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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 1999
FOAMEX INTERNATIONAL INC.
FOAMEX L.P.
FOAMEX CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-22624 05-0473908
Delaware 1-11432 05-0475617
Delaware 1-11436 22-3182164
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1000 Columbia Avenue, Linwood, PA 19061
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 859-3000
Not Applicable
(Former name or former address, if changed from last report)
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Item 5. Other Events
On June 30, 1999, Foamex International Inc. (the "Company") issued a press
release announcing that Foamex L.P. and Foamex Carpet Cushion, Inc., two of its
wholly owned subsidiaries, had amended their bank credit agreements to reset
their financial and operating covenants. The Company had previously received
waivers of certain provisions of such credit agreements through June 30, 1999.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of businesses acquired:
None.
(b) Pro Forma financial information:
None.
(c) Exhibits:
99.1 Press Release of Foamex International Inc., dated June 30, 1999
regarding amendments to the Foamex L.P. and Foamex Carpet
Cushion, Inc. bank credit agreements.
4.4.34 Amended and Restated Foamex Pledge Agreement, dated as of June
30, 1999 made by Foamex L.P. in favor of Citicorp U.S.A. Inc. as
Collateral Agent.
4.4.35 Amended and Restated Partnership Pledge Agreement, dated as of
June 30, 1999 by FMXI, Inc. and Foamex International Inc. in
favor of Citicorp U.S.A. Inc. as FII Intercreditor Collateral
Agent.
4.10.11 Foamex L.P. Credit Agreement, dated June 12, 1997, as amended and
restated as of February 27, 1998 as further amended and restated
as of June 29, 1999 among Foamex L.P., FMXI, Inc., the
institutions from time to time party thereto as lenders, the
institutions from time to time party thereto as issuing banks and
Citicorp USA, Inc. and the Bank of Nova Scotia as Administrative
Agents.
4.10.12 Amendment No. 3 to Foamex Carpet Cushion Inc. Credit Agreement,
dated June 30, 1999.
4.10.13 Foamex International Pledge Agreement, dated June 30, 1999, made
by Foamex International in favor of Citicorp U.S.A. Inc. as FII
Intercreditor Collateral Agent.
4.12.3 Amendment to Promissory Note of Foamex L.P. in favor of Foam
Funding LLC dated as of June 30, 1999.
4.12.4 Amendment to Promissory Note of Foamex Carpet Cushion, Inc. in
favor of Foam Funding LLC dated as of June 30, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FOAMEX INTERNATIONAL INC.
/s/ John G. Johnson, Jr.
---------------------------------
Name: John G. Johnson, Jr.
Title: Chief Executive Officer, President
FOAMEX L.P.
BY FMXI, Inc.
its Managing General Partner
/s/ George L. Karpinski
---------------------------------
Name: George L. Karpinski
FOAMEX CAPITAL CORPORATION
/s/ George L. Karpinski
---------------------------------
Name: George L. Karpinski
July 12, 1999
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EXHIBIT INDEX
Exhibit
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99.1 Press Release of Foamex International Inc., dated June 30, 1999
regarding amendments to the Foamex L.P. and Foamex Carpet
Cushion, Inc. bank credit agreements.
4.4.34 Amended and Restated Foamex Pledge Agreement, dated as of June
30, 1999 made by Foamex L.P. in favor of Citicorp U.S.A. Inc. as
Collateral Agent.
4.4.35 Amended and Restated Partnership Pledge Agreement, dated as of
June 30, 1999 by FMXI, Inc. and Foamex International Inc. in
favor of Citicorp U.S.A. Inc. as FII Intercreditor Collateral
Agent.
4.10.11 Foamex L.P. Credit Agreement, dated June 12, 1997, as amended and
restated as of February 27, 1998 as further amended and restated
as of June 29, 1999 among Foamex L.P., FMXI, Inc., the
institutions from time to time party thereto as lenders, the
institutions from time to time party thereto as issuing banks and
Citicorp USA, Inc. and the Bank of Nova Scotia as Administrative
Agents.
4.10.12 Amendment No. 3 to Foamex Carpet Cushion Inc. Credit Agreement,
dated June 30, 1999.
4.10.13 Foamex International Pledge Agreement, dated June 30, 1999, made
by Foamex International in favor of Citicorp U.S.A. Inc. as FII
Intercreditor Collateral Agent.
4.12.3 Amendment to Promissory Note of Foamex L.P. in favor of Foam
Funding LLC dated as of June 30, 1999.
4.12.4 Amendment to Promissory Note of Foamex Carpet Cushion, Inc. in
favor of Foam Funding LLC dated as of June 30, 1999.
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PRESS RELEASE Contact: Andrew Campbell David Bright
------- Foamex International Foamex International
610-859-3620 212-230-0488
FOR IMMEDIATE RELEASE
FOAMEX AMENDS ITS CREDIT AGREEMENTS
LINWOOD, PENNSYLVANIA, June 30, 1999 - Foamex International Inc. (Nasdaq: FMXI)
today announced that its Foamex L.P. and Foamex Carpet Cushion, Inc.
subsidiaries had amended their bank credit agreements to reset the financial and
operating covenants. Foamex had previously received waivers of certain
provisions of these credit agreements through June 30, 1999.
The Company said that the amendments contained certain provisions to
restrict future cash outflows, including payments of $3.0 million annually under
a management agreement between Foamex and a subsidiary of Trace International
Holdings, Inc. Foamex also announced that it would terminate the sublease of New
York office space at 375 Park Avenue to Trace, effective September 30, 1999.
Foamex intends to vacate the space and offer the offices for sublease to a third
party.
John G. Johnson, Jr., President and Chief Executive Officer, stated, "We
are pleased that our lenders recognize the stronger ongoing potential of Foamex
as well as the progress we've made to strengthen operations and financial
controls. Our 1999 results to date show that our employees are resilient,
devoted and achieving continuous improvement and increased sales. I fully expect
Foamex to be a viable, profit-generating entity for the long-term."
Mr. Johnson added that the steps taken today reflect positive actions taken
by the Linwood, PA-based leadership team which are designed to reposition Foamex
for sustained profitability.
Foamex, headquartered in Linwood, Pennsylvania, manufactures and markets
flexible polyurethane and advanced polymer products in North America. The
Company expects to announce results for the second quarter 1999 on or about
August 5, 1999. For more information, visit its web site at
http://www.foamex.com.
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[EXECUTION COPY]
AMENDED AND RESTATED FOAMEX PLEDGE AGREEMENT
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This AMENDED AND RESTATED FOAMEX PLEDGE AGREEMENT (as amended,
supplemented, amended and restated or otherwise modified from time to time, this
"Pledge Agreement"), dated as of June 30, 1999, is made by FOAMEX, L.P., a
Delaware limited partnership (the "Pledgor"), in favor of CITICORP USA, INC., as
collateral agent (together with any successor(s) thereto in such capacity, the
"Collateral Agent") for each of the Secured Parties.
W I T N E S S E T H:
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WHEREAS, pursuant to a Credit Agreement, dated as of June 12, 1997, as
amended as of February 27, 1998, as further amended as of June 29, 1999 (as
amended, supplemented, amended and restated or modified from time to time, the
"Credit Agreement"), among Foamex L.P., a Delaware limited partnership ("Foamex"
or a "Borrower"), General Felt Industries, Inc., a Delaware corporation (a
"Borrower"; and, if together with Foamex, the "Borrowers"), Trace Foam Company,
Inc., a Delaware corporation and general partner of Foamex, FMXI, Inc., a
Delaware corporation and managing general partner of Foamex, the Lenders, the
Issuing Banks and Citicorp USA, Inc., as Collateral Agent for the Lenders and
the Issuing Banks and The Bank of Nova Scotia, as Funding Agent for the Lenders
and the Issuing Banks (together with the Collateral Agent, the "Administrative
Agents"), the Lenders and the Issuing Banks have extended Commitments to make
Credit Extensions to the Borrowers;
WHEREAS, the Pledgor has heretofore executed, in favor of the Collateral
Agent, that certain Foamex Pledge Agreement, dated as of June 12, 1997 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Existing Pledge Agreement").
WHEREAS, the Pledgor and the Collateral Agent have agreed to hereby amend
and restate the Existing Pledge Agreement;
WHEREAS, the Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
and the Issuing Banks to make Credit Extensions (including the initial Credit
Extension) to the Borrowers pursuant to the Credit Agreement, the Pledgor
agrees, for the benefit of each Secured Party, as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Borrower" and "Borrowers" are defined in the first recital.
"Collateral" is defined in Section 2.1.
"Collateral Agent" is defined in the preamble.
"Commodity Account" means an account maintained by a Commodity Intermediary
in which a Commodity Contract is carried out for a Commodity Customer.
"Commodity Contract" means a commodity futures contract, an option on a
commodity futures contract, a commodity option or any other contract that, in
each case, is (a) traded on or subject to the rules of a board of trade that has
been designated as a contract market for such a contract pursuant to the federal
commodities laws or (b) traded on a foreign commodity board of trade, exchange
or market, and as is carried on the books of a Commodity Intermediary for a
Commodity Customer.
"Commodity Customer" means a person for whom a Commodity Intermediary
carries a Commodity Contract on its books.
"Commodity Intermediary" means (a) a person who is registered as a futures
commission merchant under the federal commodities laws or (b) a person who in
the ordinary course of its business provides clearance or settlement services
for a board of trade that has been designated as a contract market pursuant to
federal commodities laws.
"Credit Agreement" is defined in the first recital.
"Credit Extensions" means the Loans and the Letters of Credit.
"Distributions" means all stock dividends, liquidating dividends, shares of
stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock or other Equity Interests constituting Collateral, but shall not
include Dividends.
"Dividends" means cash dividends and cash distributions with respect to any
Pledged Shares or other Pledged Property made in the ordinary course of business
and not a liquidating dividend.
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"Entitlement Holder" means a person identified in the records of a
Securities Intermediary as the person having a Security Entitlement against the
Securities Intermediary. If a person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the U.C.C., such person is the Entitlement
Holder.
"Financial Asset" means (a) a Security, (b) an obligation of a person or a
share, participation or other interest in a person or in property or an
enterprise of a person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another person in a Securities Account if the
Securities Intermediary has expressly agreed with the other person that the
property is to be treated as a Financial Asset under Article 8 of the U.C.C. As
the context requires, the term Financial Asset shall mean either the interest
itself or the means by which a person's claim to it is evidenced, including a
certificated or uncertificated Security, a certificate representing a Security
or a Security Entitlement.
"Investment Property" means all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts
and Commodity Accounts of the Pledgor.
"Lender" and "Lenders" are defined in the first recital.
"Pledge Agreement" is defined in the preamble.
"Pledged Note Issuing Bank" means each Person identified in Item A of
Attachment 1 hereto as the issuing bank of the Pledged Note identified opposite
the name of such Person.
"Pledged Notes" means all promissory notes of any Pledged Note Issuing Bank
substantially the form of Exhibit A hereto which are delivered by the Pledgor to
the Collateral Agent as Pledged Property hereunder, as such promissory notes, in
accordance with Section 4.5, are amended, modified or supplemented from time to
time, together with any promissory note of any Pledged Note Issuing Bank taken
in extension or renewal thereof or substitution therefor.
"Pledged Property" means all Pledged Shares, all Pledged Notes, and all
other pledged shares of capital stock or other Equity Interests or promissory
notes, all Investment Property, all other securities, all assignments of any
amounts due or to become due, all other instruments which are now being
delivered or requested to be delivered by the Pledgor to the Collateral Agent or
may from time to time hereafter be delivered or required to be delivered by the
Pledgor to the Collateral Agent for the purpose of pledge under this Pledge
Agreement or any other Loan Document, and all proceeds of any of the foregoing.
"Pledged Share Issuing Bank" means each Person identified in Item B of
Attachment 1 hereto as the issuing bank of the Pledged Shares identified
opposite the name of such Person.
"Pledged Shares" means all shares of capital stock or other Equity
Interests of any Pledged Share Issuing Bank which are delivered by the Pledgor
to the Collateral Agent as Pledged Property hereunder.
"Pledgor" is defined in the preamble.
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"Secured Obligations" is defined in Section 2.2.
"Secured Parties" means, collectively, the Lenders, the Issuing Banks, the
Administrative Agents, the Collateral Agent and the Funding Agent.
"Securities Act" is defined in Section 6.2.
"Securities" means any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c) (i) are, or are of a type,
dealt with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the U.C.C.
"Securities Account" means an account to which a Financial Asset is or may
be credited in accordance with an agreement under which the person maintaining
the account undertakes to treat the person for whom the account is maintained as
entitled to exercise rights that comprise the Financial Asset.
"Securities Intermediary" means (a) a clearing corporation or (b) a person,
including a bank or broker, that in the ordinary course of its business
maintains Securities Accounts for others and is acting in that capacity.
"Security Entitlements" means the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.
"U.C.C." means the Uniform Commercial Code, as in effect from time to time
in the State of New York.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined herein
or the context otherwise requires, terms used in this Pledge Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or the
Credit Agreement or the context otherwise requires, terms for which meanings are
provided in the U.C.C. are used in this Pledge Agreement, including its preamble
and recitals, with such meanings.
ARTICLE II
PLEDGE
SECTION 2.1. Grant of Security Interest. The Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to the
Collateral Agent, for its benefit and the ratable benefit of each of the Secured
Parties, and hereby grants to the
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Collateral Agent, for its benefit and the ratable benefit of the Secured
Parties, a continuing security interest in, all of the following property (the
"Collateral"):
(a) all promissory notes of each Pledged Note Issuing Bank identified
in Item A of Attachment 1 hereto;
(b) all other Pledged Notes issued from time to time;
(c) all issued and outstanding shares of capital stock of each Pledged
Share Issuing Bank identified in Item B of Attachment 1 hereto;
(d) all other Pledged Shares issued from time to time;
(e) all other Pledged Property, whether now or hereafter delivered or
required to be delivered to the Collateral Agent in connection with this
Pledge Agreement;
(f) all Dividends, Distributions, interest, and other payments and
rights with respect to any Pledged Property; and
(g) all proceeds of any of the foregoing.
SECTION 2.2. Security for Obligations. This Pledge Agreement secures the
payment in full in cash of all Obligations of each Borrower now or hereafter
existing under the Credit Agreement, the Notes, the Foamex Guaranty, and each
other Loan Document to which Foamex is or may become a party, whether for
principal, interest, costs, fees, expenses, or otherwise, and all obligations of
each other Obligor now or hereafter existing under each Loan Document to which
such Obligor is or may become a party (all such obligations of Foamex and such
other Obligors being the "Secured Obligations").
SECTION 3.3. Delivery of Pledged Property. All certificates or instruments
representing or evidencing any Collateral, including all Pledged Shares and all
Pledged Notes, shall be delivered to and held by or on behalf of (and, in the
case of the Pledged Notes, endorsed to the order of) the Collateral Agent
pursuant hereto, shall be in suitable form for transfer by delivery, and shall
be accompanied by all necessary instruments of transfer or assignment, duly
executed in blank.
SECTION 2.4. Dividends on Pledged Shares and Payments on Pledged Notes. In
the event that any Dividend is to be paid on any Pledged Share or any payment of
principal or interest is to be made on any Pledged Note at a time when no
Default of the nature referred to in Section 11.1(f) or 11.1(g) of the Credit
Agreement or Event of Default has occurred and is continuing, such Dividend or
payment may be paid directly to the Pledgor. If any such Default or Event of
Default has occurred and is continuing, then any such Dividend or payment shall
be paid directly to the Collateral Agent.
SECTION 2.5. Continuing Security Interest; Transfer of Note. This Pledge
Agreement shall create a continuing security interest in the Collateral and
shall
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(a) remain in full force and effect until payment in full in cash of
all Secured Obligations, the termination or expiration of all Letters of
Credit, the termination of all Commitments,
(b) be binding upon the Pledgor and its successors, transferees and
assigns, and
(c) inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Collateral Agent and each other
Secured Party.
Without limiting the foregoing clause (c), any Lender may assign or otherwise
transfer (in whole or in part) any Note or Loan held by it to any other Person
or entity, and such other Person or entity shall thereupon become vested with
all the rights and benefits in respect thereof granted to such Lender under any
Loan Document (including this Pledge Agreement) or otherwise, subject, however,
to any contrary provisions in such assignment or transfer, and to the provisions
of Article XIII of the Credit Agreement. Upon (i) the sale, transfer or other
disposition of Collateral in accordance with the Credit Agreement or (ii) the
payment in full in cash of all Secured Obligations, the termination or
expiration of all Letters of Credit and the termination of all Commitments, the
security interest granted herein shall automatically terminate with respect to
(x) such Collateral (in the case of clause (i)) or (y) all Collateral (in the
case of clause (ii)). Upon any such termination, the Collateral Agent will, at
the Pledgor's sole expense, deliver to the Pledgor, without any representations,
warranties or recourse of any kind whatsoever, all certificates and instruments
representing or evidencing all Pledged Shares and all Pledged Notes, together
with all other Collateral held by the Collateral Agent hereunder, and execute
and deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence such termination.
SECTION 2.6. Security Interest Absolute. All rights of the Collateral Agent
and the security interests granted to the Collateral Agent hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional with
respect to the Secured Obligations, irrespective of
(a) any lack of validity or enforceability of the Credit Agreement,
any Note or any other Loan Document,
(b) the failure of any Secured Party or any holder of any Note
(i) to assert any claim or demand or to enforce any right or
remedy against either Borrower, any other Obligor or any other Person
under the provisions of the Credit Agreement, any Note, any other Loan
Document or otherwise, or
(ii) to exercise any right or remedy against any other guarantor
of, or collateral securing, any Secured Obligations,
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other
extension, compromise or renewal of any Secured Obligation,
(d) any reduction, limitation, impairment or termination of any
Secured Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall
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not be subject to (and the Pledgor hereby waives any right to or claim of)
any defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Secured Obligations or otherwise,
(e) any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of the Credit Agreement,
any Note or any other Loan Document,
(f) any addition, exchange, release, surrender or non-perfection of
any collateral (including the Collateral), or any amendment to or waiver or
release of or addition to or consent to departure from any guaranty, for
any of the Secured Obligations, or
(g) any other circumstances which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Borrower, any other
Obligor, any surety or any guarantor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties, etc. The Pledgor represents
and warrants unto each Secured Party, as at the date of each pledge and delivery
hereunder (including each pledge and delivery of Pledged Shares and each pledge
and delivery of a Pledged Note) by the Pledgor to the Collateral Agent of any
Collateral, as set forth in this Article.
SECTION 3.1.1. Ownership, No Liens, etc. The Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full right
and authority to pledge and assign) such Collateral, free and clear of all
liens, security interests, options, or other charges or encumbrances, except any
lien or security interest granted pursuant hereto in favor of the Collateral
Agent.
SECTION 3.1.2. Valid Security Interest. The delivery of such Collateral to
the Collateral Agent is effective to create a valid, perfected, first priority
security interest in such Collateral and all proceeds thereof, securing the
Secured Obligations. No filing or other action will be necessary to perfect or
protect such security interest.
SECTION 3.1.3. As to Pledged Shares. In the case of any Pledged Shares
constituting such Collateral, all of such Pledged Shares are duly authorized and
validly issued, fully paid, and non-assessable, and constitute all of the issued
and outstanding shares of capital stock of each Pledged Share Issuing Bank. The
Pledgor has no Subsidiaries other than the Pledged Share Issuing Banks, except
as set forth in Item C of Attachment 1.
SECTION 3.1.4. As to Pledged Notes. In the case of each Pledged Note, all
of such Pledged Notes have been duly authorized, executed, endorsed, issued and
delivered, and are the legal, valid and binding obligation of the issuing bank
thereof, and are not in default.
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SECTION 3.1.5. Authorization, Approval, etc. No authorization, approval, or
other action by, and no notice to or filing with, any governmental authority,
regulatory body or any other Person is required either
(a) for the pledge by the Pledgor of any Collateral pursuant to this
Pledge Agreement or for the execution, delivery, and performance of this
Pledge Agreement by the Pledgor, or
(b) for the exercise by the Collateral Agent of the voting or other
rights provided for in this Pledge Agreement, or, except with respect to
any Pledged Shares, as may be required in connection with a disposition of
such Pledged Shares by laws affecting the offering and sale of securities
generally, the remedies in respect of the Collateral pursuant to this
Pledge Agreement.
SECTION 3.1.6. Compliance with Laws. The Pledgor is in compliance with the
requirements of all applicable laws (including the provisions of the Fair Labor
Standards Act), rules, regulations and orders of every governmental authority,
the non-compliance with which might have a Material Adverse Effect or materially
adversely affect the value of the Collateral or the worth of the Collateral as
collateral security.
ARTICLE IV
COVENANTS
SECTION 4.1. Protect Collateral; Further Assurances, etc. The Pledgor will
not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral (except in favor of the Collateral Agent hereunder). The Pledgor will
warrant and defend the right and title herein granted unto the Collateral Agent
in and to the Collateral (and all right, title, and interest represented by the
Collateral) against the claims and demands of all Persons whomsoever. The
Pledgor agrees that at any time, and from time to time, at the expense of the
Pledgor, the Pledgor will promptly execute and deliver all further instruments,
and take all further action, that may be necessary or desirable, or that the
Collateral Agent may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Collateral Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral.
SECTION 4.2. Stock Powers, etc. The Pledgor agrees that all Pledged Shares
(and all other shares of capital stock constituting Collateral) delivered by the
Pledgor pursuant to this Pledge Agreement will be accompanied by duly executed
undated blank stock powers, or other equivalent instruments of transfer
acceptable to the Collateral Agent. The Pledgor will, from time to time upon the
request of the Collateral Agent, promptly deliver to the Collateral Agent such
stock powers, instruments, and similar documents, satisfactory in form and
substance to the Collateral Agent, with respect to the Collateral as the
Collateral Agent may reasonably request and will, from time to time upon the
request of the Collateral Agent after the occurrence of any Event of Default,
promptly transfer any Pledged Shares or other shares of common stock
constituting Collateral into the name of any nominee designated by the
Collateral Agent.
SECTION 4.3. Continuous Pledge. The Pledgor will, at all times, keep
pledged to the Collateral Agent pursuant hereto all Pledged Shares and all other
shares of capital stock constituting Collateral, all Dividends and Distributions
with respect thereto, all Pledged Notes, all interest, principal and other
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proceeds received by the Collateral Agent with respect to the Pledged Notes, and
all other Collateral and other securities, instruments, proceeds, and rights
from time to time received by or distributable to the Pledgor in respect of any
Collateral and will not permit any Pledged Share Issuing Bank to issue any
capital stock which shall not have been immediately duly pledged hereunder on a
first priority perfected basis.
SECTION 4.4. Voting Rights; Dividends, etc. The Pledgor agrees:
(a) after any Event of Default shall have occurred and be continuing,
promptly upon receipt of notice thereof by the Pledgor and without any
request therefor by the Collateral Agent, to deliver (properly endorsed
where required hereby or requested by the Collateral Agent) to the
Collateral Agent all Dividends, Distributions, all interest, all principal,
all other cash payments, and all proceeds of the Collateral, all of which
shall be held by the Collateral Agent as additional Collateral for use in
accordance with Section 6.4; and
(b) after any Event of Default shall have occurred and be continuing
and the Collateral Agent has notified the Pledgor of the Collateral Agent's
intention to exercise its voting power under this Section 4.4(b)
(i) the Collateral Agent may exercise (to the exclusion of the
Pledgor) the voting power and all other incidental rights of ownership
with respect to any Pledged Shares or other shares of capital stock
constituting Collateral and the Pledgor hereby grants the Collateral
Agent an irrevocable proxy, exercisable under such circumstances, to
vote the Pledged Shares and such other Collateral; and
(ii) promptly to deliver to the Collateral Agent such additional
proxies and other documents as may be necessary to allow the
Collateral Agent to exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by the Pledgor but which the
Pledgor is then obligated to deliver to the Collateral Agent, shall, until
delivery to the Collateral Agent, be held by the Pledgor separate and apart from
its other property in trust for the Collateral Agent. The Collateral Agent
agrees that unless an Event of Default shall have occurred and be continuing and
the Collateral Agent shall have given the notice referred to in Section 4.4(b),
the Pledgor shall have the exclusive voting power with respect to any shares of
capital stock (including any of the Pledged Shares) constituting Collateral and
the Collateral Agent shall, upon the written request of the Pledgor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by the Pledgor which are necessary to allow the Pledgor to exercise
voting power with respect to any such share of capital stock (including any of
the Pledged Shares) constituting Collateral; provided, however, that no vote
shall be cast, or consent, waiver, or ratification given, or action taken by the
Pledgor that would impair any Collateral or be inconsistent with or violate any
provision of the Credit Agreement or any other Loan Document (including this
Pledge Agreement).
SECTION 4.5. Additional Undertakings. The Pledgor will not, without the
prior written consent of the Collateral Agent:
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<PAGE>
(a) enter into any agreement amending, supplementing, or waiving any
provision of any Pledged Note (including any underlying instrument pursuant
to which such Pledged Note is issued) or compromising or releasing or
extending the time for payment of any obligation of the maker thereof; or
(b) take or omit to take any action the taking or the omission of
which would result in any impairment or alteration of any obligation of the
maker of any Pledged Note or other instrument constituting Collateral.
ARTICLE V
THE Collateral Agent
SECTION 5.1. Collateral Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Collateral Agent the Pledgor's attorney-in-fact,
with full authority in the place and stead of the Pledgor and in the name of the
Pledgor or otherwise, from time to time in the Collateral Agent's discretion, to
take any action and to execute any instrument which the Collateral Agent may
deem necessary or advisable to accomplish the purposes of this Pledge Agreement,
including after the occurrence and continuance of a Default of the nature
referred to in Section 11.1(f) or 11.1(g) of the Credit Agreement or an Event of
Default:
(a) to ask, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above; and
(c) to file any claims or take any action or institute any proceedings
which the Collateral Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Collateral Agent with respect to any of the Collateral.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Collateral Agent May Perform. If the Pledgor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by the Pledgor pursuant to
Section 6.4.
SECTION 5.3. Collateral Agent Has No Duty. The powers conferred on the
Collateral Agent hereunder are solely to protect its interest (on behalf of the
Secured Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
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<PAGE>
possession and the accounting for moneys actually received by it hereunder, the
Collateral Agent shall have no duty as to any Collateral or responsibility for
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Property, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, or
(b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Collateral Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, the Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as the Pledgor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default, but failure of the Collateral Agent to
comply with any such request at any time shall not in itself be deemed a failure
to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Event of Default shall have occurred
and be continuing:
(a) The Collateral Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the U.C.C. (whether or not the U.C.C. applies to the affected
Collateral) and also may, without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Collateral Agent's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the
Collateral Agent may deem commercially reasonable. The Pledgor agrees that,
to the extent notice of sale shall be required by law, at least ten days'
prior notice to the Pledgor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. 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.
(b) The Collateral Agent may
(i) transfer all or any part of the Collateral into the name of
the Collateral Agent or its nominee, with or without disclosing that
such Collateral is subject to the lien and security interest
hereunder,
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<PAGE>
(ii) notify the parties obligated on any of the Collateral to
make payment to the Collateral Agent of any amount due or to become
due thereunder,
(iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof,
or compromise or extend or renew for any period (whether or not longer
than the original period) any obligations of any nature of any party
with respect thereto,
(iv) endorse any checks, drafts, or other writings in the
Pledgor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral, and
(vi) execute (in the name, place and stead of the Pledgor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral.
SECTION 6.2. Securities Laws. If the Collateral Agent shall determine to
exercise its right to sell all or any of the Collateral pursuant to Section 6.1,
the Pledgor agrees that, upon request of the Collateral Agent, the Pledgor will,
at its own expense:
(a) execute and deliver, and cause each issuing bank of the Collateral
contemplated to be sold and the directors and officers thereof to execute
and deliver, all such instruments and documents, and do or cause to be done
all such other acts and things, as may be necessary or, in the opinion of
the Collateral Agent, advisable to register such Collateral under the
provisions of the Securities Act of 1933, as from time to time amended (the
"Securities Act"), and to cause the registration statement relating thereto
to become effective and to remain effective for such period as prospectuses
are required by law to be furnished, and to make all amendments and
supplements thereto and to the related prospectus which, in the opinion of
the Collateral Agent, are necessary or advisable, all in conformity with
the requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the state
securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Collateral
Agent;
(c) cause each such issuing bank to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy
the provisions of Section 11(a) of the Securities Act; and
(d) do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law.
The Pledgor further acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by the Collateral Agent or the Secured Parties by
reason of the failure by the Pledgor to perform
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<PAGE>
any of the covenants contained in this Section and, consequently, agrees that,
if the Pledgor shall fail to perform any of such covenants, it shall pay, as
liquidated damages and not as a penalty, an amount equal to the value (as
determined by the Collateral Agent) of the Collateral on the date the Collateral
Agent shall demand compliance with this Section.
SECTION 6.3. Compliance with Restrictions. The Pledgor agrees that in any
sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, the Collateral Agent is hereby authorized to comply with any
limitation or restriction in connection with such sale as it may be advised by
counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and the Pledgor further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Collateral Agent be liable nor accountable to
the Pledgor for any discount allowed by the reason of the fact that such
Collateral is sold in compliance with any such limitation or restriction.
SECTION 6.4. Application of Proceeds. All cash proceeds received by the
Collateral Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral may, in the discretion of
the Collateral Agent be applied as set forth in Section 3.02(b)(iii) of the
Credit Agreement.
SECTION 6.5. Indemnity and Expenses. The Pledgor hereby indemnifies and
holds harmless the Collateral Agent from and against any and all claims, losses,
and liabilities arising out of or resulting from this Pledge Agreement
(including enforcement of this Pledge Agreement), except claims, losses, or
liabilities resulting from the Collateral Agent's gross negligence or wilful
misconduct. Upon demand, the Pledgor will pay to the Collateral Agent the amount
of any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which the Collateral
Agent may incur in connection with:
(a) the administration of this Pledge Agreement, the Credit Agreement
and each other Loan Document;
(b) the custody, preservation, use, or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral;
(c) the exercise or enforcement of any of the rights of the Collateral
Agent hereunder; or
(d) the failure by the Pledgor to perform or observe any of the
provisions hereof.
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<PAGE>
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION 7.2. Amendments, etc. No amendment to or waiver of any provision of
this Pledge Agreement nor consent to any departure by the Pledgor herefrom shall
in any event be effective unless the same shall be in writing and signed by the
Collateral Agent (on behalf of the Lenders or the Required Lenders, as the case
may be), and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it is given.
SECTION 7.3. Protection of Collateral. The Collateral Agent may from time
to time, at its option, perform any act which the Pledgor agrees hereunder to
perform and which the Pledgor shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of an Event of Default) and the
Collateral Agent may from time to time take any other action which the
Collateral Agent reasonably deems necessary for the maintenance, preservation or
protection of any of the Collateral or of its security interest therein.
SECTION 7.4. Addresses for Notices. All notices and other communications
provided for hereunder shall be made as set forth in Section 13.08 of the Credit
Agreement.
SECTION 7.5. Section Captions. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION 7.6. Severability. Wherever possible each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Pledge Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Pledge Agreement.
SECTION 7.7. Counterparts. This Pledge Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
SECTION 7.8. Governing Law, Entire Agreement, etc. THIS PLEDGE AGREEMENT
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS PLEDGE AGREEMENT AND THE
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<PAGE>
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
FOAMEX L.P.
By: FMXI, INC., the Managing
General Partner
By /s/ George L. Karpinski
-------------------------------
Name: George L. Karpinski
CITICORP USA, INC., as
Collateral Agent
By /s/ Shapleigh Smith
-------------------------------
Name: Shapleigh Smith
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<PAGE>
EXHIBIT A
to Amended and Restated Foamex
Pledge Agreement
PROMISSORY NOTE
$____________ ___________, ____
FOR VALUE RECEIVED, the undersigned, [Name of Maker], a _______________
__________ (the "Maker"), promises to pay to the order of ___________________, a
__________ __________ (the "Payee"), in equal ________ installments, commencing
_________, ____ to and including ___________, ___, the principal sum of DOLLARS
__________ ($______), representing the aggregate principal amount of an
intercompany loan made by the Payee to the Maker.
The unpaid principal amount of this promissory note (this "Note") from time
to time outstanding shall bear interest at a rate of interest equal to
____________, which the Maker represents to be a lawful and commercially
reasonable rate, payable __________, and all payments of principal of and
interest on this Note shall be payable in lawful currency of the United States
of America. All such payments shall be made by the Maker to an account
established by the Payee at _______________ and shall be recorded on the grid
attached hereto by the holder hereof (including the Collateral Agent as
pledgee). Upon notice from the Collateral Agent (hereinafter defined) that a
Default (as defined in the Credit Agreement, hereinafter defined) of the nature
referred to in Section 11.1(f) or 11.1(g) of the Credit Agreement or an Event of
Default (as defined in the Credit Agreement) has occurred and is continuing
under the Credit Agreement, the Maker shall make such payments, in same day
funds, to such other account as the Collateral Agent shall direct in such
notice.
This Note is one of the Pledged Notes referred to in, and evidences
Indebtedness incurred pursuant to Section 9.01 of the Credit Agreement, dated as
of June 12, 1997, as amended and restated as of February 27, 1999, as further
amended and restated as of June 29, 1999 (as amended, supplemented, amended and
restated or modified from time to time, the "Credit Agreement"), among Foamex
L.P., a Delaware limited partnership ("Foamex" or a "Borrower"), General Felt
Industries, Inc., a Delaware corporation (a "Borrower"; and, if together with
Foamex, the "Borrowers"), Trace Foam Company, Inc., a Delaware corporation and
general partner of Foamex, FMXI, Inc., a Delaware corporation and managing
general partner of Foamex, the Lenders, the Issuing Banks and Citicorp USA,
Inc., as Collateral Agent for the Lenders and the Issuing Banks and The Bank of
Nova Scotia, as Funding Agent for the Lenders and the Issuing Banks (together
with the Collateral Agent, the "Administrative Agents")], the Lenders and the
Issuing Banks have extended Commitments to make Credit Extensions to the
Borrowers. Upon the occurrence and continuance of an Event of Default under the
Credit Agreement, and notice thereof by the Collateral Agent to the Maker, the
Collateral Agent shall have all rights of the Payee to collect and accelerate,
and enforce all rights with respect to, the Indebtedness evidenced by this Note.
Unless otherwise defined herein or the context otherwise requires, terms used
herein have the meanings provided in the Credit Agreement.
Reference is made to the Credit Agreement for a description of the Pledge
Agreement pursuant to which this Note has been pledged to the Collateral Agent
as security for the Secured Obligations outstanding from time to time under the
Credit Agreement and each other Loan Document.
In addition to, but not in limitation of, the foregoing, the Maker further
agrees to pay all expenses, including reasonable attorneys' fees and legal
expenses, incurred by the holder (including the Collateral Agent as pledgee) of
this Note endeavoring to collect any amounts payable hereunder which are not
paid when due, whether by acceleration or otherwise.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS NOTE.
THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.
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<PAGE>
[NAME OF MAKER]
By
-------------------------------
Name:
Title:
Pay to the order of CITICORP USA, INC.,
as Collateral Agent
[NAME OF PAYEE]
By /s/ Shapleigh Smith
-------------------------------
Name: Shapleigh Smith
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<PAGE>
GRID
Intercompany Loans made by [Name of Payee] to [Name of Maker] and payments
of principal of such Loans.
<TABLE>
<CAPTION>
====================================================================================================================
Amount of Intercompany Amount of Principal Outstanding Principal Notation Made By
Date Loan Payment Balance
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
<S> <C> <C> <C> <C>
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
====================================================================================================================
</TABLE>
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<PAGE>
ATTACHMENT 1
to Amended and Restated Foamex
Pledge Agreement
Item A. Pledged Notes
-------------
Pledged Note Issuing Bank Description
- ------------------------- -----------
Item B. Pledged Shares
--------------
Common Stock
------------
Authorized Outstanding % of Shares
Pledged Share Issuing Bank Shares Shares Pledged
- -------------------------- ------ ------ -------
Item C. Additional Subsidiaries
-----------------------
<PAGE>
[EXECUTION COPY]
AMENDED AND RESTATED PARTNERSHIP PLEDGE AGREEMENT
-------------------------------------------------
THIS AMENDED AND RESTATED PARTNERSHIP PLEDGE AGREEMENT (this
"Partnership Pledge Agreement"), dated as of June 30, 1999, is made by FMXI,
Inc., a Delaware corporation (a "Grantor" or "FMXI") and Foamex International
Inc., a Delaware corporation (a "Grantor" or "FII"; and, if together with FMXI,
the "Grantors") in favor of Citicorp USA, Inc., as FII Intercreditor Collateral
Agent (together with any successor(s) thereto in such capacity, the "Collateral
Agent") for each of the Secured Parties (as defined below).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to that certain Credit Agreement, dated as of June
12, 1997, as amended and restated as of February 27, 1998, as further amended
and restated as of June 29, 1999 (as amended, supplemented, amended and restated
or modified from time to time, the "Credit Agreement"), among Foamex L.P., a
Delaware limited partnership ("Partnership" or the "Borrower"), FMXI, Inc.,
certain institutions party thereto from time to time as lenders (the "Lenders"),
certain institutions party thereto from time to time as issuing banks (the
"Issuing Banks"), Citicorp USA, Inc., as collateral agent for the Lenders and
the Issuing Banks, and The Bank of Nova Scotia, as Funding Agent for the Lenders
and the Issuing Banks (together with the collateral agent therein, the
"Administrative Agents"), the Lenders and the Issuing Banks have extended Loans
and Commitments to make Credit Extensions to the Borrower;
WHEREAS, FII has heretofore entered into a guaranty, dated as of
February 27, 1998 (the "FII Guaranty"), pursuant to which it has guaranteed
certain obligations of New GFI;
WHEREAS, the Collateral Agent has heretofore entered into the FII
Intercreditor Agreement, dated as of February 27, 1998 (as amended,
supplemented, amended and restated or modified from time to time, the "FII
Intercreditor Agreement"), pursuant to which it has agreed to act as a
collateral agent (the "FII Intercreditor Collateral Agent") with respect to,
among other things, the Collateral;
WHEREAS, the Grantors have heretofore executed, in favor of the
Collateral Agent, that certain Partnership Pledge Agreement, dated as of
February 27, 1998 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Existing Pledge Agreement").
WHEREAS, the Grantors and the Collateral Agent have agreed to hereby
amend and restate the Existing Pledge Agreement.
<PAGE>
WHEREAS, each Grantor has duly authorized the execution, delivery and
performance of this Partnership Pledge Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, each Grantor agrees, for the benefit of each
Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Partnership Pledge Agreement, including its
preamble and recitals, shall have the following meanings (such definitions to be
equally applicable to the singular and plural forms thereof):
"Administrative Agents" is defined in the first recital.
"Collateral" is defined in Section 2.1.
"Collateral Agent" is defined in the preamble.
"Commodity Account" means an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" means a commodity futures contract, an option on a
commodity futures contract, a commodity option or any other contract that, in
each case, is (a) traded on or subject to the rules of a board of trade that has
been designated as a contract market for such a contract pursuant to the federal
commodities laws or (b) traded on a foreign commodity board of trade, exchange
or market, and as is carried on the books of a Commodity Intermediary for a
Commodity Customer.
"Commodity Customer" means a person for whom a Commodity Intermediary
carries a Commodity Contract on its books.
"Commodity Intermediary" means (a) a person who is registered as a
futures commission merchant under the federal commodities laws or (b) a person
who in the ordinary course of its business provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities laws.
"Credit Agreement" is defined in the first recital.
"Credit Extensions" means the Loans and Letters of Credit.
"Entitlement Holder" means a person identified in the records of a
Securities Intermediary as the person having a Security Entitlement against the
Securities Intermediary. If a person acquires a Security Entitlement by virtue
of Section 8-
-2-
<PAGE>
501(b)(2) or (3) of the U.C.C., such person is the Entitlement Holder.
"FII" is defined in the preamble.
"FII Guaranty" is defined in the second recital.
"FII Intercreditor Agreement" is defined in the third recital.
"FII Intercreditor Collateral Agent" is defined in the third recital.
"Financial Asset" means (a) a Security, (b) an obligation of a person
or a share, participation or other interest in a person or in property or an
enterprise of a person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another person in a Securities Account if the
Securities Intermediary has expressly agreed with the other person that the
property is to be treated as a Financial Asset under Article 8 of the U.C.C. As
the context requires, the term Financial Asset shall mean either the interest
itself or the means by which a person's claim to it is evidenced, including a
certificated or uncertificated Security, a certificate representing a Security
or a Security Entitlement.
"FMXI" is defined in the preamble.
"Grantor" and "Grantors" are defined in the preamble.
"Investment Property" means all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts
and Commodity Accounts of the Grantor.
"Issuing Banks" is defined in the first recital.
"Lenders" is defined in the first recital.
"New GFI Intercreditor Collateral Agent" means the collateral agent
appointed pursuant to the New GFI Intercreditor Agreement, dated as of February
27, 1998.
"Partnership" is defined in the first recital.
"Partnership Pledge Agreement" is defined in the preamble.
"Secured Obligations" is defined in Section 2.2.
"Secured Parties" means, collectively, (i) the Lenders, the Issuing
Banks, the Administrative Agents, the Collateral Agent, the Funding Agent and
any Lender in its capacity as a
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<PAGE>
counterparty to a Hedging Obligation, (ii) the New GFI Intercreditor Collateral
Agent, (iii) the FII Intercreditor Collateral Agent and (iv) each holder of a
Guaranteed Obligation (as defined in the FII Guaranty).
"Securities" means any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c) (i) are, or are of a type,
dealt with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the U.C.C.
"Securities Account" means an account to which a Financial Asset is or
may be credited in accordance with an agreement under which the person
maintaining the account undertakes to treat the person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
"Securities Intermediary" means (a) a clearing corporation or (b) a
person, including a bank or broker, that in the ordinary course of its business
maintains Securities Accounts for others and is acting in that capacity.
"Security Entitlements" means the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.
"U.C.C." means the Uniform Commercial Code, as in effect in the State
of New York.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Partnership Pledge
Agreement, including its preamble and recitals, have the meanings provided in
the Credit Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the U.C.C.
are used in this Partnership Pledge Agreement, including its preamble and
recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security. As collateral security for the payment
and performance of the Secured Obligations, each Grantor hereby grants, pledges,
hypothecates, assigns, charges,
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mortgages, delivers and transfers to the Collateral Agent for its benefit and
the ratable benefit of each of the other Secured Parties a continuing security
interest in all right, title and interest of such Grantor, whether now existing
or hereafter arising or acquired, in, to and under the Partnership Agreement,
including, without limitation, such Grantor's rights, now existing or hereafter
arising or acquired, to receive from time to time its share of profits, income,
surplus, compensation, return of capital, distributions and other reimbursements
and payments from the Partnership (including, without limitation, specific
properties of the Partnership upon dissolution and otherwise), in respect of any
and all of the following (the "Collateral"):
(a) all general or limited partnership interests now owned or
hereafter acquired by such Grantor in the Partnership as a result of
exchange offers, direct investments or contributions or otherwise;
(b) such Grantor's accounts, general intangibles and other
rights to payment or reimbursement, now existing or hereafter arising
or acquired, from its ownership of an interest in the Partnership;
(c) all Investment Property now owned or hereafter acquired by
any Grantor relating to its ownership interest in the Partnership; and
(d) the proceeds of and from any and all of the foregoing.
SECTION 2.2. Security for Obligations. This Partnership Pledge
Agreement secures the payment of (i) all obligations of each Grantor now or
hereafter existing under the Credit Agreement, the Partnership Guaranty, the
Foamex International Guaranty and each other Loan Document to which such Grantor
is or may become a party, (ii) all Obligations of the Borrower now or hereafter
existing under the Credit Agreement and each other Loan Document to which the
Borrower is or may become a party, (iii) all other obligations of each other
Obligor now or hereinafter existing under each Loan Document to which such other
Obligor is or may become a party, whether for principal, interest, costs, fees,
expenses or otherwise and (iv) all obligations of FII under the FII Guaranty
(all such Obligations of such Grantor, FII and all such obligations the Borrower
and such other Obligor being the "Secured Obligations").
SECTION 2.3. Continuing Security Interest; Transfer of Notes. This
Partnership Pledge Agreement shall create a continuing security interest in the
Collateral and shall
(a) remain in full force and effect until payment in full of
all Secured Obligations;
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(b) be binding upon each Grantor, their respective successors,
transferees and assigns, and
(c) inure, together with the rights and remedies of the
Secured Parties hereunder, to the benefit of the Secured Parties.
Without limiting the generality of the foregoing clause (c), any Secured Party
may assign or otherwise transfer (in whole or in part) any Secured Obligation
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all the rights and benefits in respect thereof
granted to such Secured Party under any Secured Obligation (including this
Security Agreement) or otherwise, subject, however, to any contrary provisions
in such assignment or transfer. Upon the payment in full in cash of all Secured
Obligations, the termination or expiration of all Letters of Credit, the
termination of all Commitments and the termination of the FII Guaranty, the
security interest granted herein shall terminate and all rights to the
Collateral shall revert to the respective Grantor. Upon any such termination,
the Collateral Agent will, at each Grantor's sole expense, execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination. Upon any sale or other transfer of Collateral
permitted by the terms of the Credit Agreement, the security interest created
hereunder in such Collateral (but not in the proceeds thereof) shall be deemed
to be automatically released and the Collateral Agent will, at each Grantor's
sole expense, execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence such release.
SECTION 2.4. Each Grantor Remains Liable. Anything herein to the
contrary notwithstanding
(a) each Grantor shall remain liable under the Partnership
Agreement to the extent set forth therein and shall perform all of its
duties and obligations under the Partnership Agreement to the same
extent as if this Partnership Pledge Agreement had not been executed;
(b) the exercise by any Secured Party of any of its rights
hereunder shall not release any Grantor from any of its respective
duties or obligations under the Partnership Agreement; and
(c) the Secured Parties shall not have any obligation or
liability under the Partnership Agreement by reason of this Partnership
Pledge Agreement, nor shall the Secured Parties be obligated to perform
any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned
hereunder.
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SECTION 2.5. Security Interest Absolute. All rights of the Secured
Parties and the security interests granted to the Secured Parties hereunder, and
all obligations of each Grantor hereunder, shall be absolute and unconditional,
irrespective of
(a) any lack of validity or enforceability of any Loan
Document or the FII Guaranty;
(b) the failure of any Secured Party
(i) to assert any claim or demand or to enforce any
right or remedy against the Partnership, any other Obligor or
any other Person under the provisions of any Loan Document,
the FII Guaranty or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any of the Secured
Obligations;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations or any
other extension, compromise or renewal of any Secured Obligations;
(d) any reduction, limitation, impairment or termination of
any Secured Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject
to (and each Grantor hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Secured Obligations;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
any Loan Document or the FII Guaranty;
(f) any addition, exchange, release, surrender or
non-perfection of any collateral (including the Collateral), or any
amendment to or waiver or release of or addition to or consent to
departure from any guaranty, for any of the Secured Obligations; or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the
Partnership, any other Obligor, any surety or any guarantor.
SECTION 2.6. Postponement of Subrogation. Each Grantor agrees that it
will not exercise any rights which it may acquire by way of subrogation under
this Partnership Pledge Agreement, by any payment made hereunder or otherwise,
until the prior payment, in full and in cash, of all Obligations of the Borrower
and each
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other Obligor, the termination or expiration of all Letters of Credit and the
termination of all Commitments and the FII Guaranty. Any amount paid to each
Grantor on account of any such subrogation rights prior to the payment in full
of all Obligations of the Borrower and each other Obligor, the termination or
expiration of all Letters of Credit and the termination of all Commitments and
the FII Guaranty shall be held in trust for the benefit of the Secured Parties
and shall immediately be paid to the Collateral Agent and credited and applied
against the Obligations of the Borrower and each other Obligor, whether matured
or unmatured, in accordance with the terms of the Credit Agreement; provided,
however, that if
(a) any Grantor has made payment to the Secured Parties of all
or any part of the Obligations of the Borrower or any other Obligor,
and
(b) all Obligations of the Borrower and each other Obligor
have been paid in full, all Letters of Credit have expired or been
terminated and all Commitments and the FII Guaranty have been
terminated,
each Secured Party agrees that, at such Grantor's request, the Secured Parties
will execute and deliver to such Grantor appropriate documents (without recourse
and without representation or warranty) necessary to evidence the transfer by
subrogation to such Grantor of an interest in the Secured Obligations resulting
from such payment by such Grantor. In furtherance of the foregoing, for so long
as any Secured Obligations, Letters of Credit, Commitments or the FII Guaranty
remain outstanding, each Grantor shall refrain from taking any action or
commencing any proceeding against the Borrower or any other Obligor (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in the respect of payments made under this
Partnership Pledge Agreement to any Secured Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. Each Grantor represents
and warrants to each Secured Party as set forth in this Article.
SECTION 3.1.1. Filing. No presently effective Uniform Commercial Code
financing statement (other than any which may have been filed for the benefit of
the Secured Parties) covering any of the Collateral is on file in any public
office.
SECTION 3.1.2. Ownership of Collateral. Such Grantor is and will be the
lawful owner of all Collateral owned by such Grantor, free and clear of all
Liens and claims whatsoever, other than the security interest hereunder, and has
full power and
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authority to execute this Partnership Pledge Agreement and perform such
Grantor's obligations hereunder, and to subject the Collateral to the security
interest hereunder.
SECTION 3.1.3. Validity, etc. Such Grantor has furnished to the Secured
Parties a true and correct copy of the Partnership Agreement and all amendments
thereto, which Partnership Agreement, as so amended, constitutes the valid,
binding and enforceable obligations of such Grantor, sets forth the entire
agreement of the parties thereto with respect to the subject matter thereof, has
not been further amended or modified and remains in full force and effect.
SECTION 3.1.4. Partnership Interests, Profits. The character (general
and/or limited partner) of such Grantor's interest in the Partnership, and such
Grantor's percentage interest in the Partnership's profits (with profit
interests as a general and as a limited partner separately stated) are as set
forth in Schedule I hereto (with such changes thereto as are expressly permitted
by the Credit Agreement or as otherwise consented to in writing by the
Collateral Agent). Except as expressly permitted by the Credit Agreement, no
changes in any Grantor's percentage interest in the Partnership or the
Partnership's profits shall be made without the prior written consent of the
Collateral Agent.
SECTION 3.1.5. Certificate. No interest of such Grantor in the
Partnership is represented by a certificate of interest or similar instrument,
except such certificates or instruments, if any, as have been delivered to the
Collateral Agent and are held in its possession (and such Grantor covenants and
agrees that any such certificates or instruments hereafter received by such
Grantor with respect to any of the Collateral will be promptly delivered to the
Collateral Agent).
SECTION 3.1.6. Performance of Obligations. Such Grantor has
substantially performed all of its respective obligations to date under the
Partnership Agreement and has not received notice of the failure of any other
party thereto to perform substantially its obligations thereunder.
SECTION 3.1.7. Location, Records, etc. The place(s) of business and
chief executive office of such Grantor and the office(s) where such Grantor
keeps its records concerning the Collateral are located at the addresses
specified in Schedule II hereto. Such Grantor has no trade name nor has such
Grantor been known by any legal name different from the one set forth on the
signature page hereto.
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ARTICLE IV
COVENANTS
SECTION 4.1. Certain Covenants. Each Grantor covenants and agrees that,
so long as any portion of the Secured Obligations shall remain unpaid, such
Grantor will, unless the Requisite Lenders shall otherwise consent in writing,
perform the obligations set forth in this Section.
SECTION 4.1.1. Maintenance of Records. Subject to the provisions of
Section 4.1.2 hereof, such Grantor will keep, at its address indicated on
Schedule II hereto, all its records concerning the Collateral, which records
will be of such character as will enable the Collateral Agent or its designees
to determine at any time the status thereof.
SECTION 4.1.2. Notice of Change of Address, etc. Such Grantor will
furnish notice in writing to the Collateral Agent, as soon as practicable and in
any event within five days after the occurrence and during the continuance from
time to time of any change in the address of such Grantor's location (as
described on Schedule II hereto) or in the name of such Grantor.
SECTION 4.1.3. Information. Such Grantor will furnish the Collateral
Agent such information concerning the Collateral as the Collateral Agent may
from time to time reasonably request, and permit the Collateral Agent and its
designees from time to time to inspect, audit and make copies of and extracts
from all records and all other papers in the possession of such Grantor which
pertain to the Collateral, and, upon request of the Collateral Agent (which may
be made only on and after the occurrence of an Event of Default), deliver to the
Collateral Agent all of such original records and papers.
SECTION 4.1.4. Amendment of Partnership Agreement. Such Grantor will
provide the Collateral Agent, not less than ten days prior to entering into the
same, a copy of any amendment or supplement to, or modification or waiver of,
any term or provision of the Partnership Agreement, provided that none of the
Grantors will enter into any such amendment, supplement or modification, or
execute any such waiver, except as permitted by the terms of the Credit
Agreement.
SECTION 4.1.5. Notice of Litigation. Such Grantor will notify the
Collateral Agent of the institution of any litigation or governmental proceeding
against or affecting any of the Collateral, to the extent and as soon as
practicable after such Grantor shall have knowledge thereof.
SECTION 4.1.6. Withdrawal from Partnership. Such Grantor will not,
without the express written consent of the Collateral Agent and the Lenders,
actively cause itself to withdraw as a
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general partner or limited partner, as the case may be, of the Partnership.
SECTION 4.1.7. Notice of Dissolution. Such Grantor will notify the
Collateral Agent in writing promptly upon learning of the occurrence of any
event which is reasonably likely to cause termination and/or dissolution of The
Partnership.
SECTION 4.1.8. Liens. No Grantor shall
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral; or
(b) create or suffer to exist any Lien upon or with respect to
any of the Collateral to secure Indebtedness of any Person or entity,
except for the security interest created by this Partnership Pledge
Agreement and as permitted by the Credit Agreement or the FII Guaranty.
SECTION 4.1.9. Further Assurances, etc. Such Grantor agrees that, from
time to time at its own expense, such Grantor will promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Collateral Agent may reasonably request, in
order to perfect, preserve and protect any security interest granted or
purported to be granted hereby or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, such Grantor will
(a) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Collateral Agent
may request, in order to perfect and preserve the security interests
and other rights granted or purported to be granted to the Collateral
Agent hereby; and
(b) furnish to the Collateral Agent, from time to time at the
Collateral Agent's request, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Collateral Agent may reasonably
request, all in reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
such Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of such Grantor where permitted
by law. A photographic or other reproduction of this Partnership Pledge
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.
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SECTION 4.1.10. Transfer of Interests. Such Grantor agrees that it will
not transfer, sell or otherwise dispose of an interest in the Partnership if (i)
a Change of Control would occur as a result of such transfer, sale or other
disposition or (ii) an Event of Default shall have occurred and be continuing at
the time of the consummation of such transfer, sale or other disposition or an
Event of Default would be caused thereby. Such Grantor shall cause each
transferee of such Grantor of an interest in the Partnership to agree in writing
in form and substance satisfactory to the Collateral Agent that (i) such
transferee will not further transfer, sell or otherwise dispose of such an
interest if such transfer, sale, or other disposition would cause an Event of
Default under the Credit Agreement, (ii) such transferee shall cause each of its
subsequent transferees to agree in writing to comply with the obligation set
forth in the preceding clause (i) and (iii) such transferee shall become a party
hereto by executing and delivering to the Collateral Agent a counterpart of this
Partnership Pledge Agreement.
ARTICLE V
THE COLLATERAL AGENT
SECTION 5.1. Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Collateral Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, if an Event of Default shall have
occurred and be continuing, from time to time in the Collateral Agent's
discretion, to take any action and to execute any instrument which the
Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Partnership Pledge Agreement, including, without limitation:
(a) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above;
(c) to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce the
rights of the Secured Parties with respect to any of the Collateral;
and
(d) to perform the affirmative obligations of such Grantor
hereunder.
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Each Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Collateral Agent May Perform. If any Grantor fails to
perform any agreement contained herein, after the occurrence of an Event of
Default the Collateral Agent may itself perform, or cause performance of, such
agreement, and the expenses of the Collateral Agent incurred in connection
therewith shall be payable by such Grantor pursuant to Section 6.2.
SECTION 5.3. Collateral Agent Has No Duty. In addition to, and not in
limitation of, Section 2.4, the powers conferred on the Collateral Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining to
any Collateral.
SECTION 5.4. Reasonable Care. The Collateral Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, the Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
of the Collateral, if it takes such action for that purpose as any Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure of the Collateral
Agent to comply with any such request at any time shall not in itself be deemed
a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Event of Default shall have
occurred and be continuing the Collateral Agent may exercise from time to time
any rights and remedies available to it under applicable law. Without limiting
the foregoing, upon the occurrence and continuance of an Event of Default, the
Collateral Agent may, to the fullest extent permitted by applicable law, without
notice, advertisement, hearing or process of law of any kind, (x) sell any or
all of the Collateral, free of all rights and claims of each Grantor therein and
thereto at any public or private sale or broker's board, and (y) bid for and
purchase any or all of the Collateral at any such public or private sale or
broker's board. Any notification of intended disposition of any of the
Collateral required by law shall be deemed reasonably and properly given if
given at least ten days (or such longer period required by law) before such
disposition. Each Grantor agrees that in any sale of the Collateral after an
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Event of Default (where such Collateral may be deemed to constitute a security),
the Collateral Agent is hereby authorized to comply with any limitation or
restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law or in order to
obtain any required approval of the purchaser by any Regulatory Authority, and
each Grantor further agrees that such compliance shall not result in such sale
being considered or deemed not to have been made in a commercially reasonable
manner. Any proceeds of any disposition of any of the Collateral shall be
applied, by the Collateral Agent, first, in accordance with Section 3.02(b)(iii)
of the Credit Agreement, and second, without duplication, after payment in full
in cash or cash equivalents of all Secured Obligations under the Credit
Agreement and each other Loan Document, to the FII Intercreditor Collateral
Agent for payment to the holders of all other Secured Obligations, pro rata.
SECTION 6.2. Indemnity and Expenses.
(a) Each Grantor jointly and severally agrees to indemnify the
Collateral Agent and each Secured Party from and against any and all
claims, losses and liabilities arising out of or resulting from this
Partnership Pledge Agreement (including, without limitation,
enforcement of this Partnership Pledge Agreement), except claims,
losses or liabilities resulting from the Collateral Agent's or such
Secured Party's gross negligence or willful misconduct.
(b) Each Grantor will upon demand pay to the Collateral Agent
the amount of any and all reasonable expenses, including the reasonable
fees and disbursements of its counsel and of any experts and agents,
which the Collateral Agent may incur in connection with
(i) the administration of this Partnership Pledge
Agreement,
(ii) the custody, preservation, use or operation of,
or the sale of, collection from, or other realization upon,
any of the Collateral,
(iii) the exercise or enforcement of any of the
rights of the Collateral Agent hereunder, or
(iv) the failure by any of the Grantors to perform or
observe any of the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Partnership Pledge Agreement is a Loan
Document and shall (unless otherwise
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expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions thereof.
SECTION 7.2. Amendments; etc. No amendment to or waiver of any
provision of this Partnership Pledge Agreement nor consent to any departure by
any Grantor herefrom, shall in any event be effective unless the same shall be
in writing and signed by the Collateral Agent, with the consent of the Requisite
Lenders, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 7.3. Notices. All notices and other communications provided for
hereunder 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. For the purposes
hereof, the address of each Grantor shall be the address specified on the
signature page of such Grantor hereto, or at such other address as may be
designated by such Grantor in a written notice to the Collateral Agent.
SECTION 7.4. Section Captions. Section captions used in this
Partnership Pledge Agreement are for convenience of reference only, and shall
not affect the construction of this Partnership Pledge Agreement.
SECTION 7.5. Severability. Wherever possible each provision of this
Partnership Pledge Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Partnership Pledge Agreement shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Partnership Pledge Agreement.
SECTION 7.6. Certain Consents and Waivers of the Grantors.
SECTION 7.6.1. Personal Jurisdiction. EACH GRANTOR 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 IN CONNECTION WITH THIS
PARTNERSHIP PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT TO WHICH SUCH GRANTOR IS
A PARTY, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND SUCH GRANTOR 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.
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EACH GRANTOR IRREVOCABLY DESIGNATES AND APPOINTS CORPORATION SERVICE COMPANY, 15
COLUMBUS CIRCLE, NEW YORK, NEW YORK 10023, AS ITS AGENT (THE "PROCESS AGENT")
FOR SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT, SUCH
SERVICE BEING HEREBY ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. EACH GRANTOR 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 GRANTOR WAIVES
IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE.
EACH GRANTOR AGREES THAT THE COLLATERAL AGENT SHALL HAVE THE RIGHT TO
PROCEED AGAINST SUCH GRANTOR 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 SECURED OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE ADMINISTRATIVE
AGENTS, ANY LENDER OR ANY ISSUING BANK. EACH GRANTOR WAIVES ANY OBJECTION THAT
IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE COLLATERAL AGENT MAY
COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
SECTION 7.6.2. Service of Process. EACH GRANTOR 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 SUCH GRANTOR'S NOTICE ADDRESS SPECIFIED
BELOW, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. EACH
GRANTOR 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 PARTNERSHIP PLEDGE 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 ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 7.7. Governing Law, Entire Agreement, etc. THIS PARTNERSHIP
PLEDGE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY
OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR ITEM OF COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS PARTNERSHIP PLEDGE AGREEMENT
AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO OTHER THAN THE PARTNERSHIP
PLEDGE AGREEMENT (AS DEFINED IN THE EXISTING CREDIT AGREEMENT). THE INTENT OF
THE PARTIES IS TO AMEND AND RESTATE THE OBLIGATIONS OF
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THE GRANTORS THEREUNDER AND NOT TO AFFECT THE LIENS GRANTED THEREBY INCLUDING,
WITHOUT LIMITATION, THE PRIORITY OR PERFECTION THEREOF.
SECTION 7.8. Waiver of Jury Trial. THE COLLATERAL AGENT AND EACH
GRANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS PARTNERSHIP PLEDGE AGREEMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF THE COLLATERAL AGENT OR SUCH GRANTOR. EACH GRANTOR
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
SECURED PARTIES ENTERING INTO THE LOAN DOCUMENTS TO WHICH THEY ARE A PARTY.
SECTION 7.9. Conflicts. In the event of any conflict between the terms
of this Partnership Pledge Agreement and the FII Intercreditor Agreement, the
terms of the FII Intercreditor Agreement shall govern.
IN WITNESS WHEREOF, each Grantor has caused this Partnership Pledge
Agreement to be duly executed and delivered by its respective authorized officer
thereunto duly authorized as of the date first above written.
FMXI, Inc.
Foamex International Inc.
By /s/ George L. Karpinski
----------------------------------
Name: George L. Karpinski
Title: Vice President
1000 Columbia Avenue
Linwood, Pennsylvania 19061
Attn: Kenneth R. Fuette
Telecopier: 610-859-3085
Amended and Restated Partnership
Pledge Agreement
CITICORP USA, INC., as
Collateral Agent
By /s/ Shapleigh Smith
----------------------------------
Name: Shapleigh Smith
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<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Grantor Grantor's Interest in the Partnership
- ------- -------------------------------------
Percentage Type
---------- ----
<S> <C>
FMXI 2% General Partner
FII 98% Limited Partner
</TABLE>
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
Address of Chief Address of
Executive Office and location of records
Grantor's Name Place(s) of Business concerning Collateral
- -------------- -------------------- ---------------------
<S> <C> <C>
FMXI, Inc. 1000 Columbia Avenue 1000 Columbia Avenue
Linwood, Pennsylvania 19061 Linwood, Pennsylvania 19061
Foamex International, Inc. 1000 Columbia Avenue 1000 Columbia Avenue
Linwood, Pennsylvania 19061 Linwood, Pennsylvania 19061
</TABLE>
<PAGE>
[EXECUTION COPY]
================================================================================
CREDIT AGREEMENT
Dated as of June 12, 1997,
as amended and restated as of February 27, 1998
as further amended and restated as of June 29, 1999
among
FOAMEX L.P.
FMXI, INC.
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS ISSUING BANKS
and
CITICORP USA, INC.
and
THE BANK OF NOVA SCOTIA
as Administrative Agents
================================================================================
<PAGE>
CREDIT AGREEMENT
This CREDIT AGREEMENT dated as of June 12, 1997, as amended and restated as
of February 27, 1998 as further amended and restated as of June 29, 1999 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, this "Agreement") is entered into among Foamex L.P., a Delaware limited
partnership ("Foamex" or the "Borrower"), FMXI, Inc., a Delaware corporation and
managing general partner of Foamex ("FMXI"), the institutions from time to time
a party hereto as Lenders, whether by execution of the Existing Credit Agreement
and/or 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, Citicorp USA, Inc., a Delaware
corporation ("Citicorp"), in its capacity as the 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").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS the Borrower has obtained from the Lenders Term Loans in the
aggregate principal amount of $320,000,000;
WHEREAS, subject to the terms of this Agreement, the Borrower has obtained
from the Lenders a Commitment (to include availability for Revolving Loans,
Swing Loans and Letters of Credit) pursuant to which Borrowings of Revolving
Loans and Swing Loans, in a maximum aggregate principal amount (together with
all Letter of Credit Obligations) not to exceed $200,000,000 will be made to the
Borrower from time to time prior to the Revolving Loan Commitment Termination
Date (provided, that the aggregate outstanding principal amount of such Swing
Loans, Revolving Loans and Letter of Credit Obligations at any time shall not
exceed the then existing Revolving Loan Commitment Amount) with all the proceeds
of the Credit Extensions to be used for the purposes specified in Sections
2.01(d); and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to amend and restate the
Existing Credit Agreement as provided herein;
NOW, THEREFORE, in consideration of the above premises each of the
Borrower, FMXI, the Lenders, the Issuing Banks and the Administrative Agents
agree as follows:
ARTICLE I
DEFINITIONS
<PAGE>
1.01 Certain Defined Terms. The following terms used in this Agreement
(including the preamble and the recitals hereto) 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 (x) Indebtedness of another Person
or (y) any other obligation or liability of another Person which is not a Credit
Party, 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. The Supply Agreement shall not be deemed to be an Accommodation
Obligation.
"Administrative Agents" has the meaning ascribed to such term in the
preamble and their respective successors pursuant to Section 12.07.
"Administrative Services Agreement" means the administrative services
agreement, dated as of February 27, 1998, between the Borrower and GFI and
assigned to New GFI, as such agreement may be amended, supplemented or modified
from time to time.
"Affiliate", as applied to any Person, means any other Person that directly
or indirectly controls, is controlled by, or 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 Second Amendment to Credit Agreement and
Certain Loan Documents, dated as of February 27,
-2-
<PAGE>
1998, among the parties to the Existing Credit Agreement and Foamex
International.
"Applicable Commitment Fee Margin" means at all times .50%.
"Applicable Lending Office" means, with respect to a particular Lender, its
LIBO Rate Lending Office in respect of provisions relating to LIBO Rate Loans
and its Domestic Lending Office in respect of provisions relating to Base Rate
Loans.
"Applicable Margin" means at all times as follows:
(a) with respect to the unpaid principal amount of each Revolving Loan
maintained as a Base Rate Loan: 2.25%;
(b) with respect to the unpaid principal amount of each Revolving Loan
maintained as a LIBO Rate Loan: 3.25%;
(c) with respect to the unpaid principal amount of each Term B Loan
maintained as a Base Rate Loan: 2.50%;
(d) with respect to the unpaid principal amount of each Term B Loan
maintained as a LIBO Rate Loan: 3.50%;
(e) with respect to the unpaid principal amount of each Term C Loan
maintained as a Base Rate Loan: 2.75%;
(f) with respect to the unpaid principal amount of each Term C Loan
maintained as a LIBO Rate Loan: 3.75%;
(g) with respect to the unpaid principal amount of each Term D Loan
maintained as a Base Rate Loan: 2.875%; and
(h) with respect to the unpaid principal amount of each Term D Loan
maintained as a LIBO Rate Loan: 3.875%.
Notwithstanding the foregoing, if the Total Net Debt to EBDAIT Ratio for
any Fiscal Quarter commencing with the last Fiscal Quarter of Fiscal Year 1999
is equal to or greater than 5.00:1, then the Applicable Margin for all Loans
shall be increased by .25% for the succeeding Fiscal Quarter - plus an
additional .25% for each consecutive succeeding Fiscal Quarter immediately
succeeding such Fiscal Quarter (but not prior to the last Fiscal Quarter of
Fiscal Year 1999) with respect to which the Total Net Debt to EBDAIT Ratio is
equal to or greater than 5.00:1; provided, however, that if such Total Net Debt
to EBDAIT Ratio subsequently decreases to less than 5.00:1, the Applicable
Margin for each Loan shall be readjusted to equal the Applicable Margin in
effect for such Loan prior to any such increases in paragraphs (a) through (h)
as set forth above.
The Total Net Debt to EBDAIT Ratio used to compute the
Applicable Margin for Loans following the Effective Date shall be
the Total Net Debt to EBDAIT Ratio set forth in the Compliance
-3-
<PAGE>
Certificate most recently delivered by the Borrower to the Administrative
Agents; changes in the Applicable Margin for Loans resulting from changes in the
Total Net Debt to EBDAIT Ratio, shall become effective as to all Loans upon
delivery by the Borrower to the Administrative Agents of a new Compliance
Certificate pursuant to Section 7.01(d)(ii); provided, however, that with
respect to the Compliance Certificate so delivered in respect of the last Fiscal
Quarter of Fiscal Year 1999 any change in Applicable Margin shall take effect as
of January 1, 2000. If the Borrower shall fail to deliver a Compliance
Certificate within 50 days after the end of any Fiscal Quarter (or within 95
days, in the case of the last Fiscal Quarter of the Fiscal Year) as required
pursuant to Section 7.01(d)(ii), the Total Net Debt to EBDAIT Ratio shall be
deemed to be in excess of 5.00:1.00 from and including the 51st (or 96th, as the
case may be) day after the end of such Fiscal Quarter to but not including the
date the Borrower delivers to the Administrative Agents a Compliance
Certificate. Any change in the Applicable Margin for Loans shall be effective as
of the effective date of any such change in such Applicable Margin with respect
to any Loans then outstanding other than for the Compliance Certificate
delivered for the last Fiscal Quarter of the 1999 Fiscal Year.
"Assignment and Acceptance" means an Assignment and Acceptance attached
hereto and made a part hereof (with blanks appropriately completed) delivered to
the Administrative Agents in connection with an assignment of a Lender's
interest under this Agreement in accordance with the provisions of Section
13.01.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
ss.ss. 101 et seq.), as amended from time to time, and any successor statute.
"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 higher of:
(a) the rate of interest announced publicly by the Funding Agent in
New York, New York from time to time, as the Funding Agent's base rate; and
(b) 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).
"Beneficial Owner" means "beneficial owner" as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act; provided, however, that (i) a
person shall not be deemed to have beneficial ownership of securities subject to
a stock purchase
-4-
<PAGE>
agreement, merger agreement, or similar agreement until the consummation of the
transactions contemplated by such agreement, and (ii) for purposes of
determining beneficial ownership of Voting Stock of the Borrower, stockholders
of Foamex International shall be deemed to beneficially own a percentage of
Voting Stock of the Borrower equal to their percentage beneficial ownership of
Voting Stock of Foamex International multiplied by Foamex International's
beneficial ownership of Voting Stock of the Borrower.
"Benefit Plan" means a defined benefit plan as defined in Section 3(35) of
ERISA (other than a Multiemployer Plan) in respect of which the 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 and which is subject to Title IV
of ERISA.
"Board of Directors" means the Board of Directors of the Managing General
Partner, on behalf of the Borrower or any of its Subsidiaries or any authorized
committee of the Board of Directors.
"Borrower" 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.
"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 LIBO 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 each Business Plan of the Borrower and its
Subsidiaries delivered after the Effective Date to the Administrative Agents
pursuant to Section 7.01(f).
"Capital Expenditures" means, for any period, the aggregate of all
expenditures of the Borrower 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 the Borrower 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 the Borrower and its Subsidiaries and (B)
expenditures for Equipment which is purchased simultaneously with the trade-in
of existing Equipment owned by either the Borrower or any of its Subsidiaries,
to the extent the gross purchase price of the
-5-
<PAGE>
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 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.
"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 named "CUSA
f/a/o Foamex L.P. Cash Collateral Account" Account No.: 4067-3998 maintained at
Citibank's offices in New York, New York in which Cash Collateral of any Credit
Party 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 (a) 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; (b) 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 Ratings Services, a
division of the McGraw Hill Corporation, or P-1 (or better) by Moody's Investors
Service, Inc.; and (c) commercial paper, other than commercial paper issued by
the Borrower or any of its Affiliates, which is at the time of acquisition rated
A-1 (or better) by Standard & Poor's Ratings Services, a division of the McGraw
Hill Corporation, or P-1 (or better) by Moody's Investors Service, Inc.;
provided, that the maturities of such Cash Equivalents shall not exceed 90 days.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. ss.ss. 9601 et seq., any amendments thereto,
any successor statutes, and any regulations or legally enforceable guidance
promulgated thereunder.
-6-
<PAGE>
"Change of Control" means any event pursuant to which (a) 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, (b) another
Person in addition to FMXI becomes a general partner of Foamex, (c) FMXI
withdraws as managing general partner of Foamex pursuant to the Partnership
Agreement or otherwise, (d) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the assets of the
Borrower and its Subsidiaries taken as a whole to any "person" (as such term is
used in Section 13(d)(3) of the Securities Exchange Act) (e) the adoption of a
plan relating to the liquidation or dissolution of the Borrower, (f) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as defined above),
other than Marshall S. Cogan, TIHI and their Related Parties, becomes the
Beneficial Owner of (A) more than 25% of the Voting Stock in Foamex
International or FCC, as the case may be (measured by voting power rather than
number of shares) and (B) a greater percentage of the Voting Stock than Marshall
S. Cogan, TIHI and their Affiliates, (g) the first day on which a majority of
the members of the Board of Directors of Foamex International or FCC, as the
case may be, are not Continuing Directors, (h) there is a sale, transfer or
other assignment or disposition of any of the Equity Interests in Foamex by FMXI
or Foamex International, (i) Foamex ceases to own and control 100% of the issued
and outstanding Equity Interests in any Subsidiary Guarantor (except as a result
of a merger permitted under Section 9.09) or (j) Foamex International ceases to
own and control 100% of the issued and outstanding Equity Interests in FMXI, or
(k) 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.
"Citicorp" is defined in the preamble.
"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.
-7-
<PAGE>
"Collateral" means all Property and interests in Property now owned or
hereafter acquired by any Credit Party upon which a Lien is granted to the
Collateral Agent or any Lender or Issuing Bank under any of the Loan Documents.
"Collateral Agent" is defined in the preamble.
"Commercial Letter of Credit" means any documentary letter of credit issued
by an Issuing Bank pursuant to Section 2.03 for the account of the Borrower
which is drawable upon presentation of documents evidencing the sale or shipment
of goods purchased by the Borrower in the ordinary course of its business.
"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
"Commitment" on Annex I hereto 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 "Commitments" means the aggregate principal
amount of the Commitments of all the Lenders, the maximum amount of which shall
not exceed a principal amount of $200,000,000, as reduced from time to time
pursuant to Section 3.01.
"Commitment Termination Event" means
(a) the occurrence of any Event of Default or Potential Event of
Default described in Section 11.01(f) or (g); or
(b) the occurrence and continuance of any other Event of Default and
either:
(i) the declaration of all of the Loans to be due and payable
pursuant to Section 11.02, or
(ii) the giving of notice by the Administrative Agents, acting at
the direction of the Requisite Lenders to the Borrower that the
Commitments have been terminated; or
(c) the occurrence of the 85th day after delivery of an Officer's
Certificate described in Section 7.11 (unless the Commitments are
terminated prior to such date pursuant to Section 11.01(i)); or
(d) the effective date of any dissolution of the Borrower; or
-8-
<PAGE>
(e) the commencement date of any action (in a proceeding, at law,
equity or otherwise) to dissolve the Borrower.
"Compliance Certificate" has the meaning ascribed to such term in Section
7.01(d).
"Concentration Account" means, with respect to Foamex the account named
"CUSA f/a/o Foamex L.P. Concentration Account" Account No. 4058-7993 of the
Collateral Agent, or any similar account established for any other Credit Party,
in each case maintained at its office at 399 Park Avenue, New York, New York
into which all funds from the Lockbox Accounts of such Credit Parties 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 the Borrower and its Subsidiaries on a
consolidated basis, including, without limitation, (i) all bank fees,
commissions, discounts and other fees and charges owed with respect to letters
of credit and (ii) net costs (and reduction for net benefits) under interest
rate Hedging Obligations, but excluding, however, (a) amortization of discount,
(b) interest paid in property other than cash or (c) 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 (a) Consolidated Cash Interest Expense, plus (b) scheduled
payments of principal on the Term Loans and other Indebtedness of the Borrower
and its Subsidiaries (including the principal component of Capital Lease
obligations, but excluding the Foamex/GFI Note), plus (c) charges for federal,
state, local and foreign income taxes actually paid during such period, plus (d)
payments made to the partners or any Affiliate of the Borrower permitted to be
made under Sections 9.06(iii)(C) (to the extent not already included in the
calculation of EBDAIT).
"Consolidated Interest Expense" means, for any period, total interest
expense, whether paid or accrued (without duplication) (including the interest
component of Capital Leases), of the Borrower 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 Hedging
Obligations.
"Consolidated Net Income" means, for any period, the net earnings (or loss)
after taxes of the Borrower and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP (excluding, however, the effects of hyperinflation accounting as
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<PAGE>
set forth in FAS 52, or other similar pronouncements in effect from time to time
by the FASB or the Securities and Exchange Commission).
"Consolidated Working Capital" means, as of any date of determination, the
difference of (i) the current assets (other than cash and Cash Equivalents) of
the Borrower and its Subsidiaries on a consolidated basis minus (ii) the current
liabilities (other than (A) current maturities of Funded Debt and (B) other
Funded Debt to the extent included as a current liability of the Borrower and
its Subsidiaries) of the Borrower and its Subsidiaries on a consolidated basis.
"Constituent Documents" means, (a) with respect to any corporation, (i) the
articles/certificate of incorporation (or the equivalent organizational
documents) of such corporation, (ii) the by-laws (or the equivalent governing
documents) of such corporation and (iii) 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, (b) with respect to any
partnership (whether limited or general), (i) the certificate of partnership (or
equivalent filings), (ii) the partnership agreement (or the equivalent
organizational documents) of such partnership and (iii) any document setting
forth the designation, amount and/or relative rights, limitation and preferences
of any of such partnership's Equity Interests and (c) with respect to a limited
liability company its articles or agreement of limited liability company,
operating or management agreement and any similar document.
"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.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of Foamex International who (i) was a member of such
Board of Directors on the Effective Date or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"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.
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<PAGE>
"Crain Industries" means Crain Industries, Inc., a Delaware corporation.
"Crain Restructuring" means the proposed plan of consolidation of plant
operations and administrative functions of Crain Industries and the Borrower,
all as more fully described on page 12 of the financial information in the
memorandum dated December, 1997 relating to the Borrower delivered to the
Lenders as modified in Schedule 1.01.1 hereto.
"Credit Agents" means the Collateral Agent, Funding Agent, Administrative
Agent and the Intercreditor Agent.
"Credit Extensions" means all Loans and Letter of Credit Obligations.
"Credit Parties" means the Borrower and each Subsidiary Guarantor.
"Cure Loans" has the meaning ascribed to such term in Section
3.02(b)(vi)(C).
"Customary Permitted Liens" means
(a) 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;
(b) 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;
(c) 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 (i) all
such Liens do not in the aggregate materially detract from the value of the
Borrower's or its Subsidiaries' assets or Property or materially impair the
use thereof in the operation of their respective businesses, and (ii) all
Liens of attachment or judgment and Liens securing bonds to stay judgments
or in connection with
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appeals do not secure at any time an aggregate amount exceeding $1,000,000;
and
(d) Liens arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar charges or encumbrances on the use
of real property which do not materially interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries.
"DOL" means the United States Department of Labor and any Person succeeding
to the functions thereof.
"Dollars" and "$" 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 Borrower and the
Funding Agent.
"EBDAIT" means, for any period, (a) the sum of the amounts for such period
of (i) Consolidated Net Income plus (ii) consolidated depreciation, amortization
expense and other non-cash charges plus (iii) Consolidated Interest Expense plus
(iv) Federal, state, local and foreign income taxes provided for by the Borrower
and its Subsidiaries plus (v) restructuring and similar expenses incurred during
the first three Fiscal Quarters of Fiscal Year 1999 in an aggregate amount not
to exceed $5,900,000 as referenced in the Financial Information package
delivered to the Lenders in June, 1999 plus (vi) to the extent not included in
the calculation of Consolidated Net Income, (x) the amount by which the accrual
for severance expenses relating to the closure of the Borrower's New York, New
York office exceeds the cumulative amount recorded on a cash basis, not to
exceed $4,700,000 and (y) other related expenses not to exceed $1,500,000 in the
aggregate incurred during Fiscal Year 1999; (b) minus (i) extraordinary gains
(or plus extraordinary losses) from 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 (ii) interest or investment income.
"Effective Date" means June 29, 1999.
"Eligible Assignee" means (a) a Lender or any Affiliate thereof; or (b) a
finance company, insurance company, bank, other financial institution or fund or
any Person whose investment manager or investment advisor is the investment
manager or investment advisor of such Lender or any Affiliate thereof,
reasonably acceptable to the Administrative Agents and the
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Borrower (such acceptance not to be unreasonably withheld or delayed).
"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 (a) liabilities under any Environmental, Health or Safety Requirement of
Law, or (b) 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 the Borrower, all of the Borrower's
present and future (a) equipment and fixtures, including, without limitation,
machinery, manufacturing, distribution and office equipment, assembly systems,
tools, appliances, furniture and vehicles, (b) other tangible personal Property
(other than the Borrower's inventory), and (c) 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, or any
limited liability company membership interest 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.
"ERISA Affiliate" means (a) 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 the Borrower; (b) 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 the Borrower; and
(c) 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
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<PAGE>
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 the
Borrower, any corporation described in clause (a) above or any partnership or
trade or business described in clause (b) above.
"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.
"Excess Cash Flow" means, for any Fiscal Year, the excess (if any),
(a) of the sum (for such Fiscal Year) of, without duplication,
(i) EBDAIT;
plus
(ii) Net Cash Proceeds of Sale to the extent required to be
applied against Term Loans under Section 3.01(b);
plus
(iii) Proceeds of Issuance of Equity Interests or Indebtedness to
the extent required to be applied against Term Loans under Section
3.01(b);
plus
(iv) the net decrease in Consolidated Working Capital since the
last day of the immediately preceding Fiscal Year (other than changes
in working capital attributable to the expenses described in clauses
(a)(v) and (a)(vi) of the definition of EBDAIT);
plus
(v) repayments of the Old TIHI Loan;
plus
(vi) an amount equal to the aggregate amount of (A) payments or
repayments of the New TIHI Loan, (B) repayments of loans or advances
permitted under Section 9.04(v) and (C) repayments by Foamex
International of loans from the Borrower constituting Permitted
Existing Investments, in each case, to the extent such amounts were
subtracted from the calculation of Excess Cash Flow pursuant to clause
(b)(vi) below in respect of such Fiscal Year or
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any preceding Fiscal Year in which Excess Cash Flow has been
determined;
over
(b) the sum (for such Fiscal Year) of, without duplication,
(i) Consolidated Cash Interest Expense actually paid by such
Persons;
plus
(ii) payments, to the extent actually made, of the principal
amount of the Term Loans, scheduled and/or mandatory payments of Other
Indebtedness of the Borrower and its Subsidiaries (other than
Revolving Loan Obligations) and permanent reductions in the
Commitments;
plus
(iii) all federal, state and foreign income taxes actually paid
in cash by the Borrower and its Subsidiaries;
plus
(iv) Capital Expenditures actually made by the Borrower and its
Subsidiaries in such Fiscal Year;
plus
(v) all Restricted Junior Payments paid under Sections 9.06(iii)
and 9.06(iv) (to the extent not already subtracted from the
calculation of EBDAIT);
plus
(vi) all Investments made after January 1, 1999 and through the
Effective Date, constituting a Permitted Existing Investment permitted
under Sections 9.04(iv), 9.04(v) and 9.04(viii) of the Existing Credit
Agreement;
plus
(vii) all Investments made after the Effective Date permitted
under Sections 9.04(iv), 9.04(v) and 9.04(vi);
plus
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<PAGE>
(viii) the net increase in Consolidated Working Capital from the
last day of the immediately preceding Fiscal Year;
plus
(ix) ordinary gains from the sale of assets (other than sales or
other transfers described in Section 9.02(i)).
"Existing Credit Agreement" means the Credit Agreement, dated as of June
12, 1997, as amended through the date hereof.
"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
arms 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.
"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 the Borrower, which shall be any
calendar month within the Fiscal Year.
"Fiscal Quarter" means the fiscal quarter of the Borrower, which shall be
any of the consecutive three month intervals
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ending on March 31, June 30, September 30 and December 31, respectively.
"Fiscal Year" means the fiscal year of the Borrower, which shall be any
twelve-month period ending on December 31 of any calendar year.
"Fixed Charge Coverage Ratio" means, with respect to any period, the ratio
of
(a) the result (for such period) of
(i) EBDAIT
minus
(ii) Capital Expenditures of the Borrower and its Subsidiaries
to
(b) 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 Asia Group" means any direct or indirect wholly-owned Subsidiary of
Foamex created for the purpose of facilitating a Permitted Business.
"Foamex Canada" means Foamex Canada Inc., a corporation incorporated under
the Canada Business Corporations Act.
"Foamex/GFI Note" means the intercompany promissory note in the principal
amount of $34,000,000 having a maturity date of March 17, 2000 as originally
approved by the Requisite Lenders on February 27, 1998 and as such promissory
note may thereafter be amended, supplemented or modified from time to time.
"Foamex International" means Foamex International Inc., a Delaware
corporation.
"Foamex International Guaranty" means the second amended and restated
Guaranty dated as of February 27, 1998 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 the Borrower, as
the same may be amended, supplemented or modified from time to time.
"Foamex International Pledge Agreement" means the Pledge Agreement dated as
of February 27, 1998 between Foamex
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International and the Intercreditor Agent, as the same may be amended,
supplemented or modified from time to time.
"Foamex International Supply Agreement" means the Supply Agreement dated as
of June 23, 1994 among the Borrower and Foamex International with respect to the
purchase and resale by Foamex International to the Borrower of certain raw
materials, as the same may be amended, supplemented or modified from time to
time.
"Foamex Mexico Group" means, collectively (a) Grupo Foamex de Mexico, S.A.
de C.V., a Mexican corporation, (b) Foamex de Cuautitlan S.A. de C.V., (c)
Foamex de Mexico, S.A. de C.V., a Mexican corporation, (d) Colchones y de Todo
en Espuma, S.A. de C.V., a Mexican corporation, (e) Foamex de Acuna S.A. de
C.V., a Mexican corporation, (f) Foamex de Juarez S.A. de C.V., a Mexican
corporation and (g) any other direct or indirect wholly owned Subsidiary of any
such Mexican Subsidiary permitted to be created or acquired hereunder.
"Foamex Pledge Agreement" means the Foamex Pledge Agreement dated as of
June 12, 1997 between the Borrower and the Collateral Agent pursuant to which
the Borrower grants a security interest in all of the Equity Interests of each
of its now or hereafter existing Subsidiaries in favor of the Collateral Agent,
as such agreement may be amended, supplemented or modified from time to time.
"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 the 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 (a) is maintained or contributed to for the benefit
of employees of the Borrower or any of its Subsidiaries or any of its ERISA
Affiliates, (b) is not covered by ERISA pursuant to Section 4(b)(4) of ERISA,
and (c) under applicable local law, is required to be funded through a trust or
other funding vehicle.
"Foreign Subsidiary" means Foamex Canada, each member of the Foamex Mexico
Group and each member of the Foamex Asia Group and any other direct or indirect
wholly-owned subsidiary of the Borrower which is not incorporated under the laws
of any state of the United States or the District of Columbia and which is
created after the Effective Date for the purpose of facilitating a Permitted
Business.
"Funded Debt" means, to the extent the following would be reflected on a
balance sheet of the Borrower and its Subsidiaries on a consolidated basis
prepared in accordance with GAAP, the principal (or accreted) amount of all
Indebtedness of the Borrower and its Subsidiaries in respect of borrowed money,
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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. For purposes of calculating Funded Debt, only
the face amount of the New Foamex Notes shall be included therein.
"Funding Agent" is defined in the preamble.
"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).
"GFI" means General Felt, Inc., a Delaware corporation.
"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 (including the National Association of Insurance
Commissioners).
"GW Subordinated Note" means the Subordinated Promissory Note in the
principal amount of $7,014,864 made by the Borrower in favor of John Rallis
dated May 6, 1993.
"GW Subordination Agreement" means the GW Subordination Agreement dated as
of December 14, 1993 between John Rallis and the Collateral Agent, as such
agreement may be amended, supplemented or modified from time to time.
"Hedging Obligation" means, with respect to any Person, the obligations of
such Person under (a) interest rate or currency swap agreements, interest rate
or currency cap agreements, interest rate or currency collar agreements and (b)
other agreements or arrangements designed to protect such Person against or
expose such Person to fluctuations in interest rates and/or currency rates.
"Holder" means any Person entitled to enforce any of the Obligations,
whether or not such Person holds any evidence of Indebtedness, including,
without limitation, each Administrative Agent, each Lender and each Issuing
Bank.
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"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 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 Hedging Obligations 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 the Borrower or any
Subsidiary Guarantor in favor of the Borrower or any Subsidiary Guarantor, as
the case may be, the obligations under which have been subordinated to the
payment in full of the Obligations on terms and conditions satisfactory to the
Requisite Lenders.
"Intercreditor Agent" means Citicorp and its successors pursuant to Section
12.07.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as of
February 27, 1998, between the Intercreditor Agent, the intercreditor agent for
the Foamex Carpet Cushion Inc. credit facilities and acknowledged by Foamex
International as amended and restated, supplemented or otherwise modified from
time to time.
"Interest Coverage Ratio" means, with respect to any period, the ratio of
(a) EBDAIT for such period
to
(b) Consolidated Cash Interest Expense for such period.
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"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.
"Investment" means, with respect to any Person, (a) any purchase or other
acquisition by that Person of Securities, or of a beneficial interest in
Securities, issued by any other Person, (b) any purchase by that Person of all
or substantially all of the assets of a business conducted by another Person,
and (c) any direct or indirect loan, advance (other than prepaid expenses,
accounts receivable (other than accounts receivable having a value in the
aggregate in excess of $5,000,000 (but only to the extent of such excess) owed
by a Foreign Subsidiary to the Borrower or a Subsidiary Guarantor which are not
paid within 180 days of the invoice date therefor) 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.
"IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.
"Issuing Bank L/C Sublimit" means (a) in the case of Scotiabank (i) on or
prior to March 31, 2000, $50,000,000 and (ii) thereafter, $25,000,000 and (b) in
the case of Citibank, $25,000,000.
"Issuing Banks" means Citibank, Scotiabank and each other Lender approved
by the Administrative Agents and the Borrower who has agreed to become an
Issuing Bank for the purpose of issuing Letters of Credit pursuant to Section
2.03.
"L/C Sublimit" means, on or prior to March 31, 2000, $75,000,000, and
thereafter, $50,000,000.
"Lender" means Citicorp, Scotiabank and the other financial institutions on
the signature pages to the Existing Credit Agreement and/or hereto 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.
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"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
(a) all outstanding Reimbursement Obligations at such time, plus (b) the
aggregate undrawn face amount of all outstanding Letters of Credit at such time,
plus (c) the aggregate face amount of all Letters of Credit requested by the
Borrower 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 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.
"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.
"LIBO Rate" means, with respect to any LIBO Rate Interest Period applicable
to a Borrowing of LIBO 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 LIBO Rate Interest Rate Determination Date for such LIBO Rate Interest
Period for a period equal to such LIBO Rate Interest Period and in an amount
substantially equal to the amount of such Reference Bank's LIBO Rate Loan and
for a period equal to such LIBO Rate Interest Period.
"LIBO Rate Affiliate" means, with respect to each Lender, the Affiliate of
such Lender (if any) set forth below such Lender's name under the heading "LIBO
Rate Affiliate" on the
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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 Borrower and the Funding Agent.
"LIBO Rate Interest Payment Date" means (a) with respect to any LIBO Rate
Loan, the last day of each LIBO Rate Interest Period applicable to such Loan and
(b) with respect to any LIBO Rate Loan having a LIBO Rate Interest Period in
excess of three (3) calendar months, the last day of each three (3) calendar
month interval during such LIBO Rate Interest Period.
"LIBO Rate Interest Period" has the meaning ascribed to such term in
Section 4.02(b).
"LIBO Rate Interest Rate Determination Date" has the meaning ascribed to
such term in Section 4.02(c).
"LIBO Rate 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 "LIBO Rate 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
Borrower and the Funding Agent.
"LIBO Rate Loans" means those Loans outstanding which bear interest at a
rate determined by reference to the LIBO Rate and the Applicable LIBO Rate
Margin as provided in Section 4.01(a).
"LIBO Rate Reserve Requirement" means any reserve requirement 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 LIBO 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).
"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 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
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pursuant to ss. 9-408 of the UCC), naming the owner of such proper as debtor,
under the UCC or other comparable law of any jurisdiction.
"Limited Partner" means Foamex International, in its capacity as sole
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 Security Agreement,
the Subsidiary Security Agreements, the Subsidiary Guarantees, the Foamex
International Guaranty, the TIHI Subordination Agreement, the Intercreditor
Agreement, the GW Subordination Agreement, the Partnership Guaranty, the
Partnership Pledge Agreement, the Foamex Pledge Agreement, each Subsidiary
Pledge Agreement, the Foamex International Pledge Agreement, Mexican Pledge
Agreement Contrato de Prenda Mexicana, Acuna Mexican Pledge Agreement, Contrato
de Prenda Mexicana Acuna, Cuautitlan Mexican Pledge Agreement, Contrato de
Prenda Mexican Cuautitlan, Saltillo Mexican Pledge Agreement, Contrato de Prenda
Mexicana Saltillo, Hedging Obligations to which any Lender or any Affiliate of a
Lender is a party, foreign exchange contracts to which any Lender or any
Affiliate of a Lender is a party, the fee letter referred to in Section 4.03,
and all other instruments, agreements and written Contractual Obligations
between the Borrower or any Subsidiary of the Borrower and any of the
Administrative Agents, any Lender or any Issuing Bank delivered to either of the
Administrative Agents, such Lender or such Issuing Bank pursuant to or in
connection with this Agreement.
"Loan Parties" means, collectively, (a) the Borrower, the Managing General
Partner, FCC, Foamex International and any Subsidiary Guarantor and (b) any
other Subsidiary (or group of Subsidiaries) which is (or constitutes) a
Significant Subsidiary of the Borrower.
"Loans" means Term Loans, Revolving Loans, Base Rate Loans, LIBO 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 Credit 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 any Credit Party, 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 Credit Party deposits
proceeds of Collateral and identified as such on Schedule 1.01.2.
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"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 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, as amended on June 12, 1997.
"Managing General Partner" means FMXI.
"Margin Stock" means "margin stock" as such term is defined in Regulation
U.
"Material Adverse Effect" means a material adverse effect upon (a) the
condition (financial or otherwise), business performance, properties,
operations, assets or prospects of the Borrower, or of the Borrower and its
Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform its
obligations under the Loan Documents, or (c) the ability of the Lenders, the
Issuing Banks or the Collateral Agent to enforce the Loan Documents.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means any mortgage, leasehold mortgage or deed of trust executed
by a Credit Party in favor of the Collateral Agent, and substantially in the
form of Exhibit M hereto.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by the Borrower or any ERISA Affiliate and which is subject
to Title IV of ERISA.
"Net Cash Proceeds of Sale" means (a) proceeds received by the Borrower or
any Subsidiary Guarantor in cash from the sale, lease, assignment or other
disposition of any Property, other than dispositions of assets permitted under
Section 9.02(i) (but including any proceeds received by the Borrower or any
Subsidiary Guarantor (by dividend, distribution or otherwise) in connection with
the issuance of Equity Interests by any of the Foreign Subsidiaries), net of (i)
the costs of sale, assignment or other disposition, (ii) 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 (iii) amounts applied to the repayment of Indebtedness (other
than the Obligations) secured by a Lien permitted by Section 9.03 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 (b) proceeds of insurance (net of the reasonable expenses of
collection) 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
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condemnation or eminent domain to the extent such proceeds are not utilized to
repair or replace the Property subject to such loss, damage or condemnation
within 180 days (or if consented to in writing by the Administrative Agents, 360
days) of the date of such loss, damage or condemnation; provided, that any such
proceeds not so utilized in such 180 day period shall immediately be deemed to
be "Net Cash Proceeds of Sale". "Net Cash Proceeds of Sale" shall not include
(x) rental income arising from Foamex's sublease of office space at 375 Park
Avenue, New York, New York, (y) rental income not in excess of $1,000,000 in any
Fiscal Year arising from the lease or sublease by the Borrower and the
Subsidiary Guarantors of real property to other Persons (to the extent such
lease or sublease is otherwise permitted hereunder) and (z) proceeds from sales,
leases, assignments or other dispositions of Property in an amount not to exceed
the first $5,000,000 in the aggregate of such proceeds received in any Fiscal
Year.
"Net Worth" means, at any time, with respect to any Person (a) total
consolidated assets of such Person minus (b) 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 the Borrower
and its Subsidiaries (other than (A) Investments in Affiliates permitted under
Section 9.04(iv) and (B) other Investments permitted under Section 9.04 (other
than Investments in the New TIHI Loan) and not recorded as an asset under GAAP,
shall be added back to total consolidated assets) shall be excluded from or
added back, as applicable, to total consolidated assets of the Borrower and its
Subsidiaries (other than trade receivables due from Affiliates incurred in the
ordinary course of business less than sixty (60) days past due). Any calculation
of Net Worth under this Agreement after the Effective Date shall not be
modified, adjusted, or recalculated in accordance with Statement of Financial
Accounting Standards No. 130, such as for currency translations and minimum
pension adjustments.
"New Foamex Indenture" means the indenture, dated as of December 23, 1997,
pursuant to which the New Foamex Notes were issued, as such agreement may be
amended, supplemented or otherwise modified from time to time.
"New Foamex Notes" means the 13 1/2 % Senior Subordinated Notes due 2005
issued by the Borrower pursuant to the terms of the New Foamex Indenture, as
such notes may be amended, supplemented or otherwise modified from time to time.
"New Foamex Registration Rights Agreement" means the Registration Rights
Agreement dated December 23, 1997 between the Borrower and FCC, as issuers,
entered into for the benefit of the holders of the New Foamex Notes and
providing for the registration thereof under the Securities Act.
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"New Foamex Subordinated Note Indenture" means the Indenture dated as of
June 12, 1997 among the Borrower, FCC and The Bank of New York, as Trustee, as
such agreement may be amended, supplemented or modified from time to time.
"New Foamex Subordinated Notes" means the Senior Subordinated Notes issued
by FCC and the Borrower in the aggregate principal amount of up to $150,000,000
and governed by the terms of the New Foamex Subordinated Note Indenture.
"New GFI" means Foamex Carpet Cushion Inc., a Delaware corporation.
"New TIHI Loan" means the loan, not in excess of a principal amount of
$5,000,000 outstanding at any time, made by the Borrower to TIHI and evidenced
by that certain promissory note dated June 12, 1997.
"Non Pro Rata Loan" has the meaning ascribed to such term in Section
3.02(b)(vi).
"Notes" means collectively the Revolving Loan Notes, Term Notes and the
Swing Loan Notes.
"Notice of Borrowing" means a Notice of Borrowing substantially in the form
attached hereto as Exhibit B.
"Notice of Conversion/Continuation" means a Notice of
Conversion/Continuation substantially in the form attached hereto as Exhibit C
with respect to a proposed conversion or continuation of a Loan pursuant to
Section 4.01(c).
"Obligations" means all Loans, Reimbursement Obligations, advances, debts,
liabilities, obligations, covenants and duties owing by the 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 3.03 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, foreign exchange
contract or Hedging Obligation 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
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chargeable to the Borrower under this Agreement or any other Loan Document.
"Obligor" means the Borrower and any other Person (other than the Credit
Agents, the Issuing Banks or any Lender) obligated under any Loan Document.
"Officer's Certificate" means (a) as to a corporation, a certificate
executed on behalf of such corporation by (i) the chairman or vice-chairman of
its board of directors (if an officer of such corporation) or (ii) its
president, any of its vice-presidents, its chief financial officer, or its
treasurer, (b) as to a partnership, a certificate executed on behalf of such
partnership by (i) if a limited partnership, by its general partner (and if the
general partner is a corporation by the appropriate individual indicated in (a)
above) and (ii) if other than a limited partnership, by a partner (and if such
partner is a corporation by the appropriate individual indicated in (a) above)
and (c) as to a limited liability company, by its managing member (and if the
managing member is a corporation by the appropriate individual indicated in (a)
above).
"Old TIHI Loan" means the loan, not in excess of a principal amount of
$4,372,516 plus accrued interest, made by the Borrower to TIHI and evidenced by
that certain promissory note dated July 7, 1996, as amended on June 12, 1997, to
increase the aggregate amount which may be outstanding thereunder to $4,794,828.
"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 the Borrower 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, and the Second Amendment thereto dated as of June 12,
1997, as such agreement may be amended, supplemented or modified from time to
time.
"Partnership Guaranty" means the Guaranty, dated as of February 27, 1998,
issued jointly and severally by FMXI and Foamex International in favor of the
Collateral Agent as such agreement may be amended, supplemental or modified from
time to time.
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"Partnership Pledge Agreement" means the amended and restated Partnership
Pledge Agreement dated as of February 27, 1998, among Foamex International, FMXI
and the Collateral Agent pursuant to which the partners of the Borrower grant a
security interest in all the Equity Interests of the Borrower in favor of the
Collateral Agent as such agreement may be amended, supplemented or modified from
time to time.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"Permits" means any permit, approval, authorization license, variance, or
permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Business" means (a) the manufacture and distribution of
polyurethane and advance polymer foam and activities related thereto, (b) other
businesses engaged in by the Borrower and its Subsidiaries on December 23, 1997
and similar lines of business engaged in by the Borrower on December 23, 1997,
including, but not limited to, the manufacture and distribution of plastics and
related products, (c) the businesses engaged in by Crain Industries and its
Subsidiaries on December 23, 1997 and similar lines of business engaged in by
Crain Industries and its Subsidiaries on December 23, 1997 and (d) the lines of
business engaged in by Prefoam A.G. as of the Effective Date.
"Permitted Existing Accommodation Obligations" means those Accommodation
Obligations of the Borrower or any of its Subsidiaries identified as such on
Schedule 1.01.3.
"Permitted Existing Indebtedness" means the Indebtedness of the Borrower
and its Subsidiaries (other than Permitted Subordinated Indebtedness) identified
as such on Schedule 1.01.4.
"Permitted Existing Investments" means those Investments of the Borrower
identified as such on Schedule 1.01.5.
"Permitted Existing Liens" means the Liens on assets of the Borrower
identified as such on Schedule 1.01.6.
"Permitted Subordinated Indebtedness" means Indebtedness evidenced by, or
in respect of, principal and interest on (a) the New Foamex Subordinated Notes
in a principal amount not exceeding $150,000,000 (including the Accommodation
Obligations of Subsidiary Guarantors party to the related indenture as in effect
on the Effective Date), (b) the GW Subordinated Note in a principal amount not
exceeding $7,014,864, (c) any Rallis Claim (as defined in the GW Subordination
Agreement), (d) any Subordinated Claim (as defined in the TIHI Subordination
Agreement), (e) the New Foamex Notes in a principal amount not to exceed
$98,000,000 (including the Accommodation Obligations of Subsidiary Guarantors
party to the related indenture as in effect
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on the Effective Date), (f) other subordinated Indebtedness of Foamex satisfying
the requirements of Section 11.01(r) in an amount not to exceed the principal
amount of New Foamex Notes so refinanced, transaction costs associated therewith
and associated redemption premiums and (g) the Foamex/GFI Note.
"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.
"Plan" means an employee benefit plan defined in Section 3(3) 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.
"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 International, the Borrower or any of the Subsidiary
Guarantors at any time from and after the Effective Date on account of the
issuance of (a) any Equity Interest in Foamex International, the Borrower or any
Subsidiary (which proceeds do not constitute Net Cash Proceeds of Sale) or (b)
Indebtedness (other than Indebtedness permitted under Section 9.01) of Foamex
International (other than Indebtedness permitted under Sections 4.1.4(A) through
(E) and (G) and (H) of the Foamex International Guaranty), the Borrower and/or
any of its Subsidiaries, in each case net of all transaction costs and
underwriters' discounts with respect thereto, provided, however, that the
issuance of Permitted Subordinated Indebtedness described in clause (f) of the
definition thereof, in each such case, shall not constitute Proceeds of Issuance
of Equity Interests or Indebtedness.
"Process Agent" has the meaning ascribed to such term in Section 13.17(a).
"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 the Borrower 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), (a) with respect
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to Revolving Loans and Letters of Credit, the percentage obtained by dividing
(i) such Lender's Commitment by (ii) the aggregate amount of all Commitments (in
each case, as reduced from time to time in accordance with the provisions of
this Agreement), (b) with respect to Term B Loans, the percentage obtained by
dividing (i) such Lender's Term B Loans by (ii) the aggregate amount of all Term
B Loans, (c) with respect to Term C Loans, the percentage obtained by dividing
(i) such Lender's Term C Loans by (ii) the aggregate amount of all Term C Loans
and (d) with respect to Term D Loans, the percentage obtained by dividing (i)
such Lender's Term D Loans by (ii) the aggregate amount of all Term D Loans.
"Protective Advance" has the meaning ascribed to such term in Section
12.09.
"Quarterly Payment Date" means each March 31, June 30, September 30 and
December 31.
"RCRA" means the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
ss.ss. 6901 et seq., any amendments thereto, any successor statutes, and any
regulations or legally enforceable guidance promulgated thereunder.
"Reference Banks" means Citicorp, Scotiabank and one other Lender
reasonably satisfactory to the Borrower, Citicorp and Scotiabank.
"Register" has the meaning ascribed to such term in Section 13.01(c).
"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 the aggregate non-contingent
reimbursement or repayment obligations of the Borrower with respect to amounts
drawn under Letters of Credit.
"Related Obligations" has the meaning ascribed to such term in Section
12.09(e).
"Related Party" means with respect to Marshall S. Cogan or TIHI, as the
case may be, (A) any controlling stockholder, 80% (or more) owned Subsidiary, or
spouse or immediate family member (in the case of an individual) of such Person,
or (B) any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of such Person
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and/or such other Persons referred to in the immediately preceding clause (A)
and this clause (B).
"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 (a) clean up, remove, treat or
in any other way address Contaminants in the indoor or outdoor environment; (b)
prevent the Release or threat of Release or minimize the further Release of
Contaminants; or (c) 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
U and X, ERISA, 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%) of the aggregate amount of Term Loans,
Revolving Credit Obligations and unutilized Commitments; 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 the 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 the 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 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 Commitments have been
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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 (a) any dividend or distribution, direct
or indirect, on account of any Equity Interests in the Borrower 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, (b) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Equity
Interests in the Borrower or any of its Subsidiaries now or hereafter
outstanding, (c) 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, (d) 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 the Borrower or any of its Subsidiaries now or hereafter
outstanding and (e) any payment made by the Borrower to the Managing General
Partner or the Limited Partner or any other Affiliate pursuant to the Tax
Sharing Agreement, the Management Agreement or the Foamex International Supply
Agreement.
"Revolving Credit Obligations" means, at any particular time, the sum of
(a) the outstanding principal amount of the Revolving Loans at such time, plus
(b) the Letter of Credit Obligations at such time, plus (c) the Swing Loan
Obligations at such time.
"Revolving Loan" has the meaning ascribed to such term in Section 2.01(a).
"Revolving Loan Commitment Amount" means, as of any date of determination,
an amount equal to the Commitments in effect at such time.
"Revolving Loan Commitment Availability" means, at any time of
determination, the excess of
(a) the Commitments then in effect
over
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(b) the aggregate amount of Revolving Credit Obligations then
outstanding.
"Revolving Loan Commitment Termination Date" means the earliest to occur of
(a) June 12, 2003; and
(b) the date on which any Commitment Termination Event occurs.
"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.
"S&P" means Standard & Poor's Rating Services, a division of McGraw-Hill,
Inc.
"Scotiabank" means The Bank of Nova Scotia, a Canadian chartered bank.
"Securities" means any limited, general or other partnership interest, or
any limited liability company 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.
"Security Agreement" means the Security Agreement dated as of June 12, 1997
between the Borrower and the Collateral Agent, as such agreement may be amended,
supplemented or modified from time to time.
"Settlement Date" has the meaning ascribed to such term in Section 2.02(b).
"Significant Subsidiary" means any Subsidiary (which is not a Subsidiary
Guarantor) that would be a "significant subsidiary" as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated under the Securities Act of 1933, as
amended, as such Regulation is in effect on the Effective Date.
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"Solvent", when used with respect to any Person, means that at the time of
determination:
(a) the Fair Market Value of its assets is in excess of the total
amount of its liabilities (including, without limitation, contingent
liabilities); and
(b) 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
(c) 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
(d) 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 account of the Borrower which is not a
Commercial Letter of Credit.
"Stock Option Plan" means the 1993 Foamex International employee stock
option plan pursuant to which both qualified and non-qualified options have been
issued, as amended, and any other stock option plan adopted by the shareholders
of Foamex International.
"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.
"Subsidiary Guarantor" means each of (i) FCC, (ii) Foamex Latin America,
Inc., a Delaware corporation, (iii) Foamex Mexico, Inc., a Delaware corporation,
(iv) Foamex Mexico II, Inc., a Delaware corporation, (v) Foamex Asia, Inc. and
(vi) each Person which becomes a wholly-owned domestic Subsidiary of the
Borrower after the Effective Date in accordance with Section 9.04 and has
executed a Subsidiary Guarantee, a Subsidiary Security Agreement and, as
applicable, a Subsidiary Pledge Agreement and Mortgages (subject to Section
8.14) and executed or, as applicable, delivered the other documents,
instruments, certificates and opinions required pursuant to Section 9.04.
"Subsidiary Guaranty" means each Guaranty executed by each Subsidiary
Guarantor of the Borrower in favor of the Administrative Agents, the Lenders and
the Issuing Banks pursuant to which such Subsidiary guarantees all of the
Obligations, as the same may be amended, supplemented or modified from time to
time.
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"Subsidiary Pledge Agreement" means each Pledge Agreement executed by a
Subsidiary of the Borrower and the Collateral Agent pursuant to which such
Subsidiary grants a security interest in the Equity Interests of each of its now
or hereafter existing Subsidiaries in favor of the Collateral Agent, as such
agreement may be amended, supplemented or modified from time to time.
"Subsidiary Security Agreement" means each Security Agreement executed by
each Subsidiary Guarantor and the Collateral Agent, pursuant to which each such
Subsidiary secures its Subsidiary Guaranty, as such agreement may be amended,
supplemented or modified from time to time.
"Supply Agreement" means the Supply Agreement in respect of the supply of
prime carpet cushion to GFI dated as of February 27, 1998 between the Borrower
and GFI and as assigned to New GFI, as the same may be amended, supplemented or
modified from time to time.
"Swing Bank" means, at any time, Scotiabank or such other Lender which
becomes the replacement Swing Bank at such time.
"Swing Loan" has the meaning ascribed to such term in Section 2.02(a).
"Swing Loan Notes" has the meaning ascribed to such term in Section
3.05(a)(iii).
"Swing Loan Obligations" means the aggregate principal amount of all Swing
Loans outstanding.
"Tax Advance Agreement" means the Tax Distribution Advance Agreement, dated
as of December 11, 1996, as amended on June 12, 1997 among Foamex International
and the Borrower.
"Tax Sharing Agreement" means the First Amended and Restated Tax Sharing
Agreement dated as of December 14, 1993 among the Borrower, Trace Foam, Foamex
International and FMXI, as amended on June 12, 1997.
"Taxes" has the meaning ascribed to such term in Section 3.03(a).
"TEFSA" means Foamex de Cuautitlan S.A. de C.V.
"Term B Loans" has the meaning ascribed to such term in Section 2.04(a).
"Term B Note" means a promissory note of the Borrower payable to any
Lender, in the form of Exhibit A-3 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Term B Loans,
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and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"Term C Loans" has the meaning ascribed to such term in Section 2.04(b).
"Term C Note" means a promissory note of the Borrower payable to any
Lender, in the form of Exhibit A-4 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Term C Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.
"Term D Loans" has the meaning ascribed to such term in Section 2.04(c).
"Term D Note" means a promissory note of the Borrower payable to any
Lender, in the form of Exhibit A-5 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Term D Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.
"Term Loans" means, collectively, the Term B Loans, the Term C Loans and
the Term D Loans.
"Term Notes" means, collectively, the Term B Notes, the Term C Notes and
the Term D Notes.
"Termination Event" means (a) a Reportable Event with respect to any
Benefit Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a
Benefit Plan during a plan year in which the 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 the Borrower or any ERISA
Affiliate; (c) the imposition of an obligation on the 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; (d) the institution by the PBGC or any similar foreign
Governmental Authority of proceedings to terminate a Benefit Plan or a Foreign
Pension Plan; (e) 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; (f) a foreign Governmental Authority shall appoint
or institute proceedings to appoint a trustee to administer any Foreign Pension
Plan; or (g) the partial or complete withdrawal of the Borrower or any ERISA
Affiliate from a Multiemployer Plan or a Foreign Pension Plan.
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"TIHI" means Trace International Holdings, Inc., a Delaware corporation.
"TIHI Subordination Agreement" means the TIHI Subordination Agreement dated
as of December 14, 1993 between TIHI, Trace Foam and the Collateral Agent, as
amended on June 12, 1997, and as such agreement may be further amended,
supplemented or modified from time to time.
"Total Net Debt" means, on any date of determination, the difference of
(a) the aggregate amount of Funded Debt of the Borrower and its
Subsidiaries (on a consolidated basis) outstanding on such date
minus
(b) the aggregate amount of cash and Cash Equivalents of the Borrower
and its Subsidiaries (on a consolidated basis) which are available on such
date to be applied (without any legal or Contractual Obligation
restriction) against the Indebtedness described in clause (a).
"Total Net Debt to EBDAIT Ratio" means, as of the last day of any period,
the ratio of
(a) Total Net Debt outstanding on the last day of such period
to
(b) EBDAIT computed for such period.
"Trace Foam" means Trace Foam Company, Inc., a Delaware corporation.
"Transaction Documents" means the Loan Documents, the Partnership
Agreement, the Foamex International Supply Agreement, the Foamex/GFI Note, the
Supply Agreement, the Administrative Services Agreement, the Transfer Agreement,
the Management Agreement, the Tax Sharing Agreement, the New Foamex Subordinated
Notes, the New Foamex Subordinated Note Indenture, the Intercompany Promissory
Notes, the Old TIHI Loan, the New TIHI Loan, the Tax Advance Agreement, the New
Foamex Notes, the New Foamex Indenture and the New Foamex Registration Rights
Agreement, and all other agreements entered into prior to or on the Effective
Date pursuant to such agreements.
"Transfer Agreement" means the Transfer Agreement by and between TFLLC and
the Borrower, dated as of February 27, 1998.
"Triggering Event" means (a) any Event of Default occurring under Section
11.01(f) or 11.01(g) or (b) any other Event of
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Default (i) occurring under Section 11.01(a), (i), (j), (m), (n) or (p) or (ii)
which has occurred and is continuing for a period of 30 days or more, in each
case, which the Administrative Agents have (either in their discretion or upon
the direction of the Requisite Lenders) designated in writing to the Borrower to
be a "Triggering Event".
"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).
"Voting Stock" of any Person as of any date means the Equity Interests of
such Person that at the time entitled to vote in the election of the board of
directors or other governing body of such Person.
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.
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
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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 the Borrower from time to time during the period ending on the
Business Day next preceding the Revolving Loan Commitment Termination Date, in
an amount not to exceed such Lender's Pro Rata Share of the Revolving Loan
Commitment Availability 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
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), the 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 the 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 LIBO Rate Loans. Such
Notice of Borrowing shall specify (i) the proposed Funding Date (which shall be
a Business Day), (ii) the amount of the proposed Borrowing, (iii) whether the
proposed Borrowing will be of Base Rate Loans or LIBO Rate Loans, (iv) in the
case of LIBO Rate Loans, the requested LIBO Rate Interest Period, and (v)
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)(iv). In lieu of delivering
such a Notice of Borrowing, the 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
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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 condition precedent set forth in Section 5.02, the Funding
Agent shall, make the proceeds of such amounts received by it available to the
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 the 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 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 the 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 the 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 the Borrower until the date such amount is
paid or repaid to the Funding Agent, in the case of the 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 the Borrower shall pay
and repay such corresponding amount, the Funding Agent shall promptly pay to the
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 the 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 and Swing Loans and Use of Letters
of Credit. The proceeds of the Revolving Loans
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and Swing Loans and Letters of Credit may be used for the general corporate and
working capital needs of the Borrower and the Subsidiary Guarantors.
(e) Revolving Loan Commitment Termination Date. The 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 in 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
Revolving Loan Commitment Termination Date. Each Lender's obligation to 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 Revolving Loan
Commitment Termination Date.
2.02 The Swing Loan Facility.
(a) Making of Swing Loans. Upon receipt of telephonic request therefor from
the 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 the
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 the 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)
$15,000,000 and (ii) the Revolving Loan Commitment 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 the 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 the Borrower, designated 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, 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
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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"), the 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 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
day funds are to be made available to repay such Swing Loans. If the Borrower
fails to repay any Swing Loan made to the 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 2.02 does not relieve any Lender of its
obligations to purchase Pro Rata participations in any Swing Loans; nor does
this Section relieve the Borrower of its obligation to pay or
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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 the 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 the Borrower one or more Letters of Credit, in an outstanding amount
not to exceed at any time the L/C Sublimit 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 or its
Issuing Bank L/C Sublimit;
(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
Revolving Credit Obligations at such time would exceed the Revolving
Credit Commitment Amount at such time or (III) 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 Revolving Loan Commitment Termination Date; or
(iv) which is in a currency other than Dollars unless otherwise
agreed to by the Issuing Bank and the Administrative Agents.
(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,
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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 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) The 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) that the requested Letter of Credit is
either a Commercial Letter of Credit or a Standby Letter of Credit, (B) the
stated amount of the Letter of Credit requested, (C) the effective date
(which shall be a Business Day) of issuance of such Letter of Credit, (D)
the date on which such Letter of Credit is to expire (which shall be a
Business Day and no later than the earlier of (x) the one year anniversary
of the date of such Letter of Credit and (y) the Business Day immediately
preceding the Revolving Loan Commitment Termination Date), (E) the Person
for whose benefit such Letter of Credit is to be issued, (F) other relevant
terms of such Letter of Credit and (G) 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 the 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
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in any Letter of Credit Reimbursement Agreement applicable to a Letter of
Credit:
(A) the Borrower 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 in the applicable Letter of Credit Reimbursement Agreement
and (II) one (1) Business Day after the 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 the 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, the 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, 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
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obligations of the 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 the Borrower and the Borrower does
not repay such amount to the Issuing Bank on 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
the 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 the 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
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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.
(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 the 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;
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(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) The Borrower
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 the related Letter of Credit
Reimbursement Agreement and the Letter of Credit issued pursuant thereto
when such amounts are due and payable, irrespective of any claim, setoff,
defense or other right which the Borrower may have at any time against any
Issuing Bank or any other Person.
(ii) In the event any payment by the 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 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 quarterly in arrears (on the Business Day
closest to each calendar quarter-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 the Borrower's account as may
be agreed upon by the 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 the Borrower separate
schedules for Commercial Letters of Credit and Standby Letters of Credit
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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 the 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, the 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 the Borrower other than as a result of the gross negligence
or willful misconduct of the Issuing Bank, as determined by a court 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 the Borrower on the one hand and the
Administrative Agents, the Lenders and the Issuing Banks on the other
hand, the 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
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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 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 Facilities.
(a) The Term B Loans. As of the Effective Date the Lenders have extended
term loans to the Borrower in a maximum original aggregate principal amount of
$110,000,000 (relative to such Lender, its "Term B Loans"). On the Effective
Date (after giving effect to all prepayments thereof), there were outstanding
Term B Loans in an aggregate principal amount of $82,503,789 as of June 29,
1999. Each Lender's Term B Loans as of (and giving effect to) the Effective Date
are as set forth on Annex I hereto.
(b) The Term C Loans. As of the Effective Date the Lenders have extended
term loans to the Borrower in a maximum original aggregate principal amount of
$100,000,000 (relative to such Lender, its "Term C Loans"). On the Effective
Date (after giving effect to all prepayments thereof), there were outstanding
Term C Loans in an aggregate principal amount of $75,003,445 as of June 29,
1999. Each Lender's Term C Loans as of (and giving effect to) the Effective Date
are as set forth on Annex I hereto.
(c) Term D Loans. As of the Effective Date the Lenders have extended term
loans to the Borrower in a maximum original aggregate principal amount of
$110,000,000 (relative to such Lender, its "Term D Loans"). On the Effective
Date (after giving effect to all prepayments thereof), there were outstanding
Term D Loans in an aggregate principal amount of $108,625,000 as of June 29,
1999. Each Lender's Term D Loans as of (and giving effect to) the Effective Date
are as set forth on Annex I hereto.
(d) Use of Proceeds of Term Loans. The proceeds of the Term Loans were used
solely for the purposes set forth in the Existing Credit Agreement.
2.05 Authorized Officers and Administrative Agents. The 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
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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
the 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 the
Borrower. None of the Administrative Agents, the Lenders or the Issuing Banks
shall incur any liability to the 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 behalf of the Borrower.
ARTICLE III
PAYMENTS AND PREPAYMENTS
3.01 Prepayments and Repayments; Reductions in Commitments.
(a) Voluntary Prepayments/Reductions. (i) The Borrower may, at any time and
from time to time, prepay or repay any Loan, in whole or in part; provided,
however, LIBO Rate Loans may only be prepaid (A) in whole or in part on the
expiration date of the then applicable LIBO Rate 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 type
of 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 such 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) The 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
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or permanently reduce in part Commitments, provided that the 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 Commitment Amount 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 Payments. (i) Within one (1) Business Day after any Credit
Party's receipt of any Net Cash Proceeds of Sale, the Borrower shall make or
cause to be made a mandatory prepayment of the Obligations. Any mandatory
prepayment of the Obligations required to be made pursuant to this Section
3.01(b)(i) shall be applied first, to Term Loans as set forth in Section
3.02(b)(ii), second, to the outstanding principal amount of the Swing Loans and
third, to the outstanding principal amount of the Revolving Loans.
(ii) On each Quarterly Payment Date set forth below, the Borrower shall
make a scheduled repayment of the aggregate outstanding principal amount, if
any, of all Term B Loans in an amount equal to the amount set forth below
opposite the applicable Quarterly Payment Date:
Amount of Required
Period Principal Payment
------ -----------------
June 30, 1999 $209,933
September 30, 1999 $209,933
December 31, 1999 $209,933
March 31, 2000 $209,933
June 30, 2000 $209,933
September 30, 2000 $209,933
December 31, 2000 $209,933
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March 31, 2001 $209,933
June 30, 2001 $209,933
September 30, 2001 $209,933
December 31, 2001 $209,933
March 31, 2002 $209,933
June 30, 2002 $209,933
September 30, 2002 $209,933
December 31, 2002 $209,933
March 31, 2003 $209,933
June 30, 2003 $209,933
September 30, 2003 $8,397,332
December 31, 2003 $8,397,332
March 31, 2004 $8,397,332
June 30, 2004 $8,397,332
September 30, 2004 $11,336,398
December 31, 2004 $11,336,398
March 31, 2005 $11,336,398
June 30, 2005 $11,336,406
(iii) On each Quarterly Payment Date set forth below, the Borrower shall
make a scheduled repayment of the aggregate outstanding principal amount, if
any, of all Term C Loans in an amount equal to the amount set forth below
opposite the applicable Quarterly Payment Date:
Amount of Required
Period Principal Payment
------ -----------------
June 30, 1999 $190,848
September 30, 1999 $190,848
December 31, 1999 $190,848
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March 31, 2000 $190,848
June 30, 2000 $190,848
September 30, 2000 $190,848
December 31, 2000 $190,848
March 31, 2001 $190,848
June 30, 2001 $190,848
September 30, 2001 $190,848
December 31, 2001 $190,848
March 31, 2002 $190,848
June 30, 2002 $190,848
September 30, 2002 $190,848
December 31, 2002 $190,848
March 31, 2003 $190,848
June 30, 2003 $190,848
September 30, 2003 $190,848
December 31, 2003 $190,848
March 31, 2004 $190,848
June 30, 2004 $190,848
September 30, 2004 $6,297,999
December 31, 2004 $6,297,999
March 31, 2005 $6,297,999
June 30, 2005 $6,297,999
September 30, 2005 $11,450,907
December 31, 2005 $11,450,907
March 31, 2006 $11,450,907
June 30, 2006 $11,450,920
(iv) On each Quarterly Payment Date set forth below, the Borrower shall
make a scheduled repayment of the aggregate
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outstanding principal amount, if any, of all Term D Loans in an amount equal to
the amount set forth below opposite the applicable Quarterly Payment Date:
Amount of Required
Period Principal Payment
------ -----------------
June 30, 1999 $275,000
September 30, 1999 $275,000
December 31, 1999 $275,000
March 31, 2000 $275,000
June 30, 2000 $275,000
September 30, 2000 $275,000
December 31, 2000 $275,000
March 31, 2001 $275,000
June 30, 2001 $275,000
September 30, 2001 $275,000
December 31, 2001 $275,000
March 31, 2002 $275,000
June 30, 2002 $275,000
September 30, 2002 $275,000
December 31, 2002 $275,000
March 31, 2003 $275,000
June 30, 2003 $275,000
September 30, 2003 $275,000
December 31, 2003 $275,000
March 31, 2004 $275,000
June 30, 2004 $275,000
September 30, 2004 $275,000
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December 31, 2004 $275,000
March 31, 2005 $275,000
June 30, 2005 $275,000
September 30, 2005 $275,000
December 31, 2005 $275,000
March 31, 2006 $25,300,000
June 30, 2006 $25,300,000
September 30, 2006 $25,300,000
December 31, 2006 $25,300,000
(v) Within 100 days after the close of each Fiscal Year (beginning with the
close of the 1999 Fiscal Year), the Borrower shall make a mandatory prepayment
of the Term Loans in an amount equal to 75% of the Excess Cash Flow (if any) for
such Fiscal Year.
(vi) Within one (1) Business Day after any Credit Party or Foamex
International or any agent thereof, receives any amount of Proceeds of Issuance
of Equity or Indebtedness, the Borrower shall make or cause to be made a
mandatory prepayment of the Obligations in an amount equal to (x) 80% of the
amount of such proceeds of the type described in clause (a) of the definition of
"Proceeds of Issuance of Equity or Indebtedness"; provided, however, that no
prepayment of Loans shall be required from Proceeds of Issuance of Equity or
Indebtedness due to sales of Equity Interests in Foamex International under the
Stock Option Plan until the aggregate amount of such sales equals $10,000,000
and any subsequent multiple of $10,000,000 (it being understood that no such
prepayment shall be required until such proceeds equals at least $10,000,000 and
that all such proceeds shall be subject to this clause (vi) and not just the
excess over $10,000,000) with any such prepayment being due on or prior to the
30th day following the close of the Fiscal Year in which such proceeds equaled
or exceeded such $10,000,000 or multiple thereof and (y) 100% of the amount of
such proceeds of the type described in clause (b) of the definition of "Proceeds
of Issuance of Equity or Indebtedness". Any mandatory prepayment of the
Obligations required to be made pursuant to this Section 3.01(b)(vi) shall be
applied first, to Term Loans as set forth in Section 3.02(b)(ii), second, to the
outstanding principal amount of the Swing Loans and third, to the outstanding
principal amount of the Revolving Loans.
(vii) Immediately upon any acceleration of the Stated Maturity Date of any
Loans pursuant to Section 11.02, the Borrower shall repay all the Loans, unless,
pursuant to
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Section 11.02, only a portion of all the Loans is so accelerated (in which case
the portion so accelerated shall be so prepaid).
(viii) After the occurrence and during the continuance of a Triggering
Event, the Collateral Agent is hereby authorized by the Borrower to transfer to
the Funding Agent, and the Funding Agent is hereby authorized to apply to the
Obligations then outstanding, any and all amounts held in the Borrower's
Concentration Account, such amounts to be applied by the Funding Agent in
accordance with the provisions of Section 3.02.
(c) Mandatory Reductions in Commitments. The Commitments shall be
permanently reduced by the amount of any payment made pursuant to Section
3.01(b) which is applied to the Revolving Credit Obligations; provided, however,
that no mandatory reduction of the Commitment required pursuant to Section
3.01(b) shall cause the Commitments to be reduced to an amount less than
$50,000,000. The Revolving Loan Commitment Amount will automatically reduce by
an amount equal to $2,500,000 on each Quarterly Payment Date commencing on
September 30, 1998.
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 or Term 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.
(b) Apportionment of Payments. (i) Subject to the provisions of Sections
3.02(b)(iii) and (v), all payments of principal and interest in respect of
outstanding Swing Loans and Revolving Loans, all payments in respect of
Reimbursement Obligations, as applicable, all payments of fees and all other
payments in respect of any other 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 the Borrower shall be applied to the Borrower's Obligations as
follows: first to pay principal of and interest on any portion
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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 the Borrower, third, to pay principal of
and interest on any Protective Advance for which the Collateral Agent has not
then been paid by the 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 the Borrower so designates. Unless otherwise designated by the
Borrower, 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 LIBO Rate Loans with those LIBO Rate Loans which have earlier
expiring LIBO Rate Interest Periods being repaid prior to those which have later
expiring LIBO Rate Interest Periods.
(ii) Subject to the provisions of Sections 3.02(b)(iii) and (v), all
payments of principal of outstanding Term Loans shall be applied as follows: (A)
voluntary prepayments of Term Loans shall (I) be applied pro rata to all Term
Loans of the Lenders of such type of Term Loans as designated by the Borrower in
writing and (II) reduce the remaining scheduled amortization of such type of
Terms Loans pro rata among the then remaining scheduled amortizations of such
Loans and (B) mandatory payments of Term Loans shall (I) be applied pro rata
among all then outstanding Term Loans and (II) reduce the remaining scheduled
amortization payments of such Term Loans pro rata among all the outstanding Term
Loans.
(iii) After the occurrence of an Event of Default and while the same is
continuing, the Funding Agent may, and at the direction of the Requisite Lenders
shall, apply all payments in respect of any Obligations of the Borrower against,
and the Collateral Agent may, and at the direction of the Requisite Lenders
shall, transfer to the Funding Agent all proceeds of Collateral of the Borrower
for application to, the Obligations of the Borrower in the following order:
(A) first, to pay principal or interest on any portion of the Swing
Loans of the Borrower;
(B) second, to pay principal of and interest on any portion of the
Revolving Loans of the 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 the Borrower;
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(C) third, to pay principal of and interest on any Protective Advance
for which the Collateral Agent has not then been paid by the Borrower or
reimbursed by the Lenders;
(D) fourth, to pay Obligations in respect of any expense
reimbursements or indemnities of the Borrower then due to the
Administrative Agents;
(E) fifth, to pay Obligations in respect of any expense reimbursements
or indemnities of the Borrower then due to the Lenders and the Issuing
Banks;
(F) sixth, to pay interest and fees due in respect of Loans of the
Borrower, to the extent not already paid pursuant to clause (B) of this
Section 3.02(b)(iii);
(G) seventh, to pay or prepay (or, to the extent such Obligations are
contingent, to deposit into the Cash Collateral Account pursuant to Section
11.02(b)) principal outstanding on the Revolving Loans, the Term Loans, the
Reimbursement Obligations of the Borrower and all other Letter of Credit
Obligations of the Borrower and Hedging Obligations of the Borrower to
which any of the Lenders or any Affiliate of any of the Lenders is a party;
and
(H) eighth, to the ratable payment of all other Obligations of the
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 (H), 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)(iii)
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 clauses (A) through (H) of this Section 3.02(b)(iii) 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 Borrower, 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 (H) 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)(iii) may
be changed only with the prior written consent of the Administrative Agents.
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(iv) The Funding Agent, in its sole discretion subject only to the terms of
this Section 3.02(b)(iv), may pay from the proceeds of Revolving Loans (which
Loans have not been requested by the Borrower pursuant to a Notice of Borrowing)
made to the Borrower hereunder, whether made following a request by the Borrower
pursuant to Section 2.01 or 2.02 or a deemed request as provided in this Section
3.02(b)(iv), all amounts then due and payable by the 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. The 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 the Borrower, reimbursing expenses
pursuant to Section 13.02 and paying any and all other amounts due and payable
by the 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 the 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 the Borrower), of the amount and Funding Date of
the proposed Borrowing and that such Borrowing is being requested on the
Borrower's behalf pursuant to this Section 3.02(b)(iv). 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).
(v) Subject to Section 3.02(b)(vi), 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 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.
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(vi) In the event that any Lender fails to fund its Pro Rata Share of any
Revolving Loan requested by the 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 Commitments, the proceeds of all amounts
thereafter repaid to the Funding Agent by the 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 the 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)(vi) 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 Borrower, whether made by such Lender
itself or by operation of the terms of this Section 3.02(b)(vi), and
whether or not the Non Pro Rata Loan with respect thereto has been repaid,
converted or continued;
(C) amounts advanced to the 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") 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 the 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 the
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, and any such
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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 the 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 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 the 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
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) the Borrower shall make such withholding or
deductions, and (z) the Borrower shall pay the full amount withheld or deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(b) Indemnification. The 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,
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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 the 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 the Borrower, to provide
the 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 the Borrower, the 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. The 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
(each a "Non-U.S. Lender") shall deliver to the Borrower and the Funding Agent
not later than the date on which such Lender becomes a Lender, (A) a true and
accurate certificate executed in duplicate by a duly 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)) or (B) in the case of a Lender or Issuing Bank
claiming exemption from United State withholding tax under Section 871(h) or
881(c) of the Internal Revenue Code with respect to payments of "portfolio
interest" (a "Registered Holder"), (i) a certificate representing that such
Registered Holder is not a "bank" for purposes of Section 881(c)(3) of the
Internal Revenue Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Internal Revenue Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Internal Revenue Code).
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(ii) Each Lender further agrees to deliver to the Borrower 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 the 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
Borrower;
(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 June 12, 1997 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 Borrower; 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 June
12, 1997 or the date on which such Lender became a Lender.
Each Lender agrees to deliver to the Borrower 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 Borrower 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 Borrower that it is not
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capable of receiving payments hereunder and under the Notes without any
deduction or withholding of United States federal income tax.
(iii) The Borrower shall not be required to pay any additional amount to,
or to indemnify, pursuant to paragraphs (a) or (b) of this Section 3.03, any
Non-U.S. Lender or any Issuing Bank in respect of United States Federal
withholding tax to the extent imposed as a result of (A) the failure by such
Non-U.S. Lender or Issuing Bank to comply with the provisions of
paragraphs(d)(i) or (d)(ii) of this Section 3.03 or (B) a representation made
pursuant to the provisions of such paragraphs (d)(i) or (d)(ii) proving to have
been false or incorrect when made.
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 Borrower 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. Such Lender or Issuing Bank shall notify
the Borrower of any event referred to in clause (i) of this Section within 180
days of obtaining actual knowledge of such event.
3.05 Promise to Repay; Evidence of Indebtedness.
(a) Promise to Repay. (i) The 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
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Lenders, and the 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 A-1 (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) The Borrower hereby agrees to pay when due the principal amount of
each Term Loan, and further agrees to pay all unpaid interest accrued thereon,
in accordance with the terms of this Agreement and the Term Notes owing to the
Lenders, and the Borrower shall execute and deliver to each Lender such Term
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.
(iii) The 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 the
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 A-2 (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 the 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 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 LIBO Rate 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 the Borrower to each
Lender hereunder or under the Notes, and (iv) the amount of any sum received by
the Funding Agent from the 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 the Borrower and
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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 Borrower
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 Credit Party shall maintain lockbox
accounts (the "Lockbox Accounts") in the name of the Collateral Agent with the
Lockbox Banks of such Credit Party and shall, promptly upon receipt thereof,
deposit in its respective Lockbox Accounts, all monies that constitute checks,
notes, drafts or funds received by such Credit Party 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 the Borrower on each Business
Day shall be transferred to the Concentration Account of such Credit Party in
accordance with the terms of the Lockbox Agreements and shall be transferred
from the Concentration Account of such Credit Party either (i) if no Triggering
Event has occurred and is continuing, as the Borrower may direct in writing or
(ii) after the occurrence and during the continuance of a Triggering Event, to
the Funding Agent to be applied to the Obligations in accordance with Section
3.02(b). Each such Credit Party hereby grants to the Collateral Agent a security
interest in the Concentration Account of such Credit Party and all funds from
time to time deposited therein, including, without limitation, all overnight
investments.
(c) Each such Credit Party 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 the Borrower and
depositing for collection any check or item of payment received by and/or
delivered to the Lockbox Banks or the Collateral Agent on account of the
Obligations of such Credit Party. The 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 Credit Party.
(d) The Borrower shall enter into Lockbox Agreements on terms satisfactory
to the Administrative Agents on or prior to the 90th day following the Effective
Date.
3.07 Replacement of Lender. If (i) the Borrower becomes obligated to pay
additional amounts to any Lender pursuant to
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Section 3.03, 3.04 or 4.01(f) (other than with respect to a LIBO Rate Reserve
Requirement) 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, within fifteen (15) days of being on notification of such condition,
(ii) a Lender refuses in writing to give its written consent to any amendment
which requires the consent of all Lenders which amendment has received the
written consent of at least the Requisite Lenders pursuant to clause (ii) of the
second sentence of Section 13.07 or (iii) a Lender invokes the provisions of
Section 4.02(e), in each case, the Borrower may 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 Commitments. 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 the 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 Rate, as in effect from time to time as
interest accrues plus (B) the Applicable Margin in effect from time to
time; and
(ii) If a LIBO Rate Loan, at a rate per annum equal to the sum of (A)
the LIBO Rate determined for the applicable
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LIBO Rate Interest Period plus (B) the Applicable Margin in effect from
time to time during such LIBO Rate Interest Period.
Subject to Section 4.01(c)(i), 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 the Borrower to the Funding
Agent; provided, however, the Borrower may not select the LIBO 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 each Quarterly Payment Date, 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 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 LIBO Rate Loan shall be payable in arrears
(A) on each LIBO Rate 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 LIBO
Rate Loan.
(iii) Interest accrued on the principal balance of all other Obligations
shall be payable in arrears (A) on each Quarterly Payment Date, 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) The Borrower shall have the option (A)
to convert at any time all or any part of outstanding Base Rate Loans to LIBO
Rate Loans; or (B) to continue all or any part of outstanding LIBO Rate Loans,
in accordance with the terms of Section 4.01(a), having LIBO Rate Interest
Periods which expire on the same date as LIBO Rate Loans, and the succeeding
LIBO Rate 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 LIBO Rate Loan (x) if the continuation of,
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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 LIBO Rate Loan, such LIBO Rate Loan shall convert
automatically into a Base Rate Loan on the final date of the applicable LIBO
Rate Interest Period.
(ii) To convert or continue a Loan under Section 4.01(c)(i), the 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 proposed conversion/continuation date (which shall be a
Business Day), (B) the principal amount of the Loan to be converted/continued,
(C) whether such Loan shall be converted and/or continued, and (D) in the case
of a conversion to, or continuation of, a LIBO Rate Loan, the requested LIBO
Rate Interest Period. In lieu of delivering a Notice of Conversion/Continuation,
the 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 the 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 principal balance of all other Obligations (other than LIBO Rate
Loans), shall bear interest at a rate which is two percent (2%) per annum in
excess of the Base Rate plus the Applicable Margin, and the principal balance of
all LIBO Rate Loans shall bear interest at a rate which is two percent (2%) per
annum in excess of the LIBO Rate plus the Applicable 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 or, in the case of Base Rate Loans, a
year of 365 or 366
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days, as the case may be. In computing interest on any Loan, the date of the
making of the Loan or the first day of a LIBO Rate Interest Period, as the case
may be, shall be included and the date of payment or the expiration date of a
LIBO Rate 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 LIBO Rate Affiliate) to charges (other than
Taxes) of any kind which such Lender or Issuing Bank reasonably determines
to be applicable to the Commitments of the Lenders and/or the Issuing Banks
to make LIBO 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 LIBO 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 (including the
actual imposition of any LIBO Rate Reserve Requirement), 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 LIBO Rate
Affiliate of that Lender or Issuing Bank;
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 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
Borrower 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 LIBO Rate 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
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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 Lender or Issuing Bank or such Loans or obligations in respect of Letters
of Credit of such Lender or Issuing Bank.
4.02 Special Provisions Governing LIBO Rate Loans. With respect to LIBO
Rate Loans:
(a) Amount of LIBO Rate Loans. Each LIBO 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 LIBO Rate Interest Period. By giving notice as
set forth in Section 2.01(b) (with respect to any Borrowing of LIBO Rate
Loans) or Section 4.01(c) (with respect to a conversion into or
continuation of LIBO Rate Loans), the Borrower shall have the option,
subject to the other provisions of this Section 4.02, to select an interest
period (each, a "LIBO Rate Interest Period") to apply to the Loans
described in such notice, subject to the following provisions:
(i) The Borrower may only select, as to a particular Borrowing of
LIBO Rate Loans, a LIBO Rate Interest Period of either one, two, three
or six months in duration;
(ii) In the case of immediately successive LIBO Rate Interest
Periods applicable to a Borrowing of LIBO Rate Loans, each successive
LIBO Rate Interest Period shall commence on the day on which the next
preceding LIBO Rate Interest Period expires;
(iii) If any LIBO Rate Interest Period would otherwise expire on
a day which is not a Business Day, such LIBO Rate 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
LIBO Rate Interest Period shall expire on the immediately preceding
Business Day;
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(iv) The Borrower may not select a LIBO Rate Interest Period as
to any Loan if such LIBO Rate Interest Period terminates later than
the Commitment Termination Date;
(v) The Borrower may not select a LIBO Rate 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 fifteen (15) LIBO Rate 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 LIBO Rate Interest Period (the "LIBO
Rate Interest Rate Determination Date"), the Funding Agent shall determine
(pursuant to the procedures set forth in the definition of "LIBO Rate") the
interest rate which shall apply to the LIBO Rate Loans for which an interest
rate is then being determined for the applicable LIBO Rate Interest Period and
shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to the 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 Borrower.
(d) Interest Rate Unascertainable, Inadequate or Unfair. In the event that
at least one (1) Business Day before the LIBO Rate 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 LIBO Rate 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 LIBO Rate then being determined is to be fixed; or
(iii) the Requisite Lenders advise the Funding Agent that the LIBO
Rate for LIBO 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' LIBO Rate Loans in Dollars and for a period equal to such LIBO
Rate Interest Period;
then the Funding Agent shall forthwith give notice thereof to the Borrower,
whereupon (until the Funding Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist) the right of
the Borrower to elect to have Loans bear interest based upon the LIBO Rate
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shall be suspended and each outstanding LIBO Rate Loan shall be converted
into a Base Rate Loan on the last day of the then current LIBO Rate
Interest Period therefor, notwithstanding any prior election by the
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 LIBO 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 the 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) the
Borrower's right to request from any Lender and each Lender's obligation, if
any, to make LIBO Rate Loans shall be immediately suspended, and each Lender
shall make a Base Rate Loan as part of any requested Borrowing of LIBO Rate
Loans and (B) if LIBO Rate Loans are then outstanding, the 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 LIBO Rate Loans, such Lender
shall promptly give notice of that determination, in writing, to the Borrower
and the Funding Agent, and the Funding Agent shall promptly transmit the notice
to each other Lender. The Borrower's right to request, and such Lender's
obligation, if any, to make LIBO Rate Loans shall thereupon be restored.
(f) Compensation. In addition to all amounts required to be paid by the
Borrower pursuant to Section 4.01, the 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 LIBO Rate Loans to the Borrower but excluding any loss of
Applicable Margin on the relevant Loans) which that Lender may sustain (i) if
for any reason a Borrowing, conversion into or continuation of LIBO Rate Loans
does not occur on a date specified therefor in a Notice of Borrowing or a Notice
of Conversion/Continuation given by the Borrower or in a telephonic request by
it for borrowing or conversion/continuation or a successive LIBO Rate Interest
Period does not commence after notice therefor is given pursuant to Section
4.01(c), including,
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without limitation, pursuant to Section 4.02(d), (ii) if for any reason any LIBO
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 LIBO Rate
Interest Period, (iii) as a consequence of a required conversion of a LIBO Rate
Loan to a Base Rate Loan as a result of any of the events indicated in Section
4.02(d) or 4.02(e), or (iv) as a consequence of any failure by the Borrower to
repay LIBO Rate Loans when required by the terms of this Agreement. The Lender
making demand for such compensation shall deliver to the 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 LIBO Rate Loans. Any Lender may make, carry or transfer LIBO
Rate Loans at, to, or for the account of, its LIBO Rate Lending Office or LIBO
Rate Affiliate or its other offices or Affiliates. No Lender shall be entitled,
however, to receive any greater amount under Section 3.03, 3.04, 4.01(f) or
4.02(f) as a result of the transfer of any such LIBO Rate Loan to any office
(other than such LIBO Rate Lending Office) or any Affiliate (other than such
LIBO Rate 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 LIBO Rate 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.
4.03 Fees.
(a) Administrative Agents' Fees. The Borrower shall pay to the
Administrative Agents, solely for the account of the Administrative Agents, the
fees set forth in (i) the letter from Citicorp and Scotiabank addressed to the
Borrower and GFI dated May 12, 1997 and (ii) the letter from Citicorp and
Scotiabank addressed to the Borrower, GFI, Foamex International and Trace Foam
dated February 9, 1998, in each case, payable in accordance with the terms of
such letters.
(b) Letter of Credit Fee. In addition to any charges paid pursuant to
Section 2.03(g), the Borrower shall pay to the Funding Agent, for the account of
the Lenders entitled thereto, based on their respective Pro Rata Shares, a fee
accruing at a per annum rate equal to the then Applicable Margin for LIBO Rate
Loans less 1/8 of 1% on the undrawn face amount of each outstanding Letter of
Credit for the period of time such Letter of Credit is outstanding, payable on
each Quarterly Payment Date, in arrears (the "Letter of Credit Fees"); provided,
however,
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upon: (A) the occurrence of an Event of Default described in Section 11.1(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 the then Applicable
Margin for LIBO Rate Loans (less 1/8 of 1%) plus two percent (2.0%) per annum.
(c) Unused Commitment Fee. The Borrower shall pay to the Funding Agent, for
the account of the Lenders entitled thereto, in accordance with their respective
Pro Rata Shares, a fee (the "Unused Commitment Fee"), accruing at the rate of
the Applicable Commitment Fee Margin on the amount from time to time by which
the Commitments exceed the sum of (i) the outstanding principal amount of the
Revolving Loans, plus (ii) the outstanding Reimbursement Obligations, plus (iii)
the aggregate undrawn face amount of all outstanding Letters of Credit, for the
period commencing on the Effective Date and ending on the Revolving Loan
Commitment Termination Date, such portion of the fee being payable quarterly, in
arrears, commencing with the first Quarterly Payment Date following the
Effective Date. Notwithstanding the foregoing, in the event that any Lender
fails to fund its Pro Rata Share of any Loan requested by the 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
Commitment until such failure has been cured in accordance with Section
3.02(b)(vi)(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 Commitments, and shall be calculated based upon the
average amount by which the aggregate applicable 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
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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. This
Agreement shall become effective on the date (the "Effective Date") that the
following conditions precedent have been satisfied (unless waived by the
Requisite 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.
(i) this Agreement executed by the Borrower, the Credit Agents
and the Requisite Lenders; and
(ii) such additional documentation as the Administrative Agents
or any of the Requisite Lenders may reasonably request by any of the
Credit Agents or the Requisite Lenders.
(b) Consents. Except for the consent set forth on Schedule 5.01(b)
hereto, as to which consent the Borrower shall use its reasonable best
efforts to obtain, the Borrower shall have received all material consents
and authorizations required pursuant to any material Contractual Obligation
with any other Person and shall have obtained all material consents and
authorizations of, and effected all notices to and filings with, any
Governmental Authority, in each case, as may be necessary to allow the
Borrower to lawfully and without risk of rescission, execute, deliver and
perform, in all material respects, its obligations under this Agreement and
the 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.
(c) Amendment Fee. The Funding Agent shall have received from the
Borrower, on behalf and for the benefit of each Lender which has executed
this Agreement on or prior to the Effective Date, an amendment fee in the
amount of 1/4 of 1% of the outstanding Commitment and Term Loans of such
Lender under this Agreement.
(d) No Legal Impediments. No law, regulation, order, judgment or
decree of any Governmental Authority shall, and neither Administrative
Agent shall have received, on or prior to the Effective Date, any notice
that litigation is pending or threatened which is likely to, impose or
result in the imposition of a Material Adverse Effect.
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(e) No Change in Condition. No change in the condition (financial or
otherwise), business, performance, properties, assets, operations or
prospects of the Borrower or any of its Subsidiaries shall have occurred
since December 31, 1998 which change, in the judgment of the Lenders, will
have or is reasonably likely to have a Material Adverse Effect.
(f) No Default. After giving effect to this Agreement, no Event of
Default or Potential Event of Default shall have occurred and be
continuing.
(g) Representations and Warranties. All of the representations and
warranties contained in Section 6.01 of this Agreement and in any of the
other Loan Documents shall be true and correct in all material respects on
and as of the Effective Date.
5.02 Conditions Precedent to All Loans and Letters of Credit. The
obligation of each Lender to make any 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 the
Borrower and the Managing 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 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.
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(d) No Material Adverse Effect. No change in the condition (financial
or otherwise), business, performance, properties, assets, operations or
prospects of the Borrower or any of its Subsidiaries shall have occurred
since December 31, 1998, which has had or is reasonably likely to have a
Material Adverse Effect.
Each submission by the Borrower to the Funding Agent of a Notice of Borrowing
with respect to a 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 the Borrower of
the proceeds of each Loan made, converted or continued hereunder, each
submission by the 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 the Borrower and, in the case of a submission by
the Borrower, the Managing General Partner, individually, and as the managing
general partner of the Borrower, 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 Borrower. In order to induce the
Lenders and the Issuing Banks to enter into this Agreement and to make and/or
maintain the Loans and the other financial accommodations to the Borrower and to
issue the Letters of Credit described herein, the Borrower, individually, and
the Managing General Partner, individually and as the managing general partner
of the Borrower, 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 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) The Borrower
(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 standing will have or is reasonably
likely to have a Material Adverse Effect, and (C) 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 the Borrower in
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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 the Borrower is a party on behalf of the
Borrower. After the Effective Date, FMXI will execute any other Loan
Documents to which the Borrower is a party on behalf of the Borrower. FMXI
is the managing general partner of the Borrower and FMXI has full authority
to execute alone, and on behalf of the Borrower, the Loan Documents.
(iii) The Managing General Partner (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 the Subsidiaries of the Borrower (A) other than the
Foreign Subsidiaries is a corporation or, in the case of any such
Subsidiary that is a limited liability company, a limited liability
company, 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 or, in the case of any such Subsidiary
that is a limited liability company, a foreign limited liability company,
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 or, in the case of any such Subsidiary that is a limited
liability company, limited liability company authority 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 to which it is party.
(v) The performance of the Partnership Agreement by the Managing
General Partner and the Borrower 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
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do not contravene any Requirement of Law applicable to such Person.
(vi) The Managing General Partner does not conduct any business other
than the business of acting as the managing general partner of the Borrower
and owning Equity Interests in the Borrower.
(b) Authority. (i) The Managing General Partner and each Subsidiary of the
Borrower party to a Transaction Document has the requisite corporate power, or,
in the case of any such Subsidiary that is a limited liability company (or any
other limited liability company), limited liability company power, and authority
to execute, deliver and perform each of the Transaction Documents to which it is
a party.
(ii) The Borrower 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 the
Borrower and/or the Managing General Partner or any Subsidiary of the
Borrower is party and the consummation of the transactions contemplated
thereby, have been duly approved by the Managing General Partner (on behalf
of the Borrower), the board of directors of the Managing General Partner
and each such Subsidiary and the shareholders of such Subsidiary, as the
case may be, and such approvals have not been rescinded, revoked or
modified in any manner. No other partnership action or proceedings on the
part of the Borrower or other corporate or shareholder action or
proceedings on the part of the Managing General Partner or its Subsidiaries
are necessary to consummate such transactions.
(iv) Each of the Transaction Documents to which the Borrower or the
Managing General Partner or any Subsidiary of the Borrower is a party has
been duly executed, or delivered, on behalf of the Borrower or the Managing
General Partner or Subsidiary, 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, except as set
forth in Schedule 6.01(b)(iv) hereto 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.
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(c) Subsidiaries; Ownership of Equity Interests. Schedule 6.01-C (i)
contains a diagram indicating the partnership and/or corporate structure of the
Borrower and its Subsidiaries, and any other Person which the Borrower or any of
its Subsidiaries holds an Equity Interest and each direct and indirect parent of
the Managing 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 the Borrower and its Subsidiaries and the record and, to the
knowledge of the Borrower and the Managing General Partner, beneficial owner, of
such Equity Interests. As of the Effective Date, none of the partnership
interests of the Borrower (to the Borrower's and the Managing 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 the Borrower's and the Managing 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 the Borrower'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 the Borrower or any of its Subsidiaries or the
Managing General Partner is a party do not and will not (i) conflict with the
Constituent Documents of the Borrower, any such Subsidiary, the Managing General
Partner, or to the best knowledge of the Borrower and the Managing General
Partner, any Person listed on Schedule 6.01-C, (ii) to the Borrower's or the
Managing 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 the Borrower to remain a
valid limited partnership under RULPA) or (C) any Contractual Obligation of the
Borrower, any such Subsidiary, the Managing General Partner or, to the best
knowledge of the Borrower or the Managing 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 the Borrower or any such
Subsidiary, other than Liens contemplated by the Loan Documents, or (v) require
any approval of the Borrower's, any such Subsidiary's, or to the Borrower's or
the Managing General Partner's best knowledge, the Managing General Partner's,
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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 the Borrower or any of its Subsidiaries or the Managing 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 the Borrower and its Subsidiaries conducts its business.
(f) Governmental Regulation. None of the Borrower, any of its Subsidiaries
or the Managing 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 are
based upon facts and assumptions that the Managing General Partner and the
Borrower believe to be reasonable in light of the then current and foreseeable
business conditions. All monthly, quarterly and annual financial statements of
the Borrower and any of its Subsidiaries delivered to the Administrative Agents
were prepared in conformity with GAAP and fairly present the financial position
of the Borrower or the consolidated and consolidating financial position of the
Borrower 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
Borrower at such time (it being understood that actual results may differ from
the projections). As of the date of delivery, none of the Borrower or any of its
Subsidiaries has any Accommodation Obligation, contingent liability or liability
for any Taxes, long-term leases or 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
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the Lenders in writing, which will have or is reasonably likely to have a
Material Adverse Effect.
(h) [Intentionally Omitted].
(i) Business Plan. The Business Plan of the Borrower and its Subsidiaries
most recently delivered to the Administrative Agents after the Effective Date
pursuant to Section 7.01(f), represents the Managing General Partner's and the
Borrower's reasonable and good faith plan and estimate as of the date of
delivery to the Administrative Agents of the Borrower's future business and
financial activities for the periods set forth therein. Such Business Plan has
been based on facts and on assumptions that the Managing General Partner and the
Borrower believe 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, proceedings, investigations or arbitrations before or by
any Governmental Authority or private arbitrator pending or, to the knowledge of
the Borrower, any of its Subsidiaries or the Managing General Partner,
threatened against the 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 the Borrower 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, 1998, there has occurred
no event 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 the Borrower 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. The Borrower has no knowledge of any proposed tax
assessment against the Borrower or any of its Subsidiaries that will have or is
reasonably likely to have a Material Adverse Effect.
(m) Partnership Tax Status. The Borrower since its organization has been
treated as a partnership within the meaning
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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 the
Managing General Partner nor the Borrower has any knowledge of any inquiry or
investigation by any Person (including, without limitation, the IRS) as to
whether or not the Borrower is, or any claim or assertion by any Person
(including, without limitation, the IRS) that the Borrower 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. Except as set forth on Schedule 6.01(n) hereto, none of
the Borrower, any of its Subsidiaries or the Managing 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 the 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 the Borrower,
its Subsidiaries and the Managing 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 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 Borrower and the Managing General Partner 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, and with respect to environmental and related violations of law
concerning the Borrower's Morristown, Tennessee, and Fort Wayne, Indiana
facilities, the Borrower 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 the Borrower and the Borrower's employees, consultants or
agents:
(A) the operations of the Borrower and its Subsidiaries comply in all
material respects with all applicable Environmental, Health or Safety
Requirements of Law;
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(B) the Borrower 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 the
Borrower and its Subsidiaries are currently in material compliance with all
terms and conditions of such Permits;
(C) none of the Borrower and its Subsidiaries or any of their respective
present or past Property or operations is 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 Claims or Liabilities and Costs arising from the Release or
threatened Release of a Contaminant into the environment;
(D) none of the operations of the Borrower 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 the Borrower and its Subsidiaries:
(1) 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;
(2) 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
(3) has reported any material violation of any applicable
Environmental, Health or Safety Requirement of Law;
(F) none of the Borrower'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 the 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 the Borrower 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;
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(H) there is not now, nor has there ever been on or in the Property:
(1) 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;
(2) any landfill, waste pile, underground storage tank or surface
impoundment;
(3) any asbestos-containing material; or
(4) a Release of any polychlorinated biphenyls (PCB) used in hydraulic
oils, electrical transformers or other Equipment;
(I) none of the Borrower 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 the Borrower and its Subsidiaries has 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 the Borrower or
its Subsidiaries; and
(M) none of the Borrower and its Subsidiaries has entered into any
agreements with any Person relating to any Remedial Action or environmentally
related Claim.
(ii) the Borrower and its Subsidiaries are conducting and will continue to
conduct their respective businesses and operations in an environmentally
responsible manner, and the 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 Borrower and
such Subsidiaries in excess of $10,000,000 (excluding matters described in item
V.O. and V.P. of Schedule 6.01-Q with respect to the Borrower's facilities in
Morristown, Tennessee and Fort Wayne, Indiana), in the aggregate for any
calendar year ending after June 12, 1997.
(r) ERISA. None of Borrower, its Subsidiaries or any ERISA Affiliate
currently maintains or contributes to any Benefit Plan, Multiemployer Plan or
Foreign Pension Plan other than those
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listed on Schedule 6.01-R hereto. Except as disclosed in 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 Borrower or
any ERISA Affiliate maintains or contributes to any employee welfare benefit
plan within the meaning of Section 3(l) of ERISA which provides benefits to
employees after termination of employment other than as required by Section 601
of ERISA or applicable law. The Borrower and its Subsidiaries and the ERISA
Affiliates are in compliance in all material respects with the responsibilities,
obligations and duties imposed on them by ERISA and the Internal Revenue Code
with respect to all Plans. No Benefit Plan has incurred any accumulated funding
deficiency (as defined in Section 302(a)(2) of ERISA and 412(a) of the Internal
Revenue Code) whether or not waived. None of the Borrower or any ERISA
Affiliates nor, to the knowledge of the Borrower, any fiduciary of any 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
Borrower or any ERISA Affiliate is subject to any liability under Section 4063,
4064, 4069, 4204 or 4212(c) of ERISA. None of the Borrower 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
Borrower 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
Borrower 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
Borrower 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 Borrower or its 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. The Borrower has given or made available 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
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listing of all of the Multiemployer Plans currently contributed to by the
Borrower or any ERISA Affiliate with the aggregate amount of the most recent
annual contributions required to be made by the Borrower and each ERISA
Affiliate to each such Multiemployer Plan, any information which has been
provided to the 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 the Borrower or any of such ERISA Affiliates after termination of
employment 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 the Borrower or
any of its 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 the Borrower and its
Subsidiaries, there are no actions, suits or claims (other than routine claims
for benefits) pending or threatened against the Borrower or any of such its
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 the Borrower or any of its Subsidiaries is a party on the
Effective Date 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 the 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 the Borrower or any of its Subsidiaries
is engaged in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.
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(v) Solvency. After giving effect to this Agreement, the Loans made or
requested hereunder and the disbursement of the proceeds of any such Loans made
or requested pursuant to the Borrower's instructions, the Borrower and each of
the other Loan Parties is Solvent.
(w) Patents, Trademarks, Permits, Etc.; Government Approvals. (i) The
Borrower 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, 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 the Borrower's knowledge
following diligent inquiry, threatened that the Borrower 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 the Borrower or any of its 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 the Borrower and each of its Subsidiaries in any manner which has or is
reasonably likely to have a Material Adverse Effect.
(x) Assets and Properties. The Borrower 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 and except
with Liens on assets of the Foreign Subsidiaries) 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 the 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
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have a Material Adverse Effect. Neither this Agreement nor any other Transaction
Document, nor any transaction contemplated under any such agreement, will affect
any right, title or interest of the 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 the Borrower and its
Subsidiaries, 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 the
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) the
Borrower has entered into with the Managing General Partner, any Limited Partner
or any Affiliate of the Borrower, the Managing General Partner or Limited
Partner or (ii) the Managing General Partner or Limited Partner or any Affiliate
of the Borrower, the Managing General Partner or Limited Partner is subject to
or has entered into with respect to any of the Borrower's Properties, including,
in the case of each of clauses (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) New Foamex Subordinated Notes and New Foamex Notes. The subordination
provisions of the New Foamex Subordinated Note Indenture and the New Foamex
Indenture are enforceable against the holders of the New Foamex Subordinated
Notes and the New Foamex Notes, respectively. The Obligations constitute
"Obligations" related to the "New Credit Facility" and "Senior Debt" (as each
term is defined in the New Foamex Subordinated Note Indenture and the New Foamex
Indenture).
(bb) Senior Indebtedness. Each of the parties hereto acknowledges that the
Obligations constitute "Obligations" owing under the "Credit Agreement" (as each
such term is defined in the New Foamex Subordinated Note Indenture and the New
Foamex Indenture), and "Senior Indebtedness" or "Senior Debt" (as each term is
defined in the New Foamex Subordinated Note Indenture and the New Foamex
Indenture).
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(cc) Year 2000. Any work or activity (as such work or activity relates to
the "Year 2000" systems problems) required to permit the proper functioning of
the Borrower's critical applications and systems on January 1, 2000 and at all
times thereafter will be completed by December 31, 1999. The cost to the
Borrower of such work and activity will not result in any Potential Event of
Default or Event of Default or cause a Material Adverse Effect.
ARTICLE VII
REPORTING COVENANTS
The Borrower covenants and agrees that so long as any 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. The 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. The 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 balance sheets
and results of operations of the Borrower and its Subsidiaries as at the end of
such period, and the related consolidated statements of income and cash flow of
the Borrower 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 financial forecast for the current Fiscal Year
delivered pursuant to Section 7.01(f), certified by the chief financial officer
of the Borrower as fairly presenting the consolidated financial position of the
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),
(ii) a written management's discussion and analysis for such month and (iii) a
projection of weekly cash receipts and disbursements for the four
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week period following the date of submission of such projection in form and
substance satisfactory to the Administrative Agents (it being understood that
actual results may differ from the projection).
(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, the Form 10-Q, if any, filed by the 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 the Borrower with the Securities and Exchange Commission with
respect to such Fiscal Year, (ii) the consolidated and consolidating financial
statements of the Borrower and its Subsidiaries (which shall be audited with
respect to consolidated financial statements by PricewaterhouseCoopers 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
PricewaterhouseCoopers 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
PricewaterhouseCoopers or such other independent certified public accountants
acceptable to the Administrative Agents, which opinion shall, for the fiscal
year ended December 31, 1999 and each fiscal year thereafter, 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 Borrower substantially in the form of Exhibit E
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 Borrower and its 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
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period of existence thereof and what action the Borrower or any of its
Subsidiaries have taken, are taking and proposes to take with respect thereto;
and (ii) a certificate substantially in the form of Exhibit F attached hereto
(the "Compliance Certificate"), signed by the Borrower's chief financial
officer, setting forth calculations (with such specificity as the Administrative
Agents may reasonably request) for the period then ended for the Total Net Debt
to EBDAIT Ratio for purposes of calculation of the Applicable Margin and which
demonstrate compliance, when applicable, with the provisions of Article X.
(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, at the request of
either of the Administrative Agents, be accompanied by (x) a copy of the
management letter or any similar report delivered to the 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 G
attached hereto and made a part hereof from the 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
the Borrower in having such financial statements audited is to induce the
Lenders to continue to make Loans to the Borrower under this Agreement. Either
Administrative Agent and each Lender may, with the consent of the Borrower
(which consent shall not be unreasonably withheld), communicate directly with
such accountants.
(f) Business Plans; Financial Projections. No later than the last day of
each Fiscal Year beginning with Fiscal Year 1999, (i) an annual business plan
for the next Fiscal Year for each of the Borrower and its Subsidiaries,
substantially in the form of the business plan heretofore delivered to the
Administrative Agents and the Lenders; 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 the Managing General Partner and
the Borrower believe to be reasonable in light of the
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then current and foreseeable business conditions, for the next two succeeding
Fiscal Years of the Borrower and its Subsidiaries (it being understood that
actual results may differ from the projections).
7.02 Events of Default. Promptly upon the 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 the
Borrower or any Subsidiary of the 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, the 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 the Borrower has taken, is taking
and proposes to take with respect thereto.
7.03 Lawsuits. (i) Promptly upon the Borrower obtaining knowledge of the
institution of, or written threat of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Borrower or any of its
Subsidiaries or any Property of the 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 the Borrower's reasonable judgment, the Borrower or any of such
Subsidiaries to liability in an amount aggregating $500,000 or more (exclusive
of claims covered by insurance policies of the Borrower or any of such
Subsidiaries unless the insurers of such claims have disclaimed coverage or
reserved the right to disclaim coverage on such claims), the 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 7.03, the 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.
7.04 Insurance. As soon as practicable and in any event by the last day of
each Fiscal Year, the Borrower shall deliver to
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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 the
Borrower and its Subsidiaries and the duration of such coverage and (ii) if
requested by the Administrative Agents, evidence that all premiums with respect
to such coverage have been paid when due.
7.05 ERISA Notices. The Borrower shall deliver or cause to be delivered,
within the time limits set forth below, to the Administrative Agents and the
Lenders, at the Borrower's expense, the following information and notices as
soon as reasonably possible, and in any event:
(i) within ten (10) Business Days after the 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 the
Borrower describing such Termination Event and the action, if any, which
the 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 the 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 the Borrower describing such transaction and the
action which the Borrower or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto;
(iii) within ten (10) Business Days or such longer period as may be
reasonably agreed to by either Administrative Agent after the 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
if received by the Borrower or Multiemployer Plan and each annual report
for any Multiemployer Plan;
(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 the 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
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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 the Borrower or any ERISA Affiliate was not
previously contributing, notification of such increase, establishment or
commencement;
(vii) within ten (10) Business Days after the 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 the 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 the 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 the 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
(x) within ten (10) Business Days or such longer period as may be
reasonably agreed to by either Administrative Agent after the Borrower or
any of its 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 7.05, the Borrower and any Subsidiary and any ERISA
Affiliate shall be deemed to know all facts known by the administrator of any
Plan of which the Borrower, any Subsidiary or ERISA Affiliate is the plan
sponsor. Section 7.05 shall only apply with respect to a Plan for which the
Borrower or any Subsidiary or any ERISA Affiliate is an "employer" as defined in
Section 3(5) of ERISA.
7.06 Environmental Notices. The Borrower shall notify the Administrative
Agents and the Lenders in writing, promptly upon the Borrower's learning
thereof, of any:
(i) notice or claim to the effect that the 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;
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(ii) notice that the 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 the Borrower or any of its
Subsidiaries is subject to an Environmental Lien;
(iv) notice of violation to the 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 the 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
(viii) any proposed acquisition of stock, assets, real estate, or
leasing of property, or any other action by the Borrower or any of its
Subsidiaries that could subject the 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, the
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 7.06(a),
disclosed on Schedule 6.01-Q or identified in any notice or report required
herein.
7.07 Labor Matters. The Borrower shall notify the Administrative Agents and
the Lenders in writing, promptly upon the Borrower's learning thereof, of (i)
any material labor dispute to which the 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 the Borrower or any of its Subsidiaries.
7.08 Permitted Subordinated Indebtedness. Upon its receipt of any of the
following, the 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
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behalf of the Borrower to any Person in connection with the Permitted
Subordinated Indebtedness; and (b) any material notice or other material
communication received by the Borrower from any Person in connection with any
agreement or other document relating to Permitted Subordinated Indebtedness
promptly after such notice or other communication is received by the Borrower.
7.09 Other Reports. The Borrower shall deliver or cause to be delivered to
the Administrative Agents and the Lenders copies of all financial statements,
reports and notices, if any, sent or made available generally by the Borrower to
its Securities holders or filed with the Securities and Exchange Commission, all
press releases made available generally by the Borrower or any of its
Subsidiaries to the public concerning material developments in the business of
the Borrower or any such Subsidiary and all notifications received by the
Borrower or its Subsidiaries pursuant to the Securities Exchange Act and the
rules promulgated thereunder.
7.10 Change of Control. Promptly upon, and in any event within three (3)
Business Days of, the Managing General Partner or the Borrower obtaining
knowledge of the occurrence or potential occurrence of a Change of Control, the
Managing General Partner or the 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.
7.11 Dissolution Notice. At least ninety (90) days prior to the
commencement of any action by the Managing General Partner or any Limited
Partner to dissolve the Borrower pursuant to the Partnership Agreement or
otherwise, the Managing General Partner or the Borrower 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.
7.12 Government Contracts. Promptly upon, and in any event within ten (10)
Business Days of, any Credit Party becoming a party to a Federal, state or local
government contract having a value in excess of $500,000, the Borrower shall
notify the Collateral Agent of such contract and shall provide the Collateral
Agent with any information related to such contract that the Collateral Agent
may reasonably request.
7.13 Other Information. Promptly upon receiving a request therefor from
either Administrative Agent or from the Requisite Lenders, the Borrower shall
prepare and deliver to the Administrative Agents and the Lenders such other
information with respect to the 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
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requested by either Administrative Agent or by the Requisite Lenders.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Borrower and the Managing General Partner covenant and agree that so
long as any 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:
8.01 Partnership/Corporate Existence, etc. The Managing General Partner
shall cause the Borrower to, and the Borrower shall, at all times, maintain its
partnership existence, and the Borrower shall cause its Subsidiaries to, and the
Managing General Partner shall, at all times, maintain its corporate existence
or, in the case of any such Subsidiary that is a limited liability company,
limited liability company 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 Managing General Partner
shall, and shall cause the Borrower to, and the Borrower shall, and shall cause
each of its 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 Managing General Partner shall, and
shall cause the Borrower to, and the Borrower shall, and shall cause each of its
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. The Borrower shall
pay, and cause each of its 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
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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 the 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. The Borrower will not, nor will it 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
Borrower or its Subsidiaries).
8.05 Insurance. The Borrower shall maintain for itself and for its
Subsidiaries, 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 canceled
or altered adversely to the interests of the Administrative Agents, the Issuing
Banks and the Lenders or canceled and that no act, whether willful or negligent,
or default of the Borrower, any of its 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 the 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. The Borrower shall permit, and cause its
Subsidiaries to permit, any authorized representative(s)
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designated by either Administrative Agent or by any Lender to visit and inspect
any of the Properties of the 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 (ii) by or on behalf of either Administrative Agent shall
be at the Borrower's expense.
8.07 Books and Records; Discussions. The 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 the Borrower to each Subsidiary
Guarantor. 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. The 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 the Borrower or one or more of its
Subsidiaries. The Collateral Agent shall, upon receipt of such proceeds, apply
the same to either the repair or replacement of such Collateral or the repayment
of Loans in accordance with Section 3.01(b).
8.09 ERISA Compliance. The 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. The Borrower shall, and
shall cause each of its Subsidiaries and ERISA Affiliates to, establish,
maintain and operate all Foreign
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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. The Borrower shall, and shall cause each of
its Subsidiaries to, maintain in all material respects all of the owned and
leased Property of the Borrower or such Subsidiary used and necessary in the
business of the 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 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 the Borrower or any of its Subsidiaries, the 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. The 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 Future Mortgages. The Borrower and each Subsidiary Guarantor shall,
prior to the acquisition of any fee interest or material leasehold interest in
real property, notify the Collateral Agent and provide the Collateral Agent with
the opportunity reasonably to request a Mortgage with respect to such interest
upon its acquisition, which Mortgage shall be substantially in the form of the
Mortgages delivered on February 27, 1998.
The Borrower or relevant Subsidiary Guarantor shall, with respect to any
leasehold Mortgage, exercise good-faith bona fide efforts to obtain consent to
such leasehold Mortgage, provided, however, such entity shall not be required
(i) to make any payments to the landlord or to incur any additional costs (other
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than reasonable customary costs) or (ii) to make any changes adverse to such
entity with respect to such lease and provided, further, that the failure to
obtain such consent and therefore the failure to provide such leasehold Mortgage
shall not be a default hereunder.
ARTICLE IX
NEGATIVE COVENANTS
The Borrower covenants and agrees that so long as any 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:
9.01 Indebtedness. None of the Borrower nor any of its Subsidiaries (other
than Foreign 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) [Intentionally Omitted];
(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 $10,000,000 in any twelve (12) month period
but in no event more than an aggregate of $15,000,000 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; provided, however, that for purposes of
this Section 9.01(iv) any Capital Leases and/or purchase money Indebtedness
of any Person which becomes a Subsidiary Guarantor after the Effective
Date, which such Capital Leases and/or purchase money Indebtedness existed
at the time of such Person becoming a Subsidiary Guarantor, shall be deemed
to have been incurred on the date such Person became a Subsidiary
Guarantor;
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(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 (x) owing from the Borrower or any
Subsidiary Guarantor to the Borrower or any other Subsidiary Guarantor to
the extent permitted by Section 9.04(iv) or (y) owing by the Borrower or
any Subsidiary Guarantor to a Foreign Subsidiary, but only so long as, in
each case, 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 payment in full of all Obligations and the
termination in full of the Commitments; and
(viii) Indebtedness in respect of Hedging Obligations (including any
amendments, supplements or modifications thereto) so long as the
Indebtedness thereunder receives "hedge accounting" treatment in accordance
with regulations promulgated by the Securities and Exchange Commission and
staff interpretations thereof and such Hedging Obligations were not entered
into for speculative purposes; and
(ix) Indebtedness in a principal amount not in excess of $34,000,000
evidenced by the Foamex/GFI Note.
9.02 Sales of Assets. None of the Borrower nor any of its Subsidiaries
(other than Foreign Subsidiaries) 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) (x) sales of inventory, (y) the licensing of intellectual property
or (z) the sale of services, in each case, in the ordinary course of
business; provided, that sales of inventory to Foreign Subsidiaries shall
only be permitted if made on an arm's length basis in the ordinary course
of business on customary trade terms and so long as the aggregate amount of
receivables created in connection with such sales shall not exceed at any
time 20% of the sum of (x) the consolidated Receivables of the Borrower and
its Subsidiaries plus (y) the Receivables of all Foreign Subsidiaries owing
to a Credit Party at such time;
(ii) sales of assets outside of the ordinary course of business not in
excess of $5,000,000 in a single transaction or series of related
transactions, nor in excess of $10,000,000 in the aggregate in any Fiscal
Year (except as contemplated in clause (v) below);
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(iii) contributions of assets made by any Credit Party to a Foreign
Subsidiary either directly or through another Credit Party to a Foreign
Subsidiary to the extent permitted pursuant to Section 9.04(iv);
(iv) the sublease of office space made by the Borrower at 375 Park
Avenue, New York, New York and the lease or sublease by the Borrower 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 sale or lease of assets comprising the Borrower's plant at New
Albany, Mississippi or LaPorte, Indiana;
(vi) the license by the Borrower of its patented surface modification
technology to JPS Automotive L.P. and the lease of certain equipment not in
excess of a net book value of $500,000 to JPS Automotive L.P. associated
with the use of such license;
(vii) leases or subleases of Property set forth on Schedule 9.02(vii)
hereto;
(viii) leases or subleases of Property which in the aggregate do not
provide for rental payments in excess of $1,000,000 per Fiscal Year; and
(ix) sales or other dispositions of assets in connection with the
Crain Restructuring;
provided, that (A) no sales or other dispositions (other than sales of obsolete
or used Equipment and assets sold or contributed to Foreign Subsidiaries
pursuant to clause (iii) above) 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 the Managing General Partner, the Borrower nor any of
its Subsidiaries (other than Foreign Subsidiaries) 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
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Property is subject at the time of the Borrower's or any of its
Subsidiaries purchase thereof) securing Indebtedness of the Borrower or its
Subsidiaries permitted under Section 9.01(iv); and
(v) to the extent Indebtedness secured thereby is permitted to be
extended, renewed, refunded or refinanced pursuant to Section 9.01(iii) or
(iv), 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.
9.04 Investments. None of the Borrower nor any of its Subsidiaries (other
than Foreign Subsidiaries) 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 Cash Equivalents;
(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) so long as no Event of Default or Potential Event of Default has
occurred and is continuing (or would result therefrom) Investments made
after the Effective Date by the Borrower in Persons in an amount not to
exceed $5,000,000 in the aggregate at any time outstanding; provided, that
Investments made after the Effective Date in Persons not engaged in a
Permitted Business shall not exceed $1,000,000 in the aggregate at any time
outstanding;
(v) so long as no Event of Default or Potential Event of Default has
occurred and is continuing (or would result therefrom), Investments by the
Borrower in Foamex International and the Managing General Partner in an
aggregate amount not to exceed $2,500,000 for the period beginning on the
Effective Date and ending on the Commitment Termination Date the proceeds
of which shall be used solely for the ordinary operating expenses of Foamex
International and the Managing General Partner;
(vi) Investments consisting of loans or advances by the Borrower to
Foamex International under the Tax Advance Agreement in an amount not to
exceed $1,500,000 for the purpose of making payments in satisfaction of any
outstanding obligation it may have as a prior owner of JPS Automotive L.P.;
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(vii) Investments by the Borrower in no more than 10,000 shares of
common stock of Foamex International received by the Borrower in connection
with the compromise of certain employee loans in the aggregate principal
amount not in excess of $1,000,000; and
(viii) Investments in Hedging Obligations permitted under Section
9.01(viii);
provided, however, that no Person shall become a Subsidiary (other than a
Foreign Subsidiary or a less than wholly-owned Subsidiary pursuant to Section
9.04(iv)) after the Effective Date unless (i) such Person is a wholly-owned
Subsidiary of the Borrower or any Subsidiary Guarantor and (ii) such Person has
executed and delivered to the Administrative Agents a Subsidiary Guarantee, a
Subsidiary Security Agreement and, as applicable, a Subsidiary Pledge Agreement
and Mortgages (but subject to Section 8.14), and such other documents, including
opinions of counsel, as the Administrative Agents may request, in each case in
form and substance acceptable to the Administrative Agents; provided, further,
however, that any Investment described in clause (iv) above shall be calculated
on a net basis, giving effect to the payment by the Person in which an
Investment was made of any dividends or returns of capital by way of redemption
of its Equity Interests to any Credit Party or payments to any Credit Party of
loans or advances or interest thereon made to such Person by such Credit Party.
9.05 Accommodation Obligations. None of the Borrower nor any of its
Subsidiaries (other than Foreign Subsidiaries) 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 of the Subsidiary Guarantors in
connection with their guaranty of (A) the New Foamex Subordinated Notes,
but only to the extent set forth in the New Foamex Subordinated Note
Indenture and (B) the New Foamex Notes, but only to the extent set forth in
the New Foamex Indenture;
(iv) Accommodation Obligations of the Borrower in respect of
Indebtedness permitted by Section 9.01 of any Subsidiary Guarantor;
(v) Accommodation Obligations of Credit Parties in respect of
liabilities of Foreign Subsidiaries incurred after the Effective Date,
provided, that, the aggregate outstanding amount of such Accommodation
Obligations plus the aggregate sales or other transfers of assets (valued
at the Fair Market
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Value thereof) to such Foreign Subsidiaries permitted under Section
9.02(iii) plus the amount of all Investments outstanding under Section
9.04(iv) shall not exceed $5,000,000 (computed as set forth in Section
9.04); and
(vi) the Foamex/GFI Note;
provided that, except as contemplated in clause (v) above, in no event shall any
of the Borrower or FMXI, nor any of their respective Subsidiaries (other than
Foreign Subsidiaries) directly or indirectly create or become or be liable with
respect to any Accommodation Obligation with respect to any liabilities of any
Foreign Subsidiary.
9.06 Restricted Junior Payments. None of the Borrower nor any of its
Subsidiaries (other than Foreign Subsidiaries) shall declare or make any
Restricted Junior Payment, except (without duplication):
(i) dividends or distributions to the Borrower in respect of its
Equity Interests in any of its wholly-owned Subsidiaries or to any of the
Borrower's wholly-owned Subsidiaries from any Subsidiary of the Borrower;
(ii) regularly scheduled interest and principal payments in respect of
the Foamex/GFI Note, the New Foamex Subordinated Notes and the New Foamex
Notes if such interest and principal payments are permitted to be made
pursuant to the terms of the New Foamex Subordinated Notes and the New
Foamex Subordinated Note Indenture, or the New Foamex Notes and the New
Foamex Indenture, as the case may be;
(iii) distributions to the Managing General Partner and the Limited
Partner in respect of the Borrower's obligations (and not in excess of such
obligations) under the Tax Sharing Agreement to which it is a party (A) in
an amount necessary to permit Foamex International to service its debt
obligations referred to in Sections 9.04(v) and (vi) (but only if such
distributions are immediately repaid to the Borrower); (B) in an amount
necessary to permit Foamex International to service its debt obligations
referred to in Schedule 9.06(iii) hereto (but only if such distributions
are immediately repaid to the Borrower) and (C) to the extent the proceeds
of such distributions shall be used to pay an actual tax liability of a
partner or its beneficial owners; provided, however, if a payment otherwise
required by the Tax Sharing Agreement not described in the foregoing
clauses (A), (B) and (C) is reduced because the distribution would not be
used to pay an actual tax liability, the obligation of the Borrower 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;]
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(iv) [Intentionally Omitted]
(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 and principal payments in respect of the GW Subordinated Note if
such interest and principal payments are permitted to be made pursuant to
the terms of the GW Subordinated Note and the GW Subordination Agreement;
(vi) payments made to Foamex International to purchase materials
pursuant to, and as defined in, the Foamex International Supply Agreement,
provided that (a) the Borrower shall not make any payment to Foamex
International to purchase any materials prior to receipt by the Borrower of
title to such materials, and (B) any amounts paid to Foamex International
in excess of the purchase price and reasonable expenses which the 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.
The Borrower understands and acknowledges that (i) pursuant to the Existing
Credit Agreement the Borrower was permitted to pay fees under the Management
Agreement so long as no Event of Default or Potential Event of Default (as each
such term was defined in the Existing Credit Agreement) had occurred and was
continuing and (ii) as of the Effective Date several such Events of Default had
occurred and were continuing. The Borrower hereby agrees with the Credit Agents
and the Lenders that, notwithstanding the amendment and restatement of the
Existing Credit Agreement as provided for in this Agreement which amendment and
restatement has the effect of eliminating such Events of Default, for purposes
of this Section 9.06 as it relates to the payment of fees under the Management
Agreement, such Events of Default shall be deemed to be in existence and
continuing until the payment in full of all of the Obligations and the
termination in full of the Commitments.
9.07 Conduct of Business. None of the Borrower nor any of its Subsidiaries
shall engage in any business other than a Permitted Business. The Managing
General Partner shall not engage in any business other than acting as the
managing general partner to the Borrower and holding its general partnership
interest in the Borrower. The Borrower shall cause FCC not to engage in any
business activity except the issuance of the New Foamex Subordinated Notes and
the New Foamex Notes, and the performance of FCC's obligations thereunder, under
the New Foamex Indenture, the New Foamex Subordinated Note Indenture and the
Loan Documents to which it is a party.
9.08 Transactions with Shareholders and Affiliates. None of the Borrower
nor any of its 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
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more than five percent (5%) of any class of Equity Interests in the Managing
General Partner or its corporate parents and their Affiliates (other than the
Borrower or a Subsidiary of the Borrower). Nothing contained in this Section
9.08 shall prohibit (i) any transaction expressly permitted by Section 9.02(iv),
Section 9.04(i), Section 9.04(iv) (to the extent of Investments in joint
ventures where the other joint venture parties are not Affiliates of the
Borrower), Section 9.04(v), Section 9.04(vi), Section 9.04(vii), Section 9.05
and Section 9.06; (ii) increases in compensation and benefits for officers and
employees of the Borrower or any of the 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 the Borrower or such Subsidiary or
consistent with market conditions; (iii) payment of customary directors' fees
and indemnities; (iv) performance of any obligations arising under the
Transaction Documents; (v) transactions listed on Schedule 6.01-Z; (vi) sales
and purchases of Inventory between the Borrower and its Subsidiaries on the one
hand and TIHI and its Subsidiaries on the other hand, on an arms length basis in
the ordinary course of business; (vii) the sublease of office space by the
Borrower to Foamex International and TIHI at 375 Park Avenue, New York, New York
and (viii) the termination of such sublease or the Management Agreement.
9.09 Restriction on Fundamental Changes. None of the Managing General
Partner, the Borrower nor any of its Subsidiaries (other than Foreign
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 the Managing General Partner's, the
Borrower's or any such Subsidiary's business or Property, whether now or
hereafter acquired, except (i) transactions permitted under Section 9.02 or the
Transaction Documents or (ii) so long as no Event of Default or Potential Event
of Default has occurred and is continuing (or would result therefrom) any
Subsidiary Guarantor may merge into the Borrower or another Subsidiary Guarantor
so long as if such merger is with or into the Borrower, the Borrower shall be
the surviving Person. The Borrower shall not change its partnership status to a
corporate status.
9.10 Sales and Leasebacks. None of the Borrower nor any of its Subsidiaries
(other than Foreign 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.
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9.11 Margin Regulations; Securities Laws. None of the Borrower nor any of
its Subsidiaries (other than Foreign 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. The Borrower shall not:
(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 the Borrower or any
ERISA Affiliate under Title IV of ERISA;
(iv) fail to make any contribution or payment to any Multiemployer
Plan which the Borrower or any ERISA Affiliate may be required to make
under any agreement 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
the 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.
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9.13 Issuance of Equity Interests. None of the Borrower nor any of the
Subsidiary Guarantors shall issue any Equity Interests except to the existing
holders of its Equity Interests.
9.14 Constituent Documents. None of the Managing General Partner, the
Borrower nor any of its Subsidiaries (other than Foreign 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 as
provided for in Section 9.09(ii) or for such amendments or modifications deemed
immaterial by the Administrative Agents.
9.15 Amendments to Permitted Subordinated Indebtedness. None of the
Borrower nor any of its Subsidiaries (other than Foreign 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 Borrower nor any of its
Subsidiaries (other than Foreign Subsidiaries) shall cancel any material claim
or debt, except in the ordinary course of its business, or prepay, redeem,
purchase, repurchase or retire any long-term Indebtedness (including, without
limitation, the Indebtedness evidenced by the New Foamex Subordinated Notes, and
New Foamex Notes), other than (i) Indebtedness in respect of the Obligations,
(ii) repayments of the New Foamex Subordinated Notes and the New Foamex Notes to
the extent required to be made pursuant to the terms of the New Foamex
Subordinated Note Indenture and the New Foamex Indenture, respectively, (v) as
permitted (and in accordance with terms of) Section 9.06(ii) and (v), (vi)
repayments of Indebtedness incurred pursuant to the provisions of Section
9.01(vii)(x) and (vii) repayments of the Foamex/GFI Note.
9.17 Fiscal Year. None of the Borrower nor any of its Subsidiaries (other
than Foreign Subsidiaries) shall change its Fiscal Year for accounting or tax
purposes.
9.18 Transaction Documents. None of the Credit Parties 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 or not adverse to the
interests of the Lenders by the Administrative Agents or (ii) the termination of
the Sublease to TIHI at 375 Park Avenue, New York, New York or the Management
Agreement.
9.19 Environmental Matters. None of the Borrower nor any of its
Subsidiaries (other than Foreign Subsidiaries) shall:
(i) become subject to any Liabilities and Costs which would have a
Material Adverse Effect arising out of or
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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.
ARTICLE X
FINANCIAL COVENANTS
The Borrower covenants and agrees that so long as any 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 EBDAIT. EBDAIT of the Borrower and its Subsidiaries on a consolidated
basis, as determined as of the last day of each period set forth below, shall
not be less than the minimum amount set forth opposite such period:
Minimum EBDAIT
--------------
(in millions)
Two Fiscal Quarter period ended June 30, 1999 $57.5
Three Fiscal Quarter period ended September 30, 1999 85.0
10.02 Minimum Net Worth. The Net Worth of the Borrower and its Subsidiaries
on a consolidated basis at all times during any period from the last day of the
Fiscal Quarter in each Fiscal Year of the Borrower set forth below to the next
to last day of the next succeeding Fiscal Quarter shall not be less than the
minimum amount set forth opposite the first such Fiscal Quarter:
Fiscal Quarter Minimum Net Worth
-------------- -----------------
(in millions)
Second fiscal quarter of 1999 (201.7)
Third fiscal quarter of 1999 (199.1)
Fourth fiscal quarter of 1999 (195.8)
First fiscal quarter of 2000 (195.0)
Second fiscal quarter of 2000 (189.9)
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Fiscal Quarter Minimum Net Worth
-------------- -----------------
(in millions)
Third fiscal quarter of 2000 (187.1)
Fourth fiscal quarter of 2000 (184.3)
First fiscal quarter of 2001 (179.7)
Second fiscal quarter of 2001 (173.4)
Third fiscal quarter of 2001 (169.6)
Fourth fiscal quarter of 2001 (167.4)
First fiscal quarter of 2002 (162.6)
Second fiscal quarter of 2002 (157.8)
Third fiscal quarter of 2002 (153.0)
Fourth fiscal quarter of 2002 (148.2)
First fiscal quarter of 2003 (143.0)
Second fiscal quarter of 2003 (137.8)
Third fiscal quarter of 2003 (132.5)
Fourth fiscal quarter of 2003 (127.3)
First fiscal quarter of 2004 (121.1)
Second fiscal quarter of 2004 (114.9)
Third fiscal quarter of 2004 (108.7)
Fourth fiscal quarter of 2004 (102.5)
First fiscal quarter of 2005 (93.8)
Second fiscal quarter of 2005 (85.0)
Third fiscal quarter of 2005 (76.3)
Fourth fiscal quarter of 2005 (67.5)
First fiscal quarter of 2006 (57.2)
Second fiscal quarter of 2006 (47.0)
Third fiscal quarter of 2006 (36.7)
Fourth fiscal quarter of 2006 and thereafter (26.4)
10.03 Minimum Interest Coverage Ratio. The Interest Coverage Ratio of the
Borrower and its Subsidiaries on a consolidated basis,
(a) for the two Fiscal Quarter period ended June 30, 1999 as determined as
of the last day of such period, shall not be less than 1.60 to 1.00;
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(b) for the three Fiscal Quarter period ended September 30, 1999 as
determined as of the last day of such period, shall not be less than 1.60 to
1.00; and
(c) as determined as of the last day of each Fiscal Quarter of the Borrower
set forth below for the four Fiscal Quarter period ending on such date, shall
not be less than the minimum ratio set forth opposite such Fiscal Quarter:
Fiscal Quarter Minimum Ratio
-------------- -------------
Fourth fiscal quarter of 1999 1.60:1.00
First fiscal quarter of 2000 1.60:1.00
Second fiscal quarter of 2000 1.60:1.00
Third fiscal quarter of 2000 1.65:1.00
Fourth fiscal quarter of 2000 1.65:1.00
First fiscal quarter of 2001 1.70:1.00
Second fiscal quarter of 2001 1.70:1.00
Third fiscal quarter of 2001 1.75:1.00
Fourth fiscal quarter of 2001 1.80:1.00
First fiscal quarter of 2002 1.80:1.00
Second fiscal quarter of 2002 1.80:1.00
Third fiscal quarter of 2002 1.80:1.00
Fourth fiscal quarter of 2002 1.90:1.00
First fiscal quarter of 2003 1.90:1.00
Second fiscal quarter of 2003 1.90:1.00
Third fiscal quarter of 2003 1.90:1.00
Fourth fiscal quarter of 2003 1.95:1.00
First fiscal quarter of 2004 1.95:1.00
Second fiscal quarter of 2004 1.95:1.00
Third fiscal quarter of 2004 1.95:1.00
Fourth fiscal quarter of 2004 2.10:1.00
First fiscal quarter of 2005 2.10:1.00
Second fiscal quarter of 2005 2.10:1.00
Third fiscal quarter of 2005 2.10:1.00
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Fiscal Quarter Minimum Ratio
-------------- -------------
Fourth fiscal quarter of 2005 2.40:1.00
First fiscal quarter of 2006 2.40:1.00
Second fiscal quarter of 2006 2.40:1.00
Third fiscal quarter of 2006 2.40:1.00
Fourth fiscal quarter of 2006 2.90:1.00
and thereafter
10.04 Minimum Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio
of the Borrower and its Subsidiaries on a consolidated basis,
(a) for the two Fiscal Quarter period ended June 30, 1999, shall not be
less than 1.175:1.00;
(b) for the three Fiscal Quarter period ended September 30, 1999, shall not
be less than 1.175:1.00; and
(c) as determined as of the last day of each Fiscal Quarter of the Borrower
set forth below for the four Fiscal Quarter period ending on such date, shall
not be less than the minimum ratio set forth opposite such Fiscal Quarter:
Fiscal Quarter Minimum Ratio
-------------- -------------
Fourth fiscal quarter of 1999 1.175:1.00
First fiscal quarter of 2000 1.175:1.00
Second fiscal quarter of 2000 1.20:1.00
Third fiscal quarter of 2000 1.20:1.00
Fourth fiscal quarter of 2000 1.20:1.00
First fiscal quarter of 2001 1.25:1.00
Second fiscal quarter of 2001 1.25:1.00
Third fiscal quarter of 2001 1.30:1.00
Fourth fiscal quarter of 2001 1.30:1.00
First fiscal quarter of 2002 1.30:1.00
Second fiscal quarter of 2002 1.30:1.00
Third fiscal quarter of 2002 1.30:1.00
Fourth fiscal quarter of 2002 1.35:1.00
First fiscal quarter of 2003 1.00:1.00
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Fiscal Quarter Minimum Ratio
-------------- -------------
Second fiscal quarter of 2003 1.00:1.00
Third fiscal quarter of 2003 1.00:1.00
Fourth fiscal quarter of 2003 1.00:1.00
First fiscal quarter of 2004 0.75:1.00
Second fiscal quarter of 2004 0.75:1.00
Third fiscal quarter of 2004 0.75:1.00
Fourth fiscal quarter of 2004 0.75:1.00
First fiscal quarter of 2005 0.45:1.00
Second fiscal quarter of 2005 0.45:1.00
Third fiscal quarter of 2005 0.45:1.00
Fourth fiscal quarter of 2005 0.45:1.00
First fiscal quarter of 2006 0.45:1.00
Second fiscal quarter of 2006 0.45:1.00
Third fiscal quarter of 2006 0.45:1.00
Fourth fiscal quarter of 2006 0.55:1.00
and thereafter.
10.05 Maximum Leverage Ratio. The Total Net Debt to EBDAIT Ratio of the
Borrower and its Subsidiaries on a consolidated basis, as determined as of the
last day of each Fiscal Quarter of the Borrower set forth below for the four
Fiscal Quarter period ending on such date, shall not exceed the maximum ratio
set forth below:
Fiscal Quarter Maximum Ratio
-------------- -------------
Fourth fiscal quarter of 1999 6.00:1.00
First fiscal quarter of 2000 5.80:1.00
Second fiscal quarter of 2000 5.75:1.00
Third fiscal quarter of 2000 5.50:1.00
Fourth fiscal quarter of 2000 5.45:1.00
First fiscal quarter of 2001 5.30:1.00
Second fiscal quarter of 2001 5.15:1.00
Third fiscal quarter of 2001 5.00:1.00
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Fiscal Quarter Maximum Ratio
-------------- -------------
Fourth fiscal quarter of 2001 4.85:1.00
First fiscal quarter of 2002 4.85:1.00
Second fiscal quarter of 2002 4.85:1.00
Third fiscal quarter of 2002 4.85:1.00
Fourth fiscal quarter of 2002 4.45:1.00
First fiscal quarter of 2003 4.45:1.00
Second fiscal quarter of 2003 4.45:1.00
Third fiscal quarter of 2003 4.45:1.00
Fourth fiscal quarter of 2003 4.20:1.00
First fiscal quarter of 2004 4.20:1.00
Second fiscal quarter of 2004 4.20:1.00
Third fiscal quarter of 2004 4.20:1.00
Fourth fiscal quarter of 2004 3.85:1.00
First fiscal quarter of 2005 3.85:1.00
Second fiscal quarter of 2005 3.85:1.00
Third fiscal quarter of 2005 3.85:1.00
Fourth fiscal quarter of 2005 3.50:1.00
First fiscal quarter of 2006 3.50:1.00
Second fiscal quarter of 2006 3.50:1.00
Third fiscal quarter of 2006 3.50:1.00
Fourth fiscal quarter of 2006 3.15:1.00
and thereafter.
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. The 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.
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(b) Breach of Certain Covenants. The Borrower or the Managing General
Partner shall fail duly and punctually to perform or observe any agreement,
covenant or obligation binding on such Person under Sections 3.05, 3.06,
7.10, 7.11, 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 the Borrower or the Managing General
Partner to either Administrative Agent, any Lender or any Issuing Bank
herein or by the Borrower or any of its Subsidiaries or the Managing
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).
(d) Other Defaults. The Borrower or the Managing General Partner shall
default in the performance of or compliance with any term contained in this
Agreement (other than as covered by clause (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. The Borrower 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 except as set forth in
Schedule 11.01(e); 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 the Borrower
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,
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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 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.
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(i) Dissolution. (i) Either Administrative Agent shall have received
an Officer's Certificate described in Section 7.11, (ii) any order,
judgment or decree shall be entered against any Loan Party or any of the
Borrower's 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) the Managing General Partner or any
Limited Partner shall commence any action to dissolve the Borrower pursuant
to the Partnership Agreement or otherwise or (iv) the Borrower or any of
its 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 Borrower's 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 Collateral Agent, 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 priority
contemplated by this Agreement, the Loan Documents or the other Transaction
Documents.
(k) Termination Event. Any Termination Event occurs which could
reasonably subject the 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 the 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 the 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 would
materially and adversely impair (i) the ability of any Credit Party to
perform its obligations under the Loan Documents or (ii) the ability of the
Lenders, the Issuing Banks or the Collateral Agent to enforce the Loan
Documents.
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(o) Tax Status. If the Borrower is taxed as a corporate entity by any
federal or state taxing authority and such taxation causes a Material
Adverse Effect.
(p) New Foamex Subordinated Notes, Foamex/GFI Note or New Foamex
Notes. Any "Event of Default" (or any event or occurrence or circumstance
which would become an "Event of Default" with the passage of time or the
giving of notice or both) as defined in the New Foamex Subordinated Note
Indenture or the New Foamex Indenture or the Foamex/GFI Note shall have
occurred and be continuing. Any of the terms of the New Foamex Subordinated
Notes, the Foamex/GFI Note or New Foamex Notes 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) Liens on Equity Interests. Any Lien shall be granted in favor of
any Person on the Equity Interests of the Borrower or of the Managing
General Partner other than the Liens on Foamex Equity Interests securing
the Partnership Pledge Agreement and the Foamex International Pledge
Agreement.
(r) Refinancing of the New Foamex Notes. The Borrower shall have
failed to refinance in full the aggregate amount of New Foamex Notes on or
prior to March 1, 2005 pursuant to the issuance of new subordinated
indebtedness of the Borrower having terms, conditions, covenants,
subordination, maturity and redemption provisions and all other material
agreements no more disadvantageous to the Borrower or to the Lenders or
Agents as those contained in the New Foamex Subordinated Notes and issued
pursuant to documentation in form and substance satisfactory to the
Requisite Lenders.
An Event of Default shall be deemed "continuing" until cured or waived in
writing in accordance with Section 13.07.
11.02 Rights and Remedies.
(a) Acceleration and Termination. Upon the occurrence of any Event of
Default described in Section 11.01(f) or 11.01(g), the 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
the Borrower and the Managing General Partner; and upon the occurrence and
during the continuance of any other Event of Default, the Collateral Agent
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shall at the request, or may with the consent, of the Requisite Lenders, by
written notice to the Borrower, (A) declare that the Commitments are terminated,
whereupon the 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 the Borrower.
(b) Deposit for Letters of Credit. In addition, after the occurrence and
during the continuance of an Event of Default, the 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 into 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 Commitments and/or
acceleration of the maturity of the Loans, the 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 written notice to the Borrower, the termination of the
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 the Borrower and do not give
the 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. The Borrower acknowledges that in the event the Borrower
or any of its Subsidiaries fails to perform, observe or discharge any of their
respective obligations or
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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, the 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. (a) If requested by the Borrower and
subject to the right of the Collateral Agent to withdraw funds from the Cash
Collateral 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 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 the Borrower may select. After an Event of Default,
the Collateral Agent shall invest any funds held in the Cash Collateral Account
which are not applied to the payment of the Obligations in overnight Cash
Equivalents. Such funds, interest, proceeds or income which are not so invested
or reinvested in Cash Equivalents shall, except as otherwise provided in this
Section 11.03, be deposited and held by the Collateral Agent in the Cash
Collateral Account. None of either Administrative Agent, any Lender or any
Issuing Bank shall be liable to the Borrower for, or with respect to, any
decline in value of amounts on deposit in the Cash Collateral Account which
shall have been invested pursuant to this Section 11.03(a) at the direction of
the Borrower. Cash Equivalents 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 in amounts equal to their respective outstanding principal amounts.
(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 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 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 at any public sale and, if permitted by applicable law, buy such
Cash Equivalents 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 to the payment of
the Obligations in accordance with this Agreement. The Borrower agrees that (i)
any sale of Cash
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Equivalents 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 shall be
deemed to be commercially reasonable and (ii) any requirements of reasonable
notice shall be met if such notice is received by the 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) If at any time the Collateral Agent determines that any funds held in
the Cash Collateral Account are subject to any interest, right, claim or Lien of
any Person other than the Collateral Agent, the Borrower will, forthwith upon
demand by the Collateral Agent, pay to the Collateral Agent, as additional funds
to be deposited and held in the Cash Collateral Account an amount equal to the
amount of funds subject to such interest, right, claim or Lien.
(d) The Collateral Agent shall exercise reasonable care in the custody and
preservation of any funds held in the Cash Collateral Account 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 Borrower
and shall constitute Obligations hereunder.
ARTICLE XII
THE CREDIT AGENTS
12.01 Appointment. (a) Each Lender and each Issuing Bank hereby designates
and appoints Citicorp as the Collateral Agent and Intercreditor Agent, and as an
Administrative Agent and Scotiabank as the Funding Agent, and as an
Administrative Agent of such Lender or such Issuing Bank under this Agreement,
and each Lender and each Issuing Bank hereby irrevocably authorizes the Credit
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
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when due) or the other Loan Documents, no Credit Agent shall be required to
exercise any discretion or take any action. Notwithstanding the foregoing, the
Credit 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, no Credit Agent shall be
required to take any action which (i) such Credit Agent reasonably believes will
expose it to personal liability unless such Credit 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 Credit 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
Credit Agents, the Lenders and Issuing Banks, and none of the Borrower or any
Subsidiary of the Borrower 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 Credit 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 the Borrower or any Subsidiary of the
Borrower. Each Credit 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 Credit 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 Credit Agents shall be mechanical and
administrative in nature. The Credit 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 Credit 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 the Borrower
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 the Borrower and its Subsidiaries
initially and on a continuing basis, and the Credit 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 any Credit Agent under the terms of this
Agreement). If any Credit Agent seeks the consent or approval of the Lenders to
the taking or refraining from taking of any action hereunder, such Credit Agent
shall send notice thereof to each Lender. The
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Collateral Agent shall promptly notify each Lender at any time that the Lenders
so required hereunder have instructed any Credit Agent to act or refrain from
acting pursuant hereto.
12.03 Rights, Exculpation, etc.
(a) Liabilities; Responsibilities. None of the Credit Agents, any Affiliate
of any Credit 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
Credit Agents shall not be liable for any apportionment 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 Credit 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 the Borrower or any of its Subsidiaries. No
Credit 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 the
Borrower or any of its Subsidiaries, or the existence or possible existence of
any Potential Event of Default or Event of Default.
(b) Right to Request Instructions. Any Credit 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 Credit Agent is permitted or
required to take or to grant, and such Credit 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 Credit 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 any Credit Agent as a result
of such Credit 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.
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12.04 Reliance. The Credit 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
Borrower), independent public accountants and other experts selected by it.
12.05 Indemnification. To the extent that the Credit Agents are not
reimbursed and indemnified by the Borrower, the Lenders will reimburse and
indemnify the Credit 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 Credit 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
Credit Agents hereunder with respect to matters caused by or resulting from the
willful misconduct or gross negligence of the Credit 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 Citicorp and Scotiabank Individually. With respect to its Pro Rata
Shares of the Commitments hereunder, if any, and the Loans made by it, if any,
Citicorp 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 Citicorp and Scotiabank in its individual capacity as
a Lender or one of the Requisite Lenders. Citicorp 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 the Borrower or any
of its Subsidiaries as if they were not acting as Credit 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 Borrower and the Lenders.
Such resignation shall take effect upon the acceptance by a successor
Administrative Agent of appointment pursuant to this Section 12.07.
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(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 Administrative
Agent selected from among the Lenders which appointment shall be subject to the
prior written approval of the Borrower (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 Borrower (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 the 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
Commitments except in accordance with Section 11.02(a).
12.09 Concerning the Collateral and the Loan Documents.
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(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 $10,000,000 in the aggregate
(collectively, "Protective Advances"). The Collateral Agent shall notify the
Borrower and each Lender in writing of each such Protective Advance, which
notice shall include a description of the purpose of such Protective Advance.
The Borrower 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 Borrower fails to make payment in respect of any Protective Advance
within one (1) Business Day after the date the Borrower receives written demand
therefor from the Collateral Agent, the Collateral Agent shall promptly notify
each Lender having a Commitment and each such 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 Revolving Loan Commitment 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
Revolving Loan Commitment 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 Borrower. Notwithstanding the foregoing, no
Lender shall be required to fund any Protective Advance in an amount exceeding
such Lender's then remaining Commitment.
(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
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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 the Borrower or any of its Subsidiaries; (iii) act as 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 Borrower's and its 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. 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 with the Collateral Agent 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 the
Borrower or any of its Subsidiaries, as certified to the Collateral Agent
by the 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.
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(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 shall have no obligation
whatsoever to the Lenders or to any other Person to assure that the Collateral
exists or is owned by the 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 Hedging Obligations 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
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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 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 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 set-off, 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 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. 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 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
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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).
Notwithstanding the foregoing, the Funding Agent in its own discretion, or by
instruction from any Issuing Bank, may refuse acceptance of an assignment of
Revolving Loans and Revolving Loan Commitment Amounts to a Person not satisfying
long term certificate of deposit ratings published by S&P or Moody's, of at
least BBB- or Baa3, respectively, or (unless otherwise agreed to by each Issuing
Bank), if such assignment would, pursuant to any applicable laws, rules or
regulation, be binding on any Issuing Bank, result in a reduced rate of return
to such Issuing Bank or require any Issuing Bank to set aside capital in an
amount that is greater than that which is required to be set aside for other
Lenders participating in the Letters of Credit.
(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 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 the Borrower and each of its 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 the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
written 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 $3,500 (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 H hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower and the Collateral Agent.
(e) Participations. Each Lender may sell participations to one or more
banks, finance companies, insurance companies, other financial institutions or
funds in or to all or a portion of its
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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
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 Commitments hereunder)
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) the
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 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 Loan(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 the 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 the Borrower to
comply with the terms of Section 3.04, or (G) any decrease in 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 the Borrower or its
Subsidiaries furnished to such Lender by the Administrative Agents or by or on
behalf of the Borrower; 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 the
Borrower under the Loan Documents
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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 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). The 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 Weil
Gotshal & Manges LLP 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 the
Borrower and its Subsidiaries in connection with the preparation, negotiation,
and execution of the Loan Documents and such Administrative Agent's periodic
audits of the 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,
the Borrower, any of its Subsidiaries, this Agreement or any of the
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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,
the Borrower, any of its Subsidiaries, this Agreement or any of the other Loan
Documents; and (H) any 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. The 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, the Borrower
or any of its 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. The Borrower further agrees to defend, protect, indemnify,
and hold harmless each Credit 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 (or any matter
indemnified against or for as set forth therein), executed by each of the
parties thereto prior to the date hereof, including, without limitation,
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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, (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 the Borrower, its Subsidiaries or any of their respective
predecessors in interest, or the past, present or future environmental condition
of any respective Property of the Borrower or such Subsidiaries or any of their
respective predecessors in interest (relating to the period during which the
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 the Borrower or
such Subsidiaries or the Release or threatened Release of any Contaminant into
the environment from any respective Property of the Borrower or such
Subsidiaries or (c) Equity Interests in the Borrower, the New Foamex
Subordinated Notes, the New Foamex Notes, the use or intended use of the
proceeds of issuance of the New Foamex Subordinated Notes, the New Foamex Notes
or any other transaction contemplated in the Transaction Documents
(collectively, the "Indemnified Matters"); provided, however, the Borrower shall
not 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, the 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 Borrower 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 Borrower shall be the
same after such changes as if such changes had not been made;
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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 Borrower, to so reflect such change in accounting
principles.
13.05 Set-off. 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
Borrower 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 the Borrower against and on
account of the obligations of the 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 set-off rights hereunder against any accounts of the Borrower or its
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 applicable Pro Rata Shares, whether received by voluntary payment, by the
exercise of the right of set-off or banker's lien, by counterclaim or
cross-action or by the enforcement of any or all 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 or
the Collateral), (ii) if any of them shall by voluntary payment or by the
exercise of any right of counterclaim, set-off, banker's lien
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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. The 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 set-off) with respect to such participation as fully as if such Lender
were the direct creditor of the 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
Borrower, and no termination or waiver of any provision of this Agreement, or
consent to any departure by the Borrower 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 Borrower 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 Commitments of such Lender, (c) reduction of the principal of,
rate or amount of interest on the Loans, the Reimbursement Obligations or any
fees or other amounts payable to such Lender (other than by the payment or
prepayment thereof), (d) postponement of the Revolving Loan 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 any guarantor of the Obligations (except in connection with the sale
of a guarantor permitted by Section 9.02 or a
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transaction permitted by Section 12.09(c)) 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 the
Borrower in any case shall entitle the 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 Article 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 Borrower shall have
no obligation to restate or update any representation or 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
the Borrower in respect of taxes, indemnification and expense reimbursement
shall survive the execution and delivery of this Agreement and the other Loan
Documents, the
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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
Borrower's or its 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 Marshaling; Payments Set Aside. No Credit Agent, any Lender or any
Issuing Bank shall be under any obligation to marshall any assets in favor of
the Borrower or any other party or against or in payment of any or all of the
Obligations. To the extent that the Borrower makes a payment or payments to the
Credit 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 set-off,
and such payment or payments or the proceeds of such enforcement or set-off 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, rights 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 set-off 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.
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,
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<PAGE>
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO NEW YORK
CONFLICTS OF LAWS PRINCIPLES).
13.15 Limitation of Liability. No claim may be made by the Borrower, any
Lender, any Issuing Bank, any Credit Agent or any other Person against any
Credit 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 the Borrower, each Lender, each Issuing
Bank and each Credit 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 the Borrower, or any interest therein, may not be assigned without the
written consent of all Lenders.
13.17 Certain Consents and Waivers of the Borrower.
(a) Personal Jurisdiction. EACH OF THE ADMINISTRATIVE AGENTS, THE LENDERS,
THE ISSUING BANKS, THE BORROWER AND THE MANAGING 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. THE BORROWER AND THE
MANAGING GENERAL PARTNER EACH IRREVOCABLY DESIGNATES AND APPOINTS CORPORATION
SERVICE COMPANY, 15 COLUMBUS CIRCLE, NEW YORK, NEW YORK 10023 AS THEIR AGENT
(THE "PROCESS AGENT") FOR SERVICE OF ALL PROCESS IN ANY SUCH 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, THE BORROWER AND THE MANAGING 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. THE BORROWER AND THE MANAGING GENERAL PARTNER EACH WAIVES IN
ALL DISPUTES ANY
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<PAGE>
OBJECTION THAT THEY MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE
DISPUTE.
THE BORROWER AGREES THAT THE COLLATERAL AGENT SHALL HAVE THE RIGHT TO
PROCEED AGAINST THE 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. THE 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. THE BORROWER AND THE MANAGING 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 THE
BORROWER'S OR THE MANAGING GENERAL PARTNER'S NOTICE ADDRESS SPECIFIED BELOW,
SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. EACH OF THE
BORROWER AND THE MANAGING 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 THE BORROWER OR THE MANAGING GENERAL PARTNER IN THE
COURTS OF ANY OTHER JURISDICTION.
(c) Waiver of Jury Trial. EACH OF THE ADMINISTRATIVE AGENTS, THE BORROWER
AND THE MANAGING 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. 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 the Borrower, the
Credit 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 the
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<PAGE>
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 Borrower in
accordance with such Lender's or such Issuing Bank's customary procedures for
handling confidential information of this nature and in accordance with safe and
sound lending practices and in any event may make disclosure to any of its legal
or financial advisors or as reasonably required by a bona fide offeree,
transferee or participant in connection with the contemplated transfer or
participation or any recipient reasonably acceptable to the Borrower or as
required or requested by any Governmental Authority or representative thereof or
pursuant to legal process and shall require any such legal or financial advisor,
offeree, transferee or participant or other approved recipient to agree (and
require any of its offerees, transferees or participants or other approved
recipient 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 Borrower; 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 Borrower in connection with this Agreement. Any
and all confidentiality agreements entered into between any Lender or any
Issuing Bank and the Borrower 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 Release. The Borrower, on behalf of itself and for each of its direct
and indirect affiliates, parent corporations, subsidiaries, subdivisions,
successors, predecessors, shareholders, and assigns, and its present and former
officers, directors, legal representatives, employees, agents, and attorneys,
and its heirs, executors, administrators, trustees, successors and assigns
(collectively, the "Releasors"), hereby releases and forever discharges (the
"Release") each Lender, each Issuing Bank and the Administrative Agents and each
of their respective direct and indirect affiliates, parent corporations,
subsidiaries, subdivisions, successors, predecessors, shareholders, and assigns,
and their present and former officers, directors, legal representatives,
employees, agents, and attorneys, and their heirs, executors, administrators,
trustees, successors and assigns (collectively, the "Releasees") of and from any
and all claims, liabilities, demands, rights, obligations, damages, expenses,
attorneys' fees and causes of action whatsoever from the beginning of the world
to the date of
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<PAGE>
this Agreement, whether individual, class or derivative in nature, whether at
law or in equity, whether based on federal, state or foreign law or right of
action, foreseen or unforeseen, mature or unmatured, known or unknown, accrued
or not accrued, which Releasors have or had against the Releasees, arising out
of or relating to the Credit Agreement, other Loan Documents or any other
document executed in connection therewith (the "Released Claims"), and covenants
not to institute, maintain, or prosecute any action, claim suit, proceeding or
cause of action of any kind to enforce any of the Released Claims. In any
litigation arising from or related to an alleged breach of the Release, the
Release may be pleaded as a defense, counterclaim or crossclaim, and shall be
admissible into evidence without any foundation testimony whatsoever. The
Releasors expressly covenant and agree that the Release shall be binding in all
respects upon their respective successors, heirs, assigns and transferees, and
shall inure to the benefit of the successors and assigns of Releasees.
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<PAGE>
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 /s/ George L. Karpinski
-------------------------------
Title: Vice President
Notice Address:
Foamex L.P.
1000 Columbia Avenue
Linwood, Pennsylvania 19061
Attn.: Chief Financial Officer
Telecopier No. (610) 859-3085
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<PAGE>
FMXI, INC.
By /s/ George L. Karpinski
-------------------------------
Title: Vice President
Notice Address:
c/o Foamex International Inc.
1000 Columbia Avenue
Linwood, Pennsylvania 19061
Attn.: Chief Financial Officer
Telecopier No. (610) 859-3085
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<PAGE>
CITICORP USA, INC., as Administrative
Agent, Collateral Agent,
individually as a Lender, and as
Intercreditor Collateral Agent
By /s/ Shapleigh Smith
-------------------------------
Title: Attorney-in-Fact
LIBO Rate Lending Office or
LIBO Rate Affiliate:
Citicorp USA, INC.
399 Park Avenue
New York, New York 10043
Attn.:
Telecopier No. (212) 793-1290
Notice Address:
Citicorp USA, INC.
399 Park Avenue
New York, New York 10043
Attn.:
Telecopier No. (212) 793-1290
CITIBANK, N.A., as Issuing Bank
By /s/ Shapleigh Smith
-------------------------------
Title: Attorney-in-Fact
Notice Address:
Citibank N.A.
399 Park Avenue
New York, New York 10043
Attn.:
Telecopier No. (212) 793-1290
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<PAGE>
THE BANK OF NOVA SCOTIA, as
Administrative Agent, Funding
Agent, Issuing Bank, individually
as a Lender, and as Intercreditor
Agent
By /s/ Brian S. Allen
-------------------------------
Title: Senior Relationship Manager
LIBO Rate Lending Office or LIBO
Rate 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
-152-
<PAGE>
[EXECUTION COPY]
AMENDMENT NO. 3 TO CREDIT AGREEMENT
This AMENDMENT NO. 3 TO CREDIT AGREEMENT, dated as of June 30, 1999 (the
"Amendment"), amends in certain respects the Credit Agreement dated as of
February 27, 1998 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Foamex Carpet
Cushion, Inc. ("New GFI" or the "Borrower"), the institutions from time to time
party thereto as Lenders, the institutions from time to time party thereto as
Issuing Banks, Citicorp USA, Inc. ("Citicorp") as collateral agent (the
"Collateral Agent") and The Bank of Nova Scotia, as funding agent (the "Funding
Agent", and together with the Collateral Agent, the "Administrative Agents").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower (which has executed this Amendment) has requested the
undersigned, which constitute the Requisite Lenders, to amend the Credit
Agreement as set forth herein. The Lenders party hereto have agreed to amend the
Credit Agreement to accommodate the request of the Borrower contained herein,
subject to the terms set forth herein.
NOW, THEREFORE, in consideration of the above recital of the Borrower, the
Lenders party hereto and the Administrative Agents agree as follows:
SECTION 1. Defined Terms. Terms defined in the Credit Agreement and not
otherwise defined herein have the meanings given such terms in the Credit
Agreement.
SECTION 2. Amendments to the Credit Agreement. The Credit Agreement is
hereby amended as follows:
2.1. Amendment to Article I. Article I of the Credit Agreement is hereby
amended by the following:
2.1.1 New Definitions. The following definitions are hereby inserted
in Section 1.01 of the Credit Agreement in their appropriate alphabetical
place:
"Beneficial Owner" means "beneficial owner" as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Securities Exchange
Act; provided, however, that (i) a person shall not be deemed to have
beneficial ownership of securities subject to a stock purchase
agreement, merger agreement, or similar agreement until the
consummation of the transactions contemplated by such agreement, and
(ii) for purposes of determining beneficial ownership of Voting Stock
of the Borrower, stockholders of Foamex International shall be deemed
to beneficially own a percentage of Voting Stock of the Borrower equal
to their percentage beneficial ownership of Voting Stock of Foamex
International multiplied by Foamex International's beneficial
ownership of Voting Stock of the Borrower.
<PAGE>
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of Foamex International who (i)
was a member of such Board of Directors on the Effective Date or (ii)
was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
"Managing General Partner" means FMXI.
"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 Company, Inc., a Delaware corporation,
Foamex International and FMXI as amended by the First Amendment
thereto dated as of June 28, 1994, by the Second Amendment thereto
dated as of June 12, 1997, by the Third Amendment thereto dated as of
December 23, 1997, and by the Fourth Amendment thereto dated as of
February 27, 1998, as such agreement may be amended, supplemented or
modified from time to time.
"Related Party" means with respect to Marshall S. Cogan or TIHI,
as the case may be, (A) any controlling stockholder, 80% (or more)
owned Subsidiary, or spouse or immediate family member (in the case of
an individual) of such Person, or (B) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of such Person and/or such other
Persons referred to in the immediately preceding clause (A) and this
clause (B).
"Voting Stock" of any Person as of any date means the Equity
Interests of such Person that at the time entitled to vote in the
election of the board of directors or other governing body of such
Person.
2.1.2. Amendment to the definition of Applicable Margin. The
definition of Applicable Margin is hereby amended by deleting (i) in clause
(a) thereof the reference to "2.00%" and inserting in lieu thereof, "2.25%"
and (ii) in clause (b) thereof the reference to "3.00%" and inserting in
lieu thereof "3.25%".
2.1.3. Amendment to the definition of Change of Control. The
definition of Change of Control is hereby amended and restated in its
entirety as follows:
"Change of Control" means any event pursuant to which (a) 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, (b) another Person in addition to FMXI becomes a
general partner of Foamex, (c) FMXI withdraws as managing general
partner of Foamex pursuant to the Partnership Agreement or otherwise,
(d) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the
Borrower and its Subsidiaries taken as a whole to any "person" (as
such term is used in Section 13(d)(3) of the Securities Exchange Act),
(e) the adoption of a plan
-2-
<PAGE>
relating to the liquidation or dissolution of the Borrower, (f) the
consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as
defined above), other than Marshall S. Cogan, TIHI and their Related
Parties, becomes the Beneficial Owner of (A) more than 25% of the
Voting Stock in Foamex International (measured by voting power rather
than number of shares) and (B) a greater percentage of the Voting
Stock than Marshall S. Cogan, TIHI and their Affiliates, (g) the first
day on which a majority of the members of the Board of Directors of
Foamex International or FCC, as the case may be, are not Continuing
Directors, (h) there is a sale, transfer or other assignment or
disposition of any of the Equity Interests in Foamex by FMXI or Foamex
International, (i) Foamex International ceases to own and control 100%
of the issued and outstanding Equity Interests in the Borrower, (j)
Foamex International ceases to own and control 100% of the issued and
outstanding Equity Interests in FMXI, or (k) during any period of two
consecutive calendar years, individuals who at the beginning of such
period constituted the Board of Directors of the Borrower, Foamex
International or whose nomination for election by the shareholders of
such Person, 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 Borrower or Foamex International, as
the case may be, then in office.
2.1.4. Amendment to the definition of EBDAIT. The definition of EBDAIT
is hereby amended and restated in its entirety as follows:
"EBDAIT" means, for any period, (a) the sum of the amounts for
such period of (i) Net Income plus (ii) depreciation, amortization
expense and other non-cash charges plus (iii) Interest Expense plus
(iv) Federal, state, foreign and local income taxes provided for by
the Borrower minus (b)(i) extraordinary gains (or plus extraordinary
losses) from asset sales calculated pursuant to GAAP for such period
to the extent such gains or losses were included in the calculation of
Net Income plus (ii) interest or investment income."
2.1.5. Amendment to the definition of Net Worth. The definition of Net
Worth is hereby amended and restated in its entirety as follows:
"Net Worth" means, at any time, with respect to any Person (a)
the sum of total assets of such Person minus (b) total 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 the Borrower shall be excluded from or
added back, as applicable, to total assets of the Borrower (other than
trade receivables due from Affiliates incurred in the ordinary course
of business less than sixty (60) days past due). Net Worth shall be
cumulatively adjusted by adding an amount each Fiscal Quarter (1)
beginning with the Third Fiscal Quarter of the 1999 Fiscal Year
through and including the Fourth Fiscal Quarter of the 2001 Fiscal
Year by an amount equal to $117,000 and (2) beginning with the First
Fiscal Quarter of the 2002 Fiscal Year through and
-3-
<PAGE>
including the First Fiscal Quarter of the 2004 Fiscal Year by an
amount equal to $80,000.
2.1.6. Amendment to the definition of Cash Interest Expense. The
definition of Cash Interest Expense is hereby amended and restated in its
entirety as follows:
"Cash Interest Expense" means, for any period, total interest
expense, whether paid or accrued (without duplication) (including the
interest component of Capital Leases), of the Borrower, including,
without limitation, (i) all bank fees, commissions, discounts and
other fees and charges owed with respect to letters of credit and (ii)
net costs (and reduction for net benefits) under interest rate Hedging
Obligations, but excluding, however, (a) amortization of discount, (b)
interest paid in property other than cash or (c) any other interest
expense not payable in cash, all as determined in conformity with
GAAP. Cash Interest Expense shall be adjusted by subtracting the
following amounts for each Fiscal Quarter: Third Fiscal Quarter 1999:
$36,000, Fourth Fiscal Quarter 1999: $72,000, First Fiscal Quarter
2000: $108,000 and Second Fiscal Quarter 2000 and thereafter:
$144,000.
2.1.7. Amendment to the definition of Total Net Debt. The definition
of Total Net Debt is hereby amended and restated in its entirety as
follows:
"Total Net Debt" means, on any date of determination, the
difference of:
(a) the aggregate amount of Funded Debt of the Borrower
outstanding on such date
minus
-----
(b) the aggregate amount of cash and Cash Equivalents of the
Borrower which are available on such date to be applied (without any
legal or Contractual Obligation restriction) against the Indebtedness
described in clause (a) and $1,700,000.
2.2 Amendment to Article V. Article V of the Credit Agreement is hereby
amended by the following:
2.2.1. Amendment to Section 5.02(d). Section 5.02(d) of the Credit
Agreement is hereby amended by (a) deleting the reference to "Foamex
International or TFLLC" and replacing it with "or Foamex International",
and (b) changing the date from "December 29, 1996" to "December 31, 1998".
2.3. Amendment to Article VI. Article VI of the Credit Agreement is hereby
amended by the following:
2.3.1. Amendment to Section 6.01(k). Section 6.01(k) of the Credit
Agreement is hereby amended by (a) deleting the reference to "Trace Foam,
TFLLC, the Borrower or GFI" and replacing it with "the Borrower", and (b)
changing the date from "December 29, 1996" to "December 31, 1998".
2.4. Amendment to Article X. Article X of the Credit Agreement is hereby
amended by the following:
-4-
<PAGE>
2.4.1. Amendment to Section 10.01 Section 10.01 of the Credit
Agreement is hereby amended and restated in its entirety as follows:
"10.01 Minimum Net Worth. The Net Worth of the Borrower at all
times during any period from the last day of the Fiscal Quarter in
each Fiscal Year of the Borrower set forth below to the next to last
day of the next succeeding Fiscal Quarter shall not be less than the
minimum amount set forth opposite the first such Fiscal Quarter:
<TABLE>
<CAPTION>
Fiscal Quarter Minimum Net Worth
-------------- -----------------
(in millions)
<S> <C>
Second fiscal quarter of 1999 (2.7)
Third fiscal quarter of 1999 (0.4)
Fourth fiscal quarter of 1999 0.3
First fiscal quarter of 2000 1.5
Second fiscal quarter of 2000 3.2
Third fiscal quarter of 2000 5.2
Fourth fiscal quarter of 2000 6.6
First fiscal quarter of 2001 8.0
Second fiscal quarter of 2001 10.2
Third fiscal quarter of 2001 12.5
Fourth fiscal quarter of 2001 14.3
First fiscal quarter of 2002 15.8
Second fiscal quarter of 2002 17.2
Third fiscal quarter of 2002 18.6
Fourth fiscal quarter of 2002 19.9
First fiscal quarter of 2003 21.6
Second fiscal quarter of 2003 23.3
Third fiscal quarter of 2003 25.0
Fourth fiscal quarter of 2003 26.5
First fiscal quarter of 2004 28.4
Second fiscal quarter of 2004 30.3
Third fiscal quarter of 2004 32.2
Fourth fiscal quarter of 2004 and 34.0
thereafter"
</TABLE>
-5-
<PAGE>
2.4.2. Amendment to Section 10.02 Section 10.02 of the Credit
Agreement is hereby amended and restated in its entirety as follows:
"10.02. Minimum Interest Coverage Ratio. The Interest Coverage
Ratio of the Borrower,
(a) for the two Fiscal Quarter period ended June 30, 1999 as
determined as of the last day of such period, shall not be less
than 1.45 to 1.00;
(b) for the three Fiscal Quarter period ended September 30,
1999 as determined as of the last day of such period, shall not
be less than 2.10 to 1.00; and
(c) as determined as of the last day of each Fiscal Quarter
of the Borrower set forth below for the four Fiscal Quarter
period ending on such date, shall not be less than the minimum
ratio set forth opposite such Fiscal Quarter:
<TABLE>
<CAPTION>
Fiscal Quarter Minimum Ratio
-------------- -------------
<S> <C>
Fourth fiscal quarter of 1999 2.15 to 1.00
First fiscal quarter of 2000 2.30 to 1.00
Second fiscal quarter of 2000 2.95 to 1.00
Third fiscal quarter of 2000 3.00 to 1.00
Fourth fiscal quarter of 2000 3.25 to 1.00
First fiscal quarter of 2001 3.50 to 1.00
Second fiscal quarter of 2001 3.50 to 1.00
Third fiscal quarter of 2001 3.50 to 1.00
Fourth fiscal quarter of 2001 4.00 to 1.00
First fiscal quarter of 2002 4.00 to 1.00
Second fiscal quarter of 2002 4.00 to 1.00
Third fiscal quarter of 2002 4.00 to 1.00
Fourth fiscal quarter of 2002 4.00 to 1.00
First fiscal quarter of 2003 4.00 to 1.00
Second fiscal quarter of 2003 4.00 to 1.00
Third fiscal quarter of 2003 4.00 to 1.00
Fourth fiscal quarter of 2003 4.00 to 1.00
First fiscal quarter of 2004 4.00 to 1.00
Second fiscal quarter of 2004 4.00 to 1.00
Third fiscal quarter of 2004 4.00 to 1.00
Fourth fiscal quarter of 2004 4.00 to 1.00
and thereafter"
</TABLE>
-6-
<PAGE>
2.4.3 Amendment to Section 10.03 Section 10.03 of the Credit Agreement
is hereby amended and restated in its entirety as follows:
"10.03. Minimum Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio of the Borrower,
(a) for the two Fiscal Quarter period ended June 30, 1999,
as determined as of the last day of such period shall not be less
than 0.45:1.00;
(b) for the three Fiscal Quarter period ended September 30,
1999, as determined as of the last day of such period shall not
be less than 0.65:1.00; and
(c) as determined as of the last day of each Fiscal Quarter
of the Borrower set forth below for the four Fiscal Quarter
period ending on such date, shall not be less than the minimum
ratio set forth opposite such Fiscal Quarter:
<TABLE>
<CAPTION>
Fiscal Quarter Minimum Ratio
-------------- -------------
<S> <C>
Fourth fiscal quarter of 1999 0.65 to 1.00
First fiscal quarter of 2000 0.65 to 1.00
Second fiscal quarter of 2000 0.80 to 1.00
Third fiscal quarter of 2000 0.80 to 1.00
Fourth fiscal quarter of 2000 0.85 to 1.00
First fiscal quarter of 2001 0.85 to 1.00
Second fiscal quarter of 2001 0.85 to 1.00
Third fiscal quarter of 2001 0.80 to 1.00
Fourth fiscal quarter of 2001 0.80 to 1.00
First fiscal quarter of 2002 0.80 to 1.00
Second fiscal quarter of 2002 0.80 to 1.00
Third fiscal quarter of 2002 0.80 to 1.00
Fourth fiscal quarter of 2002 0.85 to 1.00
First fiscal quarter of 2003 0.75 to 1.00
Second fiscal quarter of 2003 0.75 to 1.00
Third fiscal quarter of 2003 0.75 to 1.00
Fourth fiscal quarter of 2003 0.75 to 1.00
First fiscal quarter of 2004 0.75 to 1.00
Second fiscal quarter of 2004 0.75 to 1.00
Third fiscal quarter of 2004 0.75 to 1.00
Fourth fiscal quarter of 1.50 to 1.00
2004 and thereafter"
</TABLE>
-7-
<PAGE>
2.4.4 Amendment to Section 10.04(a) Section 10.04(a) of the Credit
Agreement is hereby amended and restated in its entirety as follows:
"10.04(a) EBDAIT. EBDAIT of the Borrower, as determined as of the
last day of each period set forth below, shall not be less than the
minimum amount set forth opposite such period:
Minimum EBDAIT
--------------
(in millions)
Two Fiscal Quarter period ended June 30, 1999 $3.75
Three Fiscal Quarter period ended September 30, 1999 $8.50"
2.4.5 Amendment to Section 10.04(b) Section 10.04(b) of the Credit
Agreement is hereby amended and restated in its entirety as follows:
"10.04(b) Maximum Leverage Ratio. The Total Net Debt to EBDAIT
Ratio of the Borrower, as determined as of the last day of each Fiscal
Quarter of the Borrower set forth below for the four Fiscal Quarter
period ending on such date, shall not exceed the maximum ratio set
forth below:
<TABLE>
<CAPTION>
Fiscal Quarter Maximum Ratio
-------------- -------------
<S> <C>
Fourth fiscal quarter of 1999 5.00 to 1.00
First fiscal quarter of 2000 4.45 to 1.00
Second fiscal quarter of 2000 3.40 to 1.00
Third fiscal quarter of 2000 3.25 to 1.00
Fourth fiscal quarter of 2000 2.95 to 1.00
First fiscal quarter of 2001 2.80 to 1.00
Second fiscal quarter of 2001 2.50 to 1.00
Third fiscal quarter of 2001 2.50 to 1.00
Fourth fiscal quarter of 2001 2.25 to 1.00
First fiscal quarter of 2002 2.25 to 1.00
Second fiscal quarter of 2002 2.25 to 1.00
Third fiscal quarter of 2002 2.25 to 1.00
Fourth fiscal quarter of 2002 2.25 to 1.00
First fiscal quarter of 2003 2.25 to 1.00
Second fiscal quarter of 2003 2.25 to 1.00
Third fiscal quarter of 2003 2.25 to 1.00
Fourth fiscal quarter of 2003 2.25 to 1.00
First fiscal quarter of 2004 2.25 to 1.00
Second fiscal quarter of 2004 2.25 to 1.00
Third fiscal quarter of 2004 2.25 to 1.00
Fourth fiscal quarter of 2004 and 2.25 to 1.00
thereafter"
</TABLE>
-8-
<PAGE>
2.4.6 Amendment to Section 10.05. Section 10.05 of the Credit
Agreement is hereby amended and restated in its entirety as follows:
"10.05 Capital Expenditures. Capital Expenditures made or
incurred by the Borrower shall not exceed $2,500,000 in the aggregate
for any one Fiscal Year."
2.5. Amendment to Article XI. Article XI of the Credit Agreement is hereby
amended by the following:
2.5.1. Amendment to Sections 11.01(f) and (g). Sections 11.01(f)
and (g) of the Credit Agreement are hereby amended by deleting all
references to "TFLLC".
SECTION 3. Consent to Amendment to Foamex/GFI Note and New GFI Note.
Pursuant to (i) Section 9.17 of the Credit Agreement, the Lenders hereby consent
to the execution and delivery by the holders of that certain (x) Amendment to
Promissory Note, dated as of June 30, 1999, amending in certain respects the
Foamex/GFI Note and (y) Amendment No. 2 to Promissory Note, dated as of June 30,
1999, amending in certain respects the New GFI Note.
SECTION 4. Waiver of Reporting Covenant. The Lenders hereby agree to waive
the provision in clause (iii) of Section 7.01(c) of the Credit Agreement solely
to the extent that it requires the opinion, referred to therein, on the
financial statements for the fiscal year ended December 31, 1998, to be
unqualified. Except as otherwise provided herein, nothing herein contained shall
be deemed to evidence the waiver by the Lenders (as at any date or for any
period of time) of any provision of the Credit Agreement or of any document or
instrument executed in connection with the Credit Agreement, nor shall anything
contained herein be deemed to prejudice the exercise by the Lenders of any or
all of their rights and remedies under the Credit Agreement and other documents
and instruments executed in connection with the Credit Agreement.
SECTION 5. Conditions to Effectiveness. This Amendment shall become
effective on the date hereof (the "Amendment Effective Date"), provided, that
the following conditions precedent have been satisfied (unless waived by the
Requisite Lenders or unless the deadline for delivery has been extended by the
Administrative Agents):
(i) Documents. The Administrative Agents shall have received on or
before the Amedment Effective Date all of the following in form and
substance satisfactory to the Requisite Lenders:
(a) this Agreement duly executed and in form and substance
satisfactory to the Requisite Lenders; and
(b) such additional documentation as the Administrative Agents or
any of the Requisite Lenders may reasonably request.
(ii) Consents. The Borrower shall have received all material consents
and authorizations required pursuant to any material Contractual Obligation
with any other Person and shall have obtained all material consents and
authorizations of, and effected all notices to and filings with, any
Governmental Authority, in each case, as may be necessary to allow the
Borrower to lawfully and without risk of rescission, execute, deliver and
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<PAGE>
perform, in all material respects, its obligations under this Amendment and
the 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.
(iii) 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, impose or result in the imposition of a
Material Adverse Effect.
(iv) No Change in Condition. No change in the condition (financial or
otherwise), business, performance, properties, assets, operations or
prospects of the Borrower or any of its Subsidiaries and its subsidiaries
shall have occurred since December 31, 1998, which change, in the judgment
of the Lenders, will have or is reasonably likely to have a Material
Adverse Effect.
(v) No Default. After giving effect to this Amendment, no Event of
Default or Potential Event of Default shall have occurred.
(vi) Representations and Warranties. All of the representations and
warranties contained in Section 6.01 of the Credit Agreement and in any of
the other Loan Documents shall be true and correct in all material respects
on and as of the Amendment Effective Date.
(vii) Amendment Fee. Each of the Administrative Agents shall have
received from the Borrower, an amendment fee in the amount of 1/4 of 1% of
its outstanding Commitments under the Credit Agreement.
SECTION 6. Representations and Warranties. The Borrower hereby represents
and warrants to the Lenders party hereto that (i) the execution, delivery and
performance of this Amendment by the Borrower are within the Borrower's
corporate powers and have been duly authorized by all necessary corporate
action, and (ii) this Amendment constitutes the legal, valid and binding
obligation of the Borrower, enforceable against the Borrower, in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or limiting creditors'
rights generally or by equitable principles generally.
SECTION 7. Reference to and Effect on the Loan Documents.
7.1 Upon the effectiveness of this Amendment, on and after the date hereof
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import, and each reference in the other Loan
Documents to the Credit Agreement, shall mean and be a reference to the Credit
Agreement as amended hereby.
7.2 Except as specifically amended above, all of the terms of the Credit
Agreement and all other Loan Documents shall remain unchanged and in full force
and effect.
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<PAGE>
7.3 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 or the Administrative Agents under the Credit Agreement or
any of the Loan Documents, nor constitute a waiver of any provision of the
Credit Agreement or any of the Loan Documents.
7.4 As of the Amendment Effective Date of, and after giving effect to, this
Amendment, the Borrower is in compliance in all material respects with all
applicable terms, conditions and covenants of the Credit Agreement and other
Loan Documents.
SECTION 8. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
SECTION 9. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO NEW YORK CONFLICT OF LAWS PRINCIPLES).
SECTION 10. Guarantor Consent. By its signature below, Foamex International
consents to this Amendment in its individual capacity, and as a guarantor under
the Foamex International Guaranty, and as a guarantor hereby affirms its
obligations under such guaranty.
SECTION 11. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment or be given any substantive effect.
SECTION 12. Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
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<PAGE>
IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first above written.
FOAMEX CARPET CUSHION, INC.
By /s/ George L. Karpinski
--------------------------------
Name: George L. Karpinski
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<PAGE>
FOAMEX INTERNATIONAL INC.,
individually and as a guarantor
By /s/ George L. Karpinski
--------------------------------
Name: George L. Karpinski
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<PAGE>
CITICORP USA, INC., as Administrative
Agent, Collateral Agent, Intercreditor
Agent and individually as a Lender
By /s/ Shapleigh Smith
--------------------------------
Name: Shapleigh Smith
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<PAGE>
CITIBANK, N.A. as Issuing Bank
By /s/ Shapleigh Smith
--------------------------------
Name: Shapleigh Smith
-15-
<PAGE>
THE BANK OF NOVA SCOTIA, as Administrative
Agent, Funding Agent, Issuing Bank,
individually as a Lender, and as
Intercreditor Agent
By /s/ Brian S. Allen
--------------------------------
Name: Brian S. Allen
Title: Senior Relationship Manager
-16-
<PAGE>
[EXECUTION COPY]
FOAMEX INTERNATIONAL PLEDGE AGREEMENT
-------------------------------------
THIS FOAMEX INTERNATIONAL PLEDGE AGREEMENT (this "Pledge Agreement"), dated
as of June 30, 1999, is made by FOAMEX INTERNATIONAL INC., a Delaware
corporation (the "Pledgor"), in favor of CITICORP USA, INC., as FII
Intercreditor Collateral Agent (together with any successor(s) thereto in such
capacity, the "Collateral Agent") for each of the Secured Parties.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a Credit Agreement, dated as of June 12, 1997, as
amended and restated as of February 27, 1998, as further amended and restated as
of June 29, 1999 (as amended, supplemented, amended and restated or modified
from time to time, the "Credit Agreement"), among Foamex L.P., a Delaware
limited partnership ("Partnership" or the "Borrower"), FMXI, Inc. certain
institutions party thereto from time to time as lenders (the "Lenders"), certain
institutions party thereto from time to time as issuing banks (the "Issuing
Banks"), Citicorp USA, Inc., as collateral agent for the Lenders and the Issuing
Banks, and The Bank of Nova Scotia, as Funding Agent for the Lenders and the
Issuing Banks (together with the collateral agent therein, the "Administrative
Agents"), the Lenders and the Issuing Banks have extended Loans and Commitments
to make Credit Extensions to the Borrower;
WHEREAS, FII has heretofore entered into a guaranty, dated as of February
27, 1998 (the "FII Guaranty") pursuant to which it has guaranteed certain
obligations of New GFI;
WHEREAS, the Collateral Agent has heretofore entered into the FII
Intercreditor Agreement, dated as of February 27, 1998 (as amended,
supplemented, amended and restated or modified from time to time, the "FII
Intercreditor Agreement"), pursuant to which it has agreed to act as a
collateral agent (the "FII Intercreditor Collateral Agent") with respect to,
among other things, the Collateral;
WHEREAS, the Pledgor has heretofore executed, in favor of the Collateral
Agent, that certain Foamex International Pledge Agreement, dated as of February
27, 1998 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Existing Pledge Agreement").
WHEREAS, the Pledgor and the Collateral Agent have agreed to hereby amend
and restate the Existing Pledge Agreement;
WHEREAS, the Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor agrees, for the
benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
<PAGE>
"Administrative Agents" is defined in the first recital.
"Borrower" is defined in the first recital.
"Collateral" is defined in Section 2.1.
"Collateral Agent" is defined in the preamble.
"Commodity Account" means an account maintained by a Commodity Intermediary
in which a Commodity Contract is carried out for a Commodity Customer.
"Commodity Contract" means a commodity futures contract, an option on a
commodity futures contract, a commodity option or any other contract that, in
each case, is (a) traded on or subject to the rules of a board of trade that has
been designated as a contract market for such a contract pursuant to the federal
commodities laws or (b) traded on a foreign commodity board of trade, exchange
or market, and as is carried on the books of a Commodity Intermediary for a
Commodity Customer.
"Commodity Customer" means a person for whom a Commodity Intermediary
carries a Commodity Contract on its books.
"Commodity Intermediary" means (a) a person who is registered as a futures
commission merchant under the federal commodities laws or (b) a person who in
the ordinary course of its business provides clearance or settlement services
for a board of trade that has been designated as a contract market pursuant to
federal commodities laws.
"Credit Agreement" is defined in the first recital.
"Credit Extensions" means the Loans and the Letters of Credit.
"Distributions" means all stock dividends, liquidating dividends, shares of
stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock or other Equity Interests constituting Collateral, but shall not
include Dividends.
"Dividends" means cash dividends and cash distributions with respect to any
Pledged Shares or other Pledged Property made in the ordinary course of business
and not a liquidating dividend.
"Entitlement Holder" means a person identified in the records of a
Securities Intermediary as the person having a Security Entitlement against the
Securities Intermediary. If a person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the U.C.C., such person is the Entitlement
Holder.
"FII Guaranty" is defined in the second recital.
"FII Intercreditor Agreement" is defined in the third recital.
"FII Intercreditor Collateral Agent" is defined in the third recital.
"Financial Asset" means (a) a Security, (b) an obligation of a person or a
share, participation or other interest in a person or in property or an
enterprise of a person, which is, or is of a type, dealt with in
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<PAGE>
or traded on financial markets, or which is recognized in any area in which it
is issued or dealt in as a medium for investment or (c) any property that is
held by a Securities Intermediary for another person in a Securities Account if
the Securities Intermediary has expressly agreed with the other person that the
property is to be treated as a Financial Asset under Article 8 of the U.C.C. As
the context requires, the term Financial Asset shall mean either the interest
itself or the means by which a person's claim to it is evidenced, including a
certificated or uncertificated Security, a certificate representing a Security
or a Security Entitlement.
"Issuing Banks" is defined in the first recital.
"Investment Property" means all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts
and Commodity Accounts of the Pledgor.
"Lenders" is defined in the first recital.
"New GFI Intercreditor Collateral Agent" means the collateral agent
appointed pursuant to the New GFI Intercreditor Agreement, dated as of February
27, 1998.
"Pledge Agreement" is defined in the preamble.
"Pledged Notes" means all promissory notes of New GFI substantially the
form of Exhibit A hereto which are delivered by the Pledgor to the Collateral
Agent as Pledged Property hereunder, as such promissory notes, in accordance
with Section 4.5, are amended, modified or supplemented from time to time,
together with any promissory note of New GFI taken in extension or renewal
thereof or substitution therefor.
"Pledged Property" means all Pledged Shares, all Pledged Notes, and all
other pledged shares of capital stock or other Equity Interests or promissory
notes, all Investment Property relating thereto (provided that such Investment
Property shall be limited to interests in any shares of capital stock in New
GFI) Investment Property, all other securities, all assignments of any amounts
due or to become due, all other instruments which are now being delivered or
requested to be delivered by the Pledgor to the Collateral Agent or may from
time to time hereafter be delivered or required to be delivered by the Pledgor
to the Collateral Agent for the purpose of pledge under this Pledge Agreement or
any other Loan Document, and all proceeds of any of the foregoing.
"Pledged Shares" means all shares of capital stock or other Equity
Interests of New GFI which are delivered or are required to be delivered by the
Pledgor to the Collateral Agent as Pledged Property hereunder.
"Pledgor" is defined in the preamble.
"Secured Obligations" is defined in Section 2.2.
"Secured Parties" means, collectively, (i) the Lenders, the Issuing Banks,
the Administrative Agents, the Collateral Agent and the Funding Agent, (ii) the
New GFI Intercreditor Collateral Agent, (iii) the FII Intercreditor Collateral
Agent and (iv) each holder of a Guaranteed Obligation (as defined in the FII
Guaranty).
"Securities" means any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a
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<PAGE>
security in bearer or registered form, or the transfer of which may be
registered upon books maintained for that purpose by or on behalf of the issuer,
(b) are one of a class or series or by its terms is divisible into a class or
series of shares, participations, interests or obligations and (c) (i) are, or
are of a type, dealt with or traded on securities exchanges or securities
markets or (ii) are a medium for investment and by their terms expressly provide
that they are a security governed by Article 8 of the U.C.C.
"Securities Account" means an account to which a Financial Asset is or may
be credited in accordance with an agreement under which the person maintaining
the account undertakes to treat the person for whom the account is maintained as
entitled to exercise rights that comprise the Financial Asset.
"Securities Act" is defined in Section 6.2.
"Securities Intermediary" means (a) a clearing corporation or (b) a person,
including a bank or broker, that in the ordinary course of its business
maintains Securities Accounts for others and is acting in that capacity.
"Security Entitlements" means the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.
"U.C.C." means the Uniform Commercial Code, as in effect from time to time
in the State of New York.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined herein
or the context otherwise requires, terms used in this Pledge Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or the
Credit Agreement or the context otherwise requires, terms for which meanings are
provided in the U.C.C. are used in this Pledge Agreement, including its preamble
and recitals, with such meanings.
ARTICLE II
PLEDGE
SECTION 2.1. Grant of Security Interest. The Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to the
Collateral Agent, for its benefit and the ratable benefit of each of the Secured
Parties, and hereby grants to the Collateral Agent, for its benefit and the
ratable benefit of the Secured Parties, a continuing security interest in, all
of the following property (the "Collateral"):
(a) all promissory notes of New GFI;
(b) all other Pledged Notes issued from time to time;
(c) all issued and outstanding shares of capital stock of New GFI;
(d) all other Pledged Shares issued from time to time;
(e) all other Pledged Property, whether now or hereafter delivered or
required to be delivered to the Collateral Agent in connection with this
Pledge Agreement;
-4-
<PAGE>
(f) all Dividends, Distributions, interest, and other payments and
rights with respect to any Pledged Property; and
(g) all proceeds of any of the foregoing;.
SECTION 2.2. Security for Obligations. This Pledge Agreement secures the
payment in full in cash of (i) all Obligations of the Pledgor now or hereafter
existing under the Credit Agreement, the Notes, the Foamex International
Guaranty, and each other Loan Document to which the Pledgor is or may become a
party, whether for principal, interest, costs, fees, expenses, or otherwise,
(ii) all obligations of each other Obligor now or hereafter existing under each
Loan Document to which such Obligor is or may become a party and (iii) all
obligations of FII under the FII Guaranty (all such Obligations of the Pledgor,
FII and all such obligations of such other Obligors being the "Secured
Obligations").
SECTION 2.3. Delivery of Pledged Property. All certificates or instruments
representing or evidencing any Collateral, including all Pledged Shares and all
Pledged Notes, shall be delivered to and held by or on behalf of (and, in the
case of the Pledged Notes, endorsed to the order of) the Collateral Agent
pursuant hereto, shall be in suitable form for transfer by delivery, and shall
be accompanied by all necessary instruments of transfer or assignment, duly
executed in blank.
SECTION 2.4. Dividends on Pledged Shares and Payments on Pledged Notes. In
the event that any Dividend is to be paid on any Pledged Share or any payment of
principal or interest is to be made on any Pledged Note at a time when no
Default of the nature referred to in Section 11.01(f) or 11.01(g) of the Credit
Agreement or Event of Default has occurred and is continuing, such Dividend or
payment may be paid directly to the Pledgor. If any such Default or Event of
Default has occurred and is continuing, then any such Dividend or payment shall
be paid directly to the Collateral Agent.
SECTION 2.5. Continuing Security Interest; Transfer of Note. This Pledge
Agreement shall create a continuing security interest in the Collateral and
shall
(a) remain in full force and effect until payment in full in cash of
all Secured Obligations, the termination or expiration of all Letters of
Credit, the termination of all Commitments,
(b) be binding upon the Pledgor and its successors, transferees and
assigns, and
(c) inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Collateral Agent and each other
Secured Party.
Without limiting the foregoing clause (c), any Secured Party may assign or
otherwise transfer (in whole or in part) any Secured Obligation held by it to
any other Person or entity, and such other Person or entity shall thereupon
become vested with all the rights and benefits in respect thereof granted to
such Secured Party under any Secured Obligation (including this Pledge
Agreement) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer. Upon (i) the sale, transfer or other disposition of
Collateral in accordance with the Credit Agreement or (ii) the payment in full
in cash of all Secured Obligations, the termination or expiration of all Letters
of Credit, the termination of all Commitments and the termination of the FII
Guaranty, the security interest granted herein shall automatically terminate
with respect to (x) such Collateral (in the case of clause (i)) or (y) all
Collateral (in the case of clause (ii)). Upon any such termination, the
Collateral Agent will, at the Pledgor's sole expense, deliver to the Pledgor,
without any representations, warranties or recourse of any kind whatsoever, all
certificates and instruments
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<PAGE>
representing or evidencing all Pledged Shares and all Pledged Notes, together
with all other Collateral held by the Collateral Agent hereunder, and execute
and deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence such termination.
SECTION 2.6. Security Interest Absolute. All rights of the Collateral Agent
and the security interests granted to the Collateral Agent hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional with
respect to the Secured Obligations, irrespective of
(a) any lack of validity or enforceability of the Credit Agreement,
any Note, any other Loan Document or the FII Guaranty,
(b) the failure of any Secured Party or any holder of any Note
(i) to assert any claim or demand or to enforce any right or
remedy against the Borrower, any other Obligor or any other Person
under the provisions of the Credit Agreement, any Note, any other Loan
Document, the FII Guaranty or otherwise, or
(ii) to exercise any right or remedy against any other guarantor
of, or collateral securing, any Secured Obligations,
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other
extension, compromise or renewal of any Secured Obligation,
(d) any reduction, limitation, impairment or termination of any
Secured Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and the
Pledgor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Secured Obligations or otherwise,
(e) any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of the Credit Agreement,
any Note, any other Loan Document or the FII Guaranty,
(f) any addition, exchange, release, surrender or non-perfection of
any collateral (including the Collateral), or any amendment to or waiver or
release of or addition to or consent to departure from any guaranty, for
any of the Secured Obligations, or
(g) any other circumstances which might otherwise constitute a defense
available to, or a legal or equitable discharge of, the Borrower, any other
Obligor, any surety or any guarantor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties, etc. The Pledgor represents
and warrants unto each Secured Party, as at the date of each pledge and delivery
hereunder (including each pledge and delivery of Pledged Shares and each pledge
and delivery of a Pledged Note) by the Pledgor to the Collateral Agent of any
Collateral, as set forth in this Article.
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<PAGE>
SECTION 3.1.1. Ownership, No Liens, etc. The Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full right
and authority to pledge and assign) such Collateral, free and clear of all liens
(except as contemplated by the FII Intercreditor Agreement), security interests,
options, or other charges or encumbrances, except any lien or security interest
granted pursuant hereto in favor of the Collateral Agent.
SECTION 3.1.2. Valid Security Interest. The delivery of such Collateral to
the Collateral Agent is effective to create a valid, perfected, first priority
security interest in such Collateral and all proceeds thereof, securing the
Secured Obligations. No filing or other action will be necessary to perfect or
protect such security interest.
SECTION 3.1.3. As to Pledged Shares. In the case of any Pledged Shares
constituting such Collateral, all of such Pledged Shares are duly authorized and
validly issued, fully paid, and non-assessable, and constitute all of the issued
and outstanding shares of capital stock.
SECTION 3.1.4. As to Pledged Notes. In the case of each Pledged Note, all
of such Pledged Notes have been duly authorized, executed, endorsed, issued and
delivered, and are the legal, valid and binding obligation of the issuers
thereof, and are not in default.
SECTION 3.1.5. Authorization, Approval, etc. No authorization, approval, or
other action by, and no notice to or filing with, any governmental authority,
regulatory body or any other Person is required either
(a) for the pledge by the Pledgor of any Collateral pursuant to this
Pledge Agreement or for the execution, delivery, and performance of this
Pledge Agreement by the Pledgor, or
(b) for the exercise by the Collateral Agent of the voting or other
rights provided for in this Pledge Agreement, or, except with respect to
any Pledged Shares, as may be required in connection with a disposition of
such Pledged Shares by laws affecting the offering and sale of securities
generally, the remedies in respect of the Collateral pursuant to this
Pledge Agreement.
SECTION 3.1.6. Compliance with Laws. The Pledgor is in compliance with the
requirements of all applicable laws (including the provisions of the Fair Labor
Standards Act), rules, regulations and orders of every governmental authority,
the non-compliance with which might have a Material Adverse Effect or materially
adversely affect the value of the Collateral or the worth of the Collateral as
collateral security.
ARTICLE IV
COVENANTS
SECTION 4.1. Protect Collateral; Further Assurances, etc. The Pledgor will
not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral (except in favor of the Collateral Agent hereunder). The Pledgor will
warrant and defend the right and title herein granted unto the Collateral Agent
in and to the Collateral (and all right, title, and interest represented by the
Collateral) against the claims and demands of all Persons whomsoever. The
Pledgor agrees that at any time, and from time to time, at the expense of the
Pledgor, the Pledgor will promptly execute and deliver all further instruments,
and take all further action, that may be necessary or desirable, or that the
Collateral Agent may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Collateral Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral.
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<PAGE>
SECTION 4.2. Stock Powers, etc. The Pledgor agrees that all Pledged Shares
(and all other shares of capital stock constituting Collateral) delivered by the
Pledgor pursuant to this Pledge Agreement will be accompanied by duly executed
undated blank stock powers, or other equivalent instruments of transfer
acceptable to the Collateral Agent. The Pledgor will, from time to time upon the
request of the Collateral Agent, promptly deliver to the Collateral Agent such
stock powers, instruments, and similar documents, satisfactory in form and
substance to the Collateral Agent, with respect to the Collateral as the
Collateral Agent may reasonably request and will, from time to time upon the
request of the Collateral Agent after the occurrence of any Event of Default,
promptly transfer any Pledged Shares or other shares of common stock
constituting Collateral into the name of any nominee designated by the
Collateral Agent.
SECTION 4.3. Continuous Pledge. The Pledgor will, at all times, keep
pledged to the Collateral Agent pursuant hereto all Pledged Shares and all other
shares of capital stock constituting Collateral, all Dividends and Distributions
with respect thereto, all Pledged Notes, all interest, principal and other
proceeds received by the Collateral Agent with respect to the Pledged Notes, and
all other Collateral and other securities, instruments, proceeds, and rights
from time to time received by or distributable to the Pledgor in respect of any
Collateral and will not permit New GFI to issue any capital stock which shall
not have been immediately duly pledged hereunder on a first priority perfected
basis.
SECTION 4.4. Voting Rights; Dividends, etc. The Pledgor agrees:
(a) after any Event of Default shall have occurred and be continuing,
promptly upon receipt of notice thereof by the Pledgor and without any
request therefor by the Collateral Agent, to deliver (properly endorsed
where required hereby or requested by the Collateral Agent) to the
Collateral Agent all Dividends, Distributions, all interest, all principal,
all other cash payments, and all proceeds of the Collateral, all of which
shall be held by the Collateral Agent as additional Collateral for use in
accordance with Section 6.4; and
(b) after any Event of Default shall have occurred and be continuing
and the Collateral Agent has notified the Pledgor of the Collateral Agent's
intention to exercise its voting power under this Section 4.4(b)
(i) the Collateral Agent may exercise (to the exclusion of the
Pledgor) the voting power and all other incidental rights of ownership
with respect to any Pledged Shares or other shares of capital stock
constituting Collateral and the Pledgor hereby grants the Collateral
Agent an irrevocable proxy, exercisable under such circumstances, to
vote the Pledged Shares and such other Collateral; and
(ii) promptly to deliver to the Collateral Agent such additional
proxies and other documents as may be necessary to allow the
Collateral Agent to exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by the Pledgor but which the
Pledgor is then obligated to deliver to the Collateral Agent, shall, until
delivery to the Collateral Agent, be held by the Pledgor separate and apart from
its other property in trust for the Collateral Agent. The Collateral Agent
agrees that unless an Event of Default shall have occurred and be continuing and
the Collateral Agent shall have given the notice referred to in Section 4.4(b),
the Pledgor shall have the exclusive voting power with respect to any shares of
capital stock (including any of the Pledged Shares) constituting Collateral and
the Collateral Agent shall, upon the written request of the Pledgor, promptly
deliver such proxies and other documents, if any, as shall be
-8-
<PAGE>
reasonably requested by the Pledgor which are necessary to allow the Pledgor to
exercise voting power with respect to any such share of capital stock (including
any of the Pledged Shares) constituting Collateral; provided, however, that no
vote shall be cast, or consent, waiver, or ratification given, or action taken
by the Pledgor that would impair any Collateral or be inconsistent with or
violate any provision of the Credit Agreement or any other Loan Document
(including this Pledge Agreement).
SECTION 4.5. Additional Undertakings. The Pledgor will not, without the
prior written consent of the Collateral Agent:
(a) enter into any agreement amending, supplementing, or waiving any
provision of any Pledged Note (including any underlying instrument pursuant
to which such Pledged Note is issued) or compromising or releasing or
extending the time for payment of any obligation of the maker thereof; or
(b) take or omit to take any action the taking or the omission of
which would result in any impairment or alteration of any obligation of the
maker of any Pledged Note or other instrument constituting Collateral.
ARTICLE V
THE COLLATERAL AGENT
SECTION 5.1. Collateral Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Collateral Agent the Pledgor's attorney-in-fact,
with full authority in the place and stead of the Pledgor and in the name of the
Pledgor or otherwise, from time to time in the Collateral Agent's discretion, to
take any action and to execute any instrument which the Collateral Agent may
deem necessary or advisable to accomplish the purposes of this Pledge Agreement,
including after the occurrence and continuance of a Default of the nature
referred to in Section 11.01(f) or 11.01(g) of the Credit Agreement or an Event
of Default:
(a) to ask, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above; and
(c) to file any claims or take any action or institute any proceedings
which the Collateral Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Collateral Agent with respect to any of the Collateral.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Collateral Agent May Perform. If the Pledgor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by the Pledgor pursuant to
Section 6.4.
SECTION 5.3. Collateral Agent Has No Duty. The powers conferred on the
Collateral Agent hereunder are solely to protect its interest (on behalf of the
Secured Parties) in the Collateral and shall not
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<PAGE>
impose any duty on it to exercise any such powers. Except for reasonable care of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, the Collateral Agent shall have no duty as to any Collateral or
responsibility for
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Property, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, or
(b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Collateral Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, the Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as the Pledgor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default, but failure of the Collateral Agent to
comply with any such request at any time shall not in itself be deemed a failure
to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Event of Default shall have occurred
and be continuing:
(a) The Collateral Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the U.C.C. (whether or not the U.C.C. applies to the affected
Collateral) and also may, without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Collateral Agent's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the
Collateral Agent may deem commercially reasonable. The Pledgor agrees that,
to the extent notice of sale shall be required by law, at least ten days'
prior notice to the Pledgor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. 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.
(b) The Collateral Agent may
(i) transfer all or any part of the Collateral into the name of
the Collateral Agent or its nominee, with or without disclosing that
such Collateral is subject to the lien and security interest
hereunder,
(ii) notify the parties obligated on any of the Collateral to
make payment to the Collateral Agent of any amount due or to become
due thereunder,
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<PAGE>
(iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof,
or compromise or extend or renew for any period (whether or not longer
than the original period) any obligations of any nature of any party
with respect thereto,
(iv) endorse any checks, drafts, or other writings in the
Pledgor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral, and
(vi) execute (in the name, place and stead of the Pledgor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral.
SECTION 6.2. Securities Laws. If the Collateral Agent shall determine to
exercise its right to sell all or any of the Collateral pursuant to Section 6.1,
the Pledgor agrees that, upon request of the Collateral Agent, the Pledgor will,
at its own expense:
(a) execute and deliver, and cause each issuer of the Collateral
contemplated to be sold and the directors and officers thereof to execute
and deliver, all such instruments and documents, and do or cause to be done
all such other acts and things, as may be necessary or, in the opinion of
the Collateral Agent, advisable to register such Collateral under the
provisions of the Securities Act of 1933, as from time to time amended (the
"Securities Act"), and to cause the registration statement relating thereto
to become effective and to remain effective for such period as prospectuses
are required by law to be furnished, and to make all amendments and
supplements thereto and to the related prospectus which, in the opinion of
the Collateral Agent, are necessary or advisable, all in conformity with
the requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the state
securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the Collateral
Agent;
(c) cause each such issuer to make available to its security holders,
as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act; and
(d) do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law.
The Pledgor further acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by the Collateral Agent or the Secured Parties by
reason of the failure by the Pledgor to perform any of the covenants contained
in this Section and, consequently, agrees that, if the Pledgor shall fail to
perform any of such covenants, it shall pay, as liquidated damages and not as a
penalty, an amount equal to the value (as determined by the Collateral Agent) of
the Collateral on the date the Collateral Agent shall demand compliance with
this Section.
SECTION 6.3. Compliance with Restrictions. The Pledgor agrees that in any
sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, the Collateral Agent is
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<PAGE>
hereby authorized to comply with any limitation or restriction in connection
with such sale as it may be advised by counsel is necessary in order to avoid
any violation of applicable law (including compliance with such procedures as
may restrict the number of prospective bidders and purchasers, require that such
prospective bidders and purchasers have certain qualifications, and restrict
such prospective bidders and purchasers to persons who will represent and agree
that they are purchasing for their own account for investment and not with a
view to the distribution or resale of such Collateral), or in order to obtain
any required approval of the sale or of the purchaser by any governmental
regulatory authority or official, and the Pledgor further agrees that such
compliance shall not result in such sale being considered or deemed not to have
been made in a commercially reasonable manner, nor shall the Collateral Agent be
liable nor accountable to the Pledgor for any discount allowed by the reason of
the fact that such Collateral is sold in compliance with any such limitation or
restriction.
SECTION 6.4. Application of Proceeds. All cash proceeds received by the
Collateral Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral shall be applied by the
Collateral Agent, first, to the pro rata payment of all the Secured Obligations
(other than Secured Obligations in respect of the Credit Agreement) and second,
in accordance with Section 3.02(b)(iii) of the Credit Agreement and with each
other Loan Document.
SECTION 6.5. Indemnity and Expenses. The Pledgor hereby indemnifies and
holds harmless the Collateral Agent from and against any and all claims, losses,
and liabilities arising out of or resulting from this Pledge Agreement
(including enforcement of this Pledge Agreement), except claims, losses, or
liabilities resulting from the Collateral Agent's gross negligence or willful
misconduct. Upon demand, the Pledgor will pay to the Collateral Agent the amount
of any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which the Collateral
Agent may incur in connection with:
(a) the administration of this Pledge Agreement, the Credit Agreement
and each other Loan Document;
(b) the custody, preservation, use, or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral;
(c) the exercise or enforcement of any of the rights of the Collateral
Agent hereunder; or
(d) the failure by the Pledgor to perform or observe any of the
provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION 7.2. Amendments, etc. No amendment to or waiver of any provision of
this Pledge Agreement nor consent to any departure by the Pledgor herefrom shall
in any event be effective unless the same shall be in writing and signed by the
Collateral Agent (on behalf of the Lenders or the Requisite Lenders, as the case
may be), and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it is given.
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<PAGE>
SECTION 7.3. Protection of Collateral. The Collateral Agent may from time
to time, at its option, perform any act which the Pledgor agrees hereunder to
perform and which the Pledgor shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of an Event of Default) and the
Collateral Agent may from time to time take any other action which the
Collateral Agent reasonably deems necessary for the maintenance, preservation or
protection of any of the Collateral or of its security interest therein.
SECTION 7.4. Addresses for Notices. All notices and other communications
provided for hereunder shall be made as set forth in Section 13.08 of the Credit
Agreement.
SECTION 7.5. Section Captions. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION 7.6. Severability. Wherever possible each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Pledge Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Pledge Agreement.
SECTION 7.7. Counterparts. This Pledge Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
SECTION 7.8. Governing Law, Entire Agreement, etc. THIS PLEDGE AGREEMENT
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS PLEDGE AGREEMENT AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.9. Conflicts. In the event of any conflict between the terms of
this Pledge Agreement and the FII Intercreditor Agreement, the terms of the FII
Intercreditor Agreement shall govern.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
FOAMEX INTERNATIONAL INC.
By /s/ George L. Karpinski
-----------------------------
Name: George L. Karpinski
Title: Vice President
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<PAGE>
Amended and Restated Foamex International Pledge Agreement
CITICORP USA, INC., as
Collateral Agent
By /s/ Shapleigh Smith
-----------------------------
Name: Shapleigh Smith
-14-
<PAGE>
EXHIBIT A
to Amended and Restated
Foamex International
Pledge Agreement
PROMISSORY NOTE
$___________ __________, ___
FOR VALUE RECEIVED, the undersigned, [Name of Maker], a _______________
__________ (the "Maker"), promises to pay to the order of ___________________, a
__________ __________ (the "Payee"), in equal ________ installments, commencing
_________, ___ to and including _________, _____, the principal sum of DOLLARS
_________ ($_____), representing the aggregate principal amount of an
intercompany loan made by the Payee to the Maker.
The unpaid principal amount of this promissory note (this "Note") from time
to time outstanding shall bear interest at a rate of interest equal to
____________, which the Maker represents to be a lawful and commercially
reasonable rate, payable __________, and all payments of principal of and
interest on this Note shall be payable in lawful currency of the United States
of America. All such payments shall be made by the Maker to an account
established by the Payee at _______________ and shall be recorded on the grid
attached hereto by the holder hereof (including the Collateral Agent as
pledgee). Upon notice from the Collateral Agent (hereinafter defined) that a
Default (as defined in the Credit Agreement, hereinafter defined) of the nature
referred to in Section 11.01(f) or 11.01(g) of the Credit Agreement or an Event
of Default (as defined in the Credit Agreement) has occurred and is continuing
under the Credit Agreement, the Maker shall make such payments, in same day
funds, to such other account as the Collateral Agent shall direct in such
notice.
This Note is one of the Pledged Notes referred to in, and evidences
Indebtedness incurred pursuant to Section 9.01 of the Credit Agreement, dated as
of June 12, 1997, as amended and restated as of February 27, 1998 as further
amended and restated as of June 29, 1999 (as amended, supplemented, amended and
restated or modified from time to time, the "Credit Agreement"), among Foamex
L.P., a Delaware limited partnership, (the "Borrower"), FMXI, Inc., a Delaware
corporation, the Lenders, the Issuing Banks and Citicorp USA, Inc., as
Collateral Agent for the Lenders and the Issuing Banks and The Bank of Nova
Scotia, as Funding Agent for the Lenders and the Issuing Banks, the Lenders and
the Issuing Banks have extended Commitments to make Credit Extensions to the
Borrower. Upon the occurrence and continuance of an Event of Default under the
Credit Agreement, and notice thereof by the Collateral Agent to the Maker, the
Collateral Agent shall have all rights of the Payee to collect and accelerate,
and enforce all rights with respect to, the Indebtedness evidenced by this Note.
Unless otherwise defined herein or the context otherwise requires, terms used
herein have the meanings provided in the Credit Agreement.
Reference is made to the Credit Agreement for a description of the Pledge
Agreement pursuant to which this Note has been pledged to the Collateral Agent
as security for the Secured Obligations outstanding from time to time under the
Credit Agreement and each other Loan Document.
In addition to, but not in limitation of, the foregoing, the Maker further
agrees to pay all expenses, including reasonable attorneys' fees and legal
expenses, incurred by the holder (including the Collateral Agent as pledgee) of
this Note endeavoring to collect any amounts payable hereunder which are not
paid when due, whether by acceleration or otherwise.
A-1
<PAGE>
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS NOTE.
THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.
[NAME OF MAKER]
By
-----------------------------
Name:
Title:
Pay to the order of CITICORP USA, INC.,
as Collateral Agent
[NAME OF PAYEE]
By /s/ Shapleigh Smith
-----------------------------
Name: Shapleigh Smith
A-2
<PAGE>
GRID
Intercompany Loans made by [Name of Payee] to [Name of Maker] and payments
of principal of such Loans.
<TABLE>
<CAPTION>
====================================================================================================================
Amount of Intercompany Amount of Principal Outstanding Principal Notation Made By
Date Loan Payment Balance
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
<S> <C> <C> <C> <C>
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
- --------------------- ------------------------- ------------------------- ----------------------- ------------------
====================================================================================================================
</TABLE>
<PAGE>
[EXECUTION COPY]
AMENDMENT TO PROMISSORY NOTE
This AMENDMENT TO PROMISSORY NOTE dated as of June 30, 1999 (the
"Amendment"), amends in certain respects the Foamex/GFI Note, dated as of
February 27, 1998 (as amended, amended and restated, supplemented or otherwise
modified from time to time), made by Foamex L.P., a Delaware limited partnership
("Foamex" or the "Promissor"), in favor of Foam Funding LLC (as successor in
interest by merger to General Felt Industries, Inc.), a Delaware limited
liability corporation (the "Promisee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Promissor has requested of the Promisee, and the Promisee has
agreed, to amend the Foamex/GFI Note as set forth herein.
NOW, THEREFORE, in consideration of the above recitals, the Promissor and
the Promisee agree as follows:
SECTION 1. Defined Terms. Terms used herein and not otherwise defined
herein have the meanings given such terms in the Foamex/GFI Note.
SECTION 2. Amendments to the Foamex/GFI Note. The Foamex/GFI Note is hereby
amended as follows:
2.1. Amendment to Section 1. Article I of the Foamex/GFI Note is hereby
amended by the following:
2.1.1 The following definitions are hereby inserted in Section 1.01 of
the Foamex/GFI Note in their appropriate alphabetical place:
"Beneficial Owner" means "beneficial owner" as such term is defined in
Rule 13d-3 and Rule 13d-5 under the Securities Exchange Act; provided,
however, that (i) a person shall not be deemed to have beneficial ownership
of securities subject to a stock purchase agreement, merger agreement, or
similar agreement until the consummation of the transactions contemplated
by such agreement, and (ii) for purposes of determining beneficial
ownership of Voting Stock of Foamex, stockholders of Foamex International
shall be deemed to beneficially own a percentage of Voting Stock of Foamex
equal to their percentage beneficial ownership of Voting Stock of Foamex
International multiplied by Foamex International's beneficial ownership of
Voting Stock of Foamex.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of Foamex International who (i) was a
member of such Board of Directors on the Effective Date or (ii) was
nominated for election or elected to such Board of Directors with the
approval of a majority of the Continuing Directors who were members of such
Board at the time of such nomination or election.
"Managing General Partner" means FMXI, Inc., a Delaware corporation
("FMXI").
<PAGE>
"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 Company, Inc., a Delaware corporation, Foamex
International and FMXI as amended by the First Amendment thereto dated as
of June 28, 1994, by the Second Amendment thereto dated as of June 12,
1997, by the Third Agreement thereto dated as of December 23, 1997, and by
the Fourth Amendment thereto dated as of February 27, 1998, as such
agreement may be amended, supplemented or modified from time to time.
"Related Party" means with respect to Marshall S. Cogan or TIHI, as
the case may be, (A) any controlling stockholder, 80% (or more) owned
Subsidiary, or spouse or immediate family member (in the case of an
individual) of such Person, or (B) any trust, corporation, partnership or
other entity, the beneficiaries, stockholders, partners, owners or Persons
beneficially holding an 80% or more controlling interest of which consist
of such Person and/or such other Persons referred to in the immediately
preceding clause (A) and this clause (B).
"Voting Stock" of any Person as of any date means the Equity Interests
of such Person that at the time entitled to vote in the election of the
board of directors or other governing body of such Person.
2.2 Amendment to Section 1.01. Section 1.01 of the Foamex/GFI Note is
hereby amended by the following:
2.2.1 Amendment to the definition of "Change of Control". The
definition of Change of Control is hereby amended and restated in its
entirety as follows:
"`Change of Control' means any event pursuant to which (a) 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, (b) another
Person in addition to FMXI becomes a general partner of Foamex, (c) FMXI
withdraws as managing general partner of Foamex pursuant to the Partnership
Agreement or otherwise, (d) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the assets of Foamex and
its Subsidiaries taken as a whole to any "person" (as such term is used in
Section 13(d)(3) of the Securities Exchange Act), (e) the adoption of a plan
relating to the liquidation or dissolution of Foamex, (f) the consummation of
any transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as defined above), other than Marshall S.
Cogan, TIHI and their Related Parties, becomes the Beneficial Owner of (A) more
than 25% of the Voting Stock in Foamex International (measured by voting power
rather than number of shares) and (B) a greater percentage of the Voting Stock
than Marshall S. Cogan, TIHI and their Affiliates, (g) the first day on which a
majority of the members of the Board of Directors of Foamex International or
FCC, as the case may be, are not Continuing Directors, (h) there is a sale,
transfer or other assignment or disposition of any of the Equity Interests in
Foamex by FMXI or Foamex International, (i) Foamex International ceases to own
and control 100% of the issued and outstanding Equity Interests in New GFI, (j)
Foamex International ceases to own and control 100% of the issued and
outstanding Equity Interests in FMXI, or (k) 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 or whose nomination for election by the
shareholders of such Person, 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
2
<PAGE>
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the directors of such Person then in
office.
2.3. Amendment to Article VI. Article VI of the Foamex/GFI Note is hereby
amended by the following:
2.3.1. Amendment to Section 6.01. Section 6.01(o) is hereby amended by
deleting all references to the "TIHI Note".
SECTION 3. Conditions to Effectiveness. This Amendment shall become
effective on the date hereof (the "Amendment Effective Date"), provided, that
the following conditions precedent have been satisfied (unless waived by the
Promisee or unless the deadline for delivery has been extended by the Promisee):
(i) Documents. The Promisee shall have received on or before the
Amendment Effective Date all of the following in form and substance
satisfactory to the Promisee:
(a) this Amendment duly executed and in form and substance
satisfactory to the Promisee; and
(b) such additional documentation as the Promisee may reasonably
request.
(ii) Consents. The Promissor shall have received all material consents
and authorizations required pursuant to any material Contractual Obligation
with any other Person and shall have obtained all material consents and
authorizations of, and effected all notices to and filings with, any
Governmental Authority, in each case, as may be necessary to allow the
Promissor to lawfully and without risk of rescission, execute, deliver and
perform, in all material respects, its obligations under this Amendment and
the 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.
(iii) No Legal Impediments. No law, regulation, order, judgment or
decree of any Governmental Authority shall, and Promisee shall not have
received any notice that litigation is pending or threatened which is
likely to, impose or result in the imposition of a Material Adverse Effect.
(iv) No Change in Condition. No change in the condition (financial or
otherwise), business, performance, properties, assets, operations or
prospects of the Promissor or any of its Subsidiaries and its subsidiaries
shall have occurred since December 31, 1998, which change, in the judgment
of the Promisee, will have or is reasonably likely to have a Material
Adverse Effect.
(v) No Default. After giving effect to this Amendment, no Event of
Default or Potential Event of Default shall have occurred.
(vi) Representations and Warranties. All of the representations and
warranties contained in Section 4.01 of the Foamex/GFI Note and in any of
the Transaction Documents shall be true and correct in all material
respects on and as of the Amendment Effective Date.
3
<PAGE>
SECTION 4. Representations and Warranties. The Promissor hereby represents
and warrants to the Promisee that (i) the execution, delivery and performance of
this Amendment by the Promissor are within the Promissor's corporate powers and
have been duly authorized by all necessary corporate action, and (ii) this
Amendment constitutes the legal, valid and binding obligation of the Promissor,
enforceable against the Promissor, in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or limiting creditors' rights generally or by
equitable principles generally.
SECTION 5. Reference to and Effect on the Transaction Documents.
5.1. Upon the effectiveness of this Amendment, on and after the date hereof
each reference in the Foamex/GFI Note to "this Note", "this Agreement",
"hereunder", "hereof", "herein" or words of like import, and each reference in
any Transaction Documents, shall mean and be a reference to the Foamex/GFI Note
as amended hereby.
5.2. Except as specifically amended above, all of the terms of the
Foamex/GFI Note and all Transaction Documents shall remain unchanged and in full
force and effect.
5.3. 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 Promisee under the Foamex/GFI Note or any Transaction Document, nor
constitute a waiver of any provision of the Foamex/GFI Note or any Transaction
Document.
5.4. As of the Amendment Effective Date, after giving effect to this
Amendment, the Promissor is in compliance in all material respects with all
applicable terms, conditions and covenants of the Foamex/GFI Note and all
Transaction Documents.
SECTION 6. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
SECTION 7. Miscellaneous. This Amendment is to be delivered to the Promisee
and attached as an allonge to the Foamex/GFI Note.
SECTION 8. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO NEW YORK CONFLICT OF LAWS PRINCIPLES).
SECTION 9. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment or be given any substantive effect.
SECTION 10. Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
4
<PAGE>
IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first above written.
FOAMEX L.P.
By /s/ George L. Karpinski
-------------------------------
Name: George L. Karpinski
FOAM FUNDING LLC (as successor in
interest by merger to General Felt
Industries, Inc.)
By: Trace SPV LLC
Its Sole Member
By: Trace Foam Company, Inc.
Its Sole Member
By /s/ Philip N. Smith, Jr.
-------------------------------
Name: Philip N. Smith, Jr.
5
<PAGE>
CITICORP USA, INC., as Collateral Agent
By /s/ Shapleigh Smith
--------------------------------
Name: Shapleigh Smith
6
<PAGE>
[EXECUTION COPY]
AMENDMENT TO PROMISSORY NOTE
This AMENDMENT TO PROMISSORY NOTE dated as of June 30, 1999 (the
"Amendment"), amends in certain respects the Promissory Note dated as of
February 27, 1998 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Promissory Note"), made by Foamex Carpet
Cushion, Inc. ("New GFI" or the "Promissor"), in favor of Foam Funding LLC
(f/k/a Trace Foam LLC, the "Promisee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, each of the Promissor and the Promisee (which has executed the
Promissory Note) has requested of the Promisee, and the Promisee has agreed, to
amend the Promissory Note as set forth herein.
NOW, THEREFORE, in consideration of the above recitals, the Promissor and
the Promisee agree as follows:
SECTION 1. Defined Terms. Terms used herein and not otherwise defined
herein have the meanings given such terms in the Promissory Note.
SECTION 2. Amendments to the Promissory Note. The Promissory Note is hereby
amended as follows:
2.1. Amendment to Article I. Article I of the Promissory Note is hereby
amended by the following:
2.1.1 New Definitions. The following definitions are hereby inserted
in Section 1.01 of the Promissory Note in their appropriate alphabetical
place:
"Beneficial Owner" means "beneficial owner" as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Securities Exchange
Act; provided, however, that (i) a person shall not be deemed to have
beneficial ownership of securities subject to a stock purchase
agreement, merger agreement, or similar agreement until the
consummation of the transactions contemplated by such agreement, and
(ii) for purposes of determining beneficial ownership of Voting Stock
of the Promissor, stockholders of Foamex International shall be deemed
to beneficially own a percentage of Voting Stock of the Promissor
equal to their percentage beneficial ownership of Voting Stock of
Foamex International multiplied by Foamex International's beneficial
ownership of Voting Stock of the Promissor.
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of Foamex International who (i)
was a member of such Board of Directors on the Effective Date or (ii)
was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
<PAGE>
"Managing General Partner" means FMXI.
"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 Company, Inc., a Delaware corporation,
Foamex International and FMXI as amended by the First Amendment
thereto dated as of June 28, 1994, by the Second Amendment thereto
dated as of June 12, 1997, by the Third Amendment thereto dated as of
December 23, 1997, and by the Fourth Amendment thereto dated as of
February 27, 1998, as such agreement may be amended, supplemented or
modified from time to time.
"Related Party" means with respect to Marshall S. Cogan or TIHI,
as the case may be, (A) any controlling stockholder, 80% (or more)
owned Subsidiary, or spouse or immediate family member (in the case of
an individual) of such Person, or (B) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of such Person and/or such other
Persons referred to in the immediately preceding clause (A) and this
clause (B).
"Voting Stock" of any Person as of any date means the Equity
Interests of such Person that at the time entitled to vote in the
election of the board of directors or other governing body of such
Person.
2.1.2 Amendment to the definition of Change of Control. The definition
of Change of Control is hereby amended and restated in its entirety as
follows:
"Change of Control" means any event pursuant to which (a) 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, (b) another
Person in addition to FMXI becomes a general partner of Foamex, (c) FMXI
withdraws as managing general partner of Foamex pursuant to the Partnership
Agreement or otherwise, (d) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the assets of the
Promissor and its Subsidiaries taken as a whole to any "person" (as such term is
used in Section 13(d)(3) of the Securities Exchange Act), (e) the adoption of a
plan relating to the liquidation or dissolution of the Promisor, (f) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as defined above),
other than Marshall S. Cogan, TIHI and their Related Parties, becomes the
Beneficial Owner of (A) more than 25% of the Voting Stock in Foamex
International (measured by voting power rather than number of shares) and (B) a
greater percentage of the Voting Stock than Marshall S. Cogan, TIHI and their
Affiliates, (g) the first day on which a majority of the members of the Board of
Directors of Foamex International or FCC, as the case may be, are not Continuing
Directors, (h) there is a sale, transfer or other assignment or disposition of
any of the Equity Interests in Foamex by FMXI or Foamex International, (i)
Foamex International ceases to own and control 100% of the issued and
outstanding Equity Interests in New GFI, (j) Foamex International ceases to own
and control 100% of the issued and outstanding Equity Interests in FMXI, or (k)
during any period of two consecutive calendar years, individuals who at the
beginning of such period constituted the Board of Directors of the Promissor or
Foamex International or whose nomination for election by the shareholders of
such Person, 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
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<PAGE>
was previously so approved) cease for any reason to constitute a majority of the
directors of the Promissor or Foamex International, as the case may be, then in
office.
2.1.3 Amendment to the definition of EBDAIT. The definition of EBDAIT
is hereby amended and restated in its entirety as follows:
"EBDAIT" means, for any period, (a) the sum of the amounts for such period
of (i) Net Income plus (ii) depreciation, amortization expense and other
non-cash charges plus (iii) Interest Expense plus (iv) Federal, state, foreign
and local income taxes provided for by the Issuer minus (b) (i) extraordinary
gains (or plus extraordinary losses) from asset sales calculated pursuant to
GAAP for such period to the extent such gains or losses were included in the
calculation of Net Income plus (ii) interest or investment income."
2.1.4 Amendment to the definition of Net Worth. The definition of Net
Worth is hereby amended and restated in its entirety as follows:
"Net Worth means, at any time, with respect to any Person (a) the sum of
total assets of such Person minus (b) total 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 money's due from Affiliates of the Issuer shall be excluded from or added
back, as applicable, to total assets of the Issuer (other than trade receivables
due from Affiliates incurred in the ordinary course of business less than sixty
(60) days past due). Net Worth shall be cumulatively adjusted by adding an
amount each Fiscal Quarter (1) beginning with the Third Fiscal Quarter of the
1999 Fiscal Year through and including the Fourth Fiscal Quarter of the 2001
Fiscal Year by an amount equal to $117,000 and (2) beginning with the First
Fiscal Quarter of the 2002 Fiscal Year through and including the First Fiscal
Quarter of the 2004 Fiscal Year by an amount equal to $80,000.
2.1.5 Amendment to the definition of Cash Interest Expense. The
definition of Cash Interest Expense is hereby amended and restated in its
entirety as follows:
"Cash Interest Expense" means, for any period, total interest expense,
whether paid or accrued (without duplication) (including the interest component
of Capital Leases), of the Issuer, including, without limitation, (i) all bank
fees, commissions, discounts and other fees and charges owed with respect to
letters of credit and (ii) net costs (and reduction for net benefits) under
interest rate Hedging Obligations, but excluding, however, (a) amortization of
discount, (b) interest paid in property other than cash or (c) any other
interest expense not payable in cash, all as determined in conformity with GAAP.
Cash Interest Expense shall be adjusted by subtracting the following amounts for
each Fiscal Quarter: Third Fiscal Quarter 1999: $36,000, Fourth Fiscal Quarter
1999: $72,000, First Fiscal Quarter 2000: $108,000 and Second Fiscal Quarter
2000 and thereafter: $144,000.
2.1.6 Amendment to the definition of Total Net Debt. The definition of
Total Net Debt is hereby amended and restated in its entirety as follows:
"Total Net Debt" means, on any date of determination, the
difference of:
(a) the aggregate amount of Funded Debt of the Issuer outstanding on
such date.
minus
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<PAGE>
(b) the aggregate amount of cash and Cash Equivalents of the Issuer which
are available on such date to be applied (without any legal or Contractual
Obligation restriction) against the Indebtedness described in clause (a) and
$1,700,000.
2.2. Amendment to Article IV. Article IV of the Promissory Note is hereby
amended by the following:
2.2.1 Amendment to Section 4.01. Section 4.01 of the Promissory Note
is amended by deleting (i) in clause (a)(i)(B) thereof, the reference to
"2.00%" and inserting in lieu thereof, "2.25%" and (ii) in clause
(a)(ii)(B) thereof, the reference to "3.00%" and inserting in lieu thereof,
"3.25%".
2.3. Amendment to Article V. Article V of the Promissory Note is hereby
amended by the following:
2.3.1 Amendment to Section 5.01(k). Section 5.01(k) of the Promissory
Note is hereby amended by (a) deleting the reference to "Trace Foam, TFLLC,
the Issuer or GFI" and replacing it with "the Issuer", and (b) changing the
date from "December 29, 1996" to "December 31, 1998".
2.4. Amendment to Article IX. Article IX of the Promissory Note is hereby
amended by the following:
2.4.1 Amendment to Section 9.01. Section 9.01 of the Promissory Note
is amended and restated in its entirety as follows:
"9.01 Minimum Net Worth. The Net Worth of the Issuer at all times
during any period from the last day of the Fiscal Quarter in each
Fiscal Year of the Issuer set forth below to the next to last day of
the next succeeding Fiscal Quarter shall not be less than the minimum
amount set forth opposite the first such Fiscal Quarter:
Fiscal Quarter Minimum Net Worth
-------------- -----------------
(in millions)
Second fiscal quarter of 1999 $(2.7)
Third fiscal quarter of 1999 (0.4)
Fourth fiscal quarter of 1999 0.3
First fiscal quarter of 2000 1.5
Second fiscal quarter of 2000 3.2
Third fiscal quarter of 2000 5.2
Fourth fiscal quarter of 2000 6.6
First fiscal quarter of 2001 8.0
Second fiscal quarter of 2001 10.2
Third fiscal quarter of 2001 12.5
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<PAGE>
Fiscal Quarter Minimum Net Worth
-------------- -----------------
(in millions)
Fourth fiscal quarter of 2001 14.3
First fiscal quarter of 2002 15.8
Second fiscal quarter of 2002 17.2
Third fiscal quarter of 2002 18.6
Fourth fiscal quarter of 2002 19.9
First fiscal quarter of 2003 21.6
Second fiscal quarter of 2003 23.3
Third fiscal quarter of 2003 25.0
Fourth fiscal quarter of 2003 26.5
First fiscal quarter of 2004 28.4
Second fiscal quarter of 2004 30.3
Third fiscal quarter of 2004 32.2
Fourth fiscal quarter of 2004 and thereafter" 34.0
2.4.2 Amendment to Section 9.02. Section 9.02 of the Promissory Note
is hereby amended and restated in its entirety as follows:
"9.02. Minimum Interest Coverage Ratio. The Interest Coverage
Ratio of the Issuer,
(a) for the two Fiscal Quarter period ended June 30, 1999 as
determined as of the last day of such period, shall not be less
than 1.45 to 1.00;
(b) for the three Fiscal Quarter period ended September 30,
1999 as determined as of the last day of such period, shall not
be less than 2.10 to 1.00; and
(c) as determined as of the last day of each Fiscal Quarter
of the Borrower set forth below for the four Fiscal Quarter
period ending on such date, shall not be less than the minimum
ratio set forth opposite such Fiscal Quarter:
Fiscal Quarter Minimum Ratio
-------------- -------------
Fourth fiscal quarter of 1999 2.15 to 1.00
First fiscal quarter of 2000 2.30 to 1.00
Second fiscal quarter of 2000 2.95 to 1.00
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<PAGE>
Fiscal Quarter Minimum Ratio
-------------- -------------
Third fiscal quarter of 2000 3.00 to 1.00
Fourth fiscal quarter of 2000 3.25 to 1.00
First fiscal quarter of 2001 3.50 to 1.00
Second fiscal quarter of 2001 3.50 to 1.00
Third fiscal quarter of 2001 3.50 to 1.00
Fourth fiscal quarter of 2001 4.00 to 1.00
First fiscal quarter of 2002 4.00 to 1.00
Second fiscal quarter of 2002 4.00 to 1.00
Third fiscal quarter of 2002 4.00 to 1.00
Fourth fiscal quarter of 2002 4.00 to 1.00
First fiscal quarter of 2003 4.00 to 1.00
Second fiscal quarter of 2003 4.00 to 1.00
Third fiscal quarter of 2003 4.00 to 1.00
Fourth fiscal quarter of 2003 4.00 to 1.00
First fiscal quarter of 2004 4.00 to 1.00
Second fiscal quarter of 2004 4.00 to 1.00
Third fiscal quarter of 2004 4.00 to 1.00
Fourth fiscal quarter of 2004 and thereafter" 4.00 to 1.00
2.4.3 Amendment to Section 9.03. Section 9.03 of the Promissory Note
is hereby amended and restated in its entirety as follows:
"9.03. Minimum Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio of the Issuer,
(a) for the two Fiscal Quarter period ended June 30, 1999,
as determined as of the last day of such period, shall not be
less than 0.45:1.00;
(b) for the three Fiscal Quarter period ended September 30,
1999, as determined as of the last day of such period, shall not
be less than 0.65:1.00; and
(c) as determined as of the last day of each Fiscal Quarter
of the Borrower set forth below for the four Fiscal Quarter
period ending on such date, shall not be less than the minimum
ratio set forth opposite such Fiscal Quarter:
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<PAGE>
Fiscal Quarter Minimum Ratio
-------------- -------------
Fourth fiscal quarter of 1999 0.65 to 1.00
First fiscal quarter of 2000 0.65 to 1.00
Second fiscal quarter of 2000 0.80 to 1.00
Third fiscal quarter of 2000 0.80 to 1.00
Fourth fiscal quarter of 2000 0.85 to 1.00
First fiscal quarter of 2001 0.85 to 1.00
Second fiscal quarter of 2001 0.85 to 1.00
Third fiscal quarter of 2001 0.80 to 1.00
Fourth fiscal quarter of 2001 0.80 to 1.00
First fiscal quarter of 2002 0.80 to 1.00
Second fiscal quarter of 2002 0.80 to 1.00
Third fiscal quarter of 2002 0.80 to 1.00
Fourth fiscal quarter of 2002 0.85 to 1.00
First fiscal quarter of 2003 0.75 to 1.00
Second fiscal quarter of 2003 0.75 to 1.00
Third fiscal quarter of 2003 0.75 to 1.00
Fourth fiscal quarter of 2003 0.75 to 1.00
First fiscal quarter of 2004 0.75 to 1.00
Second fiscal quarter of 2004 0.75 to 1.00
Third fiscal quarter of 2004 0.75 to 1.00
Fourth fiscal quarter of 2004 and thereafter" 1.50 to 1.00
2.4.4 Amendment to Section 9.04(a). Section 9.04(a) of the Promissory
Note is hereby amended and restated in its entirety as follows:
"9.04(a). EBDAIT. EBDAIT of the Issuer, as determined as of the
last day of each period set forth below, shall not be less than the
minimum amount set forth opposite such period:
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<PAGE>
Minimum EBDAIT
--------------
(in millions)
Two Fiscal Quarter period ended June 30, 1999 $3.75
Three Fiscal Quarter period ended September 30, 1999 $8.50
2.4.5 Amendment to Section 9.04(b). Section 9.04(b) of the Promissory
Note is hereby amended and restated in its entirety as follows:
"9.04(b) Maximum Leverage Ratio. The Total Net Debt to EBDAIT
Ratio of the Issuer, as determined as of the last day of each Fiscal
Quarter of the Issuer set forth below for the four Fiscal Quarter
period ending on such date, shall not exceed the maximum ratio set
forth below:
Fiscal Quarter Maximum Ratio
-------------- -------------
Fourth fiscal quarter of 1999 5.00 to 1.00
First fiscal quarter of 2000 4.45 to 1.00
Second fiscal quarter of 2000 3.40 to 1.00
Third fiscal quarter of 2000 3.25 to 1.00
Fourth fiscal quarter of 2000 2.95 to 1.00
First fiscal quarter of 2001 2.80 to 1.00
Second fiscal quarter of 2001 2.50 to 1.00
Third fiscal quarter of 2001 2.50 to 1.00
Fourth fiscal quarter of 2001 2.25 to 1.00
First fiscal quarter of 2002 2.25 to 1.00
Second fiscal quarter of 2002 2.25 to 1.00
Third fiscal quarter of 2002 2.25 to 1.00
Fourth fiscal quarter of 2002 2.25 to 1.00
First fiscal quarter of 2003 2.25 to 1.00
Second fiscal quarter of 2003 2.25 to 1.00
Third fiscal quarter of 2003 2.25 to 1.00
Fourth fiscal quarter of 2003 2.25 to 1.00
First fiscal quarter of 2004 2.25 to 1.00
Second fiscal quarter of 2004 2.25 to 1.00
Third fiscal quarter of 2004 2.25 to 1.00
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<PAGE>
Fiscal Quarter Maximum Ratio
-------------- -------------
Fourth fiscal quarter of 2004 and thereafter." 2.25 to 1.00
2.4.6 Amendment to Section 9.05. Section 9.05 of the Credit Agreement
is hereby amended and restated in its entirety as follows:
"9.05 Capital Expenditures. Capital Expenditures made or incurred
by the Issuer shall not exceed $2,500,000 in the aggregate, for any
one fiscal year."
2.5. Amendment to Article X. Article X of the Promissory Note is hereby
amended by the following:
2.5.1 Amendment to Sections 10.01(f) and (g). Sections 10.01(f) and
(g) of the Credit Agreement are hereby amended by deleting all references
to "TFLLC".
SECTION 3. Waiver of Reporting Covenant. The Holder hereby agrees to waive
the provision in clause (iii) of Section 6.01(c) of the Promissory Note solely
to the extent that it requires the opinion, referred to therein, on the
financial statements for the fiscal year ended December 31, 1998, to be
unqualified. Except as otherwise provided herein, nothing herein contained shall
be deemed to evidence the waiver by the Holder (as at any date or for any period
of time) of any provision of the Promissory Note or of any document or
instrument executed in connection with the Promissory Note, nor shall anything
contained herein be deemed to prejudice the exercise by the Holder of any or all
of its rights and remedies under the Promissory Note and other documents and
instruments executed in connection with the Promissory Note.
SECTION 4. Conditions to Effectiveness. This Amendment shall become
effective on the date hereof (the "Amendment Effective Date"), provided, that
the following conditions precedent have been satisfied (unless waived by the
Promisee or unless the deadline for delivery has been extended by the Promisee):
(i) Documents. The Promisee shall have received on or before the
Amendment Effective Date all of the following in form and substance
satisfactory to the Promisee:
(a) this Agreement duly executed and in form and substance
satisfactory to the Promisee; and
(b) such additional documentation as the Promisee may reasonably
request.
(ii) Consents. The Promisor shall have received all material consents
and authorizations required pursuant to any material Contractual Obligation
with any other Person and shall have obtained all material consents and
authorizations of, and effected all notices to and filings with, any
Governmental Authority, in each case, as may be necessary to allow the
Promisor to lawfully and without risk of rescission, execute, deliver and
perform, in all material respects, its obligations under this Amendment and
the 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.
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<PAGE>
(iii) No Legal Impediments. No law, regulation, order, judgment or
decree of any Governmental Authority shall, and shall not have received any
notice that litigation is pending or threatened which is likely to, impose
or result in the imposition of a Material Adverse Effect.
(iv) No Change in Condition. No change in the condition (financial or
otherwise), business, performance, properties, assets, operations or
prospects of the Promisor or any of its Subsidiaries and its subsidiaries
shall have occurred since December 31, 1998, which change, in the judgment
of the Promisee, will have or is reasonably likely to have a Material
Adverse Effect.
(v) No Default. After giving effect to this Amendment, no Event of
Default or Potential Event of Default shall have occurred.
(vi) Representations and Warranties. All of the representations and
warranties contained in Section 5.01 of the Promissory Note and in any of
the Transaction Documents shall be true and correct in all material
respects on and as of the Amendment Effective Date.
SECTION 5. Representations and Warranties. The Promisor hereby represents
and warrants to the Promisee that (i) the execution, delivery and performance of
this Amendment by the Promisor are within the Promisor's corporate powers and
have been duly authorized by all necessary corporate action, and (ii) this
Amendment constitutes the legal, valid and binding obligation of the Promisor,
enforceable against the Promisor, in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or limiting creditors' rights generally or by
equitable principles generally.
SECTION 6. Reference to and Effect on the Transaction Documents.
6.1. Upon the effectiveness of this Amendment, on and after the date hereof
each reference in the Promissory Note to "this Note", "this Agreement",
"hereunder", "hereof", "herein" or words of like import, and each reference in
any Transaction Documents, shall mean and be a reference to the Promissory Note
as amended hereby.
6.2. Except as specifically amended above, all of the terms of the
Promissory Note and all Transaction Documents shall remain unchanged and in full
force and effect.
6.3. 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 the Promisor, under the Promissory Note or any Transaction Document,
nor constitute a waiver of any provision of the Promissory Note or any
Transaction Document.
6.4. As of the Amendment Effective Date, after giving effect to this
Amendment, the Promisor is in compliance in all material respects with all
applicable terms, conditions and covenants of the Promissory Note and all
Transaction Documents.
SECTION 7. Miscellaneous. This Amendment is to be delivered to the
Collateral Agent and attached as an allonge to the Promissory Note.
SECTION 8. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and
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delivered shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
SECTION 9. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO NEW YORK CONFLICT OF LAWS PRINCIPLES).
SECTION 10. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment or be given any substantive effect.
SECTION 11. Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first above written.
FOAMEX CARPET CUSHION, INC.
By /s/ George L. Karpinski
-------------------------------
Name: George L. Karpinski
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<PAGE>
FOAM FUNDING LLC
By: Trace SPV LLC
Its Sole Member
By: Trace Foam Company, Inc.
Its Sole Member
By /s/ Philip N. Smith, Jr.
-------------------------------
Name: Philip N. Smith, Jr.
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<PAGE>
CITICORP USA, INC., as Collateral Agent
By /s/ Shapleigh Smith
-------------------------------
Name: Shapleigh Smith
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