereof
or the signature page of the Assignment and Acceptance by which it became (or
becomes) a Lender, as modified from time to time pursuant to the terms of this
Agreement or to give effect to any applicable Assignment and Acceptance, and
"Revolving Loan Commitments" means the aggregate principal amount of the
Revolving Loan Commitments of all the Lenders, the maximum amount of which shall
not exceed a principal amount of $45,000,000, as reduced from time to time
pursuant to Section 3.01.
"Revolving Loan Notes" has the meaning assigned thereto
in Section 3.05(a)(i).
"RULPA" means the Delaware Revised Uniform Limited Partnership
Act, as amended from time to time, and any successor statute.
"Scotiabank" means The Bank of Nova Scotia, a Canadian-
chartered bank.
"Securities" means any limited, general or other partnership
interest, or any stock, shares, voting trust certificates, bonds, debentures,
notes or other Equity Interests or evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or any certificates of
interest, shares, or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire
any of the foregoing, but shall not include any evidence of the Obligations.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.
"Senior Note Indenture" means the Indenture dated as of
October 13, 1992 among FCC, Foamex and Shawmut Bank Connecticut,
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National Association (formerly The Connecticut National Bank), as Trustee, as
such agreement may be amended, supplemented or otherwise modified from time to
time.
"Senior Notes" means the Senior Notes issued by FCC and Foamex
in the aggregate principal amount of $150,000,000 and governed by the terms of
the Senior Note Indenture.
"Senior Secured Note Collateral Documents" means the security
agreements, pledge agreements, collateral assignments and other agreements
evidencing the Liens granted in favor of the Trustee pursuant to the Senior
Secured Note Indenture to secure the obligations of Foamex, FCC and GFI (and any
other "Guarantor" (as defined in the Senior Secured Note Indenture) to the
extent permitted hereby) under the Senior Secured Note Indenture, as such
agreements and assignments may be amended, supplemented or otherwise modified
from time to time.
"Senior Secured Note Indenture" means the Indenture dated as
of June 3, 1993 among FCC, Foamex, GFI and Shawmut Bank, National Association,
as Trustee, as such agreement may be amended, supplemented or otherwise modified
from time to time.
"Senior Secured Notes" means the 9 1/2% Senior Secured Notes
issued by FCC and Foamex in the aggregate principal amount of $160,000,000 and
governed by the terms of the Senior Secured Note Indenture.
"Settlement Date" has the meaning ascribed to such term
in Section 2.02(b).
"Solvent", when used with respect to any Person, means that at
the time of determination:
(i) the Fair Market Value of its assets is in excess of the
total amount of its liabilities (including, without limitation,
contingent liabilities); and
(ii) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments)
as they mature; and
(iv) it has capital sufficient to carry on its business
as conducted and as proposed to be conducted.
"Standby Letter of Credit" means any letter of credit
issued by an Issuing Bank pursuant to Section 2.03 for the
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account of either Borrower which is not a Commercial Letter of
Credit.
"Subordinated Debenture Indenture" means the Indenture dated
as of October 13, 1992 among FCC, Foamex and Shawmut Bank, N.A., as Trustee, as
such agreement may be amended, supplemented or otherwise modified from time to
time.
"Subordinated Debentures" means the Senior Subordinated
Debentures issued by FCC and Foamex in the aggregate principal amount of up to
$126,000,000 and governed by the terms of the Subordinated Debenture Indenture.
"Subsidiary" of a Person means any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned or controlled by such
Person, one or more of the other subsidiaries of such Person or any combination
thereof; provided that, with respect to Foamex, and in the event Foamex
purchases, or acquires through a capital contribution, the Foamex Mexico Group
from Foamex International, the term Subsidiary shall not include any member of
the Foamex Mexico Group for any purpose other than in Article VII and Article X.
"Supply Agreement" means the Supply Agreement in respect of
the supply of prime carpet cushion to GFI dated as of March 23, 1993 between
Foamex and GFI, as the same may be amended, supplemented or otherwise modified
from time to time.
"Swing Bank" means, at any time, the Lender which is the
Funding Agent at such time.
"Swing Loan" has the meaning ascribed to such term in
Section 2.02(a).
"Swing Loan Notes" has the meaning assigned thereto in
Section 3.05(a)(iii).
"Swing Loan Obligations" means the aggregate principal amount
of all Swing Loans outstanding.
"Taxes" has the meaning ascribed to such term in
Section 3.03(a).
"Tax Sharing Agreement" means, collectively, (i) the First
Amended and Restated Tax Sharing Agreement dated as of December 14, 1993 among
Foamex, Trace Foam, Foamex International and FMXI and (ii) the Tax Sharing
Agreement dated as of June 28, 1994 between New Partners, Foamex International
and FJGP, Inc., as the same may be amended, supplemented or otherwise modified
from time to time.
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"TEFSA" means Transformacion de Espumas y Fieltros,
S.A. de C.V., a Mexican variable capital limited liability stock
corporation.
"Termination Event" means (i) a Reportable Event with respect
to any Benefit Plan; (ii) the withdrawal of either Borrower or any ERISA
Affiliate from a Benefit Plan during a plan year in which either Borrower or
such ERISA Affiliate was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of 20% of Benefit Plan participants who are employees
of either Borrower or any ERISA Affiliate; (iii) the imposition of an obligation
on either Borrower or any ERISA Affiliate under Section 4041 of ERISA to provide
affected parties written notice of intent to terminate a Benefit Plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the institution
by the PBGC or any similar foreign Governmental Authority of proceedings to
terminate a Benefit Plan or a Foreign Pension Plan; (v) any event or condition
which constitutes grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Benefit Plan; (vi) a foreign
Governmental Authority shall appoint or institute proceedings to appoint a
trustee to administer any Foreign Pension Plan; or (vii) the partial or complete
withdrawal of either Borrower or any ERISA Affiliate from a Multiemployer Plan
or a Foreign Pension Plan.
"Term Loan" has the meaning ascribed to such term in
Section 2.04(a).
"Term Loan Notes" has the meaning assigned thereto in
Section 3.05(a)(ii).
"TIHI" means Trace International Holdings, Inc., a
Delaware corporation.
"TIHI Loan" means the loan, not in excess of a principal
amount of $4,372,516 plus accrued interest, made by Foamex to TIHI and evidenced
by that certain promissory note dated July 7, 1996.
"TIHI Subordination Agreement" means the TIHI Subordination
Agreement dated as of December 14, 1993 between TIHI, Trace Foam and the
Collateral Agent, as such agreement may be amended, supplemented or modified
from time to time.
"Trace Foam" means Trace Foam Company, Inc. (formerly
'21' Foam Company, Inc.), a Delaware corporation.
"Trace Foam Sub" means Trace Foam Sub, Inc. (formerly
'21' Foam Sub, Inc.), a Delaware corporation and wholly-owned
Subsidiary of Trace Foam.
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"Transaction Costs" means the fees, costs and expenses payable
by either Borrower in connection with the execution, delivery and performance of
the Loan Documents and the PFI Merger Documents (exclusive of the PFI Guaranty
Release Amount).
"Transaction Documents" means the Loan Documents, the
Partnership Agreement, the PFI Merger Documents, the Acquisition Transaction
Documents, the Management Agreement, the Tax Sharing Agreement, the Senior
Notes, the Senior Note Indenture, the Subordinated Debentures, the Subordinated
Debenture Indenture, the 1993 Subordinated Debentures, the 1993 Subordinated
Debenture Indenture, the Senior Secured Notes, the Senior Secured Note
Indenture, the Senior Secured Note Collateral Documents, the GFI Intercompany
Note, the PFI Intercompany Note, the Supply Agreement and the Intercompany
Promissory Notes and all other agreements entered into prior to or on the
Effective Date pursuant to such agreements.
"UCC" means the Uniform Commercial Code as enacted in the
State of New York, as it may be amended from time to time.
"Unused Commitment Fee" has the meaning ascribed to
such term in Section 4.03(c).
1.02. Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding". Periods of days referred to in this Agreement shall be
counted in calendar days unless Business Days are expressly prescribed. Any
period determined hereunder by reference to a month or months or year or years
shall end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such period, provided that if such period commences on the last day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month during which such period is to end), such period
shall, unless otherwise expressly required by the other provisions of this
Agreement, end on the last day of the calendar month.
1.03. Accounting Terms. Subject to Section 13.04, for purposes
of this Agreement, all accounting terms not otherwise defined herein shall have
the meanings assigned to them in conformity with GAAP.
1.04. Other Definitional Provisions. References to
"Articles", "Sections", "subsections", "Schedules", "Exhibits"
and the "preamble" shall be to Articles, Sections, subsections,
Schedules, Exhibits and the preamble, respectively, of this
Agreement unless otherwise specifically provided.
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1.05. Other Terms. All other terms contained in this
Agreement shall, unless the context indicates otherwise, have the
meanings assigned to such terms by the UCC to the extent the same
are defined therein.
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01. Revolving Credit Facility.
(a) Availability. Subject to the terms and conditions set
forth in this Agreement, each Lender hereby severally and not jointly agrees to
make revolving loans (each individually, a "Revolving Loan" and, collectively,
the "Revolving Loans") to each Borrower from time to time during the period from
the Effective Date to the Business Day next preceding the Commitment Termination
Date, in an amount not to exceed such Lender's Pro Rata Share of the
Availability at such time; provided however, that at no time shall the aggregate
principal amount of all Revolving Credit Obligations outstanding at any time
made to Foamex exceed its Borrowing Base at such time less the sum of the
principal amount of the Term Loans of Foamex outstanding at such time and the
Availability Reserves applicable to Foamex in effect at such time, and provided,
further, that at no time shall the aggregate principal amount of Revolving
Credit Obligations outstanding at any time to GFI exceed the lesser of (i) the
GFI Sublimit in effect at such time and (ii) the Borrowing Base of GFI at such
time, less the sum of the principal amount of the Term Loans of GFI outstanding
at such time and the Availability Reserves applicable to GFI in effect at such
time. All Revolving Loans comprising the same Borrowing under this Agreement
shall be made by the Lenders simultaneously and proportionately to their then
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any failure by any other Lender to perform its obligation to
make a Revolving Loan hereunder nor shall the Revolving Loan Commitment of any
Lender be increased or decreased as a result of any such failure. Subject to the
provisions of this Agreement (including, without limitation, Sections 4.02(f)
and 5.02), either Borrower may repay any outstanding Revolving Loan made to it
on any day which is a Business Day and any amounts so repaid may be reborrowed
in accordance with the provisions of this Section 2.01(a).
(b) Notice of Borrowing. When either Borrower desires to
borrow under this Section 2.01, it shall deliver to the Funding Agent a Notice
of Borrowing, signed by it, no later than 11:00 a.m. (New York time) (i) on the
Business Day immediately preceding the proposed Funding Date, in the case of a
Borrowing of Base Rate Loans and (ii) at least three (3) Business Days in
advance of the proposed Funding Date, in the case of a Borrowing of Eurodollar
Rate Loans; provided, however, no Borrowing of Eurodollar Rate Loans shall be
made on the Effective Date. Such Notice of Borrowing shall specify (i) the
Borrower requesting the
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Revolving Loan, (ii) the Availability as of the date of such Notice of
Borrowing, (iii) the proposed Funding Date (which shall be a Business Day), (iv)
the amount of the proposed Borrowing, (v) whether the proposed Borrowing will be
of Base Rate Loans or Eurodollar Rate Loans, (vi) in the case of Eurodollar Rate
Loans, the requested Eurodollar Interest Period, (vii) whether the proceeds of
the proposed Borrowing will be used for the payment of permitted Restricted
Junior Payments, and (viii) instructions for the disbursement of the proceeds of
the proposed Borrowing. Revolving Loans made on any Funding Date shall be in
minimum amount of $500,000, other than Revolving Loans constituting (i)
repayments of Swing Loans described in the first and second sentences of Section
2.02(b), (ii) refundings of Reimbursement Obligations, described in Section
2.03(e)(ii) and (iii) payments of fees and expenses described in Section
3.02(b)(iii). In lieu of delivering such a Notice of Borrowing, either Borrower
may give the Funding Agent telephonic notice of any proposed Borrowing by the
time required under this Section 2.01(b), if it confirms such notice by delivery
of the Notice of Borrowing to the Funding Agent promptly, but in no event later
than 5:00 p.m. (New York time) on the same day. Any Notice of Borrowing (or
telephonic notice in lieu thereof) given pursuant to this Section 2.01(b) shall
be irrevocable.
(c) Making of Revolving Loans. (i) Promptly after receipt of a
Notice of Borrowing under Section 2.01(b) (or telephonic notice in lieu
thereof), the Funding Agent shall notify each Lender by telex or telecopy, or
other similar form of transmission, of the proposed Borrowing. Each Lender shall
deposit an amount equal to its Pro Rata Share of the amount requested by the
Borrower specified in such Notice of Borrowing to be made as Revolving Loans
with the Funding Agent at its office in New York, New York, in immediately
available funds, not later than 11:00 a.m. (New York time) on any Funding Date
applicable thereto. Subject to the fulfillment of the conditions precedent set
forth in Section 5.02, the Funding Agent shall, after conferring with the
Collateral Agent as to the amount of the Borrowing Base of such Borrower at such
time, make the proceeds of such amounts received by it available to such
Borrower at the Funding Agent's office in New York, New York on such Funding
Date (or on the date received if later than such Funding Date) and shall
disburse such proceeds in accordance with such Borrower's disbursement
instructions set forth in the applicable Notice of Borrowing. The failure of any
Lender to deposit the amount described above with the Funding Agent on the
applicable Funding Date shall not relieve any other Lender of its obligations
hereunder to make its Revolving Loan on such Funding Date.
(ii) Unless the Funding Agent shall have been notified by any
Lender on the Business Day immediately preceding the applicable Funding Date in
respect of any Borrowing of Revolving Loans that such Lender does not intend to
fund its Revolving Loan
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requested to be made on such Funding Date, the Funding Agent may assume that
such Lender has funded its Revolving Loan and is depositing the proceeds thereof
with the Funding Agent on the Funding Date, and the Funding Agent in its sole
discretion may, but shall not be obligated to, disburse a corresponding amount
to the Borrower specified in the applicable Notice of Borrowing on the Funding
Date. If the Revolving Loan proceeds corresponding to that amount are advanced
to such Borrower by the Funding Agent but are not in fact deposited with the
Funding Agent by such Lender on or prior to the applicable Funding Date, such
Lender agrees to pay, and in addition such Borrower agrees to repay, to the
Funding Agent forthwith on demand such corresponding amount, together with
interest thereon, for each day from the date such amount is disbursed to or for
the benefit of such Borrower until the date such amount is paid or repaid to the
Funding Agent, in the case of such Borrower or such Lender, at the interest rate
applicable to such Borrowing. If such Lender shall pay to the Funding Agent the
corresponding amount, the amount so paid shall constitute such Lender's
Revolving Loan, and if both such Lender and such Borrower shall pay and repay
such corresponding amount, the Funding Agent shall promptly pay to such Borrower
such corresponding amount. This Section 2.01(c)(ii) does not relieve any Lender
of its obligation to make its Loan on any Funding Date; nor does this Section
relieve either Borrower of its obligation to pay or repay any Lender funding its
Loan pursuant to this Section interest on such Loan from such Funding Date until
the date on which such Loan is repaid in full.
(d) Use of Proceeds of Revolving Loans. The proceeds of the
Revolving Loans may be used for the following purposes: for working capital in
the ordinary course of the business of the Borrowers and for other lawful
corporate and partnership purposes (including, without limitation, any
Restricted Junior Payment permitted pursuant to Section 9.06), in each case, to
the extent permitted under the terms of this Agreement.
(e) Commitment Termination Date. The Revolving Loan
Commitments shall terminate, and all outstanding Obligations shall be paid in
full (or, in the case of contingent Letter of Credit Obligations outstanding,
payment in cash shall be made and deposited into the Cash Collateral Account in
an aggregate principal amount equal to the then outstanding Letter of Credit
Obligations to the satisfaction of the Issuing Banks and the Requisite Lenders
on the day (the "Commitment Termination Date") which is the earlier of (i) June
28, 1999 (or, if not a Business Day, the next preceding Business Day), (ii) the
date of termination of the Commitments pursuant hereto, (iii) eighty-five (85)
days after delivery of an Officer's Certificate described in Section 7.12
(unless the Revolving Loan Commitments are terminated prior to such date
pursuant to Section 11.01(i)), (iv) the effective date of any dissolution of
Foamex or (v) the commencement date of any action (in a proceeding, at law,
equity or otherwise) to dissolve Foamex. Each Lender's obligation to
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make Revolving Loans, the Swing Bank's obligation to make Swing Loans, and any
Issuing Bank's obligation to issue Letters of Credit shall terminate at the
close of business on the Business Day next preceding the Commitment Termination
Date.
2.02. The Swing Loan Facility.
(a) Making of Swing Loans. Upon receipt of telephonic request
therefor from either Borrower (which, if the Swing Bank so requests, shall be
confirmed in writing by delivery to the Funding Agent of a Notice of Borrowing
from such Borrower within one Business Day thereafter) no later than 11:00 a.m.
(New York time) the same day of the proposed Funding Date, the Swing Bank, in
its sole discretion, may from time to time make loans to such Borrower solely
for the Swing Bank's own account (the "Swing Loans"), up to an aggregate
principal amount at any one time outstanding which shall not exceed the lesser
of (i) $7,500,000 and (ii) the Swing Bank's Pro Rata Share of the Availability
at such time. The Swing Bank shall be entitled to apply any proceeds of
Collateral received by the Funding Agent as repayment of the Obligations since
the Settlement Date next preceding such Funding Date as repayment of the Swing
Loans made on any Funding Date prior to the next following Settlement Date. The
Swing Bank shall make the proceeds of such Loans available to such Borrower in
New York, New York on such Funding Date and shall disburse such funds in Dollars
and in immediately available funds to an account of such Borrower, designated in
writing by such Borrower in the Notice of Borrowing. The Swing Bank shall have
no duty to make or to continue to make Swing Loans. All Swing Loans shall be
Base Rate Loans payable on the next Settlement Date with accrued interest
thereon which shall be payable to the Swing Bank solely for its own account but
shall otherwise be subject to all the terms and conditions applicable to
Revolving Loans. The Swing Bank shall not make any Swing Loan in the period
commencing on the first Business Day after it receives written notice from any
Lender (i) that one or more of the conditions precedent contained in Section
5.02 will not on such date be satisfied, and ending when such conditions are
satisfied, or (ii) that an Event of Default has occurred, and ending when such
Event of Default no longer exists, and the Swing Bank shall not otherwise be
required to determine that, or take notice whether, (A) the conditions precedent
set forth in Section 5.02 hereof have been satisfied or (B) an Event of Default
has occurred.
(b) Repayment of Swing Loans. On at least a weekly or more
frequent basis, on a settlement date to be selected by the Funding Agent in its
sole discretion (the "Settlement Date"), each Borrower shall promptly borrow
Revolving Loans from all the Lenders pursuant to Section 2.01 or the following
sentence (irrespective of the satisfaction of the conditions in Section 5.02 or
the requirement to deliver a Notice of Borrowing in Section 2.01(b) which
conditions and requirement, for the purposes of the repayment of Swing Loans to
the Swing Bank, the
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Lenders irrevocably waive) and hereby authorizes the Funding Agent to apply the
proceeds of such Revolving Loans to the repayment of any Swing Loans then
outstanding. To the extent the Funding Agent receives any amounts in repayment
of outstanding Revolving Loans prior to such Settlement Date which it has not
paid to the Lenders pursuant to Section 3.02(a), the Funding Agent shall be
entitled to advance such amounts as additional Revolving Loans of the Lenders
(in accordance with their respective Pro Rata Shares) to repay any Swing Loans
outstanding on such Settlement Date. The failure of any Lender to make available
to the Funding Agent its Pro Rata Share of such Revolving Loans shall not
relieve any other Lender of its obligation hereunder to make available to the
Funding Agent such other Lender's Pro Rata Share of such Revolving Loans on the
date funds are to be made available to repay such Swing Loans. If either
Borrower fails to repay any Swing Loan made to such Borrower within one (1)
Business Day after demand therefor by the Swing Bank or the Funding Agent, and
in any event upon request by the Swing Bank, each other Lender shall irrevocably
and unconditionally purchase from the Swing Bank, without recourse or warranty,
an undivided interest and participation in such Swing Loan in an amount equal to
such other Lender's Pro Rata Share thereof and shall pay such amount to the
Swing Bank in New York, New York in Dollars and in immediately available funds.
If such amount is not paid to the Swing Bank by any Lender, the Swing Bank shall
be entitled to recover such amount on demand from such Lender together with
accrued interest thereon, for each day from the date of demand therefor, if made
prior to 12:00 noon (New York time) on any Business Day, or, if made at any
other time, from the next Business Day following the date of such demand, until
the date such amount is paid to the Swing Bank by such Lender, until three 3
Business Days have expired at the Federal Funds Rate and thereafter at the Base
Rate. If such Lender does not pay such amount forthwith on the Swing Bank's
demand therefor, and until such time as such Lender makes the required payment,
the Swing Bank shall be deemed to continue to have outstanding a Swing Loan in
the amount of such unpaid participation obligation for all purposes of this
Agreement other than those provisions requiring the other Lenders to purchase a
participation therein. This Section does not relieve any Lender of its
obligations to purchase Pro Rata participations in any Swing Loans; nor does
this Section relieve either Borrower of its obligation to pay or repay the
Lender funding its Pro Rata Share of such payment pursuant to this Section
interest on the amount of such payment from the date of such Borrower's failure
to repay such Swing Loan until the date on which such payment is repaid in full.
2.03. Letters of Credit. Subject to the terms and conditions
set forth in this Agreement, each Issuing Bank hereby severally agrees to issue
for the account of either Borrower one or more Letters of Credit, in an
outstanding amount not to exceed
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at any time the L/C Sublimit or the GFI L/C Sublimit, as applicable, subject to
the following provisions:
(a) Types and Amounts. An Issuing Bank shall not have any
obligation to issue, amend or extend, and shall not issue, amend or extend, any
Letter of Credit at any time:
(i) if the aggregate Letter of Credit Obligations with respect
to such Issuing Bank, after giving effect to the issuance, amendment or
extension of the Letter of Credit requested hereunder, shall exceed any
limit imposed by law or regulation upon such Issuing Bank;
(ii) if the Issuing Bank receives written notice from the
Funding Agent at or before 11:00 a.m. (New York time) on the date of
the proposed issuance, amendment or extension of such Letter of Credit
that (A) immediately after giving effect to the issuance, amendment or
extension of such Letter of Credit, (I) the Letter of Credit
Obligations at such time would exceed the L/C Sublimit, (II) the Letter
of Credit Obligations upon which GFI is or would be obligated at such
time would exceed the GFI L/C Sublimit, (III) the Revolving Credit
Obligations at such time would exceed the Maximum Revolving Credit
Amount at such time or (IV) an obligation to repay Revolving Loans or
to deposit Cash Collateral would arise pursuant to Section 3.01(b)(ii),
or (B) one or more of the conditions precedent contained in Section
5.02 would not on such date be satisfied, unless such conditions are
thereafter satisfied and written notice of such satisfaction is given
to the Issuing Bank by the Funding Agent (and an Issuing Bank shall not
otherwise be required to determine that, or take notice whether, the
conditions precedent set forth in Section 5.02 have been satisfied);
(iii) which has an expiration date later than the earlier of
(A) the date one (1) year after the date of issuance (without regard to
any automatic renewal provisions thereof) or (B) the Business Day next
preceding the Commitment Termination Date; or
(iv) which is in a currency other than Dollars.
(b) Conditions. In addition to being subject to the
satisfaction of the conditions precedent contained in Section 5.02, the
obligation of an Issuing Bank to issue, amend or extend any Letter of Credit is
subject to the satisfaction in full of the following conditions:
(i) if the Issuing Bank so requests, the Borrower
requesting such issuance, amendment or extension shall
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have executed and delivered to such Issuing Bank and the Funding Agent
a Letter of Credit Reimbursement Agreement and such other documents and
materials as may be required pursuant to the terms thereof; and
(ii) the terms of the proposed Letter of Credit shall be
satisfactory to the Issuing Bank in its sole discretion.
(c) Issuance of Letters of Credit. (i) Each Borrower shall
give an Issuing Bank and the Funding Agent written notice that it has selected
such Issuing Bank to issue a Letter of Credit not later than 11:00 a.m. (New
York time) on the third (3rd) Business Day preceding the requested date for
issuance thereof under this Agreement, or such shorter notice as may be
acceptable to such Issuing Bank and the Funding Agent. Such notice shall be
irrevocable unless and until such request is denied by the applicable Issuing
Bank and shall specify (A) the Borrower requesting the Letter of Credit, (B)
that the requested Letter of Credit is either a Commercial Letter of Credit or a
Standby Letter of Credit, (C) the stated amount of the Letter of Credit
requested, (D) the effective date (which shall be a Business Day) of issuance of
such Letter of Credit, (E) the date on which such Letter of Credit is to expire
(which shall be a Business Day and no later than the Business Day immediately
preceding the Commitment Termination Date), (F) the Person for whose benefit
such Letter of Credit is to be issued, (G) other relevant terms of such Letter
of Credit, (H) the Availability at such time, and (I) the amount of the then
outstanding Letter of Credit Obligations. Such Issuing Bank shall notify the
Funding Agent immediately upon receipt of a written notice from such Borrower
requesting that a Letter of Credit be issued, or that an existing Letter of
Credit be extended or amended and, upon the Funding Agent's request therefor,
send a copy of such notice to the Funding Agent.
(ii) The Issuing Bank shall give the Funding Agent written
notice, or telephonic notice confirmed promptly thereafter in writing, of the
issuance, amendment or extension of a Letter of Credit (which notice the Funding
Agent shall promptly transmit by telegram, telex, telecopy, telephone or similar
transmission to each Lender).
(d) Reimbursement Obligations; Duties of Issuing
Banks. (i) Notwithstanding any provisions to the contrary in
any Letter of Credit Reimbursement Agreement applicable to a
Letter of Credit:
(A) the Borrower party to such Letter of Credit Reimbursement
Agreement shall reimburse the Issuing Bank for amounts drawn under such
Letter of Credit, in Dollars, no later than the date (the
"Reimbursement Date") which is the earlier of (I) the time specified
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in the applicable Letter of Credit Reimbursement Agreement and (II) one
(1) Business Day after such Borrower receives written notice from the
Issuing Bank that payment has been made under such Letter of Credit by
the Issuing Bank; and
(B) all Reimbursement Obligations with respect to any Letter
of Credit shall bear interest at the rate applicable to Base Rate Loans
in accordance with Section 4.01(a) from the date of the relevant
drawing under such Letter of Credit until the Reimbursement Date and
thereafter at the rate applicable to Base Rate Loans in accordance with
Section 4.01(d).
(ii) The Issuing Bank shall give the Funding Agent written
notice, or telephonic notice confirmed promptly thereafter in writing, of all
drawings under a Letter of Credit and the payment (or the failure to pay when
due) by either Borrower on account of a Reimbursement Obligation (which notice
the Funding Agent shall promptly transmit by telegram, telex, telecopy or
similar transmission to each Lender).
(iii) No action taken or omitted in good faith by an Issuing Bank
under or in connection with any Letter of Credit shall put such Issuing Bank
under any resulting liability to any Lender, either Borrower or, so long as it
is not issued in violation of Section 2.03(a), relieve any Lender of its
obligations hereunder to such Issuing Bank. Solely as between the Issuing Banks
and the Lenders, in determining whether to pay under any Letter of Credit, the
respective Issuing Bank shall have no obligation to the Lenders other than to
confirm that any documents required to be delivered under a respective Letter of
Credit appear to have been delivered and that they appear on their face to
comply with the requirements of such Letter of Credit.
(e) Participations. (i) Immediately upon issuance by an
Issuing Bank of any Letter of Credit in accordance with the procedures set forth
in this Section 2.03 and immediately upon conversion of a letter of credit of an
Issuing Bank to a Letter of Credit pursuant to Section 2.03(j), each Lender
shall be deemed to have irrevocably and unconditionally purchased and received
from that Issuing Bank, without recourse or warranty, an undivided interest and
participation in such Letter of Credit to the extent of such Lender's Pro Rata
Share, including, without limitation, all obligations of either Borrower with
respect thereto (other than amounts owing to the Issuing Bank under Section
2.03(g)) and any security therefor and guaranty pertaining thereto.
(ii) If any Issuing Bank makes any payment under any Letter of
Credit issued for the account of either Borrower and such Borrower does not
repay such amount to the Issuing Bank on
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the Reimbursement Date, the Issuing Bank shall promptly notify the Funding
Agent, which shall promptly notify each Lender, and each Lender shall promptly
and unconditionally pay to the Funding Agent for the account of such Issuing
Bank, in immediately available funds, the amount of such Lender's Pro Rata Share
of such payment (net of that portion of such payment, if any, made by such
Lender in its capacity as an Issuing Bank), and the Funding Agent shall promptly
pay to the Issuing Bank such amounts received by it, and any other amounts
received by the Funding Agent for the Issuing Bank's account, pursuant to this
Section 2.03(e). All such payments shall constitute Revolving Loans made to such
Borrower pursuant to Section 2.01 (irrespective of the satisfaction of the
conditions in Section 5.02 or the requirement in Section 2.01(b) to deliver a
Notice of Borrowing which conditions and requirement, for the purpose of
refunding any Reimbursement Obligation owing to any Issuing Bank, the Lenders
irrevocably waive). If a Lender does not make its Pro Rata Share of the amount
of such payment available to the Funding Agent, such Lender agrees to pay to the
Funding Agent for the account of the Issuing Bank, forthwith on demand, such
amount together with interest thereon after the date such payment was first due
at the Federal Funds Rate. The failure of any Lender to make available to the
Funding Agent for the account of an Issuing Bank its Pro Rata Share of any such
payment shall neither relieve any other Lender of its obligation hereunder to
make available to the Funding Agent for the account of such Issuing Bank such
other Lender's Pro Rata Share of any payment on the date such payment is to be
made nor increase the obligation of any other Lender to make such payment to the
Funding Agent. This Section does not relieve any Lender of its obligations to
purchase Pro Rata Share participations in Letters of Credit; nor does this
Section relieve such Borrower of its obligation to pay or repay any Issuing Bank
funding its Pro Rata Share of such payment pursuant to this Section interest on
the amount of such payment from such date such payment is to be made until the
date on which payment is repaid in full.
(iii) Whenever an Issuing Bank receives a payment on account
of a Reimbursement Obligation, including any interest thereon, as to which the
Funding Agent has previously received proceeds of Revolving Loans from any
Lender for the account of such Issuing Bank pursuant to this Section 2.03(e),
such Issuing Bank shall promptly pay to the Funding Agent an amount equal to
such Lender's Pro Rata Share thereof and the Funding Agent shall pay such
amounts over to such Lender as a repayment of such Revolving Loan in accordance
with Section 3.02.
(iv) Upon the request of any Lender, an Issuing Bank shall
furnish such Lender copies of any Letter of Credit or Letter of Credit
Reimbursement Agreement to which such Issuing Bank is party and such other
documentation as reasonably may be requested by such Lender.
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(v) The obligations of a Lender to make payments to the
Funding Agent for the account of any Issuing Bank with respect to a Letter of
Credit shall be irrevocable, shall not be subject to any qualification or
exception whatsoever except willful misconduct or gross negligence of such
Issuing Bank, and shall be honored in accordance with this Article II
(irrespective of the satisfaction of the conditions described in Section 5.02)
which conditions, for the purposes of the repayment of Letters of Credit to the
Issuing Bank, the Lenders irrevocably waive under all circumstances, including,
without limitation, any of the following circumstances:
(A) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(B) the existence of any claim, setoff, defense or other right
which either Borrower may have at any time against a beneficiary named
in a Letter of Credit or any transferee of a beneficiary named in a
Letter of Credit (or any Person for whom any such transferee may be
acting), the Funding Agent, the Issuing Bank, any Lender, or any other
Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transactions between the account
party and beneficiary named in any Letter of Credit);
(C) any draft, certificate or any other document presented
under the Letter of Credit having been determined to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(D) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
(E) any failure by that Issuing Bank to make any reports
required pursuant to Section 2.03(h) or the inaccuracy of any such
report; or
(F) the occurrence of any Event of Default or Potential Event
of Default.
(f) Payment of Reimbursement Obligations. (i) Each Borrower
party to a Letter of Credit Reimbursement Agreement applicable to a Letter of
Credit unconditionally agrees to pay to each Issuing Bank, in Dollars, the
amount of all Reimbursement Obligations, interest and other amounts payable to
such Issuing Bank under or in connection with such Letter of Credit
Reimbursement Agreement and the Letter of Credit issued pursuant thereto when
such amounts are due and payable, irrespective of
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any claim, setoff, defense or other right which either Borrower may have at any
time against any Issuing Bank or any other Person.
(ii) In the event any payment by either Borrower received by an
Issuing Bank with respect to a Letter of Credit and distributed by the Funding
Agent to the Lenders on account of their participations is thereafter set aside,
avoided or recovered from such Issuing Bank in connection with any receivership,
liquidation or bankruptcy proceeding, each Lender which received such
distribution shall, upon demand by such Issuing Bank, contribute to such Issuing
Bank such Lender's Pro Rata Share of the amount set aside, avoided or recovered
together with interest at the rate required to be paid by such Issuing Bank upon
the amount required to be repaid by it.
(g) Issuing Bank Charges. With respect to each Letter of
Credit, the Borrower for whose account such Letter of Credit was issued shall
pay to each Issuing Bank, solely for its own account, (i) a fee of one-quarter
of one percent (0.25%) of the undrawn face amount of each Letter of Credit
payable monthly in arrears (on the Business Day closest to each calendar
month-end after the date of issuance thereof) and (ii) the standard charges
assessed by such Issuing Bank in connection with the issuance, administration,
amendment and payment or cancellation of letters of credit and such compensation
for such Borrower's account as may be agreed upon by such Borrower and such
Issuing Bank from time to time.
(h) Issuing Bank Reporting Requirements. Each Issuing Bank
shall, no later than the tenth (10th) Business Day following the last day of
each calendar month, provide to the Funding Agent and each Borrower separate
schedules for Commercial Letters of Credit and Standby Letters of Credit issued
as Letters of Credit, in form and substance reasonably satisfactory to the
Funding Agent, setting forth the aggregate Letter of Credit Obligations
outstanding to it at the end of each month and any information requested by the
Funding Agent or such Borrower relating to the date of issue, account party,
amount, expiration date and reference number of each Letter of Credit issued by
it.
(i) Indemnification; Exoneration. (i) In addition to all other
amounts payable to an Issuing Bank, each Borrower hereby agrees to defend,
indemnify, and save each Administrative Agent, each Issuing Bank and each Lender
harmless from and against any and all claims, demands, liabilities, penalties,
damages, losses (other than loss of profits), costs, charges and expenses
(including reasonable attorneys' fees but excluding taxes) which such
Administrative Agent, such Issuing Bank or such Lender may incur or be subject
to as a consequence, direct or indirect, of (A) the issuance of any Letter of
Credit to such Borrower other than as a result of the gross negligence or
willful misconduct of the Issuing Bank, as determined by a court
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of competent jurisdiction, or (B) the failure of the Issuing Bank issuing a
Letter of Credit to honor a drawing under such Letter of Credit as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or Governmental Authority.
(ii) As between either Borrower on the one hand and the
Administrative Agents, the Lenders and the Issuing Banks on the other hand, such
Borrower assumes all risks of the acts and omissions of, or misuse of Letters of
Credit by, the respective beneficiaries of the Letters of Credit. In furtherance
and not in limitation of the foregoing, subject to the provisions of the Letter
of Credit Reimbursement Agreements applicable to any Letter of Credit, the
Issuing Banks and the Lenders shall not be responsible for: (A) the form,
validity, legality, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of the Letters of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B) the
validity, legality or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (C) failure of the beneficiary of a
Letter of Credit to comply duly with conditions required in order to draw upon
such Letter of Credit; (D) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (E) errors in interpretation of
technical terms; (F) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof; (G) the misapplication by the beneficiary of a Letter of
Credit of the proceeds of any drawing under such Letter of Credit; and (H) any
consequences arising from causes beyond the control of the Administrative
Agents, the Issuing Banks or the Lenders.
(j) Obligations Several. The obligations of each Lender under
this Section 2.03 are several and not joint, and no Lender shall be responsible
for the obligation to issue Letters of Credit or participation obligation
hereunder, respectively, of any other Issuing Bank or Lender.
2.04. Term Loan Facility.
(a) The Term Loans. On June 28, 1994, each Lender made a term
loan (each individually, a "Term Loan" and, collectively, the "Term Loans") (i)
to Foamex in a principal amount of such Lender's Pro Rata Share of $25,000,000
and (ii) to GFI in a principal amount of such Lender's Pro Rata Share of
$15,000,000.
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(b) Use of Proceeds of Term Loans. The proceeds of the Term
Loans made to Foamex were used solely (i) to fund the New Partners Loan, (ii) to
pay Transaction Costs and (iii) to repay in full the Foamex International Loan.
The proceeds of the Term Loans made to GFI were used solely to repay principal
under the GFI Intercompany Note.
(c) Repayment of Term Loans. The principal amount of the Term
Loans shall be payable in nineteen (19) equal quarterly installments, each in an
aggregate amount equal to $1,250,000, in the case of Foamex, and $750,000, in
the case of GFI, on the first Business Day of the months of January, April,
July, October, beginning in October 1994, and a final installment in an
aggregate amount equal to the remaining principal balance thereof on the
Commitment Termination Date.
2.05. Authorized Officers and Administrative Agents. Each
Borrower shall deliver to each Administrative Agent from time to time an
Officer's Certificate setting forth the names of the officers, employees and
agents authorized to request Loans and Letters of Credit and to request a
conversion/continuation of any Loan and containing a specimen signature of each
such officer, employee or agent. The officers, employees and agents so
authorized shall also be authorized to act for such Borrower in respect of all
other matters relating to the Loan Documents. The Administrative Agents shall be
entitled to rely conclusively on such officer's or employee's authority to
request such Loan, Letter of Credit or such conversion/continuation until the
Administrative Agents receive written notice to the contrary. The Administrative
Agents shall have no duty to verify the authenticity of the signature appearing
on any written Notice of Borrowing or Notice of Conversion/Continuation or any
other document, and, with respect to an oral request for such a Loan, Letter of
Credit or such conversion/continuation, the Administrative Agents shall have no
duty to verify the identity of any person representing himself or herself as one
of the officers, employees or agents authorized to make such request or
otherwise to act on behalf of such Borrower. None of the Administrative Agents,
the Lenders or the Issuing Banks shall incur any liability to either Borrower or
any other Person in acting upon any telephonic notice referred to above which
any Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of such
Borrower.
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ARTICLE III
PAYMENTS AND PREPAYMENTS
3.01. Prepayments; Reductions in Revolving Loan
Commitments.
(a) Voluntary Prepayments/Reductions. (i) Each Borrower may,
at any time and from time to time, prepay or repay any Loan, in whole or in
part, without premium or penalty; provided, however, Eurodollar Rate Loans may
only be prepaid (A) in whole or in part on the expiration date of the then
applicable Eurodollar Interest Period, upon at least three (3) Business Days'
prior written notice to the Funding Agent (which the Funding Agent shall
promptly transmit to each Lender) or (B) otherwise upon payment of the amounts
described in Section 4.02(f). Any notice of prepayment given to the Funding
Agent under this Section 3.01(a)(i) shall specify the Loans to be prepaid or
repaid, the date (which shall be a Business Day) of prepayment or repayment, and
the aggregate principal amount of the prepayment or repayment. Any prepayment or
repayment of Term Loans shall be applied to each remaining principal installment
of the Term Loans on a pro rata basis. When notice of prepayment is delivered as
provided herein, the principal amount of the Loans specified in the notice shall
become due and payable on the prepayment date specified in such notice.
(ii) Each Borrower, upon at least three (3) Business Days'
prior written notice to the Funding Agent (which the Funding Agent shall
promptly transmit to each Lender), shall have the right, at any time and from
time to time, to terminate in whole or permanently reduce in part the Revolving
Loan Commitments, provided that each Borrower shall have made whatever payment
may be required to reduce the Revolving Credit Obligations to an amount less
than or equal to the Revolving Loan Commitments as reduced or terminated on the
date of such reduction. Any notice of termination or reduction given to the
Funding Agent under this Section 3.01(a)(ii) shall specify the date (which shall
be a Business Day) of such termination or reduction and, with respect to a
partial reduction, the aggregate principal amount thereof. When notice of
termination or reduction is delivered as provided herein, the principal amount
of the Revolving Loans specified in the notice shall become due and payable on
the date specified in such notice.
(iii) The prepayments and payments in respect of reductions
and terminations described in clauses (i) and (ii) of this Section 3.01(a) may
be made without premium or penalty (except as provided in Section 4.02(f)).
(b) Mandatory Prepayments. (i) Within one (1) Business Day
after either Borrower's or any of the Borrowers' Subsidiaries' receipt of any
Net Cash Proceeds of Sale, the Borrower in receipt thereof, or in a position to
direct the
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disposition of such Net Cash Proceeds, shall make or cause to be made a
mandatory prepayment of the Obligations (or, to the extent no Obligations (other
than contingent Obligations) are outstanding, a deposit in the Investment
Account of such Borrower or such Subsidiaries applicable corporate parent) in
the amount of such Net Cash Proceeds of Sale, provided that to the extent such a
deposit is prohibited by the terms of the Senior Secured Note Indenture, the
Lenders shall not deposit such Net Cash Proceeds in such Investment Account, but
instead shall allow such Borrower to retain such Net Cash Proceeds) in an amount
equal to one hundred percent (100%) of such Net Cash Proceeds of Sale; provided
further that, to the extent any such proceeds constitute "Net Proceeds" from an
"Asset Sale" (as such terms are defined in the Senior Note Indenture) and are
required by the terms of the Senior Note Indenture to be applied to the
repayment of the Senior Notes or by the terms of the Subordinated Debenture
Indenture to be applied to the repayment of other Senior Indebtedness (as
defined in the Subordinated Debenture Indenture), then such Borrower shall be
entitled to apply such proceeds to the repayment of the Senior Notes or such
other Senior Indebtedness, as the case may be. Notwithstanding the foregoing, in
the event such Borrower receives Net Cash Proceeds of Sale constituting a
portion of "Net Proceeds" of an "Asset Sale" (as such terms are defined in the
Senior Note Indenture) which, at the time of the receipt thereof, (A) pursuant
to Section 4.10(b) of the Senior Note Indenture, represent the pro rata portion
of such "Net Proceeds" (as defined in the Senior Note Indenture) to be offered
to redeem Senior Notes, and (B) are not, pursuant to Section 4.10(d) of the
Senior Note Indenture, required, at such time, to be applied to the repayment of
the Senior Notes but which may, if certain contingencies are not met, be
required to be so applied at a later date (such proceeds, being the "Pending
Proceeds"), then during such interim period, all of the Pending Proceeds shall
be applied to the Revolving Credit Obligations (or, to the extent no Revolving
Credit Obligations (other than contingent Revolving Credit Obligations) are
outstanding, as a deposit in the Investment Account of such Borrower), and,
until it is determined whether such proceeds shall be required to be applied to
the repayment of the Senior Notes in accordance with the terms of the Senior
Note Indenture, an Availability Reserve shall be established in the amount of
the Pending Proceeds applied to the Revolving Loans. In the event any portion of
such Pending Proceeds are required to be applied to the repayment of Senior
Notes, then all Pending Proceeds deposited in the Investment Account shall be
released to such Borrower for the purpose of making such repayment and the
aforementioned Availability Reserve shall be abated to the extent necessary to
permit a Borrowing of Revolving Loans (but in an amount not in excess of such
reserve), the proceeds of which shall be used to make the required repayment of
the Senior Notes. To the extent it is determined that no repayment of the Senior
Notes is required to be made with the Pending Proceeds, then all such proceeds
on deposit in the Investment Account shall be
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applied to the Obligations in accordance with the following sentence, the
aforementioned Availability Reserve shall be abated in its entirety and that
portion of the Pending Proceeds that was applied to the Revolving Loans shall be
deemed to have been applied to the Obligations in accordance with the following
sentence (it being understood that if any portion of the Pending Proceeds
originally applied to the Revolving Loans are deemed to have been permanently
applied to the Term Loans, the Funding Agent shall make a corresponding increase
in the outstanding balance of the Revolving Loans). Any mandatory prepayment of
the Obligations required to be made pursuant to this Section 3.01(b)(i) (other
than the initial application of Pending Proceeds to the Revolving Loans) shall
be applied first, to each remaining principal installment of the Term Loans on a
pro rata basis, second, to the outstanding principal amount of the Swing Loans,
third, to the outstanding principal amount of the Revolving Loans, and fourth,
to the extent no Obligations (other than contingent Obligations) are
outstanding, as a deposit in the Investment Account of such Borrower or such
Subsidiaries applicable corporate parent; provided that to the extent that any
such prepayment constitutes Net Cash Proceeds of Sale arising from the sale,
lease, assignment or other disposition of any Property not in excess of
$1,000,000 for any single transaction or series of related transactions and
$5,000,000 in the aggregate for all transactions in any Fiscal Year, such
prepayment shall not be required to be applied to the Term Loans. The Borrowers
shall not be required to apply to the Term Loans up to an aggregate amount of
$7,500,000 of any Net Cash Proceeds arising from the 1995 Restructuring
Dispositions that would otherwise be required to be applied as mandatory
prepayments of the Obligations pursuant to this Section 3.01(b) (it being
understood that such Net Cash Proceeds shall otherwise be applied in the order
set forth in the preceding sentence).
(ii) Each Borrower shall make payments of Loans made to it to
the extent necessary to assure that (A) the aggregate amount of Revolving Credit
Obligations outstanding at any time does not exceed the Maximum Revolving Credit
Amount at such time, (B) the aggregate amount of Term Loans and Revolving Credit
Obligations owing by Foamex does not exceed Foamex's Borrowing Base at such time
less the Availability Reserves applicable to Foamex in effect at such time and
(C) the aggregate amount of Term Loans and Revolving Credit Obligations owing by
GFI does not exceed the excess of (I) the lesser of (x) the GFI Sublimit in
effect at such time and (y) GFI's Borrowing Base at such time, over (II)
Availability Reserves applicable to GFI in effect at such time. In addition, to
the extent the Maximum Revolving Credit Amount is at any time less than the
amount of contingent Letter of Credit Obligations outstanding at any time, the
Borrowers with outstanding Letter of Credit Obligations shall deposit in the
Cash Collateral Account cash in an aggregate amount equal to the amount by which
such Letter of Credit Obligations exceed such Maximum Revolving Credit Amount.
In the
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event there are no outstanding Revolving Loans, to the extent the amount of the
Borrowing Base of either Borrower less the principal amount of the Term Loans of
such Borrower outstanding at such time, is at any time less than the outstanding
Letter of Credit Obligations of such Borrower at such time, such Borrower with
outstanding Letter of Credit Obligations shall deposit in the Cash Collateral
Account cash in an aggregate amount equal to the amount by which such Letter of
Credit Obligations exceed the amount of the Borrowing Base of such Borrower less
the principal amount of the Term Loans of such Borrower outstanding at such
time.
(iii) The Collateral Agent is hereby authorized by each
Borrower to transfer to the Funding Agent, and the Funding Agent is hereby
authorized to apply to the Revolving Credit Obligations then outstanding, any
and all amounts held in such Borrower's Concentration Account (or, if no funds
are available in such Concentration Account, all available funds on deposit in
such Borrower's Investment Account), such amounts to be applied by the Funding
Agent in accordance with the provisions of Section 3.02.
(iv) Within one (1) Business Day after Foamex, or any agent or
Affiliate thereof, receives any amount of Proceeds of Issuance of Equity
Interests or Indebtedness, Foamex shall make or cause to be made a mandatory
prepayment of the Obligations in an amount equal to such proceeds. Such proceeds
shall be applied in accordance with Section 3.02(b).
(v) Within one (1) Business Day after Foamex receives any
proceeds from the prepayment or repayment of all or any part of the principal
amount outstanding of the New Partners Loan, Foamex shall make or cause to be
made a mandatory prepayment of the Term Loans in an amount equal to the amount
of such proceeds. Any prepayment or repayment of Term Loans pursuant to this
clause (v) shall be applied (A) first, to each remaining principal installment
of the Term Loans made to Foamex on a pro rata basis and (B) second, to the Term
Loans made to GFI on a pro rata basis. In the event there are no outstanding
Term Loans and an Event of Default has occurred and is continuing, such proceeds
shall be applied to the outstanding principal amount of the Revolving Loans.
(vi) The Borrowers shall make a mandatory prepayment of the
Revolving Loans to the extent necessary to ensure that during a period of thirty
(30) consecutive days in each Fiscal Year chosen at the discretion of the
Borrowers (each such period being a "Clean Down Period") the outstanding
principal amount of Revolving Loans are less than or equal to $5,000,000 at all
times during such period; provided that each Clean Down Period shall not begin
less than ninety (90) days after the termination of a prior Clean Down Period.
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(vii) On the Effective Date, the Term Loans shall be prepaid by an
amount equal to the PFI Guaranty Release Amount, such amount to be applied first
to each remaining principal installment of the Term Loan made to GFI on a pro
rata basis and then to each remaining principal installment of the Term Loan
made to Foamex on a pro rata basis (it being understood and agreed that such
prepayment of the Term Loan made to Foamex shall reduce by a like principal
amount the outstanding balance owing by GFI to Foamex under the GFI Intercompany
Note). In addition, all PFI Merger Proceeds shall be held in the Investment
Account of GFI (or to the extent required under the terms of the Senior Secured
Note Indenture, with the trustee thereunder) for a period of 270 days, during
which time the Borrowers may use such proceeds (A) for the purpose of prepaying
or redeeming the Senior Secured Notes, the Senior Notes, the Subordinated
Debentures and the 1993 Subordinated Debentures (as required by the terms of the
indentures governing the terms thereof, it being understood and agreed that, for
purposes of Section 4.10 of the Senior Note Indenture, the Lenders have elected
not to receive such PFI Merger Proceeds) and (B), if otherwise permitted by such
indentures and so long as no Potential Event of Default or Event of Default has
occurred and is continuing, to make open market purchases of the Senior Secured
Notes, the Senior Notes, the Subordinated Debentures and the 1993 Subordinated
Debentures. To the extent any PFI Merger Proceeds remain in the Investment
Account (or with the trustee under the Senior Secured Note Indenture) on the
270th day after the Effective Date, then such proceeds shall be applied, to the
extent not prohibited by the terms of the Senior Secured Note Indenture or the
Senior Note Indenture, first, to each remaining principal installment of the
Term Loans on a pro rata basis, second, to the outstanding principal amount of
the Swing Loans and third, to the outstanding principal amount of the Revolving
Loans. Any remaining proceeds shall remain on deposit in the Investment Account
of GFI (or be deposited in such Investment Account if not already on deposit
therein) and may be released to GFI to the extent otherwise permitted hereby.
(viii) Nothing in this Section 3.01(b) shall be construed to
constitute the Lenders' consent to any transaction referred to in clause (i),
clause (iv) , clause (v) or clause (vii) above which is not expressly permitted
by Article IX.
(c) Mandatory Reductions in Revolving Loan Commitments. The
Revolving Loan Commitments shall be permanently reduced by the amount of any
payment made pursuant to Section 3.01(b)(i) which is applied to the Revolving
Credit Obligations or deposited in the Investment Account, as the case may be,
(A) in respect of Net Cash Proceeds of Sale arising from the sale, lease,
assignment or other disposition of any Property in excess of $5,000,000 in any
single transaction or event or (B) in respect of Net Cash Proceeds of Sale
(other than any Net Cash Proceeds of Sale referred to in clause (A) above)
received by the
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Borrowers in excess of $5,000,000 in any Fiscal Year; provided, however, with
respect to Pending Proceeds, the Revolving Loan Commitments shall be reduced on
the date of the abatement of the Availability Reserve in respect of such Pending
Proceeds (or the application of such Pending Proceeds that were deposited in the
Investment Account to the Obligations) by that portion of such Pending Proceeds,
if any, which was not required to be applied to the repayment of the Senior
Notes and which was not applied (or deemed applied) to the Terms Loans pursuant
to the penultimate sentence of Section 3.01(b)(i). Notwithstanding the
foregoing, no permanent reduction of the Revolving Loan Commitments shall be
made from any mandatory prepayment (i) that was not applied first to the Term
Loans pursuant to the last sentence of Section 3.01(b)(i) or (ii) made in
connection with the PFI Merger.
3.02. Payments.
(a) Manner and Time of Payment. All payments of principal of
and interest on the Loans and Reimbursement Obligations and other Obligations
(including, without limitation, fees and expenses) which are payable to the
Administrative Agents, the Lenders or any Issuing Bank shall be made without
condition or reservation of right, in immediately available funds, delivered to
the Funding Agent (or, in the case of Reimbursement Obligations, to the
pertinent Issuing Bank) not later than 1:00 p.m. (New York time) on the date and
at the place due, to such account of the Funding Agent (or such Issuing Bank) as
it may designate, for the account of the Administrative Agents, the Lenders or
such Issuing Bank, as the case may be; and funds received by the Funding Agent,
including, without limitation, funds in respect of any Revolving Loans to be
made on that date, not later than 1:00 p.m. (New York time) on any given
Business Day shall be credited against payment to be made that day and funds
received by the Funding Agent after that time shall be deemed to have been paid
on the next succeeding Business Day. All immediately available funds posted to
the Concentration Account of each Borrower at 1:00 p.m. on any Business Day
shall be wire transferred by the Collateral Agent to the Funding Agent for
application by the Funding Agent directly to the Obligations of such Borrower on
the same Business Day if received by 3:00 p.m. (New York time) by the Funding
Agent or otherwise on the next succeeding Business Day (or any Investment
Account as provided in Section 3.01(b)). Payments actually received by the
Funding Agent for the account of the Lenders or the Issuing Banks, or any of
them, shall be paid to them by the Funding Agent on the next following
Settlement Date.
(b) Apportionment of Payments. (i) Subject to the provisions
of Sections 3.02(b)(ii) and (iv), all payments of principal and interest in
respect of outstanding Loans, all payments in respect of Reimbursement
Obligations, as applicable, all payments of fees and all other payments in
respect of any other Obligations, including, without limitation, all proceeds of
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Collateral on deposit in any Concentration Account applied to the Obligations
shall be allocated among such of the Lenders and Issuing Banks as are entitled
thereto, as provided herein. All such payments and any other amounts received by
the Funding Agent from or for the benefit of either Borrower shall be applied to
such Borrower's Obligations as follows: first to pay principal of and interest
on any portion of any outstanding Swing Loans, second to pay principal of and
interest on any portion of the Revolving Loans which the Funding Agent may have
advanced on behalf of any Lender other than Scotiabank for which the Funding
Agent has not then been reimbursed by such Lender or such Borrower, third, to
pay principal of and interest on any Protective Advance for which the Collateral
Agent has not then been paid by such Borrower or reimbursed by the Lenders,
fourth, to pay principal of and interest on all Revolving Loans which are Base
Rate Loans constituting Non Pro Rata Loans, fifth, to pay all other Obligations
then due and payable other than Base Rate Loans constituting Cure Loans, sixth,
to pay principal of and interest on Base Rate Loans constituting Cure Loans, and
seventh, as such Borrower so designates; provided that if no Revolving Credit
Obligations of such Borrower are then outstanding, all funds of such Borrower
remaining in such Borrower's Concentration Account shall be transferred to the
Investment Account of such Borrower and invested in accordance with account
instructions applicable thereto agreed to by such Borrower and the Collateral
Agent. Each Borrower hereby grants to the Collateral Agent a security interest
for the benefit of the Administrative Agents, the Lenders and the Issuing Banks
in all funds deposited in each Investment Account. Unless otherwise designated
by the Borrowers, all principal payments in respect of Loans shall be applied to
the outstanding Loans, first, to repay outstanding Base Rate Loans, and then to
repay outstanding Eurodollar Rate Loans with those Eurodollar Rate Loans which
have earlier expiring Eurodollar Interest Periods being repaid prior to those
which have later expiring Eurodollar Interest Periods. In addition, all
principal payments in respect of Loans shall be applied first to Loans made for
the purpose of making Restricted Junior Payments permitted under Section 9.06
and then to all other Loans; provided, however, no such principal repayments
shall be applied to Eurodollar Rate Loans on any day other than an Interest
Payment Date to the extent Base Rate Loans are outstanding.
(ii) After the occurrence of an Event of Default and while the same
is continuing, the Funding Agent shall apply all payments in respect of any
Obligations of either Borrower against, and the Collateral Agent shall transfer
to the Funding Agent all proceeds of Collateral of such Borrower for application
to, the Obligations of such Borrower in the following order:
(A) first, to pay principal or interest on any portion
of the Swing Loans of such Borrower;
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(B) second, to pay principal of and interest on any portion of
the Revolving Loans of such Borrower which the Funding Agent may have
advanced on behalf of any Lender other than Scotiabank for which the
Funding Agent has not then been reimbursed by such Lender or such
Borrower;
(C) third, to pay principal of and interest on any Protective
Advance for which the Collateral Agent has not then been paid by such
Borrower or reimbursed by the Lenders;
(D) fourth, to pay Obligations in respect of any expense
reimbursements or indemnities of such Borrower then due to the
Administrative Agents;
(E) fifth, to pay Obligations in respect of any expense
reimbursements or indemnities of such Borrower then due to the Lenders
and the Issuing Banks;
(F) sixth, to pay interest and fees due in respect of Loans of
such Borrower, to the extent not already paid pursuant to clause B of
this Section 3.02(b)(ii);
(G) seventh, to pay or prepay (or, to the extent such
Obligations are contingent, to deposit in the Cash Collateral Account
Cash Collateral pursuant to Section 11.02(b)) principal outstanding on
the Revolving Loans, the Term Loans, the Reimbursement Obligations of
such Borrower and all other Letter of Credit Obligations of such
Borrower;
(H) eighth, to the ratable payment of Interest Rate Contracts
and foreign exchange contracts of such Borrower to which any of the
Lenders or any Affiliate of any of the Lenders is a party; and
(I) ninth, to the ratable payment of all other Obligations of
such Borrower;
provided, however, if sufficient funds are not available to fund all payments to
be made in respect of any of the Obligations described in any of the foregoing
clauses (A) through (I), the available funds being applied with respect to any
such Obligations (unless otherwise specified in such clause) shall be allocated
to the payment of such Obligations ratably, based on the proportion of each
Administrative Agent's, each Lender's or each Issuing Bank's interest in the
aggregate outstanding Obligations described in such clauses.
The order of application of funds set forth in this Section 3.02(b)(ii) and the
related provisions of this Agreement are set forth solely to determine the
application of funds among the Administrative Agents, the Lenders, the Issuing
Banks and other Holders as among themselves. The order of priority set forth in
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clauses A through I of this Section 3.02(b)(ii) may at any time and from time to
time be changed by the agreement of the Requisite Lenders without necessity of
notice to or consent of or approval by the Borrowers, any Holder which is not a
Lender or Issuing Bank, or any other Person; provided that the priority listed
in any of clauses E through I may not be changed with respect to clauses A
through D and provided, further that the order of priority set forth in clauses
A through D of this Section 3.02(b)(ii) may be changed only with the prior
written consent of the Administrative Agents.
(iii) The Funding Agent, in its sole discretion subject only
to the terms of this Section 3.02(b)(iii), may pay from the proceeds of
Revolving Loans (which Loans have not been requested by either Borrower pursuant
to a Notice of Borrowing) made to either Borrower hereunder, whether made
following a request by either Borrower pursuant to Section 2.01 or 2.02 or a
deemed request as provided in this Section 3.02(b)(iii), all amounts then due
and payable by such Borrower hereunder, including, without limitation, amounts
payable with respect to payments of principal, interest, Reimbursement
Obligations and fees and all reimbursements for expenses pursuant to Section
13.02. Each Borrower hereby irrevocably authorizes the Lenders to make Revolving
Loans, which Revolving Loans shall be Base Rate Loans, in each case, upon notice
from the Funding Agent as described in the following sentence for the purpose of
paying principal, interest, Reimbursement Obligations and fees due from such
Borrower, reimbursing expenses pursuant to Section 13.02 and paying any and all
other amounts due and payable by such Borrower hereunder or under the Notes, and
agrees that all such Revolving Loans so made shall be deemed to have been
requested by it pursuant to Section 2.01 or 2.02 as of the date of the
aforementioned notice. The Funding Agent shall request Revolving Loans on behalf
of each Borrower as described in the preceding sentence by notifying the Lenders
by telex, telecopy, telegram or other similar form of transmission (which notice
the Funding Agent shall thereafter promptly transmit to such Borrower), of the
amount and Funding Date of the proposed Borrowing and that such Borrowing is
being requested on such Borrower's behalf pursuant to this Section 3.02(b)(iii).
On the proposed Funding Date, the Lenders shall make the requested Loans in
accordance with the procedures and subject to the conditions specified in
Section 2.01 or 2.02 (irrespective of the satisfaction of the conditions
described in Section 5.02 or the requirement to deliver a Notice of Borrowing in
Section 2.01(b), which conditions and requirement, for the purposes of the
payment of Revolving Loans at the request of the Funding Agent as described in
the preceding sentence, the Lenders irrevocably waive).
(iv) Subject to Section 3.02(b)(v), the Funding Agent shall
promptly distribute to each Lender and Issuing Bank at its primary address set
forth on the appropriate signature page hereof or the signature page to the
Assignment and Acceptance by
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which it became a Lender or Issuing Bank, or at such other address as a Lender,
an Issuing Bank or other Holder may request in writing, such funds as such
Person may be entitled to receive, subject to the provisions of Article XII;
provided that the Funding Agent shall under no circumstances be bound to inquire
into or determine the validity, scope or priority of any interest or entitlement
of any Holder and may suspend all payments or seek appropriate relief
(including, without limitation, instructions from the Requisite Lenders or an
action in the nature of interpleader) in the event of any doubt or dispute as to
any apportionment or distribution contemplated hereby.
(v) In the event that any Lender fails to fund its Pro Rata
Share of any Revolving Loan requested by either Borrower which such Lender is
obligated to fund under the terms of this Agreement (the Pro Rata Share of each
other Lender of such Revolving Loan funded by each other Lender being
hereinafter referred to as a "Non Pro Rata Loan"), excluding any such Lender who
has delivered to the Funding Agent written notice that one or more of the
conditions precedent contained in Section 5.02 will not on the date of such
request be satisfied and until such conditions are satisfied, until the earlier
of such Lender's cure of such failure and the termination of the Revolving Loan
Commitments, the proceeds of all amounts thereafter repaid to the Funding Agent
by either Borrower and otherwise required to be applied to such Lender's share
of all other Obligations pursuant to the terms of this Agreement shall be
advanced to either Borrower by the Funding Agent on behalf of such Lender to
cure, in full or in part, such failure by such Lender, but shall nevertheless be
deemed to have been paid to such Lender in satisfaction of such other
Obligations. Notwithstanding anything in this Agreement to the contrary:
(A) the foregoing provisions of this Section 3.02(b)(v) shall
apply only with respect to the proceeds of payments of Obligations and
shall not affect the conversion or continuation of Loans pursuant to
Section 4.01(c);
(B) a Lender shall be deemed to have cured its failure to fund
its Pro Rata Share of any Revolving Loan at such time as an amount
equal to such Lender's original Pro Rata Share of the requested
principal portion of such Revolving Loan is fully funded to the
applicable Borrower, whether made by such Lender itself or by operation
of the terms of this Section 3.02(b)(v), and whether or not the Non Pro
Rata Loan with respect thereto has been repaid, converted or continued;
(C) amounts advanced to either Borrower to cure, in full or in
part, any such Lender's failure to fund its Pro Rata Share of any
Revolving Loan ("Cure Loans")
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shall bear interest at the Base Rate in effect from time to time, and
for all other purposes of this Agreement shall be treated as if they
were Base Rate Loans; and
(D) regardless of whether or not an Event of Default has
occurred or is continuing, and notwithstanding the instructions of
either Borrower as to its desired application, all repayments of
principal which, in accordance with the other terms of this Section
3.02, would be applied to the outstanding Base Rate Loans shall be
applied in accordance with the terms of the second sentence of Section
3.02(b)(i).
(c) Payments on Non-Business Days. Whenever any payment to be
made by either Borrower hereunder or under the Notes is stated to be due on a
day which is not a Business Day, the payment shall instead be due on the next
succeeding Business Day (or, as set forth in Section 4.02(b)(iii), the next
preceding Business Day), and any such extension of time shall be included in the
computation of the payment of interest and fees hereunder.
3.03. Taxes.
(a) Payment of Taxes. Any and all payments by either Borrower
hereunder or under any Note or other document evidencing any Obligations shall
be made, in accordance with Section 3.02, free and clear of and without
reduction for any and all taxes, levies, imposts, deductions, charges,
withholdings, and all stamp or documentary taxes, excise taxes, ad valorem taxes
and other taxes imposed on the value of the Property, charges or levies which
arise from the execution, delivery or registration, or from payment or
performance under, or otherwise with respect to, any of the Loan Documents or
the Revolving Loan Commitments and all other liabilities with respect thereto
excluding, in the case of each Lender, each Issuing Bank and each Administrative
Agent, taxes imposed on its income, capital, profits or gains and franchise
taxes imposed on it by (i) the United States, except certain withholding taxes
contemplated pursuant to Section 3.03(d)(ii)(C), (ii) the Governmental Authority
of the jurisdiction in which such Lender's Applicable Lending Office is located
or any political subdivision thereof or (iii) the Governmental Authority in
which such Person is organized, managed and controlled or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If either Borrower shall be required by law to withhold or deduct any Taxes from
or in respect of any sum payable hereunder or under any such Note or document to
any Lender, any Issuing Bank or any Administrative Agent, (x) the sum payable to
such Lender or such Administrative Agent shall be increased as may be necessary
so that after making all required withholding or deductions (including
withholding or deductions
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applicable to additional sums payable under this Section 3.03) such Lender, such
Issuing Bank or such Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such withholding or
deductions been made, (y) such Borrower shall make such withholding or
deductions, and (z) such Borrower shall pay the full amount withheld or deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(b) Indemnification. Each Borrower will indemnify each Lender,
each Issuing Bank and each Administrative Agent against, and reimburse each on
demand for, the full amount of all Taxes (including, without limitation, any
Taxes imposed by any Governmental Authority on amounts payable under this
Section 3.03 and any additional income or franchise taxes resulting therefrom)
incurred or paid by such Lender, such Issuing Bank or such Administrative Agent
(as the case may be) or any bank holding company parent of such Lender or
Issuing Bank and any liability (including penalties, interest, and out-of-pocket
expenses paid to third parties) arising therefrom or with respect thereto,
whether or not such Taxes were lawfully payable. A certificate as to any
additional amount payable to any Person under this Section 3.03 submitted by it
to either Borrower shall, absent manifest error, be final, conclusive and
binding upon all parties hereto. Each Lender and each Issuing Bank agrees,
within a reasonable time after receiving a written request from either Borrower,
to provide such Borrower and each Administrative Agent with such certificates as
are reasonably required, and take such other actions as are reasonably necessary
to claim such exemptions as such Lender or such Issuing Bank may be entitled to
claim in respect of all or a portion of any Taxes which are otherwise required
to be paid or deducted or withheld pursuant to this Section 3.03 in respect of
any payments under this Agreement or under the Notes.
(c) Receipts. Within thirty (30) days after the date of any
payment of Taxes by either Borrower, such Borrower will furnish to the Funding
Agent, at its address referred to in Section 13.08, the original or a certified
copy of a receipt, if any, or other documentation reasonably satisfactory to the
Funding Agent, evidencing payment thereof. Each Borrower shall furnish to the
Funding Agent upon the request of the Funding Agent from time to time an
Officer's Certificate stating that all Taxes of which it is aware are due have
been paid and that no additional Taxes of which it is aware are due.
(d) Foreign Bank Certifications. (i) Each Lender that is not
created or organized under the laws of the United States or a political
subdivision thereof has delivered to Foamex and the Funding Agent on the date on
which such Lender became a Lender or shall deliver to each Borrower on the date
such Lender becomes a Lender, if such date is after the Effective Date, a true
and accurate certificate executed in duplicate by a duly
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authorized officer of such Lender to the effect that such Lender is eligible to
receive payments hereunder and under the Notes without deduction or withholding
of United States federal income tax (I) under the provisions of an applicable
tax treaty concluded by the United States (in which case the certificate shall
be accompanied by two duly completed copies of IRS Form 1001 (or any successor
or substitute form or forms)) or (II) under Section 1441(c)(1) as modified for
purposes of Section 1442(a) of the Internal Revenue Code (in which case the
certificate shall be accompanied by two duly completed copies of IRS Form 4224
(or any successor or substitute form or forms)).
(ii) Each Lender further agrees to deliver to the Borrowers
and the Funding Agent from time to time, a true and accurate certificate
executed in duplicate by a duly authorized officer of such Lender before or
promptly upon the occurrence of any event requiring a change in the most recent
certificate previously delivered by it to either Borrower and the Funding Agent
pursuant to this Section 3.03(d) (including, but not limited to, a change in
such Lender's lending office). Each certificate required to be delivered
pursuant to this Section 3.03(d)(ii) shall certify as to one of the following:
(A) that such Lender can continue to receive payments
hereunder and under the Notes without deduction or withholding of
United States federal income tax;
(B) that such Lender cannot continue to receive payments
hereunder and under the Notes without deduction or withholding of
United States federal income tax as specified therein but does not
require additional payments pursuant to Section 3.03(a) because it is
entitled to recover the full amount of any such deduction or
withholding from a source other than the Borrowers;
(C) that such Lender is no longer capable of receiving
payments hereunder and under the Notes without deduction or withholding
of United States federal income tax as specified therein by reason of a
change in law (including the Internal Revenue Code or applicable tax
treaty) after the later of the Effective Date or the date on which such
Lender became a Lender and that it is not capable of recovering the
full amount of the same from a source other than the Borrowers; or
(D) that such Lender is no longer capable of receiving
payments hereunder without deduction or withholding of United States
federal income tax as specified therein other than by reason of a
change in law (including the Internal Revenue Code or applicable tax
treaty) after the later of
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the Effective Date or the date on which such Lender became a
Lender.
Each Lender agrees to deliver to the Borrowers and the Funding Agent further
duly completed copies of the above-mentioned IRS forms on or before the earlier
of (x) the date that any such form expires or becomes obsolete or otherwise is
required to be resubmitted as a condition to obtaining an exemption from
withholding from United States federal income tax and (y) fifteen (15) days
after the occurrence of any event requiring a change in the most recent form
previously delivered by such Lender to the Borrowers and the Funding Agent,
unless any change in treaty, law, regulation, or official interpretation thereof
which would render such form inapplicable or which would prevent the Lender from
duly completing and delivering such form has occurred prior to the date on which
any such delivery would otherwise be required and the Lender promptly advises
the Borrowers that it is not capable of receiving payments hereunder and under
the Notes without any deduction or withholding of United States federal income
tax.
3.04. Increased Capital. If after the date hereof any Lender
or Issuing Bank determines that (i) the adoption or implementation of or any
change in or in the interpretation or administration of any law or regulation or
any guideline or request from any central bank or other Governmental Authority
or quasi-governmental authority exercising jurisdiction, power or control over
any Lender, Issuing Bank or banks or financial institutions generally (whether
or not having the force of law), or compliance with any of the above affects or
would affect the amount of capital required or expected to be maintained by such
Lender or Issuing Bank or any corporation controlling such Lender or Issuing
Bank and (ii) the amount of such capital is increased by or based upon (A) the
making or maintenance by any Lender of its Loans, any Lender's participation in
or obligation to participate in the Loans, Letters of Credit or other advances
made hereunder or the existence of any Lender's obligation to make Loans or (B)
the issuance or maintenance by any Issuing Bank of, or the existence of any
Issuing Bank's obligation to issue, Letters of Credit, then, in any such case,
upon written demand by such Lender or Issuing Bank (with a copy of such demand
to the Funding Agent), the Borrowers shall pay to the Funding Agent for the
account of such Lender or Issuing Bank, from time to time as specified by such
Lender or Issuing Bank, additional amounts sufficient to compensate such Lender
or Issuing Bank or such corporation therefor. Such demand shall be accompanied
by a statement as to the amount of such compensation and include a brief summary
of the basis for such demand. Such statement shall be conclusive and binding for
all purposes, absent manifest error.
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3.05. Promise to Repay; Evidence of Indebtedness.
(a) Promise to Repay. (i) Each Borrower hereby agrees to pay
when due the principal amount of each Revolving Loan which is made to it, and
further agrees to pay all unpaid interest accrued thereon, in accordance with
the terms of this Agreement and the promissory notes evidencing the Revolving
Loans owing to the Lenders, and each Borrower shall execute and deliver to each
Lender such promissory notes as are necessary to evidence the Revolving Loans
owing to the Lenders after giving effect to any assignment thereof pursuant to
Section 13.01, all substantially in the form of Exhibit I (all such promissory
notes and all amendments thereto, replacements thereof and substitutions
therefor being collectively referred to as the "Revolving Loan Notes"; and
"Revolving Loan Note" means any one of the Notes).
(ii) Each of Foamex and GFI hereby agrees to pay when due the
principal amount of each Term Loan which is made to it, and further agrees to
pay all unpaid interest accrued thereon, in accordance with the terms of this
Agreement and the promissory notes evidencing the Term Loans owing to the
Lenders, and each Borrower shall execute and deliver to each Lender such
promissory notes as are necessary to evidence the Term Loans owing to the
Lenders after giving effect to any assignment thereof pursuant to Section 13.01,
all substantially in the form of Exhibit K (all such promissory notes and all
amendments thereto, replacements thereof and substitutions therefor being
collectively referred to as the "Term Loan Notes"; and "Term Loan Note" means
any one of the Notes).
(iii) Each Borrower hereby agrees to pay when due the
principal amount of each Swing Loan which is made to it, and further agrees to
pay all unpaid interest accrued thereon, in accordance with the terms of this
Agreement and the promissory note evidencing the Swing Loans owing to the Swing
Bank, and each Borrower shall execute and deliver to the Swing Bank such
promissory note as is necessary to evidence the Swing Loans owing to the Swing
Bank, substantially in the form of Exhibit J (all such promissory notes and all
amendments thereto, replacements thereof and substitutions therefor being
collectively referred to as the "Swing Loan Notes"; and "Swing Loan Note" means
any one of the Notes).
(b) Loan Account. Each Lender shall maintain in accordance
with its usual practice an account or accounts (a "Loan Account") evidencing the
Indebtedness of each Borrower to such Lender resulting from each Loan owing to
such Lender from time to time, including the amount of principal and interest
payable and paid to such Lender from time to time hereunder and under the Notes.
(c) Control Account. The Register maintained by the Funding
Agent pursuant to Section 13.01(c) shall include a control account, and a
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subsidiary account for each Lender, in which accounts (taken together) shall be
recorded (i) the date and amount of each Borrowing made hereunder, the type of
Loan comprising such Borrowing and any Eurodollar Interest Period applicable
thereto, (ii) the effective date and amount of each Assignment and Acceptance
delivered to and accepted by it and the parties thereto, (iii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder or under the Notes, and (iv) the amount of any
sum received by the Funding Agent from each Borrower hereunder and each Lender's
share thereof.
(d) Entries Binding. The Funding Agent will render and deliver
a statement of the Register monthly to each Borrower and each Lender. All
entries on any such statement shall, fifteen (15) days after the same is sent,
be presumed to be correct and shall constitute prima facie evidence of the
information contained in such statement. Each of the Borrowers and the Lenders
shall have the express right to rebut such presumption by conclusively
demonstrating the existence of an error on the part of the Funding Agent.
3.06. Deposit Accounts. (a) Each Borrower shall maintain
lockbox accounts (the "Lockbox Accounts") in the name of the Collateral Agent
with the Lockbox Banks of such Borrower and shall, promptly upon receipt
thereof, deposit in its respective Lockbox Accounts, all monies that constitute
checks, notes, drafts or funds received by such Borrower in the ordinary course
of business or otherwise and that constitute proceeds of Collateral. Any amounts
which are required to be paid to the Funding Agent hereunder which are not
proceeds of Collateral shall be paid directly to the Funding Agent and not
deposited in a Lockbox Account.
(b) Funds on deposit in a Lockbox Account of either Borrower
on each Business Day shall be transferred to the Concentration Account of such
Borrower in accordance with the terms of the Lockbox Agreements and on the next
succeeding Business Day shall be transferred from the Concentration Account of
such Borrower either to the Funding Agent to be applied to such Borrower's
Obligations at the times provided in Section 3.02 or to any Investment Account
as provided in Section 3.02. Each Borrower hereby grants to the Collateral Agent
a security interest in the Concentration Account of such Borrower and all funds
from time to time deposited therein, including, without limitation, all such
overnight investments.
(c) Each Borrower agrees to pay to the Collateral Agent any
and all reasonable fees, costs and expenses which the Collateral Agent incurs in
connection with opening and maintaining the Lockbox Accounts, the Concentration
Accounts or any other similar payment collection mechanism for either Borrower
and depositing for collection any check or item of
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payment received by and/or delivered to the Lockbox Banks or the Collateral
Agent on account of the Obligations of such Borrower. Each Borrower agrees to
reimburse the Collateral Agent for any amounts paid to any Lockbox Bank arising
out of any required indemnification by the Collateral Agent of such Lockbox Bank
against damages incurred by the Lockbox Bank in the operation of a Lockbox
Account for such Borrower.
3.07. Replacement of Lender in Event of Adverse Condition. If
either Borrower becomes obligated to pay additional amounts to any Lender
pursuant to Sections 3.03, 3.04 or 4.01(f) as a result of any condition
described in such Sections which is not generally applicable to all Lenders,
then, unless such Lender has theretofore taken steps to remove or cure, and has
removed or cured, the conditions creating the cause for such obligation to pay
such additional amounts, such Borrower may, within fifteen (15) days of being on
notification of such condition, designate another bank which is reasonably
acceptable to the Administrative Agents (such bank being herein called a
"Replacement Lender") to purchase for cash all of the Notes of such Lender and
all of such Lender's rights hereunder, without recourse to or warranty (other
than title) by, or expense to, such Lender for a purchase price equal to the
outstanding principal amount of the Notes payable to such Lender plus any
accrued but unpaid interest on such Notes and accrued but unpaid commitment and
other fees, expense reimbursements and indemnities in respect of that Lender's
Revolving Loan Commitment. Such Lender shall consummate such sale in accordance
with such terms (and, if such Lender is an Issuing Bank, such other terms as may
be necessary to compensate fully such Lender) within a reasonable time not
exceeding 60 days from the date such Borrower designated a Replacement Lender,
and thereupon such Lender shall no longer be a party hereto or have any
obligations or rights hereunder (except rights which, pursuant to the provisions
of this Agreement, survive the termination of this Agreement and the repayment
of the Notes), and the Replacement Lender shall succeed to such obligations and
rights.
ARTICLE IV
INTEREST AND FEES
4.01. Interest on the Loans and other Obligations.
(a) Rate of Interest. All Loans and the outstanding principal
balance of all other Obligations shall bear interest on the unpaid principal
amount thereof from the date such Loans are made and such other Obligations are
due and payable until paid in full, except as otherwise provided in Section
4.01(d), as follows:
(i) If a Base Rate Loan or such other Obligation,
at a rate per annum equal to the sum of (A) the Base
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Rate, as in effect from time to time as interest accrues plus (B) the
Applicable Base Rate Margin in effect from time to time; and
(ii) If a Eurodollar Rate Loan, at a rate per annum equal to
the sum of (A) the Eurodollar Rate determined for the applicable
Eurodollar Interest Period plus (B) the Applicable Eurodollar Rate
Margin in effect from time to time during such Eurodollar
Interest Period.
The applicable basis for determining the rate of interest on the Loans shall be
selected at the time a Notice of Borrowing or a Notice of
Conversion/Continuation is delivered by a Borrower to the Funding Agent;
provided, however, such Borrower may not select the Eurodollar Rate as the
applicable basis for determining the rate of interest on such a Loan if at the
time of such selection an Event of Default or a Potential Event of Default would
occur or has occurred and is continuing. If on any day any Loan is outstanding
with respect to which notice has not been timely delivered to the Funding Agent
in accordance with the terms of this Agreement specifying the basis for
determining the rate of interest on that day, then for that day interest on that
Loan shall be determined by reference to the Base Rate.
(b) Interest Payments. (i) Interest accrued on each Base Rate
Loan shall be payable in arrears (A) on the first day of each calendar month,
commencing on the first such day following the making of such Base Rate Loan,
(B) upon the prepayment thereof in full or in part when made in connection with
a prepayment of the Term Loans or a permanent reduction in the Revolving Loan
Commitments, and (C) if not theretofore paid in full, at maturity (whether by
acceleration or otherwise) of such Base Rate Loan.
(ii) Interest accrued on each Eurodollar Rate Loan shall be
payable in arrears (A) on each Eurodollar Interest Payment Date applicable to
such Loan, (B) upon the payment or prepayment thereof in full or in part, and
(C) if not theretofore paid in full, at maturity (whether by acceleration or
otherwise) of such Eurodollar Rate Loan.
(iii) Interest accrued on the principal balance of all other
Obligations shall be payable in arrears (A) on the first day of each calendar
month, commencing on the first such day following the incurrence of such
Obligation, (B) upon repayment thereof in full or in part, and (C) if not
theretofore paid in full, at the time such other Obligation becomes due and
payable (whether by acceleration or otherwise).
(c) Conversion or Continuation. (i) Each Borrower shall have
the option (A) to convert at any time all or any part of outstanding Base Rate
Loans to Eurodollar Rate Loans; or (B)
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to continue all or any part of outstanding Eurodollar Rate Loans, in accordance
with the terms of Section 4.01(a), having Eurodollar Interest Periods which
expire on the same date as Eurodollar Rate Loans, and the succeeding Eurodollar
Interest Period of such continued Loans shall commence on such expiration date;
provided, however, (I) no portion of any outstanding Loan may be continued as
(and shall be immediately converted into a Base Rate Loan), or be converted
into, a Eurodollar Rate Loan (x) if the continuation of, or the conversion into,
would violate any of the provisions of Section 4.02 or (y) if an Event of
Default or a Potential Event of Default would occur or has occurred and is
continuing and (II) if the option set forth in clause (B) of this Section is not
exercised, in accordance with the terms of Section 4.01(c)(ii), in respect of a
Eurodollar Rate Loan, such Eurodollar Rate Loan shall convert automatically into
a Base Rate Loan on the final date of the applicable Eurodollar Interest Period.
(ii) To convert or continue a Loan under Section
4.01(c)(i), each Borrower shall deliver a Notice of Conversion/Continuation to
the Funding Agent no later than 11:00 a.m. (New York time) at least three (3)
Business Days in advance of the proposed conversion/continuation date. A Notice
of Conversion/Continuation shall specify (A) the identity of the Borrower
delivering such notice, (B) the proposed conversion/continuation date (which
shall be a Business Day), (C) the principal amount of the Loan to be
converted/continued, (D) whether such Loan shall be converted and/or continued,
and (E) in the case of a conversion to, or continuation of, a Eurodollar Rate
Loan, the requested Eurodollar Interest Period. In lieu of delivering a Notice
of Conversion/Continuation, such Borrower may give the Funding Agent telephonic
notice of any proposed conversion/continuation by the time required under this
Section 4.01(c)(ii), and such notice shall be confirmed in writing delivered to
the Funding Agent promptly (but in no event later than 5:00 p.m. (New York time)
on the same day). Promptly after receipt of a Notice of Conversion/Continuation
under this Section 4.01(c)(ii) (or telephonic notice in lieu thereof), the
Funding Agent shall notify each Lender by telex or telecopy, or other similar
form of transmission, of the proposed conversion/continuation. Any Notice of
Conversion/Continuation for conversion to, or continuation of, a Loan (or
telephonic notice in lieu thereof) shall be irrevocable, and such Borrower shall
be bound to convert or continue in accordance therewith.
(d) Default Interest. Notwithstanding the rates of interest
specified in Section 4.01(a) or elsewhere in this Agreement, effective
immediately upon (i) the occurrence of an Event of Default described in Section
11.01(a) or (ii) the occurrence of any other Event of Default and notice from
the Requisite Lenders of the effectiveness of this Section 4.01(d), and for as
long thereafter as such Event of Default shall be continuing, the principal
balance of all Base Rate Loans, and the
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principal balance of all other Obligations (other than Eurodollar Rate Loans),
shall bear interest at a rate which is two percent (2%) per annum in excess of
the Base Rate plus the Applicable Base Rate Margin, and the principal balance of
all Eurodollar Rate Loans shall bear interest at a rate which is two percent
(2%) per annum in excess of the Eurodollar Rate plus the Applicable Eurodollar
Rate Margin.
(e) Computation of Interest. Interest on all Obligations shall
be computed on the basis of the actual number of days elapsed in the period
during which interest accrues and a year of 360 days. In computing interest on
any Loan, the date of the making of the Loan or the first day of a Eurodollar
Interest Period, as the case may be, shall be included and the date of payment
or the expiration date of a Eurodollar Interest Period, as the case may be,
shall be excluded; provided, however, if a Loan is repaid on the same day on
which it is made, one (1) day's interest shall be paid on such Loan.
(f) Changes; Legal Restrictions. If after the date hereof any
Lender or Issuing Bank determines that the adoption or implementation of or any
change in or in the interpretation or administration of any law or regulation or
any guideline or request from any central bank or other Governmental Authority
or quasi-governmental authority exercising jurisdiction, power or control over
any Lender, Issuing Bank or over banks or financial institutions generally
(whether or not having the force of law), compliance with which:
(A) does or will subject a Lender or an Issuing Bank (or its
Applicable Lending Office or Eurodollar Affiliate) to charges (other
than taxes) of any kind which such Lender or Issuing Bank reasonably
determines to be applicable to the Revolving Loan Commitments of the
Lenders and/or the Issuing Banks to make Eurodollar Rate Loans or issue
and/or participate in Letters of Credit or change the basis of taxation
of payments to that Lender or Issuing Bank of principal, fees,
interest, or any other amount payable hereunder with respect to
Eurodollar Rate Loans or Letters of Credit; or
(B) does or will impose, modify, or hold applicable, in the
determination of a Lender or an Issuing Bank, any reserve (other than
reserves taken into account in calculating the Eurodollar Rate),
special deposit, compulsory loan, FDIC insurance or similar requirement
against assets held by, or deposits or other liabilities (including
those pertaining to Letters of Credit) in or for the account of,
advances or loans by, commitments made, or other credit extended by, or
any other acquisition of funds by, a Lender or an Issuing Bank or any
Applicable Lending Office or Eurodollar Affiliate of that Lender or
Issuing Bank;
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and the result of any of the foregoing is to increase the cost to that Lender or
Issuing Bank of making, renewing or maintaining the Loans or its Revolving Loan
Commitments or issuing or participating in the Letters of Credit or to reduce
any amount receivable thereunder; then, in any such case, upon written demand by
such Lender or Issuing Bank (with a copy of such demand to the Funding Agent),
the Borrowers shall immediately pay to the Funding Agent for the account of such
Lender or Issuing Bank, from time to time as specified by such Lender or Issuing
Bank, such amount or amounts as may be necessary to compensate such Lender or
Issuing Bank or its Eurodollar Affiliate for any such additional cost incurred
or reduced amount received. Such demand shall be accompanied by a statement as
to the amount of such compensation and include a brief summary of the basis for
such demand. Such statement shall be conclusive and binding for all purposes,
absent manifest error. If such increased costs are incurred as a result of a
Lender's or Issuing Bank's selection of a particular Applicable Lending Office,
such Lender or Issuing Bank shall take reasonable efforts to make, fund and
maintain its Loans and to make, fund and maintain its obligations under the
Letters of Credit through another Applicable Lending Office of such Lender or
Issuing Bank in another jurisdiction, if the making, funding or maintaining of
such Loans or obligations in respect of Letters of Credit through such other
office of such Lender or Issuing Bank does not, in the judgment of such Lender
or Issuing Bank, otherwise materially adversely affect such Loans or obligations
in respect of Letters of Credit of such Lender or Issuing Bank.
4.02. Special Provisions Governing Eurodollar Rate
Loans. With respect to Eurodollar Rate Loans:
(a) Amount of Eurodollar Rate Loans. Each Eurodollar Rate Loan
shall be for a minimum amount of $5,000,000 and in integral multiples of
$1,000,000 in excess of that amount.
(b) Determination of Eurodollar Interest Period. By giving
notice as set forth in Section 2.01(b) (with respect to any Borrowing of
Eurodollar Rate Loans) or Section 4.01(c) (with respect to a conversion into or
continuation of Eurodollar Rate Loans), the Borrower giving such notice shall
have the option, subject to the other provisions of this Section 4.02, to select
an interest period (each, a "Eurodollar Interest Period") to apply to the Loans
described in such notice, subject to the following provisions:
(i) Such Borrower may only select, as to a particular
Borrowing of Eurodollar Rate Loans, a Eurodollar Interest Period of
either one, two, three or six months in duration;
(ii) In the case of immediately successive Eurodollar
Interest Periods applicable to a Borrowing of Eurodollar Rate Loans,
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each successive Eurodollar Interest Period shall commence on the day
on which the next preceding Eurodollar Interest Period expires;
(iii) If any Eurodollar Interest Period would otherwise expire
on a day which is not a Business Day, such Eurodollar Interest Period
shall be extended to expire on the next succeeding Business Day if the
next succeeding Business Day occurs in the same calendar month, and if
there will be no succeeding Business Day in such calendar month, the
Eurodollar Interest Period shall expire on the immediately preceding
Business Day;
(iv) Such Borrower may not select a Eurodollar Interest Period
as to any Loan if such Eurodollar Interest Period terminates later than
the Commitment Termination Date;
(v) Such Borrower may not select a Eurodollar Interest Period
with respect to any portion of principal of a Loan which extends beyond
a date on which such Borrower is required to make a scheduled payment
of such portion of principal; and
(vi) There shall be no more than seven (7) Eurodollar Interest
Periods in effect at any one time.
(c) Determination of Interest Rate. As soon as practicable on
the second Business Day prior to the first day of each Eurodollar Interest
Period (the "Eurodollar Interest Rate Determination Date"), the Funding Agent
shall determine (pursuant to the procedures set forth in the definition of
"Eurodollar Rate") the interest rate which shall apply to the Eurodollar Rate
Loans for which an interest rate is then being determined for the applicable
Eurodollar Interest Period and shall promptly give notice thereof (in writing or
by telephone confirmed in writing) to each Borrower and to each Lender. The
Funding Agent's determination shall be presumed to be correct, absent manifest
error, and shall be binding upon the Borrowers.
(d) Interest Rate Unascertainable, Inadequate or Unfair. In
the event that at least one (1) Business Day before the Eurodollar Interest Rate
Determination Date:
(i) the Funding Agent is advised by any Reference Bank that
deposits in Dollars (in the applicable amounts) are not being offered
by such Reference Bank in the London interbank market for such
Eurodollar Interest Period; or
(ii) the Administrative Agents determine that
adequate and fair means do not exist for ascertaining
the applicable interest rates by reference to which the
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Eurodollar Rate then being determined is to be fixed;
or
(iii) the Requisite Lenders advise the Funding Agent that the
Eurodollar Rate for Eurodollar Rate Loans comprising such Borrowing
will not adequately reflect the cost to such Requisite Lenders of
obtaining funds in Dollars in the London interbank market in the amount
substantially equal to such Lenders' Eurodollar Rate Loans in Dollars
and for a period equal to such Eurodollar Interest Period;
then the Funding Agent shall forthwith give notice thereof to each Borrower,
whereupon (until the Funding Agent notifies such Borrower that the circumstances
giving rise to such suspension no longer exist) the right of such Borrower to
elect to have Loans bear interest based upon the Eurodollar Rate shall be
suspended and each outstanding Eurodollar Rate Loan shall be converted into a
Base Rate Loan on the last day of the then current Eurodollar Interest Period
therefor, notwithstanding any prior election by such Borrower to the contrary.
(e) Illegality. (i) If at any time any Lender determines
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties) that the making or continuation of any Eurodollar Rate
Loan has become unlawful or impermissible by compliance by that Lender with any
law, governmental rule, regulation or order of any Governmental Authority
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful or would result in costs or penalties), then, and in
any such event, such Lender may give notice of that determination, in writing,
to each Borrower and the Funding Agent, and the Funding Agent shall promptly
transmit the notice to each other Lender.
(ii) When notice is given by a Lender under Section 4.02(e)(i), (A)
each Borrower's right to request from any Lender and each Lender's obligation,
if any, to make Eurodollar Rate Loans shall be immediately suspended, and each
Lender shall make a Base Rate Loan as part of any requested Borrowing of
Eurodollar Rate Loans and (B) if Eurodollar Rate Loans are then outstanding,
each Borrower shall immediately, or if permitted by applicable law, no later
than the date permitted thereby, upon at least one (1) Business Day's prior
written notice to the Funding Agent and the Lenders, convert each Loan into a
Base Rate Loan.
(iii) If at any time after a Lender gives notice under Section
4.02(e)(i) such Lender determines that it may lawfully make Eurodollar Rate
Loans, such Lender shall promptly give notice of that determination, in writing,
to each Borrower and the Funding Agent, and the Funding Agent shall promptly
transmit the notice to each other Lender. Each Borrower's right to
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request, and such Lender's obligation, if any, to make Eurodollar Rate Loans
shall thereupon be restored.
(f) Compensation. In addition to all amounts required to be
paid by each Borrower pursuant to Section 4.01, each Borrower shall compensate
each Lender, upon demand, for all losses, expenses and liabilities (including,
without limitation, any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Lender's Eurodollar Rate Loans to such Borrower but excluding any
loss of Applicable Eurodollar Rate Margin on the relevant Loans) which that
Lender may sustain (i) if for any reason a Borrowing, conversion into or
continuation of Eurodollar Rate Loans does not occur on a date specified
therefor in a Notice of Borrowing or a Notice of Conversion/Continuation given
by such Borrower or in a telephonic request by it for borrowing or
conversion/continuation or a successive Eurodollar Interest Period does not
commence after notice therefor is given pursuant to Section 4.01(c), including,
without limitation, pursuant to Section 4.02(d), (ii) if for any reason any
Eurodollar Rate Loan is prepaid (including, without limitation, mandatorily
pursuant to Section 3.01(b) on a date which is not the last day of the
applicable Eurodollar Interest Period, (iii) as a consequence of a required
conversion of a Eurodollar Rate Loan to a Base Rate Loan as a result of any of
the events indicated in Section 4.02(d), or (iv) as a consequence of any failure
by such Borrower to repay Eurodollar Rate Loans when required by the terms of
this Agreement. The Lender making demand for such compensation shall deliver to
such Borrower concurrently with such demand a written statement in reasonable
detail as to such losses, expenses and liabilities, and this statement shall be
conclusive as to the amount of compensation due to that Lender, absent manifest
error.
(g) Booking of Eurodollar Rate Loans. Any Lender may make,
carry or transfer Eurodollar Rate Loans at, to, or for the account of, its
Eurodollar Lending Office or Eurodollar Affiliate or its other offices or
Affiliates. No Lender shall be entitled, however, to receive any greater amount
under Sections 3.03, 3.04, 4.01(f) or 4.02(f) as a result of the transfer of any
such Eurodollar Rate Loan to any office (other than such Eurodollar Lending
Office) or any Affiliate (other than such Eurodollar Affiliate) than such Lender
would have been entitled to receive immediately prior thereto, unless (i) the
transfer occurred at a time when circumstances giving rise to the claim for such
greater amount did not exist and (ii) such claim would have arisen even if such
transfer had not occurred.
(h) Affiliates Not Obligated. No Eurodollar Affiliate or other
Affiliate of any Lender shall be deemed a party to this Agreement or shall have
any liability or obligation under this Agreement.
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4.03. Fees.
(a) Administrative Agents' Fees. (i) The Borrowers
shall pay to the Administrative Agents, solely for the account of
the Administrative Agents, the fees set forth in the letter from
Citibank and Scotiabank addressed to the Borrowers dated May 24,
1994, payable in accordance with the terms of such letter.
(ii) The Borrowers shall pay to the Collateral Agent, solely
for the account of the Collateral Agent, the fees set forth in the letter from
Citibank addressed to the Borrowers dated May 24, 1994, payable in accordance
with the terms of such letter.
(iii) The Borrowers shall pay to the Funding Agent, solely for
the account of the Funding Agent, the fees set forth in the letter from
Scotiabank addressed to the Borrowers dated June 2, 1994, payable in accordance
with the terms of such letter.
(b) Letter of Credit Fee. In addition to any charges paid
pursuant to Section 2.03(g), each Borrower shall pay to the Funding Agent, for
the account of the Lenders based on their respective Pro Rata Shares, a fee
accruing at a per annum rate equal to two and three-quarters of one percent
(2.75%) per annum on the undrawn face amount of each outstanding Letter of
Credit for the period of time such Letter of Credit is outstanding, with respect
to Standby Letters of Credit, payable monthly, in arrears, and, with respect to
Commercial Letters of Credit, payable in advance on the date of issuance of such
Letter of Credit, (the "Letter of Credit Fees"); provided, however, upon (A) the
occurrence of an Event of Default described in Section 11.01(a) or (B) the
occurrence of any other Event of Default and notice from the Requisite Lenders
of the effectiveness of Section 4.01(d), and for so long thereafter as such
Event of Default shall be continuing, the rate at which the Letter of Credit
Fees shall accrue and be payable shall be equal to four and three-quarters of
one percent (4.75%) per annum.
(c) Unused Commitment Fee. The Borrowers shall pay to the
Funding Agent, for the account of the Lenders in accordance with their
respective Pro Rata Shares, a fee (the "Unused Commitment Fee"), accruing at the
rate of one-half of one percent (0.5%) per annum on the amount from time to time
by which the Revolving Loan Commitments exceed the sum of (A) the outstanding
principal amount of the Revolving Loans and Swing Loans, plus (B) the
outstanding Reimbursement Obligations, plus (C) the aggregate undrawn face
amount of all outstanding Letters of Credit, for the period commencing on
November 18, 1993 and ending on the Commitment Termination Date, such portion of
the fee being payable monthly, in arrears, commencing on the first day of the
calendar month next succeeding November 18, 1993. Notwithstanding the foregoing,
in the event that any Lender fails
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to fund its Pro Rata Share of any Loan requested by either Borrower which such
Lender is obligated to fund under the terms of this Agreement, (I) such Lender
shall not be entitled to any Unused Commitment Fees with respect to its
Revolving Loan Commitment until such failure has been cured in accordance with
Section 3.02(b)(v)(B) and (II) until such time, the Unused Commitment Fee shall
accrue in favor of the Lenders which have funded their respective Pro Rata
Shares of such requested Loan, shall be allocated among such performing Lenders
ratably based upon their relative Revolving Loan Commitments, and shall be
calculated based upon the average amount by which the aggregate Revolving Loan
Commitments of such performing Lenders exceeds the sum of (1) the outstanding
principal amount of the Loans owing to such performing Lenders, plus (2) the
outstanding Reimbursement Obligations owing to such performing Lenders, plus (3)
the aggregate participation interests of such performing Lenders arising
pursuant to Section 2.03(e) with respect to undrawn and outstanding Letters of
Credit.
(d) Calculation and Payment of Fees. All of the above fees
payable on a per annum percentage basis shall be calculated on the basis of the
actual number of days elapsed in a 360-day year. All such fees shall be payable
in addition to, and not in lieu of, interest, compensation, expense
reimbursements, indemnification and other Obligations. Fees shall be payable to
the Funding Agent at its office in New York, New York in immediately available
funds. All fees shall be fully earned and nonrefundable when paid. All fees
specified or referred to in this Agreement due to any Administrative Agent, any
Issuing Bank or any Lender, including, without limitation, those referred to in
this Section 4.03, shall bear interest, if not paid when due, at the interest
rate for Base Rate Loans in accordance with Section 4.01(d), shall constitute
Obligations and shall be secured by all of the Collateral.
ARTICLE V
CONDITIONS TO LOANS AND LETTERS OF CREDIT
5.01. Conditions Precedent to the Effectiveness of this
Agreement. Section 13.22 shall become effective upon the execution of this
Agreement by all the parties hereto. This Agreement (other than Section 13.22)
shall become effective on the date (the "Effective Date") when the following
conditions precedent have been satisfied (unless waived by the Lenders or unless
the deadline for delivery has been extended by the Administrative Agents):
(a) Documents. The Administrative Agents shall have
received on or before the Effective Date all of the following in
form and substance satisfactory to the Lenders:
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(i) this Agreement and all other agreements, documents and
instruments described in the List of Closing Documents, attached hereto
and made a part hereof as Exhibit F, each duly executed where
appropriate and in form and substance satisfactory to the Lenders;
without limiting the foregoing, the Borrowers hereby direct their
counsel, Willkie Farr & Gallagher, to prepare and deliver to the
Administrative Agents, the Lenders, the Issuing Banks and Sidley &
Austin, counsel to the Collateral Agent, the opinions referred to in
such List of Closing Documents;
(ii) the estimated consolidated pro forma balance sheets of
the Borrowers and Borrowers' Subsidiaries as at May 26, 1996 (giving
effect pro forma as of such date to the PFI Merger and the other
transactions contemplated by the PFI Merger Documents and this
Agreement), and detailed financial projections through Fiscal Year 1999
on a monthly basis through the end of Fiscal Year 1996 and on a
quarterly basis thereafter, in each case in form and substance
reasonably satisfactory to the Administrative Agents and the Lenders;
and
(iii) such additional documentation as either Administrative
Agent or any of the Lenders may reasonably request.
(b) Perfection of Liens. The Collateral Agent shall have
received evidence that all Liens granted to the Collateral Agent with respect to
all Collateral are and/or continue to be perfected and of first priority, except
as otherwise permitted under this Agreement.
(c) Closing under the PFI Merger Agreement. The Administrative
Agents, and the Requisite Lenders shall be satisfied that: (i) the PFI Merger
Agreement and all other PFI Merger Documents shall have been duly approved and
executed and delivered by the parties thereto in form and substance satisfactory
to the Administrative Agents and the Requisite Lenders, (ii) all conditions
precedent to closing under the PFI Merger Agreement and the other PFI Merger
Documents have been met (and no modification or waiver of any such condition
shall have been made without the consent of the Administrative Agents which
consent shall not be unreasonably withheld) and such documents are, or
simultaneously with the execution hereof, will be in full force and effect,
(iii) GFI shall have received PFI Merger Proceeds in an aggregate amount of at
least $42,900,000 (less the PFI Guaranty Release Amount) in exchange for its
Equity Interests in PFI pursuant to the PFI Merger Agreement, (iv) the Funding
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Agent shall have received the PFI Guaranty Release Amount and the Term Loans
shall have been prepaid as contemplated in Section 3.01(b)(vii), (v) the PFI
Merger and the transactions contemplated thereby and by this Agreement
(including, without limitation, the application of the PFI Guaranty Release
Amount and the PFI Merger Proceeds as contemplated in this Agreement) do not and
will not contravene or constitute a default under or in respect of the Senior
Secured Notes, the Senior Notes, any Permitted Subordinated Indebtedness or any
other Indebtedness of PFI or any of the Borrowers, (vi) the Borrowers and the
other parties to the Loan Documents and the PFI Merger Documents are (and, after
giving effect to the PFI Merger and the transactions contemplated thereby and by
this Agreement, will be) in compliance with all Requirements of Law and all
material Contractual Obligations, (vii) Foamex and its Subsidiaries have made
adequate provision for the payment of all fees, expenses, indemnities and other
liabilities to be incurred by Foamex and its Subsidiaries in connection with the
PFI Merger and the transactions contemplated thereby and by this Agreement and
(viii) PFI has been released from its obligations under and in respect of the
Senior Secured Notes, the Senior Notes, the Subordinated Debentures and the 1993
Subordinated Debentures.
(d) Consents. Each of the Borrowers, any of Borrowers'
Subsidiaries and each General Partner, shall have received all consents and
authorizations required pursuant to any material Contractual Obligation with any
other Person and shall have obtained all consents and authorizations of, and
effected all notices to and filings with, any Governmental Authority, in each
case, as may be necessary to allow each of the Borrowers, any of Borrowers'
Subsidiaries and each General Partner, lawfully and without risk of rescission,
(i) to execute, deliver and perform, in all material respects, its obligations
under this Agreement, the other Loan Documents and Transaction Documents to
which it is, or is to be, a party and each other agreement or instrument to be
executed and delivered by it pursuant thereto or in connection therewith and
(ii) to create and perfect or continue the validity and perfection of the Liens
on the Collateral to be owned by it in the manner and for the purpose
contemplated by the Loan Documents.
(e) No Legal Impediments. No law, regulation, order, judgment
or decree of any Governmental Authority shall, and neither Administrative Agent
shall have received any notice that litigation is pending or threatened which is
likely to (i) enjoin, prohibit or restrain the making of the Loans and/or the
issuance of Letters of Credit and/or the consummation of the transactions
contemplated by the Transaction Documents or (ii) impose or result in the
imposition of a Material Adverse Effect.
(f) No Change in Condition. No change in the condition
(financial or otherwise), business, performance, properties, assets, operations
or prospects of either Borrower
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(other than in respect of the PFI Merger) shall have occurred since December 31,
1995 which change, in the judgment of the Lenders, will have or is reasonably
likely to have a Material Adverse Effect.
(g) No Default. No Event of Default or Potential Event of
Default (as each such term is defined herein and under the Existing Credit
Agreement) shall have occurred and be continuing or would result from the making
of the Loans.
(h) Representations and Warranties. All of the representations
and warranties contained in Section 6.01 and in any of the other Loan Documents
shall be true and correct in all material respects on and as of the Effective
Date.
(i) Fees and Expenses Paid. There shall have been paid to the
Funding Agent, for the account of the Lenders and the Funding Agent, as
applicable, all fees due and payable on or before the Effective Date and all
expenses due and payable on or before the Effective Date.
5.02. Conditions Precedent to All Revolving Loans and Letters
of Credit. The obligation of each Lender to make any Revolving Loan and of the
Swing Bank to make any Swing Loan, requested to be made by it on the Effective
Date or any date after the Effective Date and the agreement of each Issuing Bank
to issue any Letter of Credit on the Effective Date or any date after the
Effective Date is subject to the following conditions precedent as of each such
date:
(a) Representations and Warranties. As of such date, both
before and after giving effect to the Loans to be made or the Letter of Credit
to be issued on such date, all of the representations and warranties of each
Borrower and each General Partner contained in Section 6.01 and in any other
Loan Document (other than representations and warranties which expressly speak
as of a different date) shall be true and correct in all material respects.
(b) No Defaults. No Event of Default shall have occurred and
be continuing or would result from the making of the requested Loan or issuance
of the requested Letter of Credit.
(c) No Legal Impediments. No law, regulation, order, judgment
or decree of any Governmental Authority shall, and neither Administrative Agent
shall have received from any Lender or Issuing Bank notice that, in the judgment
of such Lender or Issuing Bank, litigation is pending or threatened which is
likely to, enjoin, prohibit or restrain, or impose or result in the imposition
of any material adverse condition upon, (i) such Lender's making of the
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requested Loan or participation in the requested Letter of Credit, (ii) the
Swing Bank's making of the requested Swing Loan or (iii) such Issuing Bank's
issuance of the requested Letter of Credit.
(d) No Material Adverse Effect. No change in the condition
(financial or otherwise), business, performance, properties, assets, operations
or prospects of either Borrower (other than in respect of the PFI Merger) shall
have occurred since December 31, 1995, which has had or is reasonably likely to
have a Material Adverse Effect.
Each submission by either Borrower to the Funding Agent of a Notice of Borrowing
with respect to a Revolving Loan or Swing Loan or a Notice of
Conversion/Continuation with respect to any Loan (excluding any automatic
conversion to Base Rate Loans pursuant to the proviso at the end of Section
4.01(c)) and each acceptance by either Borrower of the proceeds of each Loan
made, converted or continued hereunder, each submission by either Borrower to an
Issuing Bank of a request for issuance of a Letter of Credit and the issuance of
such Letter of Credit, shall constitute a representation and warranty by such
Borrower and, in the case of a submission by Foamex, each of the General
Partners, individually, and as a general partner of Foamex, as of the Funding
Date in respect of such Revolving Loan or Swing Loan, the date of conversion or
continuation and the date of issuance of such Letter of Credit, that all the
conditions contained in this Section 5.02 have been satisfied or waived in
accordance with Section 13.07.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01. Representations and Warranties of the Borrowers. In
order to induce the Lenders and the Issuing Banks to enter into this Agreement
and to make the Loans and the other financial accommodations to each of the
Borrowers and to issue the Letters of Credit described herein, each Borrower,
individually, and each of the General Partners, individually and as a general
partner or managing general partner of Foamex, as the case may be, hereby
represents and warrants to each Lender, each Issuing Bank and the Administrative
Agents as of the Effective Date and, other than with respect to Section
6.01(bb), after giving effect to the PFI Merger and as of each date thereafter
on which such representations and warranties shall be made or deemed to be made
that the following statements are true, correct and complete:
(a) Organization; Partnership Powers; Corporate Powers. (i)
Foamex (A) is a limited partnership duly formed and organized, validly existing
and in good standing under the laws of the State of Delaware and is a valid
limited partnership under RULPA, (B) is duly qualified to operate as a foreign
limited partnership and is in good standing under the laws of each jurisdiction
in which failure to be so qualified and in good
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standing will have or is reasonably likely to have a Material Adverse Effect,
(C) has filed and maintained effective (unless exempt from the requirements for
filing) a current Business Activity Report with the appropriate Governmental
Authority in the states of Minnesota and New Jersey, and (D) has all requisite
partnership power and authority to own, operate and encumber its Property and to
conduct its business as presently conducted and as proposed to be conducted
pursuant to the Business Plan of Foamex in connection with and following the
consummation of the transactions contemplated by this Agreement.
(ii) FMXI, in its capacity as managing general partner, is the
Person who has executed this Agreement and the other Loan Documents executed on
the Effective Date to which Foamex is a party on behalf of Foamex. After the
Effective Date, FMXI will execute any other Loan Documents to which Foamex is a
party on behalf of Foamex. Trace Foam and FMXI are the sole general partners of
Foamex and FMXI has full authority to execute alone, and on behalf of Foamex,
the Loan Documents. FMXI is the sole managing general partner of Foamex.
(iii) Each of the General Partners (A) is a corporation duly
formed and organized, validly existing and in good standing under the laws of
the State of Delaware, (B) is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction in which
the failure to be so qualified and in good standing will have or is reasonably
likely to have a Material Adverse Effect and (C) has all requisite corporate
power and authority to own, operate and encumber its Property and to conduct its
business as presently conducted and as proposed to be conducted in connection
with and following the consummation of the transactions contemplated by this
Agreement and the other Transaction Documents.
(iv) Each of GFI and the other Subsidiaries of Foamex (A)
other than Foamex Canada, is a corporation duly formed and organized, validly
existing and in good standing under the laws of the State of Delaware, (B) is
duly qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction in which the failure to be so qualified and
in good standing will have or is reasonably likely to have a Material Adverse
Effect, (C) solely in the case of GFI, has filed and maintained effective
(unless exempt from the requirements for filing) a current Business Activity
Report with the appropriate Governmental Authority in the states of Minnesota
and New Jersey and (D) has all requisite corporate power and authority to own,
operate and encumber its Property and to conduct its business as presently
conducted and as proposed to be conducted (in the case of GFI, pursuant to the
Business Plan of GFI) in connection with and following the consummation of the
transactions contemplated by this Agreement and the other Transaction Documents
to which it is party.
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(v) The performance of the Partnership Agreement by each of
the General Partners and Foamex are within their respective corporate powers or
partnership powers, as the case may be, have each been duly authorized by all
necessary corporate power or partnership power, as the case may be, and do not
contravene any Requirement of Law applicable to such Person. Neither General
Partner conducts any business other than the business of acting as a general
partner of Foamex and owning Equity Interests in Foamex and in the case of
Trace Foam, (i) owning Equity Interests in Foamex International, (ii)
guaranteeing certain obligations of TIHI to Recticel Foam Corporation and
Generale Bank and (iii) owning Equity Interests in Trace Foam Sub.
(b) Authority. (i) Each of the General Partners and GFI
has the requisite corporate power, and authority to execute, deliver and
perform each of the Transaction Documents to which it is a party.
(ii) Foamex has the requisite partnership power, and authority
to execute, deliver and perform each of the Transaction Documents to which it is
a party.
(iii) The execution, delivery and performance as the case may
be, of each of the Transaction Documents which have been executed and to which
either Borrower and/or any General Partner is party and the consummation of the
transactions contemplated thereby, have been duly approved by the General
Partners (on behalf of Foamex), the board of directors of the General Partners,
GFI and the shareholders of GFI and such approvals have not been rescinded,
revoked or modified in any manner. No other partnership action or proceedings on
the part of Foamex or other corporate or shareholder action or proceedings on
the part of any General Partner or GFI or either Borrower's respective
Subsidiaries are necessary to consummate such transactions.
(iv) Each of the Transaction Documents to which either
Borrower or any General Partner is a party has been duly executed, or delivered,
on behalf of such Borrower or General Partner, as the case may be, and
constitutes its legal, valid and binding obligation, enforceable against such
Person in accordance with its terms, is in full force and effect and all parties
thereto have performed and complied with all the terms, provisions, agreements
and conditions set forth therein and required to be performed or complied with
by such parties on or before the Effective Date, and, as of the Effective Date,
no default (or event that with the passing of time or giving of notice or both
would constitute an event of default) or breach of any covenant by any such
party exists thereunder.
(c) Subsidiaries; Ownership of Equity Interests. Schedule
6.01-C (i) contains a diagram indicating the partnership and/or corporate
structure of Foamex and its Subsidiaries, and
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any other Person which either Borrower or any of their respective Subsidiaries
holds an Equity Interest (other than Investments of GFI set forth on Schedule
1.01.5 on the Effective Date) and each direct and indirect parent of each
General Partner and each Limited Partner as of the Effective Date; and (ii)
accurately sets forth as of the Effective Date (A) the correct legal name and
the jurisdiction of incorporation of the Persons listed on such Schedule, and
(B) the authorized, issued and outstanding shares of each class of Equity
Interests in Foamex and its Subsidiaries and the record and, to the knowledge of
each Borrower and each General Partner, beneficial owner, of such Equity
Interests. As of the Effective Date, none of the partnership interests of Foamex
(to Foamex's and each General Partner's best knowledge in respect of such
interests constituting limited partnership interests) is subject to any vesting,
redemption, or repurchase agreement, and, to each of Borrowers' and each General
Partner's best knowledge as of the Effective Date, there are no warrants or
options outstanding with respect to such Equity Interests, except in each case
as contemplated in the Transaction Documents. The outstanding Equity Interests
in each of Foamex's Subsidiaries are duly authorized, validly issued, fully paid
and nonassessable and do not constitute Margin Stock.
(d) No Conflict. The execution, delivery and performance of
each of the Transaction Documents to which Foamex or any of its Subsidiaries or
any General Partner is a party do not and will not (i) conflict with the
Constituent Documents of either Borrower, any such Subsidiary, any General
Partner, or to the best knowledge of each Borrower and each General Partner, any
Person listed on Schedule 6.01-C, (ii) to each Borrower's or each General
Partner's best knowledge, constitute a tortious interference with any
Contractual Obligation of any Person (other than a Lender) or (iii) except as
set forth on Schedule 6.01-D, conflict with, result in a breach of or constitute
(with or without notice or lapse of time or both) a default under (A) any
Transaction Document, (B) any Requirement of Law (including, without limitation,
any requirement under RULPA in order for Foamex to remain a valid limited
partnership under RULPA) or (C) any Contractual Obligation of either Borrower,
any such Subsidiary, any General Partner or, to the best knowledge of either
Borrower or any General Partner, any Person listed on Schedule 6.01-C, or
require termination of any Contractual Obligation, the consequences of which
violation, breach, default or termination, will have or is reasonably likely to
have a Material Adverse Effect or may subject either Administrative Agent, any
of the Lenders or any of the Issuing Banks to any liability, (iv) result in or
require the creation or imposition of any Lien whatsoever upon any of the
Property or assets of either Borrower or any such Subsidiary, other than Liens
contemplated by the Loan Documents, or (v) require any approval of either
Borrower's, any such Subsidiary's, or to each Borrower's or each General
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Partner's best knowledge, any General Partner's, direct or indirect, Equity
Interest holders (which has not been obtained).
(e) Governmental Consents. Except as set forth on Schedule
6.01-E, the execution, delivery and performance of each of the Transaction
Documents to which Foamex or any of its Subsidiaries or any General Partner is a
party do not and will not require any registration with, consent or approval of,
or notice to, or other action to, with or by any Governmental Authority, except
(i) filings, consents or notices which have been made, obtained or given, or, in
a timely manner, will be made, obtained or given, and registrations with,
filings, approvals and consents required under the Securities Act, the
Securities Exchange Act and state securities and "Blue Sky" laws in connection
with the transactions contemplated by the Transaction Documents, and (ii)
filings necessary to create or perfect security interests in the Collateral, and
(iii) routine corporate and partnership filings to maintain good standing, in
each state in which Foamex, GFI, Foamex Canada or Foamex Fibers conducts its
business.
(f) Governmental Regulation. None of Foamex, any of its
Subsidiaries and any General Partner is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, or the Investment Company Act of 1940, or any other federal or
state statute or regulation which limits its ability to incur indebtedness or
its ability to consummate the transactions contemplated in the Transaction
Documents.
(g) Financial Position. All financial projections and related
materials and documents delivered to the Administrative Agents pursuant to this
Agreement (including the Blue Books delivered pursuant to Section 7.01(a)) are
based upon facts and assumptions that each General Partner and each Borrower
believe to be reasonable in light of the then current and foreseeable business
conditions. All monthly, quarterly and annual financial statements of each
Borrower or of Foamex and any of its Subsidiaries delivered to the
Administrative Agents were prepared in conformity with GAAP (other than with
respect to the information contained in the Blue Books) and fairly present the
financial position of each Borrower or the consolidated and consolidating
financial position of Foamex and such Subsidiaries, as the case may be, as at
the respective dates thereof and the results of operations and changes in
financial position for each of the periods covered thereby, subject, in the case
of unaudited interim financials, to changes resulting from the audit and normal
year-end adjustments and, with respect to all financial statements delivered
prior to the Effective Date, such statements were in conformity with GAAP as
interpreted by the Borrowers at such time. As of the date of delivery, none of
Foamex or any of its Subsidiaries has any Accommodation Obligation, contingent
liability or liability for any Taxes, long-term leases or
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commitments, not reflected in any of its audited financial statements delivered
to the Administrative Agents pursuant to this Agreement or otherwise disclosed
to the Administrative Agents and the Lenders in writing, which will have or is
reasonably likely to have a Material Adverse Effect.
(h) Pro Forma Financials. The estimated consolidated pro forma
balance sheets of the Borrowers and Borrowers' Subsidiaries as of April 28, 1996
(giving effect pro forma as of such date to the PFI Merger and the other
transactions contemplated by the Transaction Documents and this Agreement and on
a historical basis giving effect to the transactions contemplated by the
Transaction Documents) delivered on the Effective Date, copies of each of which
have been, or will be, furnished to the Lenders on such dates, present on a pro
forma basis the estimated financial condition of the Borrowers and such
Subsidiaries as of April 28, 1996 and reflect on a pro forma basis those
liabilities reflected in the notes thereto and resulting from consummation of
the transactions contemplated in the Transaction Documents and this Agreement,
and the payment or accrual of all Transaction Costs paid or estimated to be
payable on the Effective Date with respect to any of the foregoing. The
projections and assumptions expressed in the pro forma financials furnished
pursuant to this Section 6.01(h) are reasonable based on facts and on assumption
that each General Partner and each Borrower believes to be reasonable in light
of the then current and foreseeable business conditions.
(i) Business Plan. (i) The Business Plan of Foamex most
recently delivered to the Administrative Agents, either on May 6, 1996 or after
the Effective Date pursuant to Section 7.01(f), as the case may be, represents
each General Partner's and Foamex's reasonable and good faith plan and estimate
as of the date of delivery to the Administrative Agents of Foamex's future
business and financial activities for the periods set forth therein. Such
Business Plan has been based on facts and on assumptions that each General
Partner and Foamex believe to be reasonable in light of the then current and
foreseeable business conditions.
(ii) The Business Plan of GFI most recently delivered to the
Administrative Agents, either on May 6, 1996 or after the Effective Date
pursuant to Section 7.01(f), as the case may be, represents GFI's reasonable and
good faith plan and estimate as of the date of delivery to the Administrative
Agents of GFI's future business and financial activities for the periods set
forth therein. Such Business Plan has been based on facts and on assumptions
that GFI believes to be reasonable in light of the then current and foreseeable
business conditions.
(j) Litigation; Adverse Effects. Except as set forth in
Schedule 6.01-J, there is no action, suit, proceeding, investigation or
arbitration or series of related actions, suits,
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proceedings, investigations or arbitrations before or by any Governmental
Authority or private arbitrator pending or, to the knowledge of Foamex, any of
its Subsidiaries or any General Partner, threatened against either Borrower or
any such Subsidiaries or any Property of any of them (i) challenging the
validity or the enforceability of any of the Transaction Documents or (ii) which
will or is reasonably likely to result in any Material Adverse Effect. Neither
Foamex nor any of its Subsidiaries is (A) in violation of any applicable
Requirements of Law which violation will have or is reasonably likely to have a
Material Adverse Effect, or (B) subject to or in default with respect to any
final judgment, writ, injunction, restraining order or order of any nature,
decree, rule or regulation of any court or Governmental Authority which will
have or is reasonably likely to have a Material Adverse Effect.
(k) No Material Adverse Change. Since December 31, 1995,
there has occurred no event (other than the PFI Merger) which has had or is
reasonably likely to have a Material Adverse Effect.
(l) Payment of Taxes. Except as set forth on Schedule 6.01-L,
all tax returns and reports of Foamex and its Subsidiaries required to be filed
have been timely filed, and all taxes, assessments, fees and other governmental
charges thereupon and upon their respective Property, assets, income and
franchises which are shown in such returns or reports to be due and payable have
been paid prior to any penalty being imposed unless the terms of Section 8.04
permit non-payment thereof. None of the Borrowers has any knowledge of any
proposed tax assessment against either Borrower or any of Borrowers'
Subsidiaries that will have or is reasonably likely to have a Material Adverse
Effect.
(m) Partnership Tax Status. Foamex since its organization has
been treated as a partnership within the meaning of Section 761(a) of the
Internal Revenue Code for Federal income tax purposes and has not been and is
not an entity subject to Federal or state income tax (other than state income
taxes generally imposed on partnerships). Neither General Partner nor either
Borrower has any knowledge of any inquiry or investigation by any Person
(including, without limitation, the IRS) as to whether or not Foamex is, or any
claim or assertion by any Person (including, without limitation, the IRS) that
Foamex is not, a partnership for Federal or state income tax purposes or an
entity subject to Federal or state income taxes (other than state income taxes
generally imposed on partnerships).
(n) Performance. None of Foamex, any of its Subsidiaries or
any General Partner has received notice or has actual knowledge that it is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation applicable to
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either Borrower or such Subsidiaries, except where such default or defaults, if
any, will not have or is not reasonably likely to have a Material Adverse
Effect.
(o) Disclosure. The representations and warranties of each of
Foamex, its Subsidiaries and each General Partner contained in the Transaction
Documents to which it is a party and all certificates and other documents
delivered to the Administrative Agents pursuant to the terms thereof, and the
factual disclosures applicable to Foamex, its Subsidiaries and each General
Partner set forth in the JPS Automotive Senior Note Registration Statement and
the Discount Debenture Offering Memorandum, did not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements contained herein or therein, in light of the circumstances under
which and the time at which they were made, not misleading. None of the
Borrowers and General Partners has intentionally withheld any fact from the
Administrative Agents, the Issuing Banks or the Lenders in regard to any matter
which will have or is reasonably likely to have a Material Adverse Effect.
(p) Requirements of Law. Except as otherwise stated in
Schedules 6.01-J and 6.01-Q, with respect to environmental and related
violations of law concerning Foamex's Morristown, Tennessee facilities, Foamex
and its Subsidiaries are in compliance with all Requirements of Law applicable
to them and their respective businesses, in each case where the failure to so
comply individually or in the aggregate will have or is reasonably likely to
have a Material Adverse Effect.
(q) Environmental Matters. (i) Except as disclosed on
Schedule 6.01-Q, to the knowledge of each Borrower and each
Borrower's employees, consultants or agents:
(A) the operations of Foamex and its Subsidiaries comply in
all material respects with all applicable Environmental, Health or Safety
Requirements of Law;
(B) Foamex and its Subsidiaries have obtained or have taken
appropriate steps, as required by Environmental Health or Safety Requirements of
Law, to obtain all environmental, health and safety Permits necessary for their
respective operations, and all such Permits are in good standing and each of
Foamex and its Subsidiaries are currently in material compliance with all terms
and conditions of such Permits;
(C) none of Foamex and its Subsidiaries or any of their
respective present or past Property or operations are subject to or the subject
of any investigation respecting (I) any violation of any Environmental, Health
or Safety Requirements of Law or (II) any Remedial Action or has received any
notice of any
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Claims or Liabilities and Costs arising from the Release or threatened Release
of a Contaminant into the environment;
(D) none of the operations of Foamex or its Subsidiaries is
subject to any judicial or administrative proceeding, order, judgment, decree or
settlement alleging or addressing a violation of or a liability under any
Environmental, Health or Safety Requirement of Law;
(E) none of Foamex and its Subsidiaries:
(I) has experienced any Release of a Contaminant in amounts
sufficient to require reporting under any applicable Requirement of Law
without having submitted the required report;
(II) has treated, stored or disposed of a hazardous waste
on-site, as that term is defined under 40 C.F.R. Part 261 or any state
equivalent except in compliance with applicable Requirements of Law; or
(III) has reported any material violation of any
applicable Environmental, Health or Safety Requirement
of Law.
(F) none of Foamex's and its Subsidiaries' present or past
Property is listed or proposed for listing on the National Priorities List
("NPL") pursuant to CERCLA or on the Comprehensive Environmental Response
Compensation Liability Information System List ("CERCLIS") or any similar state
list of sites requiring Remedial Action and each Borrower is unaware of any
conditions on such Property which, if known to a Governmental Authority, would
qualify such Property for inclusion on any such list;
(G) none of Foamex and its Subsidiaries has sent or directly
arranged for the transport of any waste to any site listed on the NPL or
proposed for listing on the NPL or to a site included on the CERCLIS list, or
any similar state list;
(H) there is not now, nor has there ever been on or in the
Property:
(I) any generation, treatment, recycling, storage or disposal
of any hazardous waste, as that term is defined under 40 C.F.R. Part
261 or any state equivalent except in compliance with applicable
Requirements of Law;
(II) any landfill, waste pile, underground
storage tank or surface impoundment;
(III) any asbestos-containing material; or
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(IV) a Release of any polychlorinated biphenyls (PCB) used in
hydraulic oils, electrical transformers or other Equipment;
(I) none of Foamex and its Subsidiaries has received any
notice or Claim to the effect that any of such Persons is or may be liable to
any Person as a result of the Release or threatened Release of a Contaminant
into the environment;
(J) there have been no Releases of any Contaminants in
reportable or significant quantities to the environment from any
Property;
(K) none of Foamex and its Subsidiaries have any known
contingent liability in connection with any Release or threatened Release of any
Contaminants into the environment;
(L) no Environmental Lien has attached to any Property
of Foamex or its Subsidiaries; and
(M) none of Foamex and its Subsidiaries has entered into any
agreements with any Person relating to any Remedial Action or environmentally
related Claim.
(ii) Foamex and its Subsidiaries are conducting and will
continue to conduct their respective businesses and operations in an
environmentally responsible manner, and each Borrower and such Subsidiaries,
taken as a whole have not been, and have no reason to believe that they shall
be, subject to Liabilities and Costs arising out of or relating to
environmental, health or safety matters that have or will result in cash
expenditures by the Borrowers and such Subsidiaries in excess of $4,000,000
(excluding matters described in item V.O. of Schedule 6.01-Q with respect to
Foamex's facility in Morristown, Tennessee), in the aggregate for any calendar
year ending after June 28, 1994.
(r) ERISA. None of the Borrowers, Borrowers' Subsidiaries or
any ERISA Affiliate currently maintains or contributes to any Benefit Plan,
Multiemployer Plan or Foreign Pension Plan other than those listed on Schedule
6.01-R hereto. Each Plan which is intended to be qualified under Section 401(a)
of the Internal Revenue Code as currently in effect has been determined by the
IRS to be so qualified. Except as disclosed in Schedule 6.01-R, none of the
Borrowers or any ERISA Affiliate maintains or contributes to any employee
welfare benefit plan within the meaning of Section 3(1) of ERISA which provides
benefits to employees after termination of employment other than as required by
Section 601 of ERISA. Each Borrower and Borrowers' Subsidiaries and the ERISA
Affiliates are in compliance in all material respects with the responsibilities,
obligations and duties imposed on them by ERISA, the Internal Revenue Code and
regulations promulgated thereunder with respect
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to all Plans. No Benefit Plan has incurred any accumulated funding deficiency
(as defined in Sections 302(a)(2) of ERISA and 412(a) of the Internal Revenue
Code) whether or not waived. None of the Borrowers or any ERISA Affiliates nor
any fiduciary of any Plan which is not a Multiemployer Plan (i) has engaged in a
nonexempt prohibited transaction described in Sections 406 of ERISA or 4975 of
the Internal Revenue Code or (ii) has taken or failed to take any action which
would constitute or result in a Termination Event. None of the Borrowers or any
such ERISA Affiliate is subject to any liability under Section 4063, 4064, 4069,
4204 or 4212(c) of ERISA. None of the Borrowers or any ERISA Affiliate has
incurred any liability to the PBGC which remains outstanding other than the
payment of premiums, and there are no premium payments which have become due
which are unpaid. Schedule B to the most recent annual report filed with the IRS
with respect to each Benefit Plan and furnished to the Administrative Agents is
complete and accurate. Since the date of the latest Schedule B, there has been
no material adverse change in the funding status or financial condition of the
Benefit Plan relating to such Schedule B. None of the Borrowers or any ERISA
Affiliate has (i) failed to make a required contribution or payment to a
Multiemployer Plan or (ii) made a complete or partial withdrawal under Section
4203 or 4205 of ERISA from a Multiemployer Plan. None of the Borrowers or any
such ERISA Affiliate has failed to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code on or before the
due date for such installment or other payment. None of the Borrowers or any
such ERISA Affiliate is required to provide security to a Benefit Plan under
Section 401(a)(29) of the Internal Revenue Code due to a Plan amendment that
results in an increase in current liability for the plan year. Except as
disclosed on Schedule 6.01-R, none of the Borrowers or the Borrower's
Subsidiaries has, by reason of the transactions contemplated hereby, any
obligation to make any payment to any employee pursuant to any Plan or existing
contract or arrangement. Each Borrower has given to the Administrative Agents
copies of all of the following: each Benefit Plan and related trust agreement
(including all amendments to such Plan and trust) in existence as of the
Effective Date and the most recent summary plan description, actuarial report,
determination letter issued by the IRS and Form 5500 filed in respect of each
such Benefit Plan in existence; a listing of all of the Multiemployer Plans
currently contributed to by each Borrower or any ERISA Affiliate with the
aggregate amount of the most recent annual contributions required to be made by
each Borrower and each ERISA Affiliate to each such Multiemployer Plan, any
information which has been provided to either Borrower or any ERISA Affiliate
regarding withdrawal liability under any Multiemployer Plan and the collective
bargaining agreement pursuant to which such contribution is required to be made;
each employee welfare benefit plan within the meaning of Section 3(1) of ERISA
which provides benefits to employees of either Borrower or any of such ERISA
Affiliates after termination of employment
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other than as required by Section 601 of ERISA, the most recent summary plan
description for such plan and the aggregate amount of the most recent annual
payments made to terminated employees under each such plan.
(s) Foreign Employee Benefit Matters. Each Foreign Employee
Benefit Plan is in compliance in all material respects with all laws,
regulations and rules applicable thereto and the respective requirements of the
governing documents for such Plan. Except as set forth on Schedule 6.01-S, The
aggregate of the liabilities to provide all of the accrued benefits under any
Foreign Pension Plan does not exceed the current Fair Market Value of the assets
held in the trust or other funding vehicle, if any, for such Plan. With respect
to any Foreign Employee Benefit Plan maintained or contributed to by either
Borrower or any of Borrowers' Subsidiaries (other than a Foreign Pension Plan),
reasonable reserves have been established in accordance with prudent business
practice or where required by ordinary accounting practices in the jurisdiction
in which such Plan is maintained. The aggregate unfunded liabilities, after
giving effect to any reserves for such liabilities, with respect to such Plans
does not exceed the current Fair Market Value of the assets held in the trust or
other funding vehicle, if any, for such Plan. To the best knowledge of each
Borrower and such Borrower's Subsidiaries, there are no actions, suits or claims
(other than routine claims for benefits) pending or threatened against such
Borrower or any of such Borrower's Subsidiaries or with respect to any Foreign
Employee Benefit Plan.
(t) Labor Matters. Schedule 6.01-T accurately sets forth all
labor contracts to which either Borrower or any of the Borrowers' Subsidiaries
is a party on the date hereof and the expiration date of each such contract.
There are no strikes, lockouts or other disputes relating to any collective
bargaining or similar agreement to which either Borrower or any of such
Subsidiaries is a party which have or is reasonably likely to have a Material
Adverse Effect.
(u) Securities Activities. None of Foamex and its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(v) Solvency. After giving effect to the transactions
contemplated in the Transaction Documents and the Loans to be made on such date
as Loans requested hereunder are made, and the disbursement of the proceeds of
such Loans pursuant to the Borrowers' instructions, each Borrower and each of
Borrowers' Subsidiaries is Solvent.
(w) Patents, Trademarks, Permits, Etc.; Government Approvals.
(i) Foamex and its Subsidiaries own, are licensed or otherwise have the lawful
right to use, or have all permits and other governmental approvals, patents,
trademarks, trade names,
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copyrights, technology, know-how and processes used in or necessary for the
conduct of their businesses as currently conducted which are material to their
condition (financial or otherwise), operations, performance and prospects, taken
as a whole. Except as set forth on Schedule 6.01-W, no claims are pending or, to
the best of each Borrower's knowledge following diligent inquiry, threatened
that Foamex or any of its Subsidiaries is infringing or otherwise adversely
affecting the rights of any Person with respect to such permits and other
governmental approvals, patents, trademarks, trade names, copyrights,
technology, know-how and processes, except for such claims and infringements as
do not, in the aggregate, give rise to any liability on the part of either
Borrower or any of such Subsidiaries which has or is reasonably likely to have a
Material Adverse Effect.
(ii) The consummation of the transactions contemplated by the
Transaction Documents will not impair the ownership of or rights under (or the
license or other right to use, as the case may be) any permits and governmental
approvals, patents, trademarks, trade names, copyrights, technology, know-how or
processes by Foamex and each of its Subsidiaries in any manner which has or is
reasonably likely to have a Material Adverse Effect.
(x) Assets and Properties. Foamex and each of its Subsidiaries
has good and marketable (or indefeasible as to Texas real property) title
(except Liens securing the Obligations and Liens permitted under Section 9.03)
to all the Collateral and all of its other assets and Property (tangible and
intangible) owned by it, except insofar as marketability may be limited by any
laws or regulations of any Governmental Authority affecting such assets, and all
such assets and Property are free and clear of all Liens except Liens securing
the Obligations and Liens permitted under Section 9.03. Substantially all of the
assets and Property owned by, leased to or used by either Borrower and/or each
such Subsidiary are in adequate operating condition and repair, ordinary wear
and tear excepted, are free and clear of any known defects except such defects
as do not substantially interfere with the continued use thereof in the conduct
of normal operations, and are able to serve the function for which they are
currently being used, except in each case where the failure of such asset to
meet such requirements would not have or is not reasonably likely to have a
Material Adverse Effect. The Receivables of each Borrower have arisen in the
ordinary course of its business and reflect bona fide obligations for the
payment for goods and services provided by such Borrower or its predecessors.
The invoices relating to all Receivables of Foamex shall be in the name of
"Foamex L.P." The invoices relating to all Receivables of GFI shall be in the
name of "General Felt Industries, Inc." Neither this Agreement nor any other
Transaction Document, nor any transaction contemplated under any such agreement,
will affect any right, title or interest of
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either Borrower or such Subsidiary in and to any of such assets in a manner that
would have or is reasonably likely to have a Material Adverse Effect.
(y) Insurance. Schedule 6.01-Y accurately sets forth as of the
Effective Date all insurance policies and programs currently in effect with
respect to the respective Property and assets and business of Foamex and its
Subsidiaries (other than Foamex Canada and Foamex Fibers), specifying for each
such policy and program, (i) the amount thereof, (ii) the risks insured against
thereby, (iii) the name of the insurer and each insured party thereunder, (iv)
the policy or other identification number thereof, (v) the expiration date
thereof and (vi) the annual premium with respect thereto. Such insurance
policies and programs are in amounts sufficient to cover the replacement value
of the respective Property and assets of each Borrower and such Subsidiaries
subject to customary deductibles.
(z) Transaction with Affiliates. Schedule 6.01-Z lists each
and every existing agreement and arrangement as of the Effective Date that (i)
each Borrower has entered into with any General Partner, any Limited Partner or
any Affiliate of such Borrower, General Partner or Limited Partner or (ii) any
General Partner or Limited Partner or any Affiliate of either Borrower, General
Partner or Limited Partner is subject to or has entered into with respect to any
of the Borrowers' Properties, including, in the case of each of clause (i) and
(ii), any management or similar agreement. The Administrative Agents have been
provided a true, accurate and complete copy of each existing written agreement
or arrangement set forth on Schedule 6.01-Z and a true, accurate and complete
description of each existing or proposed agreement or arrangement set forth in
Schedule 6.01-Z that is not in writing.
(aa) Subordinated Debentures and 1993 Subordinated Debentures.
The subordination provisions of the Subordinated Debenture Indenture and the
1993 Subordinated Debenture Indenture are enforceable against the holders of the
Subordinated Debentures and the 1993 Subordinated Debentures, respectively. The
Obligations constitute "Obligations" owing under the "Credit Agreement" and
"Senior Indebtedness" (as each term is defined in the Subordinated Debenture
Indenture and the 1993 Subordinated Debenture Indenture).
(bb) The PFI Merger. As of the Effective Date, the "Merger" as
defined in the PFI Merger Agreement has occurred and the transactions
contemplated in the PFI Merger Documents have been consummated.
ARTICLE VII
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REPORTING COVENANTS
Each Borrower covenants and agrees that so long as any
Revolving Loan Commitments are outstanding and thereafter until all of the
Obligations (other than indemnities not yet due) are paid in full (or, in the
case of contingent Obligations (other than indemnities not yet due), Cash
Collateral has been deposited in the Cash Collateral Account in the full amount
of such Obligations on terms satisfactory to the Lenders), unless the Requisite
Lenders shall otherwise give prior written consent thereto:
7.01. Financial Statements. Each Borrower shall maintain, and
cause each of its Subsidiaries to maintain, a system of accounting established
and administered in accordance with sound business practices to permit
preparation of consolidated and consolidating financial statements in conformity
with GAAP, and each of the financial statements described below (except as
otherwise expressly provided) shall be prepared from such system and records.
Each Borrower shall deliver or cause to be delivered to the Administrative
Agents and the Lenders:
(a) Monthly Reports. As soon as practicable, and in any event
within forty-five (45) days after the end of each calendar month in each Fiscal
Year (or within sixty (60) days after the end of each calendar month which
corresponds to the end of a fiscal quarter), (i) the consolidated and
consolidating balance sheets and results of operations of each Borrower and its
Subsidiaries as at the end of such period, and the related consolidated and
consolidating statements of income and cash flow of Foamex and its Subsidiaries
for such fiscal month and for the period from the beginning of the then current
Fiscal Year to the end of such fiscal month, setting forth in each case in
comparative form the corresponding figures for the corresponding calendar month
of the previous Fiscal Year and the corresponding figures from the consolidated
and consolidating financial forecast for the current Fiscal Year delivered
pursuant to Section 7.01(f), certified by the chief financial officer of each
Borrower as fairly presenting the consolidated and consolidating financial
position of such Borrower and such Subsidiaries as at the dates indicated and
the results of their operations and cash flow for the periods indicated in
accordance with GAAP, subject to normal year end adjustments (but excluding GAAP
footnotes) and (ii) the Blue Book of Foamex and its Subsidiaries for such
calendar month which represents, to the best of each Borrower's knowledge, an
accurate presentation of the information contained therein (it being understood
that the financial information contained therein is not in conformity with
GAAP).
(b) Quarterly Reports. As soon as practicable, and in any
event within fifty (50) days after the end of each fiscal quarter (other than
the last fiscal quarter) in each Fiscal Year,
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the Form 10-Q, if any, filed by each Borrower with the Securities and Exchange
Commission with respect to such fiscal quarter.
(c) Annual Reports. As soon as practicable, and in any event
within ninety-five (95) days after the end of each Fiscal Year, (i) the Form
10-K, if any, filed by each Borrower with the Securities and Exchange Commission
with respect to such Fiscal Year, (ii) the consolidated and consolidating
financial statements of Foamex and its Subsidiaries (which shall be audited with
respect to consolidated financial statements by Coopers & Lybrand or any other
independent certified public accountants) as at the end of such Fiscal Year
which shall be prepared in conformity with GAAP applied on a basis consistent
with prior years (except for changes with which Coopers & Lybrand or any such
other independent certified public accountants, if applicable, shall concur and
which shall have been disclosed in the notes to the financial statements), and
which shall set forth in each case in comparative form the corresponding figures
for the previous Fiscal Year and the corresponding figures from the consolidated
and consolidating financial forecast for the Fiscal Year being reported or
delivered pursuant to Section 7.01(f), and (iii) an opinion on such consolidated
financial statements by Coopers & Lybrand or such other independent certified
public accountants acceptable to the Administrative Agents, which opinion shall
be unqualified.
(d) Officer's Certificate. Together with each delivery of any
financial statement pursuant to paragraphs (b) and (c) of this Section 7.01, (i)
an Officers' Certificate of the Borrowers substantially in the form of Exhibit G
attached hereto and made a part hereof, stating that the executive officers
signatory thereto have reviewed the terms of the Loan Documents, and have made,
or caused to be made under their supervision, a review in reasonable detail of
the transactions and consolidated and consolidating (in the case of such
certification for statements delivered pursuant to Section 7.01(c)) financial
condition of the Borrowers and Borrowers' Subsidiaries during the accounting
period covered by such financial statements, that such review has not disclosed
the existence during or at the end of such accounting period, and that such
officers do not have knowledge of the existence as at the date of such Officers'
Certificate, of any condition or event which constitutes an Event of Default or
Potential Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what action
the Borrowers or any of Borrowers' Subsidiaries have taken, are taking and
proposes to take with respect thereto; and (ii) a certificate (the "Compliance
Certificate"), signed by each Borrower's chief financial officer, setting forth
calculations (with such specificity as the Administrative Agents may reasonably
request) for the period then ended which demonstrate compliance, when
applicable, with the provisions of Article X.
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(e) Accountant's Statement and Privity Letter. Together with
each delivery of the financial statements referred to in Section 7.01(c), a
written statement of the firm of independent certified public accountants giving
the report thereon (i) stating that their audit examination has included a
review of the terms of this Agreement as it relates to accounting matters and
(ii) stating whether, in connection with their audit examination, any condition
or event which constitutes an Event of Default or Potential Event of Default has
come to their attention, and if such condition or event has come to their
attention, specifying the nature and period of existence thereof; provided that
such accountants shall not be liable by reason of any failure to obtain
knowledge of any such condition or event that would not be disclosed in the
course of their audit examination. The statement referred to above shall be
accompanied by (x) a copy of the management letter or any similar report
delivered to each Borrower or to any officer or employee thereof by such
accountants in connection with such financial statements and (y) a letter in
substantially the form of Exhibit H attached hereto and made a part hereof from
each Borrower to such accountants informing such accountants that the Lenders
are relying upon the financial statements audited by such accountants and
delivered to the Administrative Agents and the Lenders pursuant to Section
7.01(c) and that a primary intent of each Borrower in having such financial
statements audited is to induce the Lenders to continue to make Loans to each
Borrower under this Agreement. Either Administrative Agent and each Lender may,
with the consent of each Borrower (which consent shall not be unreasonably
withheld), communicate directly with such accountants.
(f) Business Plans; Financial Projections. No later than
December 31 of each Fiscal Year beginning with Fiscal Year 1994, (i) an annual
business plan for the next Fiscal Year for each of the Borrowers and Borrowers'
Subsidiaries, substantially in the form of the business plan heretofore
delivered to the Administrative Agents and the Lenders, accompanied by a report
reconciling all changes and departures from the business plan delivered to the
Administrative Agents and the Lenders for the preceding Fiscal Year; and (ii) a
consolidated and consolidating plan and financial forecast consisting of balance
sheets, income statements and cash flow statements on a monthly basis for the
next 12 months and on an annual basis, based upon facts and assumptions that
each General Partner and each Borrower believe to be reasonable in light of the
then current and foreseeable business conditions, for each succeeding Fiscal
Year of each Borrower and such Subsidiaries through 1999.
(g) Consolidated Balance Sheet. On or before ninety (90) days
after the Effective Date, a consolidated and consolidating balance sheet of
Foamex and its Subsidiaries as of June 30, 1996 (after giving effect to all
transactions contemplated by the Transaction Documents and the payment of all
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Transaction Costs paid on or before the Effective Date), certified as fairly
presenting the financial position of Foamex and its Subsidiaries by the chief
financial officer of each Borrower, together with such Borrower's
reconciliation, in form and substance satisfactory to the Requisite Lenders, of
all changes from the estimated pro forma balance sheet of each Borrower referred
to in Section 6.01(h).
7.02. Borrowing Base Certificate. As soon as practicable, and
in any event within three (3) days after the close of each week (and more often
if requested by either Administrative Agent or by the Requisite Lenders), each
Borrower shall provide the Administrative Agents and the Lenders with a
Borrowing Base Certificate, together with such supporting documents as either
Administrative Agent may reasonably request (including weekly updated
information concerning Receivables of such Borrower and monthly updated
information concerning Inventory of such Borrower), all certified as being true
and correct by such Borrower.
7.03. Events of Default. Promptly upon either Borrower
obtaining knowledge (i) of any condition or event which constitutes an Event of
Default or Potential Event of Default, (ii) that any Person has given any
written notice to either Borrower or any Subsidiary of such Borrower or taken
any other action with respect to a claimed default or event or condition of the
type referred to in Section 11.01(e), or (iii) of any condition or event which
has or is reasonably likely to have a Material Adverse Effect or adversely
affect the value of, or the Collateral Agent's interest in, the Collateral
(taken as a whole) in any material respect, such Borrower shall deliver to the
Administrative Agents and the Lenders an Officer's Certificate specifying (A)
the nature and period of existence of any such claimed default, Event of
Default, Potential Event of Default, condition or event, (B) the notice given or
action taken by such Person in connection therewith, and (C) what action such
Borrower has taken, is taking and proposes to take with respect thereto.
7.04. Lawsuits. (i) Promptly upon either Borrower obtaining
knowledge of the institution of, or written threat of, any action, suit,
proceeding, governmental investigation or arbitration against or affecting
Foamex or any of its Subsidiaries or any Property of either Borrower or any of
such Subsidiaries not previously disclosed pursuant to Section 6.01(j), which
action, suit, proceeding, governmental investigation or arbitration exposes, or
in the case of multiple actions, suits, proceedings, governmental investigations
or arbitrations arising out of the same general allegations or circumstances
which expose, in such Borrower's reasonable judgment, such Borrower or any of
such Subsidiaries to liability in an amount aggregating $500,000 or more
(exclusive of claims covered by insurance policies of such Borrower or any of
such Subsidiaries unless the insurers of such claims have disclaimed
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coverage or reserved the right to disclaim coverage on such claims), such
Borrower shall give written notice thereof to the Administrative Agents and the
Lenders and provide, if requested, such other information as may be reasonably
available to enable each Lender and either Administrative Agent and its counsel
to evaluate such matters; and (ii) in addition to the requirements set forth in
clause (i) of this Section 7.04, each Borrower upon request of either
Administrative Agent or of the Requisite Lenders shall promptly give written
notice of the status of any action, suit, proceeding, governmental investigation
or arbitration covered by a report delivered pursuant to clause (i) above and
provide such other information as may be reasonably available to it to enable
each Lender and each Administrative Agent and its counsel to evaluate such
matters.
7.05. Insurance. As soon as practicable and in any event by
the last day of each Fiscal Year, each Borrower shall deliver to the
Administrative Agents and the Lenders (i) a report in form and substance
reasonably satisfactory to the Administrative Agents and the Lenders outlining
all material insurance coverage maintained as of the date of such report by such
Borrower and its Subsidiaries and the duration of such coverage and (ii)
evidence that all premiums with respect to such coverage have been paid when
due.
7.06. ERISA Notices. Each Borrower shall deliver or cause to
be delivered, within the time limits set forth below, to the Administrative
Agents and the Lenders, at such Borrower's expense, the following information
and notices as soon as reasonably possible, and in any event:
(i) within ten (10) Business Days after either Borrower or any
ERISA Affiliate knows or has reason to know that a Termination Event
has occurred, a written statement of the chief financial officer of
such Borrower describing such Termination Event and the action, if any,
which such Borrower or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto, and when known, any action taken
or threatened by the IRS, DOL or PBGC with respect thereto;
(ii) within ten (10) Business Days after either Borrower or
any ERISA Affiliate knows or has reason to know that a prohibited
transaction (defined in Section 406 of ERISA and Section 4975 of the
Internal Revenue Code) has occurred with respect to any Plan, a
statement of the chief financial officer of such Borrower describing
such transaction and the action which such Borrower or any ERISA
Affiliate has taken, is taking or proposes to take with respect
thereto;
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(iii) within ten (10) Business Days or such longer period as
may be reasonably agreed to by either Administrative Agent after either
Borrower or ERISA Affiliate receives written notice from such
Administrative Agent requesting same, copies of each annual report
(form 5500 series), including Schedule B thereto, filed with respect to
each Benefit Plan;
(iv) within ten (10) Business Days after the request of either
Administrative Agent, copies of each actuarial report for any Benefit
Plan or Multiemployer Plan and each annual report for any Multiemployer
Plan, copies of each such report;
(v) within ten (10) Business Days after the filing of the same
with the IRS, a copy of each funding waiver request filed with respect
to any Benefit Plan and all communications received by such Borrower or
any ERISA Affiliate with respect to such request;
(vi) within ten (10) Business Days after the request of either
Administrative Agent regarding the occurrence of any material increase
in the benefits of any existing Benefit Plan or the establishment of
any new Benefit Plan or the commencement of contributions to any
Benefit Plan to which such Borrower or any ERISA Affiliate was not
previously contributing, notification of such increase, establishment
or commencement;
(vii) within ten (10) Business Days after either Borrower or
any ERISA Affiliate receives notice of any unfavorable determination
letter from the IRS regarding the qualification of a Plan under Section
401(a) of the Internal Revenue Code, copies of each such letter;
(viii) within ten (10) Business Days after either Borrower or
any ERISA Affiliate fails to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code on or
before the due date for such installment or payment, a notification of
such failure;
(ix) within ten (10) Business Days after either Borrower or
any ERISA Affiliate knows or has reason to know (A) a Multiemployer
Plan has been terminated, (B) the administrator or plan sponsor of a
Multiemployer Plan has provided such Borrower or any ERISA Affiliate
with notice of an intention to terminate a Multiemployer Plan, or (C)
the PBGC has instituted or will institute proceedings under Section
4042 of ERISA to terminate a Multiemployer Plan; and
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(x) within ten (10) Business Days or such longer period as may
be reasonably agreed to by either Administrative Agent after either
Borrower or any of Borrowers' Subsidiaries or any ERISA Affiliate
receives written notice from such Administrative Agent requesting the
same, copies of any Foreign Employee Benefit Plan and related
documents, reports and correspondence specified in such notice.
For purposes of this Section 7.06, each Borrower and any Subsidiary and any
ERISA Affiliate shall be deemed to know all facts known by the Administrator of
any Plan of which such Borrower, Subsidiary or ERISA Affiliate is the plan
sponsor. Section 7.06 shall only apply with respect to a Plan for which either
Borrower or any Subsidiary or any ERISA Affiliate is an "employer" as defined in
Section 3(5) of ERISA.
7.07. Environmental Notices. (a) Each Borrower shall
notify the Administrative Agents and the Lenders in writing,
promptly upon such Borrower's learning thereof, of any:
(i) notice or claim to the effect that such Borrower or any of
its Subsidiaries is or may be liable to any Person as a result of the
Release or threatened Release of any Contaminant into the environment;
(ii) notice that such Borrower or any of its Subsidiaries is
subject to investigation by any Governmental Authority evaluating
whether any Remedial Action is needed to respond to the Release or
threatened Release of any Contaminant into the environment;
(iii) notice that any Property of such Borrower
or any of its Subsidiaries is subject to an
Environmental Lien;
(iv) notice of violation to such Borrower or any
of its Subsidiaries of any Environmental, Health or
Safety Requirement of Law;
(v) condition which might reasonably constitute
or result in a material violation of any Environmental,
Health or Safety Requirement of Law;
(vi) commencement or threat of any judicial or administrative
proceeding alleging a material violation by such Borrower or any of its
Subsidiaries of any Environmental, Health or Safety Requirement of Law;
(vii) new or proposed changes to any existing Environmental,
Health or Safety Requirement of Law that could result in a Material
Adverse Effect; or
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(viii) any proposed acquisition of stock, assets, real estate,
or leasing of property, or any other action by such Borrower or any of
its Subsidiaries that could subject such Borrower or any of its
Subsidiaries to environmental, health or safety Liabilities and Costs.
(b) Within forty-five (45) days after the end of each Fiscal
Year, each Borrower shall submit to the Administrative Agents and the Lenders a
report summarizing the status of environmental, health or safety compliance,
hazard or liability issues identified in notices required pursuant to Section
7.07(a), disclosed on Schedule 6.01-Q or identified in any notice or report
required herein.
7.08. Labor Matters. Each Borrower shall notify the
Administrative Agents and the Lenders in writing, promptly upon each Borrower's
learning thereof, of (i) any material labor dispute to which such Borrower or
any of its Subsidiaries may become a party, including, without limitation, any
strikes, lockouts or other disputes relating to such Persons' plants and other
facilities and (ii) any material liability incurred with respect to the closing
of any plant or other facility of such Borrower or any of its Subsidiaries.
7.09. Permitted Subordinated Indebtedness; Senior Note
Indenture; Senior Secured Note Indenture. Upon its receipt of any of the
following, each Borrower shall deliver promptly thereafter a copy thereof to the
Administrative Agents and the Lenders: (a) any notice or other communication
delivered by or on behalf of such Borrower to any Person in connection with the
Permitted Subordinated Indebtedness, the Senior Note Indenture or the Senior
Secured Note Indenture (other than, in the case of the Senior Secured Note
Indenture, notices delivered to the trustee thereunder pursuant to Sections
314(c) and 314(d) of the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) or pursuant to the last sentence of Section 10.01, or Section
10.03 or 10.04 of the Senior Secured Note Indenture, to the extent that such
notice or a series of related notices relate to releases of Liens on Property of
the Borrowers having a value equal to less than ten percent (10%) of the value
of the collateral then securing the Senior Secured Notes) at the same time and
by the same means as such notice or other communication is delivered to such
Person; and (b) any material notice or other material communication received by
such Borrower from any Person in connection with any agreement or other document
relating to Permitted Subordinated Indebtedness, the Senior Note Indenture or
the Senior Secured Note Indenture promptly after such notice or other
communication is received by such Borrower.
7.10. Other Reports. Each Borrower shall deliver or cause to
be delivered to the Administrative Agents and the Lenders copies of all
financial statements, reports and notices,
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if any, sent or made available generally by such Borrower to its Securities
holders or filed with the Securities and Exchange Commission, all press releases
made available generally by such Borrower or any of its Subsidiaries to the
public concerning material developments in the business of such Borrower or any
such Subsidiary and all notifications received by such Borrower or its
Subsidiaries pursuant to the Securities Exchange Act and the rules promulgated
thereunder.
7.11. Change of Control. Promptly, upon, and in any event
within three (3) Business Days of, the Managing General Partner or either
Borrower obtaining knowledge of the occurrence or potential occurrence of a
Change of Control, the Managing General Partner or either Borrower shall deliver
to the Administrative Agents an Officer's Certificate specifying, with respect
to a Change of Control, (i) the cause and nature of such Change of Control and
(ii) the estimated date on which the Change of Control will become effective.
7.12. Dissolution Notice. At least ninety (90) days prior to
the commencement of any action by any General Partner or any Limited Partner to
dissolve Foamex pursuant to the Partnership Agreement or otherwise, the Managing
General Partner or Foamex shall deliver an Officer's Certificate to the
Administrative Agents specifying (i) the cause of such dissolution and (ii) the
date on which such dissolution will occur.
7.13. Other Information. Promptly upon receiving a request
therefor from either Administrative Agent or from the Requisite Lenders, each
Borrower shall prepare and deliver to the Administrative Agents and the Lenders
such other information with respect to such Borrower, any of its Subsidiaries,
or the Collateral, including, without limitation, schedules identifying and
describing the Collateral and any dispositions thereof and financial
information, as from time to time may be reasonably requested by either
Administrative Agent or by the Requisite Lenders.
ARTICLE VIII
AFFIRMATIVE COVENANTS
Each Borrower and each General Partner covenant and agree that
so long as any Revolving Loan Commitments are outstanding and thereafter until
all of the Obligations (other than indemnities not yet due) are paid in full
(or, in the case of contingent Obligations (other than indemnities not yet due),
cash collateral has been deposited in the Cash Collateral Account in the full
amount of such Obligations on terms satisfactory to the Lenders), unless the
Requisite Lenders shall otherwise give prior written consent thereto:
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8.01. Partnership/Corporate Existence, etc. The General
Partners shall cause Foamex to, and Foamex shall, at all times, maintain its
partnership existence, and each Borrower shall cause its Subsidiaries to, and
the General Partners and GFI shall, at all times, maintain its corporate
existence and preserve and keep, or cause to be preserved and kept, in full
force and effect its rights and franchises material to its businesses, except
where the loss or termination of such rights and franchises is not likely to
have a Material Adverse Effect.
8.02. Partnership Powers; Conduct of Business. The General
Partners shall, and shall cause Foamex to, and each Borrower shall, and shall
cause each of their respective Subsidiaries to, qualify and remain qualified to
do business in each jurisdiction in which the nature of its business requires it
to be so qualified except in such jurisdictions where the failure so to qualify
would not cause or be likely to cause a Material Adverse Effect.
8.03. Compliance with Laws, etc. The General Partners shall,
and shall cause Foamex to, and each Borrower shall, and shall cause each of
their respective Subsidiaries to, (a) comply with all Requirements of Law and
all restrictive covenants affecting such Person or the business, Property,
assets or operations of such Person, and (b) obtain as needed all Permits
necessary for its operations and maintain such Permits in good standing, except
in the case where noncompliance with either clause (a) or (b) above is not
reasonably likely to have a Material Adverse Effect.
8.04. Payment of Taxes and Claims; Tax Consolidation. Each
Borrower shall pay, and cause each of their respective Subsidiaries to pay, (a)
all taxes, assessments and other governmental charges imposed upon it or on any
of its Property or assets or in respect of any of its franchises, business,
income or Property before any penalty accrues thereon, and (b) all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien (other than a Lien permitted by Section 9.03) upon any of such
Borrower's or such Subsidiary's Property or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; provided, however, that
no such taxes, assessments and governmental charges referred to in clause (a)
above or claims referred to in clause (b) above need be paid if being contested
in good faith by appropriate proceedings diligently instituted and conducted and
if such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor. No Borrower will, nor will
either Borrower permit any of its Subsidiaries to, file or consent to the filing
of any consolidated income tax return with any Person (except as required by law
and other than the other Borrowers or Borrowers' Subsidiaries).
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8.05. Insurance. Each Borrower shall maintain for itself and
for its Subsidiaries (other than Foamex Canada and Foamex Fibers), or shall
cause each of such Subsidiaries to maintain, in full force and effect the
insurance policies and programs listed on Schedule 6.01-Y or substantially
similar policies and programs or other policies and programs as are reasonably
acceptable to the Administrative Agents. All such policies and programs shall be
maintained with insurers reasonably acceptable to the Administrative Agents.
Each certificate and policy relating to coverages (other than Property in which
the Collateral Agent does not have an insurable interest) shall contain an
endorsement naming the Collateral Agent as an additional insured or loss payee,
as applicable, under such policy. Such endorsement or an independent instrument
furnished to the Collateral Agent shall provide that the insurance companies
will give the Collateral Agent at least thirty (30) days' written notice before
any such policy or policies of insurance shall be cancelled or altered adversely
to the interests of the Administrative Agents, the Issuing Banks and the Lenders
or cancelled and that no act, whether willful or negligent, or default of either
Borrower, any of Borrowers' Subsidiaries or any other Person shall affect the
right of the Collateral Agent to recover under such policy or policies of
insurance in case of loss or damage. In the event either Borrower or any such
Subsidiary, at any time or times hereafter shall fail to obtain or maintain any
of the policies or insurance required herein or to pay any premium in whole or
in part relating thereto, then the Collateral Agent, without waiving or
releasing any obligations or resulting Event of Default hereunder, may at any
time or times thereafter (but shall be under no obligation to do so) obtain and
maintain such policies of insurance and pay such premiums and take any other
action with respect thereto which the Collateral Agent deems advisable. All sums
so disbursed by the Collateral Agent shall constitute Protective Advances
hereunder and be part of the Obligations, payable as provided in this Agreement.
8.06. Inspection of Property. Each Borrower shall permit, and
cause its Subsidiaries to permit, any authorized representative(s) designated by
either Administrative Agent or by any Lender to visit and inspect any of the
Properties of such Borrower or such Subsidiaries, to examine, audit, check and
make copies of their respective financial and accounting records, books,
journals, orders, receipts and any correspondence and other data relating to
their respective businesses or the transactions contemplated hereby and by the
Transaction Documents (including, without limitation, in connection with
environmental compliance, hazard or liability), and to discuss their affairs,
finances and accounts with their officers and independent certified public
accountants, all upon reasonable notice and at such reasonable times during
normal business hours, as often as may be reasonably requested. Each such
visitation and inspection (i) by or on behalf of any Lender shall be at such
Lender's expense and
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(ii) by or on behalf of either Administrative Agent shall be at such
Borrower's expense.
8.07. Books and Records; Discussions. Each Borrower shall keep
and maintain, and cause its Subsidiaries to keep and maintain, in all material
respects proper books of record and account in which entries in conformity with
GAAP shall be made of all dealings and transactions in relation to their
respective businesses and activities, including, without limitation,
transactions and other dealings with respect to the Collateral. Such books and
records shall include true and complete records of all Indebtedness of each
Borrower to the other Borrowers as permitted under Section 9.01(ix) and each
Officer's Certificate delivered pursuant to Section 7.01(d) shall set forth in
reasonable detail the amount, date of incurrence, interest rate and amortization
schedule for such Indebtedness.
8.08. Insurance and Condemnation Proceeds. Each Borrower
hereby directs (and, if applicable, shall cause its Subsidiaries to direct) all
insurers under policies insuring any loss of Collateral and payors of any
condemnation claim or award relating to the Collateral to pay all proceeds
relating to Collateral and payable under such policies or with respect to such
claim or award directly to the Collateral Agent, for the benefit of the
Administrative Agents, the Issuing Banks and the Lenders, and in no case to
either Borrower or one or more of Borrowers' Subsidiaries. The Collateral Agent
shall, upon receipt of such proceeds, apply the same in accordance with Section
3.02(b).
8.09. ERISA Compliance. Each Borrower shall, and shall cause
each of its Subsidiaries and ERISA Affiliates to, establish, maintain and
operate all Plans to comply in all material respects with the provisions of
ERISA, the Internal Revenue Code, all other applicable laws, and the regulations
and interpretations thereunder and the respective requirements of the governing
documents for such Plans.
8.10. Foreign Employee Benefit Plan Compliance. Each Borrower
shall, and shall cause each of its Subsidiaries and ERISA Affiliates to,
establish, maintain and operate all Foreign Employee Benefit Plans to comply in
all material respects with all laws, regulations and rules applicable thereto
and the respective requirements of the governing documents for such Plans.
8.11. Maintenance of Property. Each Borrower shall, and shall
cause each of its Subsidiaries to, maintain in all material respects all of the
owned and leased Property of such Borrower or such Subsidiary used and necessary
in the business of such Borrower or such Subsidiary in adequate, working
condition and repair, ordinary wear and tear excepted, and not permit, commit or
suffer any waste or abandonment of any such Property
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and from time to time shall make or cause to be made all material repairs,
renewal and replacements thereof, including, without limitation, any capital
improvements which may be required; provided, however, that such Property may be
altered or renovated in the ordinary course of business and disposed of in
accordance with the provisions in Section 9.02.
8.12. Condemnation. Immediately upon learning of the
institution of any proceeding for the condemnation or other taking of any of the
owned or leased real property of either Borrower or any of Borrowers'
Subsidiaries, such Borrower shall notify the Administrative Agents of the
pendency of such proceeding, and permit the Administrative Agents to participate
in any such proceeding, and from time to time will deliver to the Administrative
Agents all instruments reasonably requested by the Administrative Agents to
permit such participation.
8.13. Environmental Matters. Each Borrower shall (i) maintain
an environmental health and safety plan for all manufacturing facilities which,
at a minimum, addresses measures for response to catastrophic releases of
Contaminants into the environment or workplace, a copy of which plan shall be
delivered to the Administrative Agents; and (ii) maintain a health and safety
management system, which includes a corporate environmental health and safety
management structure, environmental health and safety personnel at each
facility, and a periodic facility audit program directed by the corporate
environmental health and safety management unit.
8.14. Post-Effective Date Matters. To the extent not delivered
prior to or on the Effective Date, Borrowers shall deliver to the Administrative
Agent, in form and substance satisfactory to the Administrative Agents, each of
the agreements, instruments and other documents listed under the heading "G.
Post Closing Matters" on the List of Closing Documents attached hereto as
Exhibit F within 30 days from the Effective Date (unless otherwise indicated on
such list).
ARTICLE IX
NEGATIVE COVENANTS
Each Borrower covenants and agrees that so long as any
Revolving Loan Commitments are outstanding and thereafter until all of the
Obligations (other than indemnities not yet due) are paid in full (or, in the
case of contingent Obligations (other than indemnities not yet due), Cash
Collateral has been deposited in the Cash Collateral Account in the full amount
of such Obligations on terms satisfactory to the Lenders), unless the Requisite
Lenders shall otherwise give prior written consent thereto:
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9.01. Indebtedness. None of the Borrowers nor any of the
Borrowers' Subsidiaries shall directly or indirectly create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(i) the Obligations;
(ii) to the extent otherwise permitted to be made pursuant
to this Agreement, the Transaction Costs;
(iii) the Permitted Existing Indebtedness and any extensions,
renewals, refundings or replacements of Permitted Existing
Indebtedness, provided that any such extension, renewal, refunding or
replacement is in an aggregate principal amount not greater than the
principal amount of, and, is on terms no less favorable to such
Borrower or such Subsidiary than the terms of, the Permitted Existing
Indebtedness so extended, renewed, refunded or replaced;
(iv) to the extent permitted by Article X and in any event in
an aggregate amount not to exceed $5,000,000 in any twelve (12) month
period but in no event more than an aggregate of $10,000,000 at any
time, Capital Leases and purchase money Indebtedness incurred to
finance the acquisition of fixed assets, and Indebtedness incurred to
refinance such Capital Leases and purchase money Indebtedness;
(v) Indebtedness constituting Accommodation Obligations
permitted by Section 9.05;
(vi) Permitted Subordinated Indebtedness (except for such
Indebtedness referred to in clause (vii)) of this Section 9.01;
(vii) intercompany Indebtedness owing to Foamex Canada from
Foamex, but only so long as such indebtedness is subordinated to the
Obligations on terms satisfactory to the Requisite Lenders and not
repayable by its terms before one (1) year after the Commitment
Termination Date;
(viii) Indebtedness in respect of the Senior Notes not in
excess of a principal amount of $150,000,000, and Indebtedness in
respect of the Senior Secured Notes not in excess of a principal amount
of $117,000,000;
(ix) Indebtedness of either Borrower owing to the other
Borrower pursuant to an Intercompany Promissory Note or the
GFI Intercompany Note;
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(x) Indebtedness of Foamex Canada in an aggregate
outstanding principal amount not to exceed CDN$8,100,000 at
any time;
(xi) Indebtedness in an aggregate amount not exceeding
$3,600,000 incurred in connection with the repurchase of the
Pico Rivera, California facility of GFI which was being leased to GFI
on June 28, 1994;
(xii) Indebtedness in respect of the two Interest Rate
Contracts permitted under Section 9.22; and
(xiii) Indebtedness incurred by Foamex Fibers not in
excess of a principal amount of $2,000,000.
9.02. Sales of Assets. None of the Borrowers nor any of the
Borrowers' Subsidiaries (other than Foamex Canada) shall sell, assign, transfer,
lease, convey or otherwise dispose of any Property, whether now owned or
hereafter acquired, or any income or profits therefrom, or enter into any
agreement to do so, except:
(i) sales of inventory in the ordinary course of
business;
(ii) sales of assets outside of the ordinary course
of business (except as contemplated in clause (v) below) not
in excess of $1,000,000 in a single transaction or series of
related transactions, nor in excess of $5,000,000 in any
Fiscal Year;
(iii) sales of assets by either Borrower to the other
Borrower for fair market value and, with respect to Inventory,
in any event for an amount no less than cost of such asset to
the selling Borrower;
(iv) the sublease of office space made by Foamex to
Foamex International and TIHI at 375 Park Avenue, New York,
New York and the lease or sublease by Foamex and its
Subsidiaries of Real Property to other Persons (but only to
the extent such lease or sublease is not prohibited by
Section 9.08);
(v) the 1995 Restructuring Dispositions, but only
on commercially reasonable terms determined on an arm's
length basis;
(vi) contributions of Equipment made by Foamex to
the Foamex Mexico Group to the extent permitted
pursuant to Section 9.04(x);
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(vii) the lease, for less than comparable market lease
rates, or the sale by Foamex of the real property located in
Conklin, New York;
(viii) the license by Foamex of its patented surface
modification technology to JPS Partners and the lease of
certain equipment not in excess of a net book value
of $500,000 to JPS Partners associated with the use of
such license; and
(ix) the sale of PFI pursuant to the PFI Merger Documents;
provided, however, the PFI Guaranty Release Amount shall have
been applied to the Term Loans in accordance with Section
3.01(b)(vii) and any PFI Merger Proceeds shall be applied to
the Obligations to the extent required by Section
3.01(b)(vii);
provided, that (A) no sales or other dispositions (other than sales of
obsolete or used Equipment, the 1995 Restructuring Dispositions,
Equipment contributed to the Foamex Mexico Group pursuant to clause
(vi) above, the sale of the real property located in Conklin, New York
pursuant to clause (vii) above and the PFI Merger) shall be permitted
if they are to be made for less than 90% of net book value of such
properties or assets, and (B) any Net Cash Proceeds of Sale in respect
of such sales or other dispositions shall be remitted to the Funding
Agent and applied to the repayment of the Loans in accordance with
Section 3.01(b).
9.03. Liens. None of General Partners, the Borrowers
nor any of the Borrowers' Subsidiaries (except Foamex Canada)
shall directly or indirectly create, incur, assume or permit to
exist any Lien on or with respect to any of their respective
Property or assets except:
(i) Liens created by the Loan Documents;
(ii) Permitted Existing Liens;
(iii) Customary Permitted Liens;
(iv) purchase money Liens (including the interest of a lessor
under a Capital Lease and Liens to which any Property is subject at the
time of either Borrower's or any of Borrowers' Subsidiary's purchase
thereof) securing Indebtedness of the Borrowers or their Subsidiaries
permitted under Section 9.01(iv);
(v) Liens on the assets of the Borrowers and their
Subsidiaries securing the Senior Secured Notes, provided that such
Liens attach only to the types of Property to which, as of the
effective date of the Senior Secured Note Indenture, they are intended
to attach pursuant to the
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Senior Secured Note Indenture and the Senior Secured Note Collateral
Documents (it being understood that such Liens shall not include Liens
on the New Partners Note);
(vi) to the extent Indebtedness secured thereby is permitted
to be extended, renewed, refunded or refinanced pursuant to Section
9.01(iii), a future Lien on any Property which is subject to a Lien
described in clauses (ii) and (iv) above, if such future Lien attaches
only to the same Property and secures only such permitted extensions,
renewals, replacements or refinancings;
(viii) Liens securing Indebtedness permitted under Section
9.01(xi) on the facility purchased by GFI in Pico Rivera, California;
(ix) Liens of Foamex and GFI on the real property listed on
Schedule 9.03 securing the Senior Notes but only if such real property
was unencumbered on the date of issuance of the Senior Secured Notes;
and
(x) Liens on the assets of Foamex Fibers securing
Indebtedness permitted to be incurred by Foamex Fibers
pursuant to Section 9.01(xiii).
9.04. Investments. None of the Borrowers nor any of
the Borrowers' Subsidiaries (other than Foamex Canada) shall
directly or indirectly make or own any Investment except:
(i) Permitted Existing Investments in an amount not
greater than the amount thereof on the Effective Date;
(ii) Investments in the Cash Collateral Account and each
Investment Account (including any Investments in Cash Equivalents and
Approved Investments through such accounts);
(iii) Investments received in connection with the bankruptcy
or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(iv) Investments in the bank accounts listed on Schedule 9.17
made in the ordinary course of business not at any time exceeding in
the aggregate $750,000;
(v) Investments of Foamex in the capital stock and loan notes
of Prefoam AG, a Swiss corporation, pursuant to the Shareholders
Agreement among Foamex, Beamech Group Limited, Recticel Holding Noord
B.V., Recticel N.V.-S.A., LME-Beamech, Inc., James Brian Blackwell and
Prefoam AG, not exceeding an amount equal to $100,000 annually;
provided
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that Foamex shall not own or control capital stock or other ownership
interests in Prefoam AG in an amount which would cause Prefoam AG to be
a Subsidiary of Foamex;
(vi) Investments in the "Collateral Account" (as
defined in the Senior Secured Note Indenture) (including any
"Cash Equivalents" (as defined in the Senior Secured Note
Indenture) made through such Collateral Account;
(vii) Investments by either Borrower in any
Intercompany Promissory Note and by Foamex in the GFI
Intercompany Note;
(viii) Investment by Foamex in the TIHI Loan;
(ix) so long as no Event of Default or Potential Event of
Default has occurred and is continuing (or would result therefrom),
Investments by Foamex in Foamex International and the Managing General
Partner in an aggregate amount not to exceed the lesser of (a)
$2,000,000 in any Fiscal Year and (b) $7,000,000 in the aggregate for
the period beginning on June 28, 1994 and ending on the Commitment
Termination Date; provided that the amount of the Investment in Foamex
International and the Managing General Partner permitted under this
clause (ix) shall be reduced by any amounts distributed to the Managing
General Partner by Foamex pursuant to Section 9.06(vi) and by any
amounts distributed to Foamex International or the Managing General
Partner pursuant to Sections 9.04(v) and 9.06(iv) of the JPS Automotive
Credit Agreement; provided further that any Investment permitted
pursuant to this clause (ix) may be recharacterized by the Borrowers at
any time as a Restricted Junior Payment made pursuant to Section
9.06(vi);
(x) Investments in cash, contributions of Equipment and in the
Equity Interests of Foamex Latin America, Inc. by Foamex; provided that
the aggregate purchase price paid to Foamex International for such
Equity Interests plus any additional Investments of cash or Equipment
(valued at Fair Market Value) made by Foamex in the Foamex Mexico Group
shall in no event exceed $5,700,000;
(xi) Investment by Foamex in the New Partners Loan not in
excess of a principal amount of $40,000,000; and
(xii) GFI's Investment in the Capital Stock of Foamex Fibers
made on or prior to the date of the consummation of the acquisition by
Foamex Fibers of certain assets of GS Industries, Inc. and Pomtonoc
Fibers, Inc.;
(xiii) Investments of Foamex Fibers in cash and Cash
Equivalents;
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(xiv) Investments by either Borrower in intercompany
promissory notes made by Foamex Fibers in favor of such Borrower up to
an aggregate maximum principal amount for all Borrowers of $1,000,000
outstanding at any time;
(xv) an Investment by Foamex in GFI associated with the
assumption of the liability for the pension plans of GFI of
approximately $2,500,000 in connection with the merger of Foamex's and
GFI's salary and hourly pension plans, with Foamex being the plan
sponsor;
(xvi) an Investment by GFI in one or more interest bearing
promissory notes in an aggregate principal amount not to exceed
$1,500,000 and with a maturity date of less than one year issued by
Habitat International in favor of GFI in respect of certain of GFI's
Receivables due from Habitat International; provided, however, such
Investment shall be permitted only on the condition that GFI deliver to
the Collateral Agent the original of such promissory note or notes duly
endorsed in blank to the Collateral Agent as additional Collateral
under the GFI Security Agreement within five Business Days after GFI's
receipt thereof from Habitat International; and
(xvii) Investments by Foamex and/or GFI in no more than
10,000 shares of common stock of Foamex International received by
Foamex in connection with the compromise of certain employee loans in
the aggregate principal amount not in excess of $1,000,000.
9.05. Accommodation Obligations. None of the
Borrowers nor any of the Borrowers' Subsidiaries (other than
Foamex Canada) shall directly or indirectly create or become or
be liable with respect to any Accommodation Obligation, except:
(i) Permitted Existing Accommodation Obligations;
(ii) Accommodation Obligations arising under the Loan
Documents;
(iii) Accommodation Obligations in respect of the Canada
Undertaking not in excess of $1,000,000 in any twelve (12) month
period;
(iv) Accommodation Obligations of GFI in connection with its
guaranty of the Senior Notes, the Subordinated Debentures, the 1993
Subordinated Debentures and the Senior Secured Notes, but only to the
extent set forth in the GFI Supplemental Indenture (Senior), the GFI
Supplemental Indenture (Subordinated), the 1993 Subordinated Debenture
Indenture, and the Senior Secured Note Indenture, respectively;
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(v) Accommodation Obligations of Foamex in respect of
Indebtedness permitted under Section 9.01(xi);
(vi) Accommodation Obligations of Foamex in an aggregate
amount not to exceed $5,000,000 (no more than $2,000,000 of which may
be in the form of a Letter of Credit Issued for the account of Foamex
for up to 180 days) at any time outstanding in respect of Indebtedness
incurred by the Foamex Mexico Group;
(vii) Accommodation Obligations of Foamex in respect of
certain obligations of the Foamex Mexico Group in respect of real
property owned or leased by the Foamex Mexico Group; provided that the
aggregate amount of such Accommodation Obligations shall not exceed
$3,000,000 in any Fiscal Year; and
(viii) Accommodation Obligations of Foamex and GFI arising
under the PFI Merger Documents;
provided that, except as contemplated in clauses (vi) and (vii) above, in no
event shall any of the Borrowers, Trace Foam or FMXI, nor any of their
respective Subsidiaries directly or indirectly create or become or be liable
with respect to any Accommodation Obligation with respect to any liabilities of
the Foamex Mexico Group.
9.06. Restricted Junior Payments. None of the
Borrowers nor any of the Borrowers' Subsidiaries shall declare or
make any Restricted Junior Payment, except (without duplication):
(i) dividends or distributions to Foamex in respect of its
Equity Interests in any of its wholly-owned Subsidiaries or to any of
the Borrowers' wholly-owned Subsidiaries from any other wholly-owned
Subsidiary of either Borrower or any other Subsidiary of either
Borrower; provided that GFI may only make dividends or distributions
under this clause (i) so long as no Event of Default or Potential Event
of Default has occurred and is continuing (or would result therefrom);
(ii) regularly scheduled interest payments in respect of the
Subordinated Debentures and the 1993 Subordinated Debentures if such
interest payments are permitted to be made pursuant to the terms of the
Subordinated Debentures and the Subordinated Debenture Indenture or the
1993 Subordinated Debentures and the 1993 Subordinated Debenture
Indenture, as the case may be;
(iii) so long as no Event of Default or Potential Event of
Default has occurred and is continuing (or would
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result therefrom), distributions to the General Partners and the
Limited Partner in respect of Foamex's obligations under the Tax
Sharing Agreement to which it is a party to the extent the proceeds of
such distributions shall be used to pay actual tax liability of a
partner or its beneficial owners; provided, however, if a payment
otherwise required by the Tax Sharing Agreement is reduced because the
distribution would not be used to pay an actual tax liability, the
obligation of Foamex to make such payment shall not be discharged but
shall be suspended and made upon termination of this Agreement or
subject to the terms of any refinancing of the Obligations or as set
forth in clause (C) below: if (A) the amount distributable for a year
under such Tax Sharing Agreement is reduced because all, or some
portion, of the distribution would not be used to pay an actual tax
liability of a partner or its beneficial owners as a result of a loss
claimed by a partnership or corporation (a "loss entity") whose taxable
income or loss is reported for federal income tax purposes by a Person
who also reports the taxable income or loss of Foamex for federal
income tax purposes and (B) in a subsequent year the tax sharing
payments by the loss entity would be reduced by the carryover of that
loss if it were subject to a tax sharing agreement with terms
substantially identical to the Tax Sharing Agreement then (C) Foamex
may make a payment under the Tax Sharing Agreement with respect to the
prior year equal to the lesser of (i) the prior reduction in payment or
(ii) the current reduction in the payments that would be made by the
loss entity as a result of a loss carryover if it were subject to a tax
sharing agreement with terms identical to the Tax Sharing Agreement;
provided further, however, notwithstanding the restrictions set forth
in this clause (iii), the Borrowers shall be permitted to make
distributions in an aggregate amount not to exceed $5,000,000 to the
General Partners and the Limited Partner in respect of Foamex's
obligations under the Tax Sharing Agreement;
(iv) so long as no Event of Default or Potential Event of
Default has occurred and is continuing (or would result therefrom) and
all payments due and payable by Foamex under the Tax Sharing Agreement
permitted under clause (iii) above have been made, distributions to the
General Partners not in excess of $1,750,000 in the aggregate in each
Fiscal Year pursuant to the Management Agreement;
(v) so long as no Event of Default or Potential Event of
Default has occurred and is continuing (or would result therefrom),
regularly scheduled interest payments in respect of the Rallis
Subordinated Note if such interest payments are permitted to be made
pursuant to the terms of the Rallis Subordinated Note and the Rallis
Subordination Agreement;
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(vi) so long as no Event of Default or Potential Event of
Default has occurred and is continuing (or would result therefrom),
distributions by the Borrowers to the Managing General Partner in an
aggregate amount not to exceed the lesser of (a) $2,000,000 in any
Fiscal Year and (b) $7,000,000 in the aggregate for the period
beginning on June 28, 1994 and ending on the Commitment Termination
Date; provided that the amount of the Restricted Junior Payments
permitted under this clause (vi) shall be reduced by any Investment in
Foamex International or the Managing General Partner permitted solely
pursuant to Section 9.04(ix) and by any amounts distributed to Foamex
International or the Managing General Partner pursuant to Sections
9.04(v) and 9.06(iv) of the JPS Automotive Credit Agreement;
(vii) payments made to Foamex International to purchase
Materials pursuant to, and as defined in, the Foamex International
Supply Agreement, provided that (A) Foamex shall not make any payment
to Foamex International to purchase any Materials prior to receipt by
Foamex of title to such Materials, and (B) any amounts paid to Foamex
International in excess of the purchase price and reasonable expenses
which either Borrower would have paid had it purchased such Materials
directly from the supplier of such Materials shall be deemed to be a
Restricted Junior Payment made pursuant to Section 9.06(vi); and
(viii) principal payments or redemptions made in respect of
the Subordinated Debentures and the 1993 Subordinated Debentures to the
extent required to be made pursuant to the terms of the Subordinated
Debenture Indenture and the 1993 Subordinated Debenture Indenture,
respectively, and open market purchases of the Subordinated Debentures
and the 1993 Subordinated Debentures as contemplated in Section
3.01(b)(vii).
9.07. Conduct of Business. None of the Borrowers nor any of
the Borrowers' Subsidiaries shall engage in any business other than (i) the
businesses engaged in by such Borrower and its Subsidiaries on the date hereof
and (ii) any business or activities which are substantially similar, related or
incidental thereto. Neither General Partner shall engage in any business other
than acting as a general partner to Foamex and holding its general partnership
interest in Foamex and, in the case of Trace Foam, (i) holding its Equity
Interest in Foamex International, (ii) guaranteeing certain obligations of TIHI
to Recticel Foam Corporation and Generale Bank and (iii) holding its Equity
Interest in Trace Foam Sub. Foamex shall cause FCC not to engage in any business
activity except the issuance of the Senior Notes, the Subordinated Debentures,
the 1993 Subordinated Debentures and the Senior Secured Notes and the
performance of FCC's obligations thereunder, under the Senior Secured Note
Collateral Documents to which it is a party, and under the Senior Note
Indenture, the
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Subordinated Debenture Indenture, the 1993 Subordinated Debenture Indenture,
the Senior Secured Note Indenture and the Loan Documents to which it is a party.
9.08. Transactions with Shareholders and Affiliates. None of
the Borrowers nor any of the Borrowers' Subsidiaries shall directly or
indirectly enter into any transaction (including, without limitation, the
purchase, sale, lease or exchange of any property or the rendering of any
service), with any holder or holders of more than five percent (5%) of any class
of Equity Interests in any General Partner or its corporate parents and their
Affiliates (other than Foamex or a Subsidiary of Foamex). Nothing contained in
this Section 9.08 shall prohibit (i) any transaction expressly permitted by
Section 9.02(viii), Section 9.04(ix), Sections 9.05 and 9.06; (ii) increases in
compensation and benefits for officers and employees of either Borrower or any
of such Borrower's predecessors in interest or any of their respective
Subsidiaries which are customary in the industry or consistent with the past
business practice of such Borrower or such Subsidiary, provided that no Event of
Default or Potential Event of Default has occurred and is continuing at the time
of such increase; (iii) payment of customary directors' fees and indemnities;
(iv) performance of any obligations arising under the Transaction Documents; (v)
the New Partners Loan; (vi) sales and purchases of Inventory and, subject to the
limitations set forth in Section 9.02, Equipment between Foamex and its
Subsidiaries on the one hand and JPS Partners and its Subsidiaries on the other
hand, on an arm's length basis in the ordinary course of business; (vii)
transactions listed on Schedule 6.01-Z; (viii) the transactions contemplated in
that certain Aircraft Lease dated as of August 23, 1993 between Trace Aviation
Corp. (formerly '21' Aviation Corp.) and Foamex and the Flight Crew Service
Agreement dated as of August 9, 1993 between Trace Aviation Corp. and Foamex;
(ix) the consolidation of Foamex's and JPS Partners' Detroit automotive sales
and marketing offices into one leased facility and the allocation of the costs
associated with operating such combined facility to the extent costs are
identifiable and otherwise on a reasonable business basis; (x) sales of
Inventory to the Foamex Mexico Group by Foamex on an arm's length basis in the
ordinary course of business provided that the aggregate amount of all such sales
does not exceed $25,000,000 during each of the Fiscal Years 1994 and 1995, with
such limitation being $35,000,000, $45,000,000, $55,000,000 and $65,000,000
during the Fiscal Years 1996, 1997, 1998 and 1999, respectively; (xi) sales of
Inventory to Foamex by the Foamex Mexico Group on an arm's length basis in the
ordinary course of business and on a commercially reasonable basis; or (xii)
sales and purchases of Inventory between Foamex and its Subsidiaries on the one
hand and TIHI and its Subsidiaries on the other hand, on an arm's length basis
in the ordinary course of business; or (xiii) the sublease of office space by
Foamex to Foamex International and TIHI at 375 Park Avenue, New York, New York.
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9.09. Restriction on Fundamental Changes. None of the General
Partners, the Borrowers nor any of Borrowers' Subsidiaries shall enter into any
merger or consolidation, or liquidate, wind-up or dissolve (or suffer any
liquidation or dissolution), or convey, lease, sell, transfer or otherwise
dispose of, in one transaction or series of transactions, all or substantially
all of such General Partner's, such Borrower's or any such Subsidiary's business
or Property, whether now or hereafter acquired, except transactions permitted
under Section 9.02 or transactions contemplated by the Transaction Documents.
None of the Borrowers, the Borrowers' Subsidiaries or the General Partners shall
create any Subsidiary.
9.10. Sales and Leasebacks. None of the Borrowers nor any of
Borrowers' Subsidiaries shall become liable, directly, by assumption or by
Accommodation Obligation, with respect to any lease, whether an Operating Lease
or a Capital Lease, of any Property (whether real or personal or mixed) (i)
which it or one of its Subsidiaries sold or transferred or is to sell or
transfer to any other Person, or (ii) which it or one of its Subsidiaries
intends to use for substantially the same purposes as any other Property which
has been or is to be sold or transferred by it or one of its Subsidiaries to any
other Person in connection with such lease.
9.11. Margin Regulations; Securities Laws. None of
the Borrowers nor any of Borrowers' Subsidiaries shall use all or
any portion of the proceeds of any credit extended under this
Agreement to purchase or carry Margin Stock.
9.12. ERISA. None of the Borrowers shall:
(i) engage, or permit any of its ERISA Affiliates to engage,
in any prohibited transaction described in Sections 406 of ERISA or
4975 of the Internal Revenue Code for which a statutory or class
exemption is not available or a private exemption has not been
previously obtained from the DOL;
(ii) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Internal Revenue Code),
with respect to any Benefit Plan, whether or not waived;
(iii) terminate, or permit any ERISA Affiliate to terminate,
any Benefit Plan which would result in any liability of such Borrower
or any ERISA Affiliate under Title IV of ERISA;
(iv) fail to make any contribution or payment to any
Multiemployer Plan which such Borrower or any ERISA Affiliate may be
required to make under any agreement
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relating to such Multiemployer Plan, or any law pertaining thereto;
(v) fail, or permit any ERISA Affiliate to fail, to pay any
required installment or any other payment required under Section 412 of
the Internal Revenue Code on or before the due date for such
installment or other payment;
(vi) amend, or permit any ERISA Affiliate to amend, a Benefit
Plan resulting in an increase in current liability for the plan year
such that such Borrower or any ERISA Affiliate is required to provide
security to such Plan under Section 401(a)(29) of the Internal Revenue
Code;
(vii) permit any unfunded liabilities with respect to any
Foreign Pension Plan if the existence of such liabilities or the
absence of full funding would be contrary to applicable law for such
Foreign Pension Plan or subject to a penalty under such law with
respect to such Foreign Pension Plan; or
(viii) fail, or permit any of its Subsidiaries or ERISA
Affiliates to fail, to pay any required contributions or payments to a
Foreign Pension Plan on or before the due date for such required
installment or payment.
9.13. Issuance of Equity Interests. None of the Borrowers nor
any of the Borrowers' Subsidiaries shall issue any Equity Interests, except
Foamex may issue Equity Interests to FMXI, New Partners or Trace Foam in
connection with a cash capital contribution from FMXI, New Partners or Trace
Foam, as the case may be, and Foamex may issue Equity Interests pursuant to the
Acquisition Transactions as contemplated in the Acquisition Transaction
Documents.
9.14. Constituent Documents. None of the General Partners, the
Borrowers nor any of the Borrowers' Subsidiaries shall amend, modify or
otherwise change any of the terms or provisions in any of their respective
Constituent Documents as in effect on the Effective Date, except for such
amendments or modifications deemed immaterial by the Administrative Agents.
9.15. Permitted Subordinated Indebtedness. None of
the Borrowers nor any of the Borrowers' Subsidiaries shall amend,
modify or otherwise change any of the terms or provisions of the
Permitted Subordinated Indebtedness.
9.16. Cancellation of Debt; Prepayment. None of the Borrowers
nor any of the Borrowers' Subsidiaries shall cancel any material claim or debt
(including, without limitation, the New
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Partners Loan), except in the ordinary course of its business or as contemplated
in Section 9.04 (xvii), or prepay, redeem, purchase, repurchase or retire any
long-term Indebtedness (including, without limitation, the Indebtedness
evidenced by the Senior Notes, the Subordinated Debentures, the 1993
Subordinated Debentures and the Senior Secured Notes) or make any payments,
prepayments or other payments (in respect of principal and/or interest) in
respect of the GFI Intercompany Note and/or any Intercompany Promissory Note
which evidences a loan or advance of "Excess Proceeds" (as defined in the Senior
Secured Note Indenture), other than (i) in respect of the Obligations, (ii) a
repayment of the Senior Notes contemplated in Section 3.01(b)(i), (iii) a
repayment of the Senior Secured Notes required by the Senior Secured Note
Indenture (as in effect on the date hereof) as a result of asset sales, (iv) the
consummation of the Acquisition Transactions, (v) regularly-scheduled payments
of interest required by the GFI Intercompany Note and any such Intercompany
Promissory Note; provided that either Borrower, as applicable, may so long as no
Event of Default or Potential Event of Default has occurred and is continuing
(or would result therefrom) make payments, prepayments and other payments of
principal in respect of the GFI Intercompany Note and any Intercompany
Promissory Note described above, so long as the Borrower receiving such payments
employs such payments in accordance with Section 2.01(d) as if such payments
were Revolving Loans and to the extent not so employed, delivers such payments
to the Funding Agent for application to the Obligations of such Borrower;
provided, further, that notwithstanding the above proviso, GFI shall make
payments, prepayments and other payments of principal in respect of the GFI
Intercompany Note from the proceeds of the Term Loan made to GFI and from the
PFI Merger Proceeds received by GFI in connection with the PFI Merger but only
if such proceeds are otherwise applied by Foamex to the Obligations to the
extent required by Section 3.01(b)(vii) or as contemplated in clause (vi) below
or (vi) repayments or redemptions of the Senior Notes, the Subordinated
Debentures and the 1993 Subordinated Debentures to the extent required to be
made pursuant to the terms of the Senior Note Indenture, the Subordinated
Debenture Indenture and the 1993 Subordinated Debenture Indenture, respectively,
and open market purchases of the Senior Secured Notes, the Senior Notes, the
Subordinated Debentures and the 1993 Subordinated Debentures made with PFI
Merger Proceeds as contemplated in Section 3.01(b)(vii). Notwithstanding
anything herein or in the Existing Credit Agreement to the contrary, Foamex
shall be permitted to contribute the PFI Intercompany Note to GFI, and GFI shall
be permitted to contribute the PFI Intercompany Note to PFI, in each case on the
Effective Date immediately prior to the consummation of the PFI Merger.
9.17. Bank Accounts. None of the Borrowers nor any of
Borrowers' Subsidiaries (other than Foamex Fibers) shall open any deposit or
payable account with any Person except, subject to
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Section 9.04, in accordance with Section 3.06 and deposit or payable accounts
listed on Schedule 9.17. Either Borrower may open deposit or payroll accounts
with other financial institutions in the ordinary course of business and shall
deliver to the Administrative Agents a substitute Schedule 9.17 specifying the
name of such financial institutions and the intended use for such account.
9.18. Fiscal Year. None of the Borrowers nor any of Borrowers'
Subsidiaries shall change its Fiscal Year for accounting or tax purposes from a
period consisting of the 12-month period ending on Sunday nearest December 31
in each calendar year.
9.19. Transaction Documents. None of the Borrowers nor the
General Partners shall amend, supplement or otherwise modify the Transaction
Documents or cause the Transaction Documents to be amended, supplemented or
otherwise modified without the prior written consent of the Requisite Lenders
except for (i) such amendments, supplements or modifications deemed immaterial
by the Administrative Agents and (ii) amendments, supplements or modifications
of the Senior Secured Note Indenture and the Senior Secured Note Collateral
Documents contemplated by the Senior Secured Note Indenture and the Senior
Secured Note Collateral Documents as the Senior Secured Note Indenture and such
documents are in effect on the Effective Date.
9.20. Environmental Matters. None of the Borrowers nor any of
Borrowers' Subsidiaries shall:
(i) become subject to any Liabilities and Costs which would
have a Material Adverse Effect arising out of or related to (a) the Release or
threatened Release at any location of any Contaminant into the environment, or
any Remedial Action in response thereto, or (b) any violation of any
environmental, health and safety Requirements of Law; or
(ii) either directly or indirectly, create, incur, assume or
permit to exist any Environmental Lien on or with respect to any of its
Property.
9.21. Transaction Costs. The Transaction Costs shall
not exceed in the aggregate $2,000,000.
9.22. Interest Rate Contracts. None of the Loan Parties shall
enter into any Interest Rate Contract after June 28, 1994 other than the two
Interest Rate Contracts described in the Letters which shall be in substantially
the same terms and conditions as the ISDA Master Agreement dated as of March 31,
1994 between Foamex L.P. and Citibank, N.A. (whether such Interest Rate
Contracts are evidenced by an amendment to such ISDA Master Agreement or
additional agreements).
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ARTICLE X
FINANCIAL COVENANTS
Each Borrower covenants and agrees that so long as any
Revolving Loan Commitments are outstanding and thereafter until all of the
Obligations are paid in full (or, in the case of contingent Obligations (other
than indemnities not yet due), Cash Collateral has been deposited in the Cash
Collateral Account in the full amount of such Obligations on terms satisfactory
to the Lenders), unless the Requisite Lenders shall otherwise give prior written
consent thereto:
10.01. Minimum Net Worth. The Net Worth of Foamex and its
Subsidiaries on a consolidated basis at all times during any period from the
last day of the fiscal quarter preceding each fiscal quarter in each Fiscal Year
of the Borrowers set forth below to the last day of such fiscal quarter set
forth below shall not be less than the minimum amount set forth opposite such
fiscal quarter:
Fiscal Quarter Minimum Amount
Second fiscal quarter of 1996 ($45,000,000)
Third fiscal quarter of 1996 ($45,000,000)
Fourth fiscal quarter of 1996 ($43,000,000)
First fiscal quarter of 1997 ($42,000,000)
Second fiscal quarter of 1997 ($37,000,000)
Third fiscal quarter of 1997 ($33,000,000)
Fourth fiscal quarter of 1997 ($28,000,000)
First fiscal quarter of 1998 ($24,000,000)
Second fiscal quarter of 1998 ($19,000,000)
Third fiscal quarter of 1998 ($15,000,000)
Fourth fiscal quarter of 1998 ($10,000,000)
First fiscal quarter of 1999 ($ 5,000,000)
Second fiscal quarter of 1999 and
thereafter -0-
10.02. [Intentionally omitted]
10.03. Minimum Interest Coverage Ratio. Interest Coverage
Ratio of Foamex and its Subsidiaries on a consolidated basis, as determined as
of the last day of each fiscal quarter of the Borrowers set forth below for the
twelve month period ending on such date (or, if less than twelve months has
occurred since the first day of the first fiscal quarter of 1994, for the period
from the first day of such first fiscal quarter to such date), shall not be less
than the minimum ratio set forth opposite such fiscal quarter:
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Fiscal Quarter Minimum Ratio
Second fiscal quarter of 1996 1.00 to 1
Third fiscal quarter of 1996 1.10 to 1
Fourth fiscal quarter of 1996 2.00 to 1
First fiscal quarter of 1997 2.00 to 1
Second fiscal quarter of 1997 2.00 to 1
Third fiscal quarter of 1997 2.00 to 1
Fourth fiscal quarter of 1997 2.00 to 1
First fiscal quarter of 1998 and
thereafter 2.25 to 1
10.04. Minimum Fixed Charge Coverage Ratio. Fixed Charge
Coverage Ratio of Foamex and its Subsidiaries on a consolidated basis, as
determined as of the last day of each fiscal quarter of the Borrowers set forth
below for the twelve month period ending on such date (or, if less than twelve
months has occurred since the first day of the first fiscal quarter of 1994, for
the period from the first day of such first fiscal quarter to such date), shall
not be less than the minimum ratio set forth opposite such fiscal quarter:
Fiscal Quarter Minimum Ratio
Second fiscal quarter of 1996 0.40 to 1
Third fiscal quarter of 1996 0.45 to 1
Fourth fiscal quarter of 1996 1.15 to 1
First fiscal quarter of 1997 and
thereafter 1.25 to 1
10.05. Maximum Capital Expenditures. Capital Expenditures made
or incurred by Foamex and its Subsidiaries on a consolidated basis during any
Fiscal Year set forth below shall not exceed in the aggregate the amount set
forth opposite such Fiscal Year (excluding, however, up to $6,000,000 of Capital
Expenditures made or incurred by Foamex and its Subsidiaries for the purpose of
financing the purchase of the facility in Pico Rivera, California which it
currently leases, the construction of a home comfort products manufacturing
facility in Tell City, Indiana and the renovation and build-out of leased
premises which will house the proposed corporate headquarters of Foamex in
Linwood, Pennsylvania):
Fiscal Year Maximum Amount
Fiscal Year 1996 $15,000,000
Fiscal Year 1997 $21,000,000
Fiscal Year 1998 $22,000,000
Fiscal Year 1999 $23,000,000
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10.06. Minimum Net Worth of GFI. The Net Worth of GFI and its
Subsidiaries on a consolidated basis at all times during any period from the
last day of the fiscal quarter preceding each fiscal quarter in each Fiscal Year
of GFI set forth below to the last day of such fiscal quarter set forth below
shall not be less than the minimum amount set forth opposite such fiscal
quarter:
Fiscal Quarter Minimum Amount
Second fiscal quarter of 1996 $ 2,000,000
Third fiscal quarter of 1996 $ 2,000,000
Fourth fiscal quarter of 1996 $ 4,000,000
First fiscal quarter of 1997 $ 7,000,000
Second fiscal quarter of 1997 $ 9,000,000
Third fiscal quarter of 1997 $11,000,000
Fourth fiscal quarter of 1997 $14,000,000
First fiscal quarter of 1998 $16,000,000
Second fiscal quarter of 1998 $18,000,000
Third fiscal quarter of 1998 $21,000,000
Fourth fiscal quarter of 1998 $24,000,000
First fiscal quarter of 1999 $27,000,000
Second fiscal quarter of 1999 and
thereafter $30,000,000
ARTICLE XI
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.01. Events of Default. Each of the following occurrences
shall constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. Either Borrower shall
fail to pay when due any of the Obligations and if such non-payment relates to
interest on the Loans or fees, such non-payment continues for a period of more
than five (5) days.
(b) Breach of Certain Covenants. Either Borrower or any
General Partner shall fail duly and punctually to perform or observe any
agreement, covenant or obligation binding on such Person under Sections 3.06,
7.11, 7.12, 8.01, 8.02 and 8.06, Article IX or Article X.
(c) Breach of Representation or Warranty. Any representation
or warranty made or deemed made by either Borrower or any General Partner to
either Administrative Agent, any Lender or any Issuing Bank herein or by Foamex
or any of its Subsidiaries or any General Partner in any of the other Loan
Documents or in any statement or certificate at any time given by any such
Person pursuant to any of the Loan Documents shall be false or misleading in any
material respect on the date as of which made (or deemed made).
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(d) Other Defaults. Either Borrower or any General Partner
shall default in the performance of or compliance with any term contained in
this Agreement (other than as covered by paragraphs (a), (b) or (c) of this
Section 11.01) or any default or event of default shall occur under any of the
other Loan Documents, and such default or event of default shall continue for
thirty (30) days after the occurrence thereof.
(e) Default as to Other Indebtedness. Foamex or any of its
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect
to Permitted Subordinated Indebtedness or any other Indebtedness (other than an
Obligation) in excess of $1,000,000; or any breach, default or event of default
shall occur, or any other condition shall exist under any instrument, agreement
or indenture pertaining to any such Indebtedness, if the effect thereof is to
cause an acceleration, mandatory redemption or other required repurchase of such
Indebtedness, or during the continuance of such breach, default or event of
default, permit the holder(s) of such Indebtedness to accelerate the maturity of
any such Indebtedness or require a redemption or other repurchase of such
Indebtedness; or any such Indebtedness shall be otherwise declared to be due and
payable (by acceleration or otherwise) or required to be prepaid, redeemed or
otherwise repurchased by Foamex or any of its Subsidiaries (other than by a
regularly scheduled required prepayment) prior to the stated maturity thereof;
in each case such accelerated, repurchased or other Indebtedness to exceed, in
the aggregate, $1,000,000.
(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i)
An involuntary case shall be commenced against any Loan Party and the petition
shall not be dismissed, stayed, bonded or discharged within forty-five (45) days
after commencement of the case; or a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of any Loan Party in an
involuntary case, under any applicable bankruptcy, insolvency or other similar
law now or hereinafter in effect; or any other similar relief shall be granted
under any applicable federal, state, local or foreign law; or the board of
directors (or other governing body) of any Loan Party (or any committee thereof)
adopts any resolution or otherwise authorizes any action to approve any of the
foregoing.
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over any Loan Party or over all
or a substantial part of the Property of any Loan Party shall be entered; or an
interim receiver, trustee or other custodian of any Loan Party or of all or a
substantial part of the Property of any Loan Party shall be appointed or a
warrant of attachment, execution or similar process against any substantial part
of the Property of any Loan
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Party shall be issued and any such event shall not be stayed, dismissed, bonded
or discharged within forty-five (45) days after entry, appointment or issuance;
or the board of directors of any Loan Party (or any committee thereof) adopts
any resolution or otherwise authorizes any action to approve any of the
foregoing.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. Any
Loan Party shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or shall consent to
the entry of an order for relief in an involuntary case, or to the conversion of
an involuntary case to a voluntary case, under any such law, or shall consent to
the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its Property; or any Loan Party shall
make any assignment for the benefit of creditors or shall be unable or fail, or
admit in writing its inability, to pay its debts as such debts become due.
(h) Judgments and Attachments. Any money judgment (other than
a money judgment covered by insurance as to which the insurance company has
acknowledged coverage), writ or warrant of attachment, or similar process
against any Loan Party or any of their respective assets involving in any case
an amount in excess of $1,000,000 is entered and shall remain undischarged,
unvacated, unbonded or unstayed for a period of sixty (60) days or in any event
later than five (5) days prior to the date of any proposed sale thereunder.
(i) Dissolution. (i) Either Administrative Agent shall have
received an Officer's Certificate described in Section 7.12, (ii) any order,
judgment or decree shall be entered against any Loan Party or any of Borrowers'
Subsidiaries decreeing its involuntary dissolution or split up and such order
shall remain undischarged and unstayed for a period in excess of sixty (60)
days, (iii) any General Partner or any Limited Partner shall commence any action
to dissolve Foamex pursuant to the Partnership Agreement or otherwise, (iv)
Foamex shall commence any action to dissolve GFI, or (v) either Borrower or any
of Borrowers' Subsidiaries shall otherwise dissolve or cease to exist except as
specifically permitted by this Agreement.
(j) Loan Documents; Failure of Security. At any time, for any
reason, (i) any Loan Document ceases to be in full force and effect or any Loan
Party or any of the Borrowers' Subsidiaries party thereto seeks to repudiate its
obligations thereunder and the Liens intended to be created thereby are, or any
Loan Party or any such Subsidiary seeks to render such Liens, invalid and
unperfected, or (ii) Liens in favor of the Administrative Agents, the Issuing
Banks and/or the Lenders contemplated by the Loan Documents shall, at any time,
for any reason, be invalidated or otherwise cease to be in full force and
effect, or such Liens shall be subordinated or shall not have the
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priority contemplated by this Agreement, the Loan Documents or
the other Transaction Documents.
(k) Termination Event. Any Termination Event occurs which
could reasonably subject either Borrower or any ERISA Affiliate to liability in
excess of $1,000,000.
(l) Waiver Application. The plan administrator of any Benefit
Plan for which either Borrower or an ERISA Affiliate is an "employer" as defined
in Section 3(5) of ERISA applies under Section 412(d) of the Internal Revenue
Code for a waiver of the minimum funding standards of Section 412(a) of the
Internal Revenue Code and the substantial business hardship upon which the
application for the waiver is based could reasonably subject either Borrower or
any ERISA Affiliate to liability in excess of $1,000,000.
(m) Change of Control. Any Change of Control occurs.
(n) Material Adverse Change. An event shall exist or occur
which has a Material Adverse Effect.
(o) Tax Status. Any Federal or state taxing authority
(including the IRS) makes a claim or assertion that Foamex is not a partnership
for tax purposes or Foamex (or any General Partner, not as holder of Equity
Interests in, but as the direct holder of the assets of, Foamex) is required to
pay Federal or state income taxes (other than state income taxes generally
imposed on partnerships).
(p) Discount Debentures. Any "Event of Default" as defined in
the Discount Debenture Indenture shall have occurred and be continuing. Any of
the terms of the Discount Debentures shall be amended, supplemented or otherwise
modified without the prior written consent of the Requisite Lenders (except for
such amendments, supplements or modifications deemed immaterial by the
Administrative Agents).
(q) New Partners Loan. Any default under the terms of
the New Partners Loan by New Partners shall have occurred and be
continuing.
(r) Liens on Equity Interests. Any Lien shall be granted in
favor of any Person on the Equity Interests of Foamex or of the General
Partners other than the Liens securing the Discount Debentures.
(s) JPS Automotive Credit Agreement. Any "Event of
Default" as defined in the JPS Automotive Credit Agreement shall
have occurred and be continuing.
An Event of Default shall be deemed "continuing" until cured
or waived in writing in accordance with Section 13.07.
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11.02. Rights and Remedies.
(a) Acceleration and Termination. Upon the occurrence of any
Event of Default described in Sections 11.01(f) or 11.01(g), the Revolving Loan
Commitments shall automatically and immediately terminate and the unpaid
principal amount of, and any and all accrued interest on, the Obligations and
all accrued fees shall automatically become immediately due and payable, without
presentment, demand, or protest or other requirements of any kind (including,
without limitation, valuation and appraisement, diligence, presentment, notice
of intent to demand or accelerate and of acceleration), all of which are hereby
expressly waived by each Borrower and each General Partner; and upon the
occurrence and during the continuance of any other Event of Default, the
Collateral Agent shall at the request, or may with the consent, of the Requisite
Lenders, by written notice to each Borrower, (A) declare that the Revolving Loan
Commitments are terminated, whereupon the Revolving Loan Commitments and the
obligation of each Lender to make any Loan hereunder and of each Lender or
Issuing Bank to issue or participate in any Letter of Credit not then issued
shall immediately terminate, and/or (B) declare the unpaid principal amount of
and any and all accrued and unpaid interest on the Obligations to be, and the
same shall thereupon be, immediately due and payable, without presentment,
demand, or protest or other requirements of any kind (including, without
limitation, valuation and appraisement, diligence, presentment, notice of intent
to demand or accelerate and of acceleration), all of which are hereby expressly
waived by each Borrower.
(b) Deposit for Letters of Credit. In addition, after the
occurrence and during the continuance of an Event of Default, each Borrower
shall, promptly upon demand by the Collateral Agent, deliver to the Collateral
Agent, Cash Collateral in such form as requested by the Collateral Agent for
deposit in the Cash Collateral Account, together with such endorsements, and
execution and delivery of such documents and instruments as the Collateral Agent
may request in order to perfect or protect the Collateral Agent's Lien with
respect thereto, in an aggregate principal amount equal to the then outstanding
Letter of Credit Obligations.
(c) Rescission. If at any time after termination of the
Revolving Loan Commitments and/or acceleration of the maturity of the Loans,
each Borrower shall pay all arrears of interest and all payments on account of
principal of the Loans and Reimbursement Obligations which shall have become due
otherwise than by acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than nonpayment
of principal of and accrued interest on the Loans due and payable solely by
virtue of acceleration) shall be remedied or waived pursuant to Section 13.07,
then upon the written consent of the Requisite Lenders and
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written notice to each Borrower, the termination of the Revolving Loan
Commitments and/or the acceleration and their consequences may be rescinded and
annulled; but such action shall not affect any subsequent Event of Default or
Potential Event of Default or impair any right or remedy consequent thereon. The
provisions of the preceding sentence are intended merely to bind the Lenders and
the Issuing Banks to a decision which may be made at the election of the
Requisite Lenders; they are not intended to benefit either Borrower and do not
give either Borrower the right to require the Lenders to rescind or annul any
acceleration hereunder, even if the conditions set forth herein are met.
(d) Enforcement. Each Borrower acknowledges that in the event
either Borrower or any of Borrowers' Subsidiaries fails to perform, observe or
discharge any of their respective obligations or liabilities under this
Agreement or any other Loan Document, any remedy of law may prove to be
inadequate relief to the Administrative Agents, the Issuing Banks and the
Lenders; therefore, each Borrower agrees that the Administrative Agents, the
Issuing Banks and the Lenders shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
11.03. The Cash Collateral Account; Investment Accounts. (a)
If requested by either Borrower and subject to the right of the Collateral Agent
to withdraw funds from the Cash Collateral Account and each Investment Account
as provided below, the Collateral Agent shall, so long as no Event of Default
shall have occurred and be continuing, from time to time invest funds on deposit
in the Cash Collateral Account and the Investment Accounts and accrued interest
thereon, reinvest proceeds of any such investments which may mature or be sold,
and invest interest or other income received from any such Investments, in each
case in such Cash Equivalents as such Borrower may select and, in the case of
the Investment Accounts, in such other investments as such Borrower selects and
the Collateral Agent approves ("Approved Investments"). Such funds, interest,
proceeds or income which are not so invested or reinvested in Cash Equivalents
or Approved Investments shall, except as otherwise provided in this Section
11.03, be deposited and held by the Collateral Agent in the Cash Collateral
Account or the Investment Accounts, as applicable. None of either Administrative
Agent, any Lender or any Issuing Bank shall be liable to either Borrower for, or
with respect to, any decline in value of amounts on deposit in the Cash
Collateral Account or the Investment Accounts which shall have been invested
pursuant to this Section 11.03(a) at the direction of either Borrower. Cash
Equivalents and Approved Investments from time to time purchased and held
pursuant to this Section 11.03(a) shall constitute Cash Collateral and shall,
for purposes of this Agreement, be deemed to be part of the funds held in the
Cash Collateral Account or the Investment Accounts, as applicable, in amounts
equal to their respective outstanding principal amounts.
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(b) The Collateral Agent may, at any time after an Event of
Default has occurred and is continuing, sell or cause to be sold any Cash
Equivalents or Approved Investments being held by the Collateral Agent as Cash
Collateral at any broker's board or at public or private sale, in one or more
sales or lots, at such price as the Collateral Agent may deem best, without
assumption of any credit risk, and the purchaser of any or all such Cash
Equivalents or Approved Investments so sold shall thereafter own the same,
absolutely free from any claim, encumbrance or right of any kind whatsoever.
Either Administrative Agent, any of the Lenders and any of the Issuing Banks
may, in its own name or in the name of a designee or nominee, buy such Cash
Equivalents or Approved Investments at any public sale and, if permitted by
applicable law, buy such Cash Equivalents or Approved Investments at any private
sale. The Collateral Agent shall apply the proceeds of any such sale, net of any
expenses incurred in connection therewith, and any other funds deposited in the
Cash Collateral Account or the Investment Accounts to the payment of the
Obligations in accordance with this Agreement. Each Borrower agrees that (i) any
sale of Cash Equivalents or Approved Investments conducted in conformity with
reasonable commercial practices of banks, commercial finance companies,
insurance companies or other financial institutions disposing of property
similar to such Cash Equivalents or Approved Investments shall be deemed to be
commercially reasonable and (ii) any requirements of reasonable notice shall be
met if such notice is received by the applicable Borrower at its notice address
on the signature pages hereto at least ten (10) Business Days before the time of
the sale or disposition. Any other requirement of notice, demand or
advertisement for sale is waived to the extent permitted by law. The Collateral
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(c) Immediately upon the advance of a Revolving Loan (other
than with respect to the advance of Revolving Loans made on the Effective Date)
by the Funding Agent on behalf of the Lenders, the Collateral Agent shall apply
any and all amounts held in the Investment Accounts to the repayment of the
Revolving Loan, to the extent necessary to reduce outstandings under such
Revolving Loan to zero, or, if the principal amount of such Revolving Loan is
greater than the aggregate amount held in the Investment Accounts, to reduce the
balance in the Investment Accounts to zero. So long as the Borrowers have not
received notice from either Administrative Agent or the Requisite Lenders that a
Potential Event of Default or an Event of Default has occurred and is
continuing, either Borrower shall be entitled withdraw funds on deposit in the
Investment Account of such Borrower to fund the disbursement accounts of such
Borrower. Such request for a withdrawal from an Investment Account shall be made
telephonically or electronically to the Collateral Agent and
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the Collateral Agent shall transfer such funds to the applicable disbursement
account of the Borrower requesting such withdrawal. Such withdrawals shall be
used solely to fund expenses of the Borrowers that would be permitted to be
funded with proceeds of Revolving Loans. Except as provided in this Section
11.03(c), none of the Borrowers or any Person or entity claiming on behalf of or
through either Borrower shall have any right to withdraw any of the funds held
in the Investment Accounts, except, notwithstanding the first sentence of this
Section 11.03(c), that, upon the payment in full in cash of the Obligations and
termination of the Revolving Loan Commitments, any funds remaining in any
Investment Account shall be returned by the Collateral Agent to the applicable
Borrower or paid to whomever may be legally entitled thereto. Except as
otherwise provided in this Section 11.03(c), none of the Borrowers or any Person
or entity claiming on behalf of or through either Borrower shall have any right
to withdraw any of the funds held in the Cash Collateral Account, except that
upon the later to occur of (x) the expiration or termination of all of the
Letters of Credit in accordance with their respective terms and (y) the payment
in full in cash of the Obligations and termination of the Revolving Loan
Commitments, any funds remaining in the Cash Collateral Account shall be
returned by the Collateral Agent to the applicable Borrower or paid to whomever
may be legally entitled thereto. In addition, after the Commitment Termination
Date, to the extent the Cash Collateral in the Cash Collateral Account exceeds
the maximum amount of Letter of Credit Obligations and other contingent
Obligations outstanding, the Borrowers may request, and the Collateral Agent
shall reasonably comply with such request, that the Collateral Agent shall
deliver such excess funds to the Borrower designated in such request.
Notwithstanding anything herein to the contrary, until the 270th after the
Effective Date, all PFI Merger Proceeds deposited in the Investment Account of
GFI shall be held in such Investment Account and shall not be applied to
Revolving Loans or otherwise released to the Borrowers, except for the purposes
identified in Section 3.01(b)(vii) (it being understood and agreed that the
Collateral Agent shall (notwithstanding the occurrence of a Potential Event of
Default or Event of Default or any right or remedy of the Collateral Agent with
respect to the PFI Merger Proceeds that would result from such proceeds being on
deposit in such Investment Account) release from such Investment Account such
PFI Merger Proceeds as are necessary to fund the redemption of any of the Senior
Secured Notes, the Senior Notes, the Subordinated Debentures or the 1993
Subordinated Debentures required to be made under the terms of the indentures
governing such notes and debentures).
(d) If at any time the Collateral Agent determines that any
funds held in the Cash Collateral Account or any Investment Account are subject
to any interest, right, claim or Lien of any Person other than the Collateral
Agent, the Borrowers will, forthwith upon demand by the Collateral Agent, pay to
the
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Collateral Agent, as additional funds to be deposited and held in the Cash
Collateral Account or any Investment Account, as applicable, an amount equal to
the amount of funds subject to such interest, right, claim or Lien.
(e) The Collateral Agent shall exercise reasonable care in the
custody and preservation of any funds held in the Cash Collateral Account and
the Investment Accounts and shall be deemed to have exercised such care if such
funds are accorded treatment substantially equivalent to that which the
Collateral Agent accords its own like property, it being understood that the
Collateral Agent shall not have any responsibility for taking any necessary
steps to preserve rights against any parties with respect to any such funds but
may do so at its option. All expenses incurred in connection therewith shall be
for the sole account of the Borrowers and shall constitute Obligations
hereunder.
ARTICLE XII
THE ADMINISTRATIVE AGENTS
12.01. Appointment. (a) Each Lender and each Issuing Bank
hereby designates and appoints Citibank as the Collateral Agent and Scotiabank
as the Funding Agent of such Lender or such Issuing Bank under this Agreement,
and each Lender and each Issuing Bank hereby irrevocably authorizes the
Administrative Agents to take such action on its behalf under the provisions of
this Agreement and the Loan Documents and to exercise such powers as are set
forth herein or therein together with such other powers as are reasonably
incidental thereto. As to any matters not expressly provided for by this
Agreement (including, without limitation, enforcement or collection of the Notes
or any amount payable under any provision of Article III when due) or the other
Loan Documents, neither Administrative Agent shall be required to exercise any
discretion or take any action. Notwithstanding the foregoing, the Administrative
Agents shall be required to act or refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of the
Requisite Lenders and such instructions shall be binding upon all Lenders,
Issuing Banks and Holders of Notes; provided, however, neither Administrative
Agent shall be required to take any action which (i) such Administrative Agent
reasonably believes will expose it to personal liability unless such
Administrative Agent receives an indemnification satisfactory to it from the
Lenders with respect to such action or (ii) is contrary to this Agreement, the
other Loan Documents or applicable law. The Administrative Agents agree to act
as such on the express conditions contained in this Article XII.
(b) The provisions of this Article XII are solely for the
benefit of the Administrative Agents, the Lenders and Issuing Banks, and none
of the Borrowers or any Subsidiary of the
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Borrowers shall have any rights to rely on or enforce any of the provisions
hereof (other than as expressly set forth in Section 12.07). In performing its
functions and duties under this Agreement, each Administrative Agent shall act
solely as agent of the Lenders and the Issuing Banks and does not assume and
shall not be deemed to have assumed any obligation or relationship of agency,
trustee or fiduciary with or for either Borrower or any Subsidiary of the
Borrowers. Each Administrative Agent may perform any of its duties hereunder, or
under the Loan Documents, by or through its agents or employees.
12.02. Nature of Duties. The Administrative Agents shall not
have any duties or responsibilities except those expressly set forth in this
Agreement or in the Loan Documents. The duties of the Administrative Agents
shall be mechanical and administrative in nature. The Administrative Agents
shall not have by reason of this Agreement a fiduciary relationship in respect
of any Holder. Nothing in this Agreement or any of the Loan Documents, expressed
or implied, is intended to or shall be construed to impose upon the
Administrative Agents any obligations in respect of this Agreement or any of the
Loan Documents except as expressly set forth herein or therein. Each Lender and
each Issuing Bank shall make its own independent investigation of the financial
condition and affairs of Foamex and its Subsidiaries in connection with the
making and the continuance of the Loans hereunder and with the issuance of the
Letters of Credit and shall make its own appraisal of the creditworthiness of
each Borrower and Borrowers' Subsidiaries initially and on a continuing basis,
and the Administrative Agents shall not have any duty or responsibility, either
initially or on a continuing basis, to provide any Holder with any credit or
other information with respect thereto (except for reports required to be
delivered by either Administrative Agent under the terms of this Agreement). If
either Administrative Agent seeks the consent or approval of the Lenders to the
taking or refraining from taking of any action hereunder, such Administrative
Agent shall send notice thereof to each Lender. The Collateral Agent shall
promptly notify each Lender at any time that the Lenders so required hereunder
have instructed either Administrative Agent to act or refrain from acting
pursuant hereto.
12.03. Rights, Exculpation, etc.
(a) Liabilities; Responsibilities. None of the Administrative
Agents, any Affiliate of either Administrative Agent, or any of their respective
officers, directors, employees or agents shall be liable to any Holder for any
action taken or omitted by them hereunder or under any of the Loan Documents, or
in connection therewith, except that no Person shall be relieved of any
liability for gross negligence or willful misconduct as determined by a court of
competent jurisdiction. The Administrative Agents shall not be liable for any
apportionment
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or distribution of payments made by it in good faith pursuant to Section
3.02(b), and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Holder to whom
payment was due, but not made, shall be to recover from other Holders any
payment in excess of the amount to which they are determined to have been
entitled. The Administrative Agents shall not be responsible to any Holder for
any recitals, statements, representations or warranties herein or for the
execution, effectiveness, genuineness, validity, legality, enforceability,
collectibility, or sufficiency of this Agreement or any of the other Transaction
Documents or the transactions contemplated thereby, or for the financial
condition of either Borrower or any of Borrowers' Subsidiaries. Neither
Administrative Agent shall be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any of the Loan Documents or the financial condition of either
Borrower or any of Borrowers' Subsidiaries, or the existence or possible
existence of any Potential Event of Default or Event of Default.
(b) Right to Request Instructions. Either Administrative Agent
may at any time request instructions from the Lenders with respect to any
actions or approvals which by the terms of any of the Loan Documents such
Administrative Agent is permitted or required to take or to grant, and such
Administrative Agent shall be absolutely entitled to refrain from taking any
action or to withhold any approval and shall not be under any liability
whatsoever to any Person for refraining from any action or withholding any
approval under any of the Loan Documents until it shall have received such
instructions from those Lenders from whom such Administrative Agent is required
to obtain such instructions for the pertinent matter in accordance with the Loan
Documents. Without limiting the generality of the foregoing, no Holder shall
have any right of action whatsoever against either Administrative Agent as a
result of such Administrative Agent acting or refraining from acting under the
Loan Documents in accordance with the instructions of the Requisite Lenders or,
where required by the express terms of this Agreement, a greater proportion of
the Lenders.
12.04. Reliance. The Administrative Agents shall be entitled
to rely upon any written notices, statements, certificates, orders or other
documents or any telephone message believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper Person, and with
respect to all matters pertaining to this Agreement or any of the Loan Documents
and its duties hereunder or thereunder, upon advice of legal counsel (including
counsel for the Borrowers), independent public accountants and other experts
selected by it.
12.05. Indemnification. To the extent that the
Administrative Agents are not reimbursed and indemnified by the
Borrowers, the Lenders will reimburse and indemnify the
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Administrative Agents for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against it in any way relating to or arising out of the Loan
Documents or any action taken or omitted by the Administrative Agents under the
Loan Documents, in proportion to each Lender's Pro Rata Share; provided,
however, the Lenders shall have no obligation to reimburse and indemnify the
Administrative Agents hereunder with respect to matters caused by or resulting
from the willful misconduct or gross negligence of the Administrative Agents, as
determined by a court of competent jurisdiction. The obligations of the Lenders
under this Section 12.05 shall survive the payment in full of the Loans, the
Reimbursement Obligations and all other Obligations and the termination of this
Agreement.
12.06. Citibank and Scotiabank Individually. With respect to
its Pro Rata Share of the Revolving Loan Commitments hereunder, if any, and the
Loans made by it, if any, Citibank and Scotiabank shall have and may exercise
the same rights and powers hereunder and are subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender. The
terms "Lenders" or "Requisite Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include each of Citibank and Scotiabank in
its individual capacity as a Lender or one of the Requisite Lenders. Citibank
and Scotiabank and their respective Affiliates may accept deposits from, lend
money to, and generally engage in any kind of banking, trust or other business
with either Borrower or any of its Subsidiaries as if they were not acting as
Administrative Agents pursuant hereto.
12.07. Successor Administrative Agent.
(a) Resignation. The Administrative Agents may resign from the
performance of all their functions and duties hereunder at any time by giving at
least thirty (30) Business Days' prior written notice to the Borrowers and the
Lenders. Such resignation shall take effect upon the acceptance by a successor
Administrative Agent of appointment pursuant to this Section 12.07.
(b) Remaining Administrative Agent. Upon any such notice of
resignation by an Administrative Agent, the remaining Administrative Agent may
in its discretion, appoint itself to the resigning Administrative Agent's
functions and duties. The remaining Administrative Agent shall give the Lenders
notice at least 15 days prior to the effectiveness of such resignation.
(c) Appointment by Requisite Lenders. Upon any such notice
of resignation and if the remaining Administrative Agent has not notified the
Lenders that it has assumed the functions and duties of the resigning
Administrative Agent, the Requisite Lenders shall have the right to appoint a
successor
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Administrative Agent selected from among the Lenders which appointment shall be
subject to the prior written approval of the Borrowers (which may not be
unreasonably withheld, and shall not be required upon the occurrence and during
the continuance of an Event of Default).
(d) Appointment by Retiring Administrative Agent. If a
successor Administrative Agent shall not have been appointed within the thirty
(30) Business Day period provided in paragraph (a) of this Section 12.07, the
retiring Administrative Agent, with the consent of the Borrowers (which may not
be unreasonably withheld, and shall not be required upon the occurrence and
during the continuance of an Event of Default), shall then appoint a successor
Administrative Agent who shall serve as Administrative Agent until such time, if
any, as the Requisite Lenders appoint a successor Administrative Agent as
provided above.
(e) Rights of the Successor and Retiring Administrative
Agents. Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Administrative Agent's resignation hereunder as an
Administrative Agent, the provisions of this Article XII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Administrative Agent under this Agreement.
12.08. Relations Among Lenders. Each Lender and each Issuing
Bank agrees that it will not take any legal action, nor institute any actions or
proceedings, against either Borrower or any other obligor hereunder or with
respect to any Collateral, without the prior written consent of the Requisite
Lenders. Without limiting the generality of the foregoing, no Lender may
accelerate or otherwise enforce its portion of the Obligations, or unilaterally
terminate its Revolving Loan Commitments except in accordance with Section
11.02(a).
12.09. Concerning the Collateral and the Loan
Documents.
(a) Protective Advances. The Collateral Agent may from time to
time, before or after the occurrence of an Event of Default, make such
disbursements and advances pursuant to the Loan Documents which the Collateral
Agent, in its sole discretion, deems necessary or desirable to preserve or
protect the Collateral or any portion thereof or to enhance the likelihood or
maximize the amount of repayment of the Loans and other Obligations; provided,
however, such disbursements and advances shall not exceed $1,200,000 in the
aggregate
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("Protective Advances"). The Collateral Agent shall notify the Borrowers and
each Lender in writing of each such Protective Advance, which notice shall
include a description of the purpose of such Protective Advance. The Borrowers
agree to pay the Collateral Agent, upon demand, the principal amount of all
outstanding Protective Advances, together with interest thereon at the rate from
time to time applicable to Base Rate Loans from the date of such Protective
Advance until the outstanding principal balance thereof is paid in full. If the
Borrowers fail to make payment in respect of any Protective Advance within one
(1) Business Day after the date the Borrowers receive written demand therefor
from the Collateral Agent, the Collateral Agent shall promptly notify each
Lender and each Lender agrees that it shall thereupon make available to the
Collateral Agent, in Dollars in immediately available funds, the amount equal to
such Lender's Pro Rata Share of such Protective Advance. If such funds are not
made available to the Collateral Agent by such Lender within one (1) Business
Day after the Collateral Agent's demand therefor, the Collateral Agent will be
entitled to recover any such amount from such Lender together with interest
thereon at the Federal Funds Rate for each day during the period commencing on
the date of such demand and ending on the date such amount is received. The
failure of any Lender to make available to the Collateral Agent its Pro Rata
Share of any such Protective Advance shall neither relieve any other Lender of
its obligation hereunder to make available to the Collateral Agent such other
Lender's Pro Rata Share of such Protective Advance on the date such payment is
to be made nor increase the obligation of any other Lender to make such payment
to the Collateral Agent. All outstanding principal of, and interest on,
Protective Advances shall constitute Obligations secured by the Collateral until
paid in full by the Borrowers.
(b) Authority. Each Lender and each Issuing Bank authorizes
and directs the Collateral Agent to enter into the Loan Documents relating to
the Collateral for the benefit of the Lenders and the Issuing Banks. Each Lender
and each Issuing Bank agrees that any action taken by the Collateral Agent or
the Requisite Lenders (or, where required by the express terms of this
Agreement, a greater proportion of the Lenders) in accordance with the
provisions of this Agreement or the other Loan Documents, and the exercise by
the Collateral Agent or the Requisite Lenders (or, where so required, such
greater proportion) of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders and Issuing Banks. Without limiting the
generality of the foregoing, the Collateral Agent shall have the sole and
exclusive right and authority to (i) act as the disbursing and collecting agent
for the Lenders and the Issuing Banks with respect to all proceeds of
Collateral; (ii) execute and deliver each Loan Document relating to the
Collateral and accept delivery of each such agreement delivered by Foamex or any
of its Subsidiaries; (iii) act as
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collateral agent for the Lenders and the Issuing Banks for purposes of the
perfection of all security interests and Liens created by such agreements and
all other purposes stated therein, provided, however, the Collateral Agent
hereby appoints, authorizes and directs the Lenders and the Issuing Banks to act
as collateral sub-agent for the Administrative Agents, the Lenders and the
Issuing Banks for purposes of the perfection of all security interests and Liens
with respect to the Borrowers' and their Subsidiaries' respective deposit
accounts maintained with, and cash and Cash Equivalents held by, such Lender or
such Issuing Bank; (iv) manage, supervise and otherwise deal with the
Collateral; (v) take such action as is necessary or desirable to maintain the
perfection and priority of the security interests and liens created or purported
to be created by the Loan Documents; and (vi) except as may be otherwise
specifically restricted by the terms of this Agreement or any other Loan
Document, exercise all remedies given to the Administrative Agents, the Lenders
or the Issuing Banks with respect to the Collateral under the Loan Documents
relating thereto, applicable law or otherwise.
(c) Release of Collateral. (i) Each Lender hereby directs, in
accordance with the terms of this Agreement, the Collateral Agent to release any
Lien held by the Collateral Agent for the benefit of the Administrative Agents,
the Lenders and the Issuing Banks:
(A) against all of the Collateral, upon payment in full of the
Obligations and termination of this Agreement (or, to the extent
certain Obligations remain contingent (other than in respect of
indemnities), sufficient Cash Collateral has been deposited in the Cash
Collateral Account in the amount of such contingent Obligations on
terms satisfactory to the Lenders);
(B) against any part of the Collateral sold or disposed of by
Foamex or any of its Subsidiaries, as certified to the Collateral Agent
by the applicable Borrower in an Officer's Certificate if such sale or
disposition is permitted by Section 9.02 or is otherwise consented to
by the Requisite Lenders;
(ii) Each Lender and each Issuing Bank hereby directs the
Collateral Agent to execute and deliver or file such termination and partial
release statements and do such other things as are necessary to release Liens to
be released pursuant to this Section 12.09(c) promptly upon the effectiveness of
any such release.
(d) Additional Collateral Matters. Except for the safe
custody of any Collateral in its possession and the accounting for moneys
actually received by it pursuant to this Agreement, the Collateral Agent
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shall have no obligation whatsoever to the Lenders or to any other Person to
assure that (i) there is sufficient Availability for any Loan made hereunder or
(ii) the Collateral exists or is owned by either Borrower or is cared for,
protected or insured or has been encumbered or that the Liens granted to the
Collateral Agent pursuant to the Loan Documents have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights authorities and powers granted or available to the
Collateral Agent in this Section 12.09 or in any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or in any act, omission
or event related thereto, the Collateral Agent may act in any manner it may deem
appropriate, in its sole discretion, given its own interest in the Collateral as
one of the Lenders and that the Collateral Agent shall have no duty or liability
whatsoever to any Lender.
(e) Collateral Matters Relating to Related Obligations. The
benefit of the Loan Documents and of the provisions of this Agreement relating
to the Collateral shall extend to and be available in respect of any Obligations
("Related Obligations") which arise under any Interest Rate Contracts or which
are otherwise owed to Persons other than the Administrative Agents, the Lenders
and the Issuing Banks, solely on the condition and understanding, as among the
Administrative Agents and all Holders, that (i) the Related Obligations shall be
entitled to the benefit of the Collateral to the extent expressly set forth in
this Agreement and the Loan Documents, and to such extent the Collateral Agent
shall hold, and have the right and power to act with respect to, the Collateral
on behalf of and as agent for the holders of the Related Obligations; but the
Administrative Agents are otherwise acting solely as agents for the Lenders and
the Issuing Banks and shall have no separate fiduciary duty, duty of loyalty,
duty of care, duty of disclosure or other obligations whatsoever to any holder
of Related Obligations; and (ii) all matters, acts and omissions relating in any
manner to the Collateral, or the omission, creation, perfection, priority,
abandonment or release of any Lien, shall be governed solely by the provisions
of this Agreement and the Loan Documents and no separate Lien, right, power or
remedy shall arise or exist in favor of any Holder under any separate instrument
or agreement or in respect of any Related Obligations; and (iii) each Holder
shall be bound by all actions taken or omitted, in accordance with the
provisions of this Agreement and the Loan Documents, by the Administrative
Agents and the Requisite Lenders, each of whom shall be entitled to act at its
sole discretion and exclusively in its own interest given its own Revolving Loan
Commitments and its own interest in the Loans, Letter of Credit Obligations and
other Obligations to it arising under this Agreement or the other Loan
Documents, without any
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duty or liability to any other Holder or as to any Related Obligations and
without regard to whether any Related Obligations remain outstanding or are
deprived of the benefit of the Collateral or become unsecured or are otherwise
affected or put in jeopardy thereby; and (iv) no holder of Related Obligations
and no other Holder (except the Administrative Agents and the Lenders, to the
extent set forth in this Agreement) shall have any right to be notified of, or
to direct, require or be heard with respect to, any action taken or omitted in
respect of the Collateral or under this Agreement or the Loan Documents; and (v)
no holder of any Related Obligations shall exercise any right of setoff,
banker's lien or similar right except as expressly provided in Section 13.05.
ARTICLE XIII
MISCELLANEOUS
13.01. Assignments and Participations.
(a) Assignments. No assignments or participations of any
Lender's rights or obligations under this Agreement shall be made except in
accordance with this Section 13.01. Each Lender may assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all of its rights and obligations with respect to the Term
Loans, the Revolving Loans and/or the Letters of Credit) in accordance with the
provisions of this Section 13.01.
(b) Limitations on Assignments. Each assignment shall be
subject to the following conditions: (i) each assignment shall be of a constant,
and not a varying, ratable percentage of the Term Loans, the Revolving Loans,
the Revolving Loan Commitments of the assigning Lender and all of the assigning
Lender's other rights and obligations under this Agreement and, in the case of a
partial assignment, shall be in a minimum principal amount of $5,000,000 or the
remaining portion of the assigning Lender's rights and obligations hereunder, if
less (provided, however, such minimum shall not apply in the case of any such
assignment between Lenders), (ii) each such assignment shall be to an Eligible
Assignee, and (iii) the parties to each such assignment shall execute and
deliver to the Funding Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance; provided, however, that any such assignment shall
be made concurrently with an assignment of a constant, and not a varying,
ratable percentage of such Lender's rights and obligations under the JPS
Automotive Credit Agreement. Upon such execution, delivery, acceptance and
recording in the Register, from and after the effective date specified in each
Assignment and Acceptance and agreed to by the Funding Agent, (x) the assignee
thereunder shall, in addition to any rights and obligations hereunder held by it
immediately prior to such effective date, if any, have the rights and
obligations hereunder
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that have been assigned to it pursuant to such Assignment and Acceptance and
shall, to the fullest extent permitted by law, have the same rights and benefits
hereunder as if it were an original Lender hereunder and (y) the assigning
Lender shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of such
assigning Lender's rights and obligations under this Agreement, the assigning
Lender shall cease to be a party hereto).
(c) The Register. The Funding Agent shall maintain at its
address referred to in Section 13.08 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Revolving Loan
Commitment under each Loan of, and principal amount of the Loans and Letter of
Credit Obligations under each facility owing to, each Lender from time to time
and whether such Lender is an original Lender or the assignee of another Lender
pursuant to an Assignment and Acceptance. The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and each
Borrower and each of Borrowers' Subsidiaries, the Administrative Agents and the
Lenders may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by each Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(d) Fee. Upon its receipt of an Assignment and Acceptance
executed by the assigning Lender and an Eligible Assignee and a processing and
recordation fee of $2,500 (payable by the assigning Lender or the assignee, as
shall be agreed between them), the Funding Agent shall, if such Assignment and
Acceptance has been completed and is in compliance with this Agreement and in
substantially the form of Exhibit A hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrowers, the other Lenders and the
Collateral Agent.
(e) Participations. Each Lender may sell partici-pations to
one or more banks, finance companies, insurance companies other financial
institutions or funds in or to all or a portion of its rights and obligations
under and in respect of any and all facilities under this Agreement (including,
without limitation, all or a portion of any or all of its Revolving Loan
Commitments hereunder and the Loans owing to it and its undivided interest in
the Letters of Credit); provided, however, that (i) such Lender's obligations
under this Agreement (including, without limitation, its Revolving Loan
Commitments hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of
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such obligations, (iii) each Borrower, the Administrative Agents and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
(iv) such participant's rights to agree or to restrict such Lender's ability to
agree to the modification, waiver or release of any of the terms of the Loan
Documents or to the release of any Collateral covered by the Loan Documents, to
consent to any action or failure to act by any party to any of the Loan
Documents or any of their respective Affiliates, or to exercise or refrain from
exercising any powers or rights which any Lender may have under or in respect of
the Loan Documents or any Collateral, shall be limited to the right to consent
to (A) increase in the Revolving Loan Commitment of the Lender from whom such
participant purchased a participation, (B) reduction of the principal of, or
rate or amount of interest on the Loans(s) subject to such participation (other
than by the payment or prepayment thereof), (C) postponement of any date fixed
for any payment of principal of, or interest on, the Loan(s) subject to such
participation, (D) release of any guarantor of the Obligations or all or a
substantial portion of the Collateral except as provided in Section 12.09(c),
(E) any decrease in the amounts payable to the Lenders resulting from a failure
of either Borrower to comply with the terms of Section 3.03, (F) any increase in
the amounts Lenders are required or expected to reserve in respect of the Loans
resulting from a failure of either Borrower to comply with the terms of Section
3.04, or (G) any decrease on the amount of fees payable to Lenders under Article
IV hereof.
(f) Information Regarding the Borrower. Any Lender may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 13.01, disclose to the assignee or
participant or proposed assignee or participant, any information relating to
Foamex or its Subsidiaries furnished to such Lender by the Administrative Agents
or by or on behalf of the Borrowers; provided that, prior to any such
disclosure, such assignee or participant, or proposed assignee or participant,
shall agree to preserve in accordance with Section 13.20 the confidentiality of
any confidential information described therein.
(g) Payment to Participants. Anything in this Agreement to the
contrary notwithstanding, in the case of any participation, all amounts payable
by either Borrower under the Loan Documents shall be calculated and made in the
manner and to the parties required hereby as if no such participation had been
sold.
(h) Lenders' Creation of Security Interests. Notwithstanding
any other provision set forth in this Agreement, any Lender may at any time
create a security interest in all or any portion of its rights under this
Agreement (including, without limitation, Obligations owing to it and Notes
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held by it) in favor of any Federal Reserve bank in accordance with
Regulation A of the Federal Reserve Board.
(i) Assignments by Issuing Banks. If any Issuing Bank ceases
to be a Lender under this Agreement by virtue of any assignment made pursuant to
this Section 13.01, then, as of the effective date of such cessation, such
Issuing Bank's obligations to issue Letters of Credit pursuant to Section 2.03
shall terminate and such Issuing Bank shall be an Issuing Bank hereunder only
with respect to outstanding Letters of Credit issued prior to such date.
13.02. Expenses.
(a) Generally (the Administrative Agents). Each Borrower
agrees upon demand to pay, or reimburse each Administrative Agent for all of
such Administrative Agent's reasonable internal and external audit, legal,
appraisal, valuation, filing, document duplication and reproduction and
investigation expenses and for all other out-of-pocket costs and expenses of
every type and nature (including, without limitation, the reasonable fees,
expenses and disbursements of Sidley & Austin and Mayer Brown & Platt, local
legal counsel, auditors, accountants, appraisers, printers, insurance and
environmental advisers, and other consultants and agents) incurred by such
Administrative Agent in connection with (A) such Administrative Agent's audit
and investigation of Foamex and its Subsidiaries in connection with the
preparation, negotiation, and execution of the Loan Documents and such
Administrative Agent's periodic audits of each Borrower; (B) the preparation,
negotiation, execution and interpretation of this Agreement (including, without
limitation, the satisfaction or attempted satisfaction of any of the conditions
set forth in Article V), the Loan Documents and the making of the Loans
hereunder; (C) the creation, perfection or protection of the Liens under the
Loan Documents (including, without limitation, any reasonable fees and expenses
for local counsel in various jurisdictions); (D) the ongoing administration of
this Agreement and the Loans, including consultation with attorneys in
connection therewith and with respect to such Administrative Agent's rights and
responsibilities under this Agreement and the other Loan Documents; (E) the
protection, collection or enforcement of any of the Obligations or the
enforcement of any of the Loan Documents; (F) the commencement, defense or
intervention in any court proceeding relating to the Obligations, the Property,
either Borrower, any of Borrowers' Subsidiaries, this Agreement or any of the
other Loan Documents; (G) the response to, and preparation for, any subpoena or
request for document production with which such Administrative Agent is served
or deposition or other proceeding in which such Administrative Agent is called
to testify, in each case, relating in any way to the Obligations, the Property,
either Borrower, any of Borrowers' Subsidiaries, this Agreement or any of the
other Loan Documents; and (H) any
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amendments, consents, waivers, assignments, restatements, or supplements to any
of the Loan Documents and the preparation, negotiation, and execution of the
same.
(b) After Default. Each Borrower further agrees to pay or
reimburse the Administrative Agents, the Issuing Banks and the Lenders upon
demand for all out-of-pocket costs and expenses, including, without limitation,
reasonable attorneys' fees (including allocated costs of internal counsel and
costs of settlement) incurred by either Administrative Agent, any Issuing Bank
or any Lender after the occurrence of an Event of Default (i) in enforcing any
Loan Document or Obligation or any security therefor or exercising or enforcing
any other right or remedy available by reason of such Event of Default; (ii) in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or in any insolvency
or bankruptcy proceeding; (iii) in commencing, defending or intervening in any
litigation or in filing a petition, complaint, answer, motion or other pleadings
in any legal proceeding relating to the Obligations, the Property, either
Borrower or any of Borrowers' Subsidiaries and related to or arising out of the
transactions contemplated hereby or by any of the other Transaction Documents;
and (iv) in taking any other action in or with respect to any suit or proceeding
(bankruptcy or otherwise) described in clauses (i) through (iii) above.
13.03. Indemnity. Each Borrower further agrees to defend,
protect, indemnify, and hold harmless each Administrative Agent, each and all of
the Lenders and Issuing Banks and each of their Affiliates, and each of their
respective officers, directors, employees, attorneys and agents (including,
without limitation, those retained in connection with the satisfaction or
attempted satisfaction of any of the conditions set forth in Article V)
(collectively, the "Indemnitees") from and against any and all liabilities,
obligations, losses (other than loss of profits), damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (excluding any taxes and including, without limitation, the
reasonable fees and disbursements of counsel for such Indemnitees in connection
with any investigative, administrative or judicial proceeding, whether or not
such Indemnitees shall be designated a party thereto), imposed on, incurred by,
or asserted against such Indemnitees in any manner relating to or arising out of
(a) this Agreement, the Existing Credit Agreement, any prior iterations of the
Existing Credit Agreement, executed by each of the parties thereto prior to the
date hereof, including, without limitation, the Transaction Documents or the
other Loan Documents, or any act, event or transaction related or attendant
thereto, the making of the Loans and the issuance of and participation in
Letters of Credit hereunder, the management of such Loans and Letters of Credit,
the use or intended use of the proceeds of the Loans or Letters of Credit
hereunder, or any of the other transactions contemplated by the Transaction
Documents,
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(b) any Liabilities and Costs under federal, state or local environmental,
health or safety laws, regulations or common law principles arising from or in
connection with the past, present or future operations of either Borrower,
either Borrowers' Subsidiaries or any of their respective predecessors in
interest, or the past, present or future environmental condition of any
respective Property of either Borrower or such Subsidiaries or any of their
respective predecessors in interest, (relating to the period during which either
Borrower, such Subsidiaries, any of their respective predecessors in interest,
or the Lenders, in such capacity, owned or operated such Property), the presence
of asbestos-containing materials at any respective Property of either Borrower
or such Subsidiaries or the Release or threatened Release of any Contaminant
into the environment from any respective Property of either Borrower or such
Subsidiaries or (c) the PFI Merger Documents and the transactions contemplated
thereby, the JPS Automotive Senior Note Registration Statement, the Discount
Debenture Offering Memorandum, the offering and issuance of the Senior Notes,
the Subordinated Debentures, the Senior Secured Notes, the JPS Automotive Senior
Notes, the Discount Debentures, the Foamex International Warrants and Equity
Interests in Foamex, the use or intended use of the proceeds of issuance of the
Senior Notes, the Subordinated Debentures, the Senior Secured Notes, the JPS
Automotive Senior Notes, the Discount Debentures or any other transaction
contemplated in the Transaction Documents (collectively, the "Indemnified
Matters"); provided, however, none of the Borrowers shall have any obligation to
an Indemnitee hereunder with respect to Indemnified Matters with respect to
costs caused by or resulting from the willful misconduct or gross negligence of
such Indemnitee, as determined by a court of competent jurisdiction. To the
extent that the undertaking to indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, each Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees.
13.04. Change in Accounting Principles. If any change in the
accounting principles used in the preparation of the most recent financial
statements referred to in Section 7.01 are hereafter required or permitted by
the rules, regulations, pronouncements and opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants (or
successors thereto or agencies with similar functions) and are adopted by the
Borrowers with the agreement of their independent certified public accountants
and such changes result in a change in the method of calculation of any of the
covenants, standards or terms found in Article IX and Article X, the parties
hereto agree to enter into negotiations in order to amend such provisions so as
to equitably reflect such changes with the desired result that the criteria for
evaluating compliance with such covenants, standards and terms by the Borrowers
shall be the
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same after such changes as if such changes had not been made; provided, however,
no change in GAAP that would affect the method of calculation of any of the
covenants, standards or terms shall be given effect in such calculations until
such provisions are amended, in a manner satisfactory to the Requisite Lenders
and the Borrowers, to so reflect such change in accounting principles.
13.05. Setoff. In addition to any Liens granted under the Loan
Documents and any rights now or hereafter granted under applicable law, upon the
occurrence and during the continuance of any Event of Default, each Lender, each
Issuing Bank and any Affiliate of any Lender or Issuing Bank and each purchaser
of a participation pursuant to Section 13.01(e) is hereby authorized by the
Borrowers at any time or from time to time, without notice to any Person (any
such notice being hereby expressly waived) to set off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured
(but not including trust accounts)) and any other Indebtedness at any time held
by or owing to such Lender, Issuing Bank, any of their Affiliates or any such
purchaser to or for the credit or the account of either Borrower against and on
account of the Obligations of such Borrower to such Lender, Issuing Bank, any of
their Affiliates or any such purchaser, including, but not limited to, all Loans
and Letters of Credit and all claims of any nature or description arising out of
or in connection with this Agreement, irrespective of whether or not (i) such
Lender, Issuing Bank or such purchaser shall have made any demand hereunder or
(ii) the Collateral Agent, at the request or with the consent of the Requisite
Lenders, shall have declared the principal of and interest on the Loans and
other amounts due hereunder to be due and payable as permitted by Article XI and
even though such Obligations may be contingent or unmatured. Each Lender, each
Issuing Bank and each such purchaser agrees that it shall not, without the
express consent of the Requisite Lenders, and that it shall, to the extent it is
lawfully entitled to do so, upon the request of the Requisite Lenders, exercise
its setoff rights hereunder against any accounts of either Borrower or
Borrowers' Subsidiaries now or hereafter maintained with such Lender, Issuing
Bank or any Affiliate of either of them or such purchaser.
13.06. Ratable Sharing. The Lenders agree among themselves
that (i) with respect to all amounts received by them which are applicable to
the payment of the Obligations (excluding the fees described in Sections
2.03(g), 3.03, 3.04, 4.01(f), 4.02(f), and 4.03), equitable adjustment will be
made so that, in effect, all such amounts will be shared among them ratably in
accordance with their Pro Rata Shares, whether received by voluntary payment, by
the exercise of the right of setoff or banker's lien, by counterclaim or
cross-action or by the enforcement of any or all of the Obligations (excluding
the fees
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described in Sections 2.03(g), 3.03, 3.04, 4.01(f), 4.02(f) and 4.03) or the
Collateral, (ii) if any of them shall by voluntary payment or by the exercise of
any right of counterclaim, setoff, banker's lien or otherwise, receive payment
of a proportion of the aggregate amount of the Obligations held by it, which is
greater than the amount which such Lender is entitled to receive hereunder, the
Lender receiving such excess payment shall purchase, without recourse or
warranty, an undivided interest and participation (which it shall be deemed to
have done simultaneously upon the receipt of such payment) in such Obligations
owed to the others so that all such recoveries with respect to such Obligations
shall be applied ratably in accordance with their Pro Rata Shares; provided,
however, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to such party
to the extent necessary to adjust for such recovery, but without interest except
to the extent the purchasing party is required to pay interest in connection
with such recovery. Each Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 13.06 may, to the
fullest extent permitted by law, exercise all its rights of payment (including,
subject to Section 13.05, the right of setoff) with respect to such
participation as fully as if such Lender were the direct creditor of either
Borrower in the amount of such participation.
13.07. Amendments and Waivers. Unless otherwise provided in
this Agreement, no amendment or modification of any provision of this Agreement
shall be effective without the written agreement of the Requisite Lenders and
the Borrowers, and no termination or waiver of any provision of this Agreement,
or consent to any departure by the Borrowers therefrom, shall be effective
without the written concurrence of the Requisite Lenders, which the Requisite
Lenders shall have the right to grant or withhold in their sole discretion.
Notwithstanding the foregoing, any amendment, modification, termination, waiver
or consent with respect to (i) any provision in Article X shall be effective by
a written agreement of the Requisite Lenders and the Borrowers and (ii) any of
the following provisions of this Agreement shall be effective only by a written
agreement, signed by each Lender affected thereby: (a) waiver of any of the
conditions specified in Sections 5.01 and 5.02 (except with respect to a
condition based upon another provision of this Agreement, the waiver of which
requires only the concurrence of the Requisite Lenders and express waiver of
such conditions set forth in this Agreement), (b) increase in the aggregate
amount of the Revolving Loan Commitments of such Lender or increase in the
advance rate in the definition of "Borrowing Base" (it being understood that any
increase in the aggregate Revolving Loan Commitments would require the consent
of all the Lenders), (c) reduction of the principal of, rate or amount of
interest on the Loans, the Reimbursement Obligations or any fees or other
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amounts payable to such Lender (other than by the payment or prepayment
thereof), (d) postponement of the Commitment Termination Date or any other date
fixed for any payment of principal of, or interest on, the Loans, the
Reimbursement Obligations or any fees or other amounts payable to such Lender
(except with respect to Section 3.01(b)), (e) release of either Borrower or any
guarantor of the Obligations or of all or any substantial portion of the
Collateral (except as provided in Section 12.09(c)), (f) change in the aggregate
Pro Rata Share of the Lenders which shall be required for the Lenders or any of
them to take action hereunder (including, without limitation, the definition of
"Requisite Lenders") or (g) amendment of Sections 3.03, 3.04, 13.02, 13.03,
13.05 and 13.06 or this Section 13.07. The Collateral Agent may, but shall have
no obligation to, with the written concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of that Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on either
Borrower in any case shall entitle either Borrower to any other or further
notice or demand in similar or other circumstances. Notwithstanding anything to
the contrary contained in this Section 13.07, no amendment, modification, waiver
or consent shall affect the rights or duties of either Administrative Agent
under this Agreement or the other Loan Documents, unless made in writing and
signed by such Administrative Agent in addition to the Lenders required above to
take such action.
13.08. Notices. Unless otherwise specifically provided herein,
any notice or other communication herein required or permitted to be given shall
be in writing and may be personally served, telecopied, telexed or sent by
courier service or United States certified mail and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of a telecopy
or telex or four (4) Business Days after deposit in the United States mail with
postage prepaid and properly addressed. Notices to either Administrative Agent
pursuant to Articles II, III or XII shall not be effective until received by
such Administrative Agent. For the purposes hereof, the addresses of the parties
hereto (until notice of a change thereof is delivered as provided in this
Section 13.08) shall be as set forth below each party's name on the signature
pages hereof or the signature page of any applicable Assignment and Acceptance,
or, as to each party, at such other address as may be designated by such party
in a written notice to all of the other parties to this Agreement.
13.09. Survival of Warranties and Agreements. All
representations and warranties made herein, and in any iteration of this
Agreement executed by each of the parties thereto prior to the date hereof,
including, without limitation, the Existing Credit Agreement (it being
understood that the Borrowers shall have no obligation to restate or update any
representation or
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warranty made in any such iteration from and after the effectiveness of any
amendment, modification, supplement or restatement to such iteration except to
the extent set forth in such amendment, modification, supplement or
restatement), and all obligations of each Borrower in respect of taxes,
indemnification and expense reimbursement shall survive the execution and
delivery of this Agreement and the other Loan Documents, the making and
repayment of the Loans, the issuance and discharge of Letters of Credit
hereunder and the termination of this Agreement and shall not be limited in any
way by the passage of time or occurrence of any event and shall expressly cover
time periods when either Administrative Agent, any of the Issuing Banks or any
of the Lenders may have come into possession or control of any of the Borrowers'
or their Subsidiaries' Property, except as limited by applicable statutes of
limitation.
13.10. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of either Administrative Agent, any Lender or
any Issuing Bank in the exercise of any power, right or privilege under any of
the Loan Documents shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing under the Loan Documents are cumulative to and not exclusive
of any rights or remedies otherwise available.
13.11. Marshalling; Payments Set Aside. None of either
Administrative Agent, any Lender or any Issuing Bank shall be under any
obligation to marshall any assets in favor of either Borrower or any other party
or against or in payment of any or all of the Obligations. To the extent that
either Borrower makes a payment or payments to the Administrative Agents, the
Lenders or the Issuing Banks or any of such Persons receives payment from the
proceeds of the Collateral or exercise their rights of setoff, and such payment
or payments or the proceeds of such enforcement or setoff or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party, then
to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied, and all Liens, right and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
13.12. Severability. In case any provision in or obligation
under this Agreement or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
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13.13. Headings. Section headings in this Agreement
are included herein for convenience of reference only and shall not constitute
a part of this Agreement or be given any substantive effect.
13.14. Governing Law. THIS AGREEMENT SHALL BE INTERPRETED, AND
THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
13.15. Limitation of Liability. No claim may be made by either
Borrower, any Lender, any Issuing Bank, either Administrative Agent or any other
Person against either Administrative Agent, any other Issuing Bank or any other
Lender or the Affiliates, directors, officers, employees, attorneys or agents of
any of them for any special, consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and each Borrower, each Lender, each
Issuing Bank and each Administrative Agent hereby waives, releases and agrees
not to sue upon any such claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
13.16. Successors and Assigns. This Agreement and the other
Loan Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and permitted assigns of the Lenders and the Issuing Banks. The
rights hereunder of each Borrower, or any interest therein, may not be assigned
without the written consent of all Lenders.
13.17. Certain Consents and Waivers of the Borrowers.
(a) Personal Jurisdiction. (i) EACH OF THE ADMINISTRATIVE
AGENTS, THE LENDERS, THE ISSUING BANKS, EACH BORROWER AND EACH GENERAL PARTNER
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING
IN NEW YORK, NEW YORK, AND ANY COURT HAVING JURISDICTION OVER APPEALS OF MATTERS
HEARD IN SUCH COURTS, IN ANY ACTION OR PROCEEDING ARISING OUT OF, CONNECTED
WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY LOAN DOCUMENT, WHETHER ARISING IN
CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT. EACH BORROWER AND EACH GENERAL PARTNER IRREVOCABLY DESIGNATES AND
APPOINTS CT CORPORATION SYSTEM, 1633 BROADWAY, NEW YORK, NEW YORK 10019, AS
THEIR AGENT (THE "PROCESS AGENT") FOR SERVICE OF ALL PROCESS IN ANY SUCH
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PROCEEDING IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED TO BE
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. EACH OF THE ADMINISTRATIVE
AGENTS, THE LENDERS, THE ISSUING BANKS, EACH BORROWER AND EACH GENERAL PARTNER
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. EACH BORROWER AND EACH GENERAL PARTNER
WAIVES IN ALL DISPUTES ANY OBJECTION THAT THEY MAY HAVE TO THE LOCATION OF THE
COURT CONSIDERING THE DISPUTE.
(ii) EACH BORROWER AGREES THAT THE COLLATERAL AGENT SHALL HAVE
THE RIGHT TO PROCEED AGAINST EACH BORROWER OR ITS PROPERTY IN A COURT IN ANY
LOCATION TO ENABLE THE ADMINISTRATIVE AGENTS, THE LENDERS AND THE ISSUING BANKS
TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE ADMINISTRATIVE
AGENTS, ANY LENDER OR ANY ISSUING BANK. EACH BORROWER WAIVES ANY OBJECTION THAT
IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE ADMINISTRATIVE AGENTS, ANY
LENDER OR ANY ISSUING BANK MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
(b) Service of Process. EACH BORROWER AND EACH GENERAL PARTNER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE PROCESS AGENT OR EACH
BORROWER'S OR EACH GENERAL PARTNER'S NOTICE ADDRESS SPECIFIED BELOW, SUCH
SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. EACH OF THE
BORROWERS AND EACH GENERAL PARTNER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF THE ADMINISTRATIVE AGENTS, THE LENDERS AND ISSUING BANKS TO BRING
PROCEEDINGS AGAINST EACH BORROWER OR EACH GENERAL PARTNER IN THE COURTS OF ANY
OTHER JURISDICTION.
(c) Waiver of Jury Trial. EACH OF THE ADMINISTRATIVE AGENTS,
EACH BORROWER AND EACH GENERAL PARTNER IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
13.18. Counterparts; Effectiveness; Inconsistencies. This
Agreement and any amendments, waivers, consents, or supplements hereto may be
executed in counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument. On the Effective Date, the Existing Credit Agreement
shall be amended and restated in its entirety by this Agreement
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and the Existing Credit Agreement shall thereafter be of no further force and
effect; provided that if the Effective Date shall not have occurred on or prior
to August 31, 1996, this Agreement will terminate and will be of no further
force and effect. The terms and conditions of this Agreement and the
Administrative Agents' and the Lenders' rights and remedies under this
Agreement, shall apply to all of the Obligations incurred under the Existing
Credit Agreement. It is expressly understood and agreed by the parties hereto
that this Agreement is in no way intended to constitute a novation of the
obligations and liabilities existing under the Existing Credit Agreement or
evidence payment of all or any of such obligations and liabilities. Each of the
Borrowers hereby reaffirms the Liens granted to the Collateral Agent for the
benefit of the Lenders and the Issuing Banks pursuant to the Foamex Security
Agreement, the GFI Security Agreement and each of the other Loan Documents
executed by such Borrower, which Liens shall continue in full force and effect
during the term of this Agreement and any extensions or renewals hereof and
shall continue to secure the Obligations of the Borrowers identified in such
Loan Documents and all Obligations of the Borrowers arising from time to time
from and after the Effective Date, including without limitation, all Obligations
of the Borrowers under and in respect of the Foamex Guaranty and the GFI
Guaranty. Each of Foamex and GFI in its capacity as a guarantor of the
Obligations of the other Borrowers under the Foamex Guaranty, the GFI Guaranty
and the PFI Guaranty, respectively, hereby reaffirms its obligations under such
guaranty in favor of the Collateral Agent for the benefit of the Lenders and the
Issuing Banks, which obligations shall continue in full force and effect during
the term of this Agreement and any extensions or renewals hereof. All references
to the Existing Credit Agreement in the Loan Documents shall be deemed to refer
to this Agreement. This Agreement and each of the other Loan Documents shall be
construed to the extent reasonable to be consistent one with the other, but to
the extent that the terms and conditions of this Agreement are actually
inconsistent with the terms and conditions of any other Loan Document, this
Agreement shall govern.
13.19. Limitation on Agreements. All agreements
between each Borrower, the Administrative Agents, each Lender and
each Issuing Bank in the Loan Documents are hereby expressly
limited so that in no event shall any of the Loans or other
amounts payable by either Borrower under any of the Loan
Documents be directly or indirectly secured (within the meaning
of Regulation U) by Margin Stock.
13.20. Confidentiality. Subject to Section 13.01(f),
the Lenders and the Issuing Banks shall hold all nonpublic
information obtained pursuant to the requirements of this
Agreement and identified as such by the Borrowers in accordance
with such Lender's or such Issuing Bank's customary procedures
for handling confidential information of this nature and in
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accordance with safe and sound banking practices and in any event may make
disclosure reasonably required by a bona fide offeree, transferee or participant
in connection with the contemplated transfer or participation or as required or
requested by any Governmental Authority or representative thereof or pursuant to
legal process and shall require any such offeree, transferee or participant to
agree (and require any of its offerees, transferees or participants to agree) to
comply with this Section 13.20. In no event shall any Lender or any Issuing Bank
be obligated or required to return any materials furnished by the Borrowers;
provided, however, each offeree shall be required to agree that if it does not
become a transferee or participant it shall return all materials furnished to it
by the Borrowers in connection with this Agreement. Any and all confidentiality
agreements entered into between any Lender or any Issuing Bank and the Borrowers
shall survive the execution of this Agreement.
13.21. Entire Agreement. This Agreement, taken together with
all of the other Loan Documents, embodies the entire agreement and understanding
among the parties hereto and all prior agreements and understandings, written
and oral, relating to the subject matter hereof.
13.22. Consents and Waivers Under Existing Credit Agreement.
Upon execution of this Agreement by all the parties thereto this Section 13.22
shall be effective. Each of the Lenders hereby consents under the Existing
Credit Agreement to the PFI Merger and the transactions contemplated in the PFI
Merger Documents; provided, however, such consent shall cease to be effective if
the Effective Date shall not have occurred on the date of the consummation of
the PFI Merger and on or prior to August 31, 1996.
13.23. Intercreditor Agreement. As between the Collateral
Agent and the Trustee under the Senior Secured Note Indenture, this Agreement is
expressly made subject to that certain Intercreditor Agreement dated as of
November 18, 1993 between the Collateral Agent and the Trustee under the Senior
Secured Note Indenture, as such Intercreditor Agreement may be amended, modified
or supplemented.
13.24 Senior Indebtedness. Each of the parties hereto
acknowledges that the Obligations constitute "Obligations" owing under the
"Credit Agreement" and "Senior Indebtedness" (as each term is defined in the
Subordinated Debenture Indenture and the 1993 Subordinated Debenture Indenture).
13.25 Material Senior Indebtedness. The Lenders, the
Administrative Agents and the Issuing Banks consent and agree that the
Indebtedness evidenced by the Senior Secured Notes constitutes "Material Senior
Indebtedness" (as defined in the Subordinated Debenture Indenture and the 1993
Subordinated Debenture Indenture).
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IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date first above written.
BORROWER: FOAMEX L.P.
By FMXI, Inc.
its Managing General Partner
By____________________________
Title: Vice President
Notice Address:
Foamex L.P.
1000 Columbia Avenue
Linwood, Pennsylvania 19061
Attn: Kenneth R. Fuette
Telecopier No. (610) 859-3085
with copies to:
Trace Foam, Inc.
c/o Trace International Holdings, Inc.
375 Park Avenue
New York, NY 10152
Attn: Robert H. Nelson
Telecopier No. (212) 593-1363
FMXI, Inc.
c/o Foamex International Inc.
1000 Columbia Avenue
Linwood, Pennsylvania 19061
Attn: Kenneth R. Fuette
Telecopier No. (610) 859-3085
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TRACE FOAM COMPANY, INC.
By______________________________
Title: Vice President
Notice Address:
Trace Foam
c/o Trace International Holdings, Inc.
375 Park Avenue
New York, NY 10152
Attn: Robert H. Nelson
Telecopier No. (212) 593-1363
with a copy to:
Trace International Holdings, Inc.
375 Park Avenue
New York, NY 10152
Attn: Philip N. Smith, Jr., Esq.
Telecopier No. (212) 593-1363
FMXI, INC.
By_______________________________
Title:
Notice Address:
c/o Foamex International Inc.
1000 Columbia Avenue
Linwood, Pennsylvania 19061
Attn: Kenneth R. Fuette
Telecopier No. (610) 859-3085
with a copy to:
Trace International Holdings, Inc.
375 Park Avenue
New York, NY 10152
Attn: Philip N. Smith, Jr., Esq. and
Robert H. Nelson
Telecopier No. (212) 593-1363
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GENERAL FELT INDUSTRIES, INC.
By_______________________________
Title: Vice President
Notice Address:
Foamex L.P.
1000 Columbia Avenue
Linwood, Pennsylvania 19061
Attn: Kenneth R. Fuette
Telecopier No. (610) 859-3085
with a copy to:
Trace International Holdings, Inc.
375 Park Avenue
New York, NY 10152
Attn: Philip N. Smith, Jr., Esq. and
Robert H. Nelson
Telecopier No. (212) 593-1363
PERFECT FIT INDUSTRIES, INC.
By_______________________________
Title:
Notice Address:
c/o Foamex L.P.
1000 Columbia Avenue
Linwood, Pennsylvania 19061
Attn: Kenneth R. Fuette
Telecopier No. (610) 859-3085
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CITIBANK, N.A., as Collateral Agent,
individually as a Lender
By_______________________________
Title: Vice President
Pro Rata Share: 25.0000005%
Revolving Loan Commitment:
$11,250,000.00
Eurodollar Lending Office or
Eurodollar Affiliate:
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Attn: Timothy L. Freeman
Telecopier No. (212) 793-1290
Notice Address:
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Attn: Timothy L. Freeman
Telecopier No. (212) 793-1290
with a copy to:
Sidley & Austin
875 Third Avenue
New York, New York 10022
Attn: Daniel S. Dokos, Esq.
Telecopier No. (212) 906-2021
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THE BANK OF NOVA SCOTIA, as Funding Agent,
and individually as a Lender
By
Title: Vice President
Pro Rata Share: 25.0000005%
Revolving Loan Commitment:
$11,250,000.00
Eurodollar Lending Office or
Eurodollar Affiliate:
The Bank of Nova Scotia-New York Agency
One Liberty Plaza
New York, New York 10006
Attn: Loan Accounting - Marcia Samuels
Telecopier No. (212) 225-5499
Notice Address:
The Bank of Nova Scotia-New York Agency
One Liberty Plaza
New York, New York 10006
Attn: Peter Colletta
Telecopier No. (212) 225-5090
with a copy to:
Brian Allen
The Bank of Nova Scotia
One Liberty Plaza
New York, New York 10006
Telecopier No. (212) 225-5090
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GENERAL ELECTRIC CAPITAL CORPORATION, as a
Lender
By_______________________________
Title: Vice President, being
duly authorized
Pro Rata Share: 12.500000%
Revolving Loan Commitment:
$5,625,000.00
Eurodollar Lending Office or
Eurodollar Affiliate:
General Electric Capital Corporation
201 High Ridge Road
Stamford, Connecticut 06927
Attn: Richard Luck
Telecopier No. (203) 316-7816
Notice Address:
General Electric Capital Corporation
201 High Ridge Road
Stamford, Connecticut 06927
Attn: Richard Luck
Telecopier No. (203) 316-7893
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HELLER FINANCIAL, INC., as a Lender
By_______________________________
Title: Vice President
Pro Rata Share: 12.500000%
Revolving Loan Commitment:
$5,625,000.00
Eurodollar Lending Office or
Eurodollar Affiliate:
Heller Financial, Inc.
101 Park Avenue
New York, New York 10178
Attn: Lucy Baez
Telecopier No. (212) 880-2060
Notice Address:
Heller Financial, Inc.
101 Park Avenue
New York, New York 10178
Attn: Thomas Bukowski
Telecopier No. (212) 880-2060
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CREDIT LYONNAIS, New York Branch
as a Lender
By
Title: Vice President
CREDIT LYONNAIS, Cayman Island Branch
By
Title: Vice President
Pro Rata Share: 8.333333%
Revolving Loan Commitment:
$3,750,000.00
Eurodollar Lending Office or
Eurodollar Affiliate:
Credit Lyonnais,
New York Branch
1301 Avenue of the Americas
New York, New York 10019
Attn: Kathy Daniele
Telecopier No. (212) 459-3179
Notice Address:
Credit Lyonnais,
New York Branch
1301 Avenue of the Americas
New York, New York 10019
Attn: Nick Bellamy
Telecopier No. (212) 459-3176
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FLEET NATIONAL BANK, as a Lender
By
Title: Vice President
Pro Rata Share: 8.333333%
Revolving Loan Commitment:
$3,750,000.00
Term Loan Commitment:
$3,333,333.33
Eurodollar Lending Office or
Eurodollar Affiliate:
Fleet Bank of Rhode Island
111 Westminster Street
Providence, Rhode Island 02903
Attn: Sheri Tedeschi
Telecopier No. (401) 278-3431
Notice Address:
Fleet Bank of Rhode Island
111 Westminster Street
Providence, Rhode Island 02903
Attn: Edward Rendine
Telecopier No. (401) 751-1274
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NATIONSBANK, N.A. (SOUTH) (successor by
merger with NationsBank of Georgia,
N.A.), as a Lender
By_______________________________
Title: Vice President
Pro Rata Share: 8.333333%
Revolving Loan Commitment:
$3,750,000.00
Eurodollar Lending Office or
Eurodollar Affiliate:
NationsBank, N.A. (South)
600 Peachtree Street
Atlanta, Georgia 30308
Attn: Shirley Dyer
Telecopier No. (404) 607-6431
Notice Address:
NationsBank, N.A. (South)
600 Peachtree Street
Atlanta, Georgia 30308
Attn: Scott K. Goldstein
Telecopier No. (404) 607-6439
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms........................................ 2
1.02. Computation of Time Periods.................................. 41
1.03. Accounting Terms............................................. 41
1.04. Other Definitional Provisions................................ 41
1.05. Other Terms.................................................. 41
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01. Revolving Credit Facility.................................... 41
2.02. The Swing Loan Facility...................................... 45
2.03. Letters of Credit............................................ 46
2.04. Term Loan Facility........................................... 53
2.05. Authorized Officers and Administrative Agents................ 55
ARTICLE III
PAYMENTS AND PREPAYMENTS
3.01. Prepayments; Reductions in Commitments....................... 55
3.02. Payments .................................................. 60
3.03. Taxes .................................................. 65
3.04. Increased Capital............................................ 68
3.05. Promise to Repay; Evidence of Indebtedness................... 68
3.06. Deposit Accounts............................................. 70
3.07. Replacement of Lender in Event of Adverse
Condition......................................... 71
ARTICLE IV
INTEREST AND FEES
4.01. Interest on the Loans and other Obligations.................. 71
4.02. Special Provisions Governing Eurodollar Rate
Loans............................................. 75
4.03. Fees .................................................. 78
ARTICLE V
CONDITIONS TO LOANS AND LETTERS OF CREDIT
5.01. Conditions Precedent to the Effectiveness of
this Agreement.................................... 80
5.02. Conditions Precedent to All Term Loans,
Revolving Loans and Letters of Credit............. 82
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Section Page
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01. Representations and Warranties of the Borrowers.............. 84
ARTICLE VII
REPORTING COVENANTS
7.01. Financial Statements......................................... 97
7.02. Borrowing Base Certificate...................................100
7.03. Events of Default............................................101
7.04. Lawsuits ..................................................101
7.05. Insurance ..................................................101
7.06. ERISA Notices................................................102
7.07. Environmental Notices........................................104
7.08. Labor Matters................................................105
7.09. Permitted Subordinated Indebtedness; Senior Note
Indenture; Senior Secured Note Indenture..........105
7.10. Other Reports................................................105
7.11. Change of Control............................................105
7.12. Dissolution Notice...........................................106
7.13. Other Information............................................106
ARTICLE VIII
AFFIRMATIVE COVENANTS
8.01. Partnership/Corporate Existence, etc.........................106
8.02. Partnership Powers; Conduct of Business......................106
8.03. Compliance with Laws, etc....................................107
8.04. Payment of Taxes and Claims; Tax Consolidation...............107
8.05. Insurance ..................................................107
8.06. Inspection of Property.......................................108
8.07. Books and Records; Discussions...............................108
8.08. Insurance and Condemnation Proceeds..........................109
8.09. ERISA Compliance.............................................109
8.10. Foreign Employee Benefit Plan Compliance.....................109
8.11. Maintenance of Property......................................109
8.12. Condemnation.................................................109
8.13. Environmental Matters........................................110
8.14. Post-Effective Date Matters..................................110
ARTICLE IX
NEGATIVE COVENANTS
9.01. Indebtedness.................................................110
9.02. Sales of Assets..............................................112
9.03. Liens ..................................................112
9.04. Investments..................................................113
9.05. Accommodation Obligations....................................115
9.06. Restricted Junior Payments...................................115
9.07. Conduct of Business..........................................117
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Section Page
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9.08. Transactions with Shareholders and Affiliates................118
9.09. Restriction on Fundamental Changes...........................119
9.10. Sales and Leasebacks.........................................119
9.11. Margin Regulations; Securities Laws..........................119
9.12. ERISA ..................................................119
9.13. Issuance of Equity Interests.................................120
9.14. Constituent Documents........................................120
9.15. Permitted Subordinated Indebtedness..........................121
9.16. Cancellation of Debt; Prepayment.............................121
9.17. Bank Accounts................................................121
9.18. Fiscal Year..................................................122
9.19. Transaction Documents........................................122
9.20. Environmental Matters........................................122
9.21. Transaction Costs............................................122
9.22. Interest Rate Contracts......................................122
ARTICLE X
FINANCIAL COVENANTS
10.01. Minimum Net Worth...........................................123
10.02. [Intentionally Omitted]
10.03. Minimum Interest Coverage Ratio.............................124
10.04. Minimum Fixed Charge Coverage Ratio.........................125
10.05. Maximum Capital Expenditures................................125
10.06. Minimum Net Worth of GFI....................................126
ARTICLE XI
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.01. Events of Default...........................................126
11.02. Rights and Remedies.........................................129
11.03. The Cash Collateral Account; Investment
Accounts..........................................131
ARTICLE XII
THE ADMINISTRATIVE AGENTS
12.01. Appointment.................................................133
12.02. Nature of Duties............................................134
12.03. Rights, Exculpation, etc....................................135
12.04. Reliance ..................................................135
12.05. Indemnification.............................................136
12.06. Citibank and Scotiabank Individually........................136
12.07. Successor Administrative Agent..............................136
12.08. Relations Among Lenders.....................................137
12.09. Concerning the Collateral and the Loan
Documents.........................................138
ARTICLE XIII
MISCELLANEOUS
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Section Page
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13.01. Assignments and Participations..............................141
13.02. Expenses ..................................................144
13.03. Indemnity ..................................................145
13.04. Change in Accounting Principles.............................146
13.05. Setoff ..................................................147
13.06. Ratable Sharing.............................................148
13.07. Amendments and Waivers......................................148
13.08. Notices ..................................................149
13.09. Survival of Warranties and Agreements.......................150
13.10. Failure or Indulgence Not Waiver; Remedies
Cumulative........................................150
13.11. Marshalling; Payments Set Aside.............................150
13.12. Severability................................................151
13.13. Headings ..................................................151
13.14. Governing Law...............................................151
13.15. Limitation of Liability.....................................151
13.16. Successors and Assigns......................................151
13.17. Certain Consents and Waivers of the Borrowers...............151
13.18. Counterparts; Effectiveness; Inconsistencies................153
13.19. Limitation on Agreements....................................154
13.20. Confidentiality.............................................154
13.21. Entire Agreement............................................154
13.22. Consents and Waivers Under Existing Credit
Agreement.........................................154
13.23. Intercreditor Agreement.....................................154
13.24 Senior Indebtedness.........................................155
13.25 Material Senior Indebtedness................................155
-iv-
<PAGE>
EXHIBITS
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Borrowing Base Certificate
Exhibit C -- Form of Lockbox Agreement
Exhibit D -- Form of Notice of Borrowing
Exhibit E -- Form of Notice of Conversion/Continuation
Exhibit F -- List of Closing Documents
Exhibit G -- Form of Officer's Certificate to Accompany Reports
Exhibit H -- Form of Privity Letter from Borrower to
Accountants
Exhibit I -- Form of Note evidencing Revolving Loans
Exhibit J -- Form of Note evidencing Swing Loans
Exhibit K -- Form of Note evidencing Term Loans
Exhibit L -- Form of Blue Book
SCHEDULES
Schedule 1.01.2 -- Lockbox Banks
Schedule 1.01.3 -- Permitted Existing Accommodation
Obligations
Schedule 1.01.4 -- Permitted Existing Indebtedness
Schedule 1.01.5 -- Permitted Existing Investments
Schedule 1.01.6 -- Permitted Existing Liens
Schedule 6.01-C -- Authorized, Issued and Outstanding Equity
Interests; Subsidiaries; Parents
Schedule 6.01-D -- Conflicts with Contractual Obligations and
Requirements of Law
Schedule 6.01-E -- Governmental Consents
Schedule 6.01-J -- Pending Actions
Schedule 6.01-L -- Taxes
Schedule 6.01-Q -- Existing Environmental Matters
Schedule 6.01-R -- ERISA Matters
Schedule 6.01-S -- Foreign Employee Benefit Matters
Schedule 6.01-T -- Labor Contracts
Schedule 6.01-W -- Patent, Trademark & Permit Claims Pending
Schedule 6.01-Y -- Insurance Policies
Schedule 6.01-Z -- Related Party Contracts
Schedule 9.03 -- Real Property
Schedule 9.17 -- Bank Accounts
-v-
<PAGE>
Exhibit 4.37.1
S&A DRAFT
7/23/96
AMENDATORY AGREEMENT AND RELEASE
This Amendatory Agreement dated as of July __, 1996 (this
"Amendment"), is entered into among FOAMEX L.P., a Delaware limited partnership
("Foamex"), GENERAL FELT INDUSTRIES, INC., a Delaware corporation ("GFI";
together with Foamex, the "Borrowers"), FOAMEX CAPITAL CORPORATION, a Delaware
corporation ("FCC"), FOAMEX INTERNATIONAL, INC., a Delaware corporation ("Foamex
International), PERFECT FIT INDUSTRIES, INC., a Delaware corporation ("PFI"),
and CITIBANK, N.A. ("Citibank"), in its separate capacity as collateral and
documentation agent under the Credit Agreement referred to below (the
"Collateral Agent"). Capitalized terms not otherwise defined herein shall have
the meanings ascribed to such terms in the Credit Agreement referred to below.
W I T N E S S E T H
WHEREAS, the Borrowers, PFI, the Lenders, the Issuing Banks
and Citibank, as administrative agent, have entered into that certain Second
Amended and Restated Credit Agreement dated as of June 28, 1994 (as amended, the
"Existing Credit Agreement");
WHEREAS, Foamex and GFI have proposed sell GFI's ownership
interest in PFI pursuant to the PFI Merger Agreement;
WHEREAS, in connection with the transactions contemplated in
the PFI Merger Agreement, the Borrowers have requested the parties to the
Existing Credit Agreement to amend certain terms of the credit facilities
extended in connection therewith on the terms set forth in the Third Amended and
Restated Credit Agreement dated as of July __, 1996 among the Borrowers, Trace
Foam Company, Inc., FMXI, Inc., the Lenders, the Issuing Banks, the Collateral
Agent and The Bank of Nova Scotia, as funding agent for the Lenders and the
Issuing Banks (the "Funding Agent"; together with the Collateral Agent, the
"Administrative Agents") (as so amended and restated, and as amended from time
to time, the "Credit Agreement");
WHEREAS, in connection with the PFI Merger, Foamex and GFI
have requested the Collateral Agent and the Lenders (i) to release PFI from its
obligations as a borrower under the Existing Credit Agreement and as a guarantor
under the PFI Guaranty, (ii) to release the Liens granted by PFI to the
Collateral Agent as security for its obligations under the Existing Credit
Agreement and the other Loan Documents to which it is a party, and (iii) to
terminate the PFI Guaranty and the PFI Security Agreement;
WHEREAS, to induce the Administrative Agents, the Lenders and
the Issuing Banks to enter into the Credit Agreement
<PAGE>
and, as a condition precedent thereunder, each of the Borrowers, FCC and Foamex
International has agreed (i) to terminate the PFI Guaranty and the PFI Security
Agreement, (ii) to amend the Foamex Guaranty, the GFI Guaranty, the FCC Guaranty
and the Foamex International Guaranty to reflect the termination of PFI as a
borrower under the Existing Credit Agreement, (iii) to reaffirm the grant of its
Liens granted under each of the Foamex Security Agreement, the GFI Security
Agreement and the FCC Security Agreement and (iv) to reaffirm its obligations
under the Loan Documents to which it is a party;
NOW, THEREFORE, in consideration of the above premises, the Borrowers,
FCC, Foamex International, PFI and the Collateral Agent agree as follows:
SECTION 1. Termination of the PFI Guaranty and the PFI
Security Agreement. Effective as of the Effective Date (as defined in the Credit
Agreement), the Collateral Agent hereby (a) terminates the PFI Guaranty dated as
of November 18, 1993, as amended, made by PFI in favor of the Collateral Agent
for the ratable benefit of the Lenders and the Issuing Banks, (b) terminates the
PFI Security Agreement dated as of November 18, 1993, as amended, between PFI
and the Collateral Agent and (c) releases its Liens on any and all of the
Collateral (as defined in the PFI Security Agreement). The Collateral Agent
agrees to deliver to the Borrowers such termination statements or other
agreements, instruments or notices, in form and substance, reasonably
satisfactory to the Borrowers, as the Borrowers may reasonably request, in
connection with the Collateral Agent's release of the Liens granted pursuant to
the PFI Security Agreement.
SECTION 2. Amendment to the Guaranties.
2.01 All references in the Foamex Guaranty to the "Guaranteed
Borrowers" shall refer to GFI only.
2.02 All references in the GFI Guaranty to the "Guaranteed
Borrowers" shall refer to Foamex only.
2.03 All references in the FCC Guaranty to the "Borrowers"
shall refer to Foamex and GFI only.
2.04 All references in the Foamex International Guaranty to
the "Borrowers" shall refer to Foamex and GFI only.
SECTION 3. Affirmation of Liens and Guaranties.
3.01 Each of the Borrowers and FCC reaffirms the Liens granted
to the Collateral Agent for the benefit of the Lenders and the Issuing Banks
pursuant to the Loan Documents executed by such Person, including, without
limitation, the Foamex Security Agreement, the GFI Security Agreement and the
FCC Security
-2-
<PAGE>
Agreement, which Liens shall continue in full force and effect during the term
of the Credit Agreement and any renewals thereof and shall continue to secure
the Obligations identified in such Loan Documents.
3.02 Each of the Borrowers, FCC and Foamex International in
its capacity as guarantor under the Foamex Guaranty, the GFI Guaranty, the FCC
Guaranty and the Foamex International Guaranty, respectively, hereby consents to
the execution, delivery and performance of this Amendment, the Credit Agreement
and all of the other Loan Documents to be executed in connection therewith,
reaffirms its obligations under such guaranties and agrees that such guaranties
shall remain in full force and effect.
SECTION 4. References to Credit Agreement in other Loan
Documents. From and after the date of this Amendment any reference to the
"Credit Agreement" contained in the Loan Documents shall be deemed to be a
reference to the Credit Agreement.
SECTION 5. Miscellaneous.
5.01 This Amendment shall become effective as of the Effective
Date.
5.02 Except as expressly amended hereby or in the Credit
Agreement, all terms and provisions of the Loan Documents shall continue
unchanged, in full force and effect. 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 Lender under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
5.03 This Amendment may be executed in counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
-3-
<PAGE>
5.04 This Amendment shall be governed by, and shall be
construed and enforced in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, this Amendment has been duly executed on
the date set forth above.
FOAMEX L.P.
By: FMXI, Inc.
Its General Partner
By:_________________________________
Title:
GENERAL FELT INDUSTRIES, INC.
By:_________________________________
Title:
FOAMEX CAPITAL CORPORATION
By:_________________________________
Title:
FOAMEX INTERNATIONAL, INC.
By:_________________________________
Title:
PERFECT FIT INDUSTRIES, INC.
By:_________________________________
Title:
CITIBANK, N.A., as Collateral Agent
By:_________________________________
Title:
-4-
<PAGE>
Exhibit 4.42
PROMISSORY NOTE
$4,372,516 New York, New York
July 7, 1996
FOR VALUE RECEIVED, THE UNDERSIGNED TRACE INTERNATIONAL HOLDINGS, INC.,
a Delaware corporation formerly known as `21' International Holdings, Inc.
("Maker"), HEREBY PROMISES TO PAY to the order of FOAMEX L.P., a Delaware
limited partnership ("Payee"), on demand, or if no demand is made, then on July
7, 1997, the principal amount of FOUR MILLION THREE HUNDRED SEVENTY TWO THOUSAND
FIVE HUNDRED SIXTEEN AND NO/100 DOLLARS ($4,372,516), or, if less, the
outstanding principal amount hereof that has been advanced to, or for the
account of, Maker by Payee together, in each case, with all accrued and
outstanding interest in respect of such principal amount. This Note amends,
restates, and renews the Promissory Note dated June 27, 1994 from Maker to Payee
in the principal amount of Three Million Dollars ($3,000,000) as amended by the
Promissory Note dated July 7, 1995 from Maker to Payee in the principal amount
of Four Million Three Hundred Seventy Two Thousand Five Hundred and Sixteen
Dollars ($4,372,516) (collectively, the "Prior Note") and has been executed and
delivered by Maker and accepted by Payee in substitution for the Prior Note and
certain other obligations of Maker to Payee, but not in payment, satisfaction of
cancellation of the indebtedness outstanding thereunder.
Maker promises to pay interest on the unpaid principal amount
outstanding hereunder from July 7, 1995 until such principal amount is paid in
full at an interest rate equal at all times to nine and one-half percent (9.5%)
per annum. Interest of $422,312 accrued through the date hereof shall be deemed
added to the principal amount of this Note. Interest on the outstanding
principal amount (including interest on the interest accrued prior to July 7,
1996) shall be payable quarterly in arrears on the first date of each calendar
quarter, for the immediately preceding calendar quarter, commencing October 1,
1996; provided, however that interest payable on October 1, 1996 shall be for
the period commencing on the date of this Note.
Both principal and interest are payable in lawful money of the United
States of America in same day or immediately available funds to the account of
Payee at 1000 Columbia Avenue, Linwood, Pennsylvania 19061, or at such other
place or places as the Holder may, from time to time, designate in writing. All
computations of interest under this Note shall be made on the basis of a year of
360 days for the actual number of days (including the first but excluding the
last day) occurring in the period for which such interest is payable. Whenever
any payment to be made hereunder shall be stated to be due on a day that is not
a Business Day, such payment shall be due instead on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of such payment of interest and not in the computation of the
succeeding payment of interest.
Payee or any Holder shall have the right to assign its rights hereunder
or any interest herein without the prior written consent of Maker.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
All the covenants, stipulations, promises and agreements made by or
contained in this Note on behalf of the undersigned shall bind its successors,
whether so expresses or not.
No failure on the part of Payee to exercise, and no delay in
exercising, any right under this Note shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
<PAGE>
DEFINED TERMS
As used in this Note, the following terms have the following meanings
(which meanings are equally applicable to both the singular and plural forms of
the terms defined):
"Business Day" shall mean a day that is not a Saturday, Sunday or a day
of which banking institutions are not required to be open in the State of New
York.
"Holder" means Payee or any subsequent holder of this Note.
[Remainder of page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first set forth above.
TRACE INTERNATIONAL HOLDINGS, INC.
___________________________________
By: Robert H. Nelson
Title: Vice President
<PAGE>
EXHIBIT 10.3.1
<PAGE>
AMENDED CONFIRMATION
Date: May 29, 1996
To: Foamex L.P. ("Foamex")
Telefax No.: 610-859-3032
Attention: George Karpinski
From: Citibank, N.A. New York ("Citibank")
Telefax No.: 718-248-9426
Transaction Reference Number: 94A93/94F98/96P047
The purpose of this letter agreement is to set forth the terms and
conditions of the Transaction entered into between us on the Trade Date referred
to below. This letter constitutes a "Confirmation" as referred to in the ISDA
Master Agreement specified below. This Confirmation amends, restates and
supersedes any prior Confirmation for this Transaction, including the
Confirmations dated November 17, 1994, February 2, 1996 and May 16, 1996 between
Citibank and Foamex.
The definitions and provisions contained in the 1991 ISDA Definitions
(as published in the International Swap Dealers Association, Inc.) are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern.
1. This Confirmation supplements, forms a part of, and is subject to,
the ISDA Master Agreement (Multicurrency Cross Border) dated as of March 31,
1994 (including the Schedule thereto of even date therewith, the "Agreement")
between you and us. All provisions contained in the Agreement shall govern this
Confirmation except as expressly modified below.
2. The terms of the particular Transaction to which this
Confirmation relates are as follows:
Notional Amount: USD 150,000,000
Trade Date: November 14, 1994
Effective Date: November 14, 1994
Amendment Date: May 16, 1996
Termination Date (amended): December 14, 1999; provided, however, that Citibank
may designate December 14, 1997 as the Termination Date of this Swap Transaction
by notice to Foamex on two Business Days prior to December 14, 1997.
Foamex Fixed and Floating Amounts:
Foamex Payment Dates: December 14, 1994, June 14, 1995, December 14,
1995, June 14, 1996, December 14, 1996, June 14, 1997, December 14,
1997, June 14, 1998 and December 14, 1998, June 14, 1999 and December
14, 1999
Modified Following Business Day convention applies to both Reset Dates
and Payment Dates
Fixed Rate for Foamex Calculation Period ending December 14, 1994;
4.250 percent
<PAGE>
Floating Rate for Foamex Calculation Period ending June 14, 1995: The
product of (1) 365/360 and (b) a Floating Rate determined pursuant to
the USD-LIBOR-BBA Floating Rate Option; provided, however, that the
Floating Rate so determined shall not exceed 5.50 percent, and shall
not be lower than 4.750 percent
Floating Rate for Foamex Calculation Period ending December 14, 1995:
The product of (a) 365/360 and (b) a Floating Rate determined pursuant
to the USD-LIBOR-BBA Floating Rate Option; provided, however, that the
Floating Rate so determined shall not be lower than 4.750 percent
Designated Maturity: 6 months
Foamex Reset Dates: The last day of each Foamex Calculation Period
Fixed Rate for Foamex Calculation Periods beginning on or after
June 14, 1996: 5.810 percent
Foamex Fixed and Floating Rate Day Count Fraction: 30/360
Citibank Floating Amounts:
Floating Rate Payer Payment Dates: December 14, 1994, June 14, 1995,
December 14, 1995, June 14, 1996, December 14, 1996, June 14, 1997,
December 14, 1997, June 14, 1998 and December 14, 1998, June 14, 1996
and December 14, 1999
Modified Following Business Day convention applies to both Reset Dates
and Payment Dates
Floating Rate for Citibank Calculation Periods ending on or before
December 14, 1995: The product of (a) 365/360 and (b) a Floating Rate
determined pursuant to the USD-LIBOR-BBA Floating Rate Option
Spread for Citibank Calculation Periods ending on or before June 14,
1995: plus 0.80 percent
Spread for Citibank Calculation Period ending on December 14, 1995:
plus 0.72 percent
Floating Rate for Citibank Calculation Period from and including
December 14, 1995 to but excluding June 14, 1996: The product of (a)
365/360 and (b) a Floating Rate determined pursuant to the
USD-LIBOR-BBA Floating Rate Option
Spread for Citibank Calculation Period from and including December 14,
1995 to but excluding June 14, 1996: plus 2.45 percent
Floating Rate for Citibank Calculation Period from and including June
14, 1996 to but excluding December 14, 1996: The product of (a) 365/360
and (b) a Floating Rate determined pursuant to the USD-LIBOR-BBA
Floating Rate Option
Spread for Citibank Calculation Period from and including June 14,
1996 to but excluding December 14, 1996: plus 2.39 percent
Floating Rate for Citibank Calculation Periods from and including
December 14, 1996 to but excluding December 14, 1997: The lower of (1)
The difference between (a) 12.340 percent and (b) The product of (i)
365/360 and (ii) a Floating Rate determined pursuant to the
USD-LIBOR-BBA Floating Rate Option, or (2) 7.34 percent
Floating Rate for Citibank Calculation Periods beginning on or after
December 14, 1997: The difference between (a) 12.340 percent and (b)
The product of (i) 365/360 and (ii) a Floating Rate determined pursuant
to the USD-LIBOR-BBA Floating Rate Option
<PAGE>
Designated Maturity: 6 months
Floating Rate Day Count Fraction: 30/360
Citibank Reset Dates: The last day of each Citibank Calculation Period
Business Days: New York and London
Calculation Agent: Citibank
3. Account Details:
Payments to Citibank:
Account for payments: Citibank, N.A., New York
ABA #021000089
Account No. 00167679
Financial Futures
Reference Swap 94A93/94F98/96P047
Payments to Foamex:
Account for payments: Citibank, N.A., New York
ABA #021000089
Account No. 4058-7993
Account Name: Foamex L.P.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
CITIBANK, N.A., NEW YORK
By:______________________________________
Name: Adam Kulick
By:______________________________________
Name: Anna Raytcheva
By:______________________________________
Name: Elaine Effren
Accepted and confirmed as of the date first written:
FOAMEX L.P.
By:
---------------------------------------------
Name: George L. Karpinski
---------------------------------------------
Title: Vice President - Treasurer
---------------------------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000890080
<NAME> FOAMEX L.P.
<MULTIPLIER> 1
<CURRENCY> US
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 2,438
<SECURITIES> 0
<RECEIVABLES> 137,175
<ALLOWANCES> 0
<INVENTORY> 79,780
<CURRENT-ASSETS> 241,290
<PP&E> 169,323
<DEPRECIATION> 0
<TOTAL-ASSETS> 574,833
<CURRENT-LIABILITIES> 150,473
<BONDS> 429,848
0
0
<COMMON> 0
<OTHER-SE> (34,451)
<TOTAL-LIABILITY-AND-EQUITY> 574,833
<SALES> 240,447
<TOTAL-REVENUES> 240,447
<CGS> 202,280
<TOTAL-COSTS> 202,280
<OTHER-EXPENSES> 13,526
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,311
<INCOME-PRETAX> 14,667
<INCOME-TAX> 2,999
<INCOME-CONTINUING> 11,668
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (29,196)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
