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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 12, 1997
FOAMEX L.P.
FOAMEX CAPITAL CORPORATION
FOAMEX INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-11432 05-0475617
1-11436 22-3182164
0-22624 05-0473908
(Commission File Number) (I.R.S. Employer Identification No.)
1000 Columbia Avenue,
Linwood, PA 19061
(Address of principal executive offices) (Zip Code)
(610) 859-3000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
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ITEM 5. Other Events.
On June 12, 1997, Foamex International Inc. completed a refinancing
plan designed to improve its financial and operating flexibility and reduce
interest expense, as more fully described in the press release filed herewith as
Exhibit 99.1 and incorporated by reference herein. As part of the refinancing
plan, Foamex-JPS Automotive L.P. and FJGP Inc. were merged with and into Foamex
International Inc. and certain management and tax sharing agreements were
amended.
ITEM 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired: None
(b) Pro Forma Financial Information: None
(c) Exhibits:
4.1 Indenture, dated as of June 12, 1997, by and among Foamex
L.P., Foamex Capital Corporation, as joint and several
obligors, General Felt Industries, Inc., Foamex Fibers, Inc.
and all future direct or indirect domestic subsidiaries of
Foamex L.P. or Foamex Capital Corporation, and The Bank of
New York, as Trustee.
4.2 Registration Rights Agreement, dated as of June 12, 1997, by
and among Foamex L.P., Foamex Capital Corporation, General
Felt Industries, Inc., Foamex Fibers, Inc. and all future
direct or indirect domestic subsidiaries of Foamex L.P. or
Foamex Capital Corporation, and Donaldson, Lufkin & Jenrette
Securities Corporation, Salomon Brothers Inc. and Scotia
Capital Markets, as Initial Purchasers.
10.1 Credit Agreement, dated as of June 12, 1997, by and among
Foamex L.P., General Felt Industries, Inc., Trace Foam
Company, Inc., 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.
10.2 Second Amendment to Fourth Amended and Restated Agreement of
Limited Partnership of Foamex L.P., dated as of June 12,
1997, by and among FMXI, Inc., Trace Foam Company, Inc. and
Foamex International Inc.
10.3 First Amendment to Management Agreement, dated as of June
12, 1997, by and between Foamex L.P. and Trace Foam Company,
Inc.
10.4 First Amendment to Amended and Restated Tax Sharing
Agreement of Foamex L.P., dated as of June 12, 1997, by and
among Foamex L.P., Foamex International Inc., FMXI, Inc. and
Trace Foam Company, Inc.
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10.5 Amendment No. 1 to Tax Distribution Advance Agreement, dated
as of June 12, 1997, by and between Foamex International
Inc. and Foamex L.P.
99.1 Press Release, dated June 12, 1997.
Certain instruments defining the rights of security holders have been
excluded herefrom in accordance with Item 601(b)(4)(iii) of Regulation S-K. The
Registrants hereby agree to furnish a copy of any such instrument to the
Commission upon request.
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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 thereunto duly authorized.
FOAMEX L.P.
By: FMXI, Inc.
Managing General Partner
DATE: June 19, 1997 By: /s/ Kenneth R. Fuette
NAME: Kenneth R. Fuette
TITLE: Senior Vice President of Finance
FOAMEX CAPITAL CORPORATION
DATE: June 19, 1997 By: /s/ Kenneth R. Fuette
NAME: Kenneth R. Fuette
TITLE: Treasurer, Chief Financial Officer
and Chief Accounting Officer
FOAMEX INTERNATIONAL INC.
DATE: June 19, 1997 By: /s/ Kenneth R. Fuette
NAME: Kenneth R. Fuette
TITLE: Senior Vice President of Finance,
Chief Financial Officer and
Chief Accounting Officer
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EXHIBIT INDEX
Sequential
Exhibit No. Document Page Number
4.1 Indenture, dated as of June 12, 1997, by and among
Foamex L.P., Foamex Capital Corporation, as joint
and several obligors, General Felt Industries,
Inc., Foamex Fibers, Inc. and all future direct or
indirect domestic subsidiaries of Foamex L.P. or
Foamex Capital Corporation, and The Bank of New
York, as Trustee.
4.2 Registration Rights Agreement, dated as of June
12, 1997, by and among Foamex L.P., Foamex Capital
Corporation, General Felt Industries, Inc., Foamex
Fibers, Inc. and all future direct or indirect
domestic subsidiaries of Foamex L.P. or Foamex
Capital Corporation, and Donaldson, Lufkin &
Jenrette Securities Corporation, Salomon Brothers
Inc. and Scotia Capital Markets, as Initial
Purchasers.
10.1 Credit Agreement, dated as of June 12, 1997, by
and among Foamex L.P., General Felt Industries,
Inc., Trace Foam Company, Inc., 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.
10.2 Second Amendment to Fourth Amended and Restated
Agreement of Limited Partnership of Foamex L.P.,
dated as of June 12, 1997, by and among FMXI,
Inc., Trace Foam Company, Inc. and Foamex
International Inc.
10.3 First Amendment to Management Agreement, dated as
of June 12, 1997, by and between Foamex L.P. and
Trace Foam Company, Inc.
10.4 First Amendment to Amended and Restated Tax
Sharing Agreement of Foamex L.P., dated as of June
12, 1997, by and among Foamex L.P., Foamex
International Inc., FMXI, Inc. and Trace Foam
Company, Inc.
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10.5 Amendment No. 1 to Tax Distribution Advance
Agreement, dated as of June 12, 1997, by and
between Foamex International Inc. and Foamex L.P.
99.1 Press Release, dated June 12, 1997.
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INDENTURE dated as of June 12, 1997 between Foamex L.P., a
Delaware limited partnership ("Foamex"), Foamex Capital Corporation, a Delaware
corporation ("FCC"), (each of Foamex and FCC an "Issuer" and together, the
"Issuers"), General Felt Industries, Inc., a Delaware corporation ("General
Felt"), Foamex Fibers, Inc. ("Foamex Fibers") and The Bank of New York, a New
York banking corporation, as trustee (the "Trustee").
The Issuers, the Subsidiary Guarantors (as defined below) and
the Trustee agree as follows for the benefit of each other and for the equal and
ratable benefit of the Holders of the 9_% Senior Subordinated Notes due 2007
(the "Senior Subordinated Notes") and the new 9_% Senior Subordinated Notes due
2007 (the "New Senior Subordinated Notes" and, together with the Senior
Subordinated Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person, (i) Indebtedness of
any other Person existing at the time such other Person is merged with or into
or became a Subsidiary of such specified Person, including, without limitation,
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person,
and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person to the extent of the fair market value of such asset where the
Indebtedness so secured is not the Indebtedness of such Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control. Notwithstanding the foregoing, Donaldson, Lufkin &
Jenrette Securities Corporation will not be deemed to be an Affiliate of the
Issuers.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition of any
assets (excluding any sale and leaseback transaction, the granting of a
Permitted Lien, and the transfer of cash and Cash Equivalents) other than sales
of inventory,
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licensing of intellectual property or sales of services, in each case in the
ordinary course of business, but including a Receivables Transaction (provided
that the sale, lease, conveyance or other disposition of all or substantially
all of the assets of the Issuers and their Restricted Subsidiaries taken as a
whole will be governed by Section 4.15 and/or Article 5 hereof and not by
Section 4.10), and (ii) the issue or sale by the Issuers or any of their
respective Restricted Subsidiaries of Equity Interests of any of the Issuers'
Restricted Subsidiaries, in the case of either clause (i) or (ii), whether in a
single transaction or a series of related transactions (a) that have a fair
market value in excess of $10.0 million or (b) for Net Proceeds in excess of
$10.0 million. Notwithstanding the foregoing: (i) a transfer of assets by either
of the Issuers to a Restricted Subsidiary or by a Restricted Subsidiary to
either of the Issuers or to another Restricted Subsidiary, (ii) an issuance of
Equity Interests by a Restricted Subsidiary to either of the Issuers or to
another Restricted Subsidiary, (iii) Hedging Obligations and (iv) a Restricted
Payment that is permitted by Section 4.07 will not be deemed to be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback transaction means, at the
time of determination, the present value (discounted at the rate of interest
implicit in such transaction, determined in accordance with GAAP) of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction (including any period
for which such lease has been extended or may, at the option of the lessor, be
extended).
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state law
for the relief of debtors.
"Beneficial Owner" means "beneficial owner" as such terms 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 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 Inc. 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 Inc. multiplied by Foamex
International Inc.'s beneficial ownership of Voting Stock of Foamex.
"Board of Directors" means the Board of Directors of the Managing General
Partner, on behalf of Foamex (or Foamex, if Foamex is a corporation), FCC, or
any Subsidiary Guarantor or any authorized committee of the Board of Directors.
"Business Day" means any day except a Saturday, Sunday or other day in the City
of New York, or in the city of the principal
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corporate trust office of the Trustee, on which banks are authorized to close.
"Capital Lease Obligation" means, at the time any determination thereof is to be
made, the amount of the liability in respect of a capital lease that would at
such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock, (ii) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support thereof), (iii) time deposits
and certificates of deposit, including eurodollar time deposits, of any
commercial bank organized in the United States having capital and surplus in
excess of $100,000,000 or a commercial bank organized under the laws of any
other country that is a member of the OECD having total assets in excess of
$100,000,000 with a maturity date not more than one year from the date of
acquisition, (iv) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (i) and (ii) above
entered into with any bank meeting the qualifications specified in clause (iii)
above, (v) direct obligations issued by any state of the United States of
America or any political subdivision of any state or any public instrumentality
thereof maturing within 90 days after the date of acquisition thereof and, at
the time of acquisition, having one of the two highest ratings obtainable from
either Standard & Poor's Corporation nor Moody's Investors Service, Inc. (or, if
at any time neither Standard & Poor's Corporation nor Moody's Investors Service,
Inc. shall be rating such obligations, then from such other nationally
recognized rating service acceptable to the Trustee), (vi) commercial paper
issued by the parent corporation of any commercial bank organized in the United
States having capital and surplus in excess of $100,000,000 or a commercial bank
organized under the laws of any other country that is a member of the OECD
having total assets in excess of $100,000,000, and commercial paper issued by
others having one of the two highest ratings obtainable from either Standard &
Poor's Corporation or Moody's Investors Service, Inc. (or, if at any time
neither Standard & Poor's Corporation nor Moody's Investors
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of acquisition, (vii) overnight bank deposits and bankers' acceptances at any
commercial bank organized in the United States having capital and surplus in
excess of $100,000,000 or a commercial bank organized under the laws of any
other country that is member of the OECD having total assets in excess of
$100,000,000, (viii) deposits available for withdrawal on demand with commercial
banks organized in the United States having capital and surplus in excess of
$50,000,000 or a commercial bank organized under the laws of any other country
that is a member of the OECD having total assets in excess of $50,000,000 and
(ix) investments in money market funds substantially all of whose assets
comprise securities of the types described in clauses (i) through (viii).
"Change of Control" means the occurrence of any of the following: (i) 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 either of the Issuers and their respective
Restricted Subsidiaries taken as a whole to any "person" (as such term is used
in Section 13(d)(3) of the Exchange Act) other than the Principals or their
Related Parties (as defined below), (ii) the adoption of a plan relating to the
liquidation or dissolution of the Issuers, (iii) 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 the
Principals and their Related Parties, becomes the Beneficial Owner of (A) more
than 25% of the Voting Stock of either of the Issuers (measured by voting power
rather than by number of shares) and (B) a greater percentage of the Voting
Stock than the Principals and their Related Parties or (iv) the first day on
which a majority of the members of the Board of Directors of either of the
Issuers are not Continuing Directors.
"Closing Date Transactions" means the following transactions to be entered into
by Foamex in connection with the issuance of the Senior Subordinated Notes: (i)
the distribution to Foamex-JPS Automotive L.P. ("FJPS") and FMXI, Inc. of: (a)
all of the FJPS and Foamex-JPS Capital Corporation Senior Secured Discount
Debentures due 2004 purchased by Foamex on or prior to the date of this
Indenture; (b) the promissory note of FJPS payable to Foamex, dated June 28,
1994 and (c) the promissory note of Foamex International Inc. payable to Foamex,
dated December 8, 1995; (ii) a cash distribution to Trace Foam Company, Inc. in
an amount equal to one-ninety ninth (1/99) of the distribution in (i) above;
(iii) the amendment of the promissory note of Trace International Holdings, Inc.
payable to Foamex, dated July 7, 1996, which extends the maturity of such
obligation to 2001; and (iv) the consummation of the cash tender offer pursuant
to Foamex's consent solicitation statement dated May 12, 1997, as amended to the
date hereof and the incurrence of borrowings under the New Credit Facility.
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"Commission" or "SEC" means the Securities and Exchange Commission and any
successor agency thereof.
"Consolidated Cash Flow" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period plus (i) an amount equal
to any extraordinary loss plus any net loss realized in connection with an Asset
Sale or discontinued operations (to the extent such losses were deducted in
computing such Consolidated Net Income), plus (ii) provision for taxes based on
income or profits of such Person and its Subsidiaries for such period
(including, to the extent applicable, payments made pursuant to any tax sharing
agreements), to the extent that such provision for taxes was included in
computing such Consolidated Net Income, plus (iii) consolidated interest expense
of such Person and its Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings
(whether or not accounted for by the Issuers and their respective Subsidiaries
as interest expense), and net payments (if any) pursuant to Hedging
Obligations), to the extent that any such expense was deducted in computing such
Consolidated Net Income, plus (iv) depreciation, amortization (including
amortization of goodwill and other intangibles) and other non-cash expenses of
such Person and its Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income, minus (v) non-cash items increasing such
Consolidated Net Income for such period, in each case, on a consolidated basis
and determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any period, the
aggregate of the Net Income of such Person and its Restricted Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP
(excluding, however, the effect of the Closing Date Transactions and of any
other extraordinary transaction in connection with the incurrence of the Senior
Subordinated Notes, and the consummation of the recapitalization of the Issuers
in connection therewith); provided that (i) the Net Income of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions with respect to current or prior years Net Income (if not
previously distributed or dividended) paid in cash to the referent Person or a
Restricted Subsidiary thereof; (ii) the Net Income of any Restricted Subsidiary
that is not a Subsidiary Guarantor shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of that Net
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Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders; (iii) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded; (iv) the cumulative effect of a change in
accounting principles shall be excluded; and (v) the Net Income (but not loss)
of any Unrestricted Subsidiary shall be excluded, whether or not distributed to
the Issuers or one of their respective Subsidiaries except as set forth in (i).
"Consolidated Net Worth" means, (A) with respect to any partnership, the common
and preferred partnership equity of such partnership and its consolidated
subsidiaries, as determined on a consolidated basis in accordance with GAAP, and
(B) with respect to any other Person as of any date, the sum of (i) the
consolidated equity of the common equityholders of such Person and its
consolidated Subsidiaries as of such date plus (ii) the respective amounts
reported on such Person's balance sheet as of such date with respect to any
series of preferred equity (other than Disqualified Stock) that by its terms is
not entitled to the payment of dividends unless such dividends may be declared
and paid only out of net earnings in respect of the year of such declaration and
payment, but only to the extent of any cash received by such Person upon
issuance of such preferred stock, less (x) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of tangible assets of
a going concern business made within 12 months after the acquisition of such
business) subsequent to the date of this Indenture in the book value of any
asset owned by such Person or a consolidated Subsidiary of such Person, (y) all
investments as of such date in unconsolidated Subsidiaries and in Persons that
are not Subsidiaries (except, in each case, Permitted Investments), plus (z) all
unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any member of the
Board of Directors of the Issuers who (i) was a member of such Board of
Directors on the date of this Indenture 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.
"Contributions" means any loans, cash advances, capital contributions,
investments or other transfers of assets for less than fair value by the Issuers
or any of their respective Restricted Subsidiaries to any Subsidiary or other
Affiliate of the Issuers or any of their respective Restricted Subsidiaries
other than a Subsidiary Guarantor, other than loans and cash
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advances to officers and directors made in the ordinary course of business not
to exceed $5.0 million.
"Corporate Trust Office of the Trustee" shall be at the address of the Trustee
specified in Section 13.02 hereof or such other address as to which the Trustee
may give notice to the Issuers.
"Credit Agent" means any of The Bank of Nova Scotia or Citicorp USA, Inc., in
their respective capacity as Administrative Agents for the lenders party to the
New Credit Facility, or any successor thereto or any person otherwise appointed.
"Default" means any event that is or with the passage of time or the giving of
notice or both would be an Event of Default.
"Designated Senior Debt" means (i) any Indebtedness outstanding under the New
Credit Facility and (ii) any other Senior Debt the principal amount of which is
$25.0 million or more and that has been designated by the Issuers as Designated
Senior Debt.
"Definitive Notes" means Notes that are in the form of the Notes attached hereto
as Exhibit A, that do not include the information called for by footnotes 1 and
2 thereof.
"Depository" means, with respect to the Notes issuable or issued in whole or in
part in global form, the Person specified in Section 2.03 hereof as the
Depository with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the Holder thereof, in whole or in part, on or prior to the date that is 91
days after the date on which the Senior Subordinated Notes mature.
"Equity Interests" means Capital Stock and all warrants, options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock).
"Existing Indebtedness" means up to $14.1 million in aggregate principal amount
of Indebtedness of the Issuers and their respective Restricted Subsidiaries
(other than Indebtedness under the New Credit Facility plus Indebtedness subject
to the Closing Date Transactions that is not purchased pursuant to such
Transactions) in existence on the date of this Indenture, including the Great
Western Note, until all such amounts are repaid.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Issuers pursuant to the
Registration Rights Agreement to exchange New Senior Subordinated Notes for
Senior Subordinated Notes.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations, but excluding the
amortization of deferred financing costs) and (ii) the consolidated interest
expense of such Person and its Restricted Subsidiaries that was capitalized
during such period to the extent related to Indebtedness, and (iii) any interest
expense on Indebtedness of another Person (other than such Person's Restricted
Subsidiaries) that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon),
but only to the extent of the interest expense attributable to the lesser of (a)
the principal amount of such Indebtedness, or (b) the fair market value of such
asset and (iv) the product of (a) all dividend payments, whether or not in cash,
on any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments to such Person or its Restricted
Subsidiaries and dividends on Equity Interests payable solely in Equity
Interests of the Issuers, times (b) a fraction, the numerator of which is one
and the denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person and its Restricted
Subsidiaries, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any period,
the ratio of the Consolidated Cash Flow of such Person for such period to the
Fixed Charges of such Person for such period. In the event that the Issuers or
any of their respective Restricted Subsidiaries incurs, assumes, Guarantees or
redeems, repurchases or otherwise retires any Indebtedness (other than revolving
credit borrowings) or issues preferred stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated but
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee or redemption,
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repurchase or retirement of Indebtedness, or such issuance or redemption of
preferred stock, as if the same had occurred at the beginning of the applicable
four-quarter reference period. In addition, for purposes of making the
computation referred to above, (i) acquisitions that have been made by the
Issuers or any of their respective Restricted Subsidiaries, including through
mergers or consolidations and including any related financing transactions,
during the four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date shall be deemed to have occurred on the
first day of the four-quarter reference period and Consolidated Cash Flow for
such reference period shall be calculated without giving effect to clause (iii)
of the proviso set forth in the definition of Consolidated Net Income, and (ii)
the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded, and (iii) the Fixed Charges
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date, shall be
excluded, but only to the extent that the obligations giving rise to such Fixed
Charges will not be obligations of the referent Person or any of its Restricted
Subsidiaries following the Calculation Date.
"FJPS" means Foamex-JPS Automotive L.P., a Delaware limited partnership.
"Foamex Latin America" means Foamex Latin America, Inc. and its direct and
indirect Subsidiaries.
"Foreign Subsidiary" means any Subsidiary of the Issuers either (a) which is
organized outside of the United States of America, (b) whose principal
activities are conducted outside of the United States of America or (c) whose
only material assets are Equity Interests in Subsidiaries which are Foreign
Subsidiaries.
"GAAP" means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Global Note" means a Note that contains the paragraph referred to in footnote 1
and the additional schedule referred to in footnote 2 to the form of the Note
attached hereto as Exhibit A.
"Great Western Note" means the subordinated promissory note incurred in
connection with the acquisition of Great Western in the principal amount of
$7,014,864 that bears interest at a maximum rate of 6.0% per annum payable
semi-annually.
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"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantor Senior Debt" means Senior Debt of a Subsidiary Guarantor.
"Hedging Obligations" means, with respect to any Person, the obligations of such
Person under (i) interest rate or currency swap agreements, interest rate or
currency cap agreements, interest rate or currency collar agreements and (ii)
other agreements or arrangements designed to protect such Person against or
expose such Person to fluctuations in interest rates and/or currency exchange
rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, without duplication, any
indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any of the
foregoing indebtedness (other than letters of credit) would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP,
as well as all Indebtedness of others secured by a Lien on any asset of such
Person (whether or not such Indebtedness is assumed by such Person) to the
extent of the fair market value of such asset where the Indebtedness so secured
is not the Indebtedness of such Person and, to the extent not otherwise
included, the Guarantee by such Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value thereof, to the extent such Indebtedness does not require current
payments of interest, and (ii) the principal amount thereof, together with any
interest thereon that is more than 30 days past due, in the case of any other
Indebtedness. Notwithstanding anything in this Indenture to the contrary,
Hedging Obligations shall not constitute Indebtedness, except to the extent they
appear on the balance sheet of Foamex.
"Indenture" means this Indenture, as amended or supplemented from time to time.
"Insolvency or Liquidation Proceedings" means (i) any insolvency or bankruptcy
case or proceeding, or any receivership, liquidation, reorganization or other
similar case or proceeding, relative to Foamex or FCC or to the creditors of
Foamex or FCC, as such, or to the assets of Foamex or FCC, or (ii) any
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liquidation, dissolution, reorganization or winding up of Foamex or FCC, whether
voluntary or involuntary and involving insolvency or bankruptcy, or (iii) any
assignment for the benefit of creditors or any other marshalling of assets and
liabilities of Foamex or FCC.
"Investments" means, with respect to any Person, all investments by such Person
in other Persons (including Affiliates) in the forms of direct or indirect loans
(including Guarantees of Indebtedness or other obligations), advances or capital
contributions (excluding advances to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. If the Issuers or any Restricted Subsidiary of the Issuers
sells or otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary of the Issuers such that, after giving effect to any such
sale or disposition, such Person is no longer a Restricted Subsidiary of one of
the Issuers, the Issuers shall be deemed to have made an Investment on the date
of any such sale or disposition equal to the fair market value of the Equity
Interests of such Subsidiary not sold or disposed of in an amount determined as
provided in the final paragraph of Section 4.07 hereof. A provision in an
agreement relating to the purchase or sale of any of the Issuers' or their
respective Restricted Subsidiaries' assets containing an "earn out" or providing
for an adjustment to the purchase or sale price based on a financial statement
relating to the assets purchased or sold shall not be deemed to be an
"Investment."
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant to Section
5 of the Registration Rights Agreement.
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"Management Services Agreement" means that management services agreement, by and
between Foamex and Trace Foam Company, Inc. as in effect on the date of this
Indenture.
"Managing General Partner" means FMXI, Inc., a Delaware corporation and its
successors.
"Net Income" means, with respect to any Person, the net income (loss) of such
Person, determined in accordance with GAAP and before any reduction in respect
of preferred stock dividends, excluding, however, (i) any gain (or loss in the
case of (a)), together with any related provision for taxes (including pursuant
to the Tax Sharing Agreement) on such gain (or loss in the case of (a)),
realized in connection with (a) any Asset Sale (including, without limitation,
dispositions pursuant to sale and leaseback transactions and losses) or (b) the
disposition of any securities other than Cash Equivalents by such Person or any
of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries and (ii) any extraordinary or
nonrecurring gain (or loss), together with any related provision for taxes on
such extraordinary or nonrecurring gain (or loss), excluding charges related to
hyper-inflationary accounting pursuant to FASB 52 and interpretations by the
Commission thereof.
"Net Proceeds" means the aggregate cash proceeds received by the Issuers or any
of their respective Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, consent fees to facilitate such
Asset Sale and sales commissions) and any relocation expenses incurred as a
result thereof, taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"New Credit Facility" means that certain New Credit Facility, to be entered
into, by and among the Issuers and The Bank of Nova Scotia and Citicorp USA,
Inc., as Credit Agents, providing for up to $480.0 million of borrowings,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
modified, renewed, refunded, replaced or refinanced from time to time, and after
the Credit Agent has acknowledged in writing that the New Credit Facility has
been terminated and all then outstanding Indebtedness and obligations thereunder
with respect thereto have been repaid in full in cash and discharged, any
successors to or replacements of such New Credit Facility (as designated by the
Board of Directors as evidenced by a resolution), as such successors or
replacements may be amended,
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modified, renewed, refunded, replaced or refinanced from time to time.
"Non-Recourse Debt" means Indebtedness (i) as to which neither of the Issuers
nor any of their respective Restricted Subsidiaries (a) provides credit support
of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise), or (c) constitutes the lender; (ii) no default which (including
any rights that the holders thereof may have to take enforcement action against
an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both)
any holder of any other Indebtedness of either of the Issuers or any of their
respective Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (iii) as to which the lenders, except for lenders under
instruments governing Acquired Debt (a) have acknowledged that they do not have
recourse to the holder of the Equity Interest of the debtor or (b) have been
notified in writing that they will not have any recourse to the stock or assets
of either of the Issuers or any of their respective Restricted Subsidiaries.
"Note Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, expenses, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the issuance and sale of the Notes by the Issuers.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Issuers by
two Officers of the Issuers, one of whom must be the principal executive
officer, the principal financial officer or the principal accounting officer of
the Issuers, that meets the requirements of Section 13.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 13.05 hereof.
The counsel may be an employee of or counsel to the Issuers, any Subsidiary of
the Issuers or the Trustee.
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"Pari Passu Debt" means any Indebtedness of the Issuers or any of their
Restricted Subsidiaries which, by its terms is pari passu in right of payment to
the Senior Subordinated Notes.
"payment in full" (together with any correlative phrases e.g. "paid in full" and
"pay in full") means (i) with respect to any Senior Debt other than Senior Debt
under or in respect of the New Credit Facility, payment in full thereof or due
provision for payment thereof (x) in accordance with the terms of the agreement
or instrument pursuant to which such Senior Debt was issued or is governed or
(y) otherwise to the reasonable satisfaction of the holders of such Senior Debt,
which shall include, in any Insolvency or Liquidation Proceeding, approval by
such holders individually or as a class, of the provision for payment thereof,
and (ii) with respect to Senior Debt under or in respect of the New Credit
Facility, payment in full thereof in cash or Cash Equivalents.
"Permitted Business" means (i) the manufacture and distribution of polyurethane
and advanced polymer foam and activities related thereto, and (ii) other
businesses engaged in by the Issuers and their respective Restricted
Subsidiaries on the date of this Indenture and similar lines of businesses to
those engaged in by the Issuers on the date of this Indenture, including, but
not limited to, the manufacture and distribution of plastics and related
products.
"Permitted Investments" means (a) any Investment in either of the Issuers or in
a Wholly Owned Restricted Subsidiary of either of the Issuers and that is
engaged in a Permitted Business; (b) any Investment in Cash Equivalents; (c) any
Investment by either of the Issuers or any Restricted Subsidiary of either of
the Issuers in a Person, if as a result of such Investment (i) such Person
becomes a Wholly Owned Restricted Subsidiary of the Issuers or such Restricted
Subsidiary is engaged in a Permitted Business or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, either of the Issuers or a
Restricted Subsidiary of either of the Issuers that is engaged in a Permitted
Business; (d) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made in compliance with Section 4.10
hereof; (e) any Investment to the extent made in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Issuers or a Subsidiary
Guarantor; (f) other Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without giving
effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (f) that are at the time outstanding,
not to exceed the sum of (A) $15.0 million, and (B) the aggregate net cash
proceeds (or non-cash proceeds when converted into cash) received by Foamex and
its Restricted Subsidiaries from the sale or disposition of investments existing
as of the date of this Indenture or made pursuant to this clause
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(f); (g) securities received in connection with any good faith settlement or
Insolvency or Liquidation Proceeding; (h) Hedging Obligations entered into in
the ordinary course of business in connection with the operation of the business
of the Issuers and their Restricted Subsidiaries or as required by any
Indebtedness issued in compliance with this Indenture; (i) prepaid expenses and
loans or advances to employees and similar items in the ordinary course of
business; (j) endorsements of negotiable instruments and other similar
negotiable documents; (k) transactions with Affiliates as permitted under this
Indenture; (l) Investments outstanding as of the date of this Indenture, (m)
Investments of up to $5.0 million in Trace Global Opportunities Fund, (n) loans
or advances of up to $5.0 million in Trace Holdings, and (o) Investments in,
including Contributions to, Foamex Latin America, Foamex Asia or one or more
Foreign Subsidiaries, provided that the maximum amount of such Investments
outstanding at any one time does not exceed $50.0 million, plus the cash
dividends and distributions received by the Issuer and its Restricted
Subsidiaries with respect to Investments pursuant to this clause (o).
"Permitted Liens" means (i) Liens securing Indebtedness under the New Credit
Facility; (ii) Liens in favor of either of the Issuers or any Subsidiary
Guarantor; (iii) Liens on property of a Person existing at the time such Person
is merged into or consolidated with the Issuers or any Subsidiary of either of
the Issuers; provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with either of the
Issuers; (iv) Liens on property existing at the time of acquisition thereof by
the Issuers or any Subsidiary of the Issuers, provided that such Liens were in
existence prior to the contemplation of such acquisition; (v) Liens to secure
the performance of statutory obligations, surety or appeal bonds, performance
bonds or other obligations of a like nature incurred in the ordinary course of
business; (vi) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (v) of Section 4.09 hereof covering only the
assets acquired with such Indebtedness; (vii) Liens existing on the date of this
Indenture; (viii) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded, provided
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (ix) Liens on assets of
Unrestricted Subsidiaries that secure Non-Recourse Debt of Unrestricted
Subsidiaries; (x) Liens incurred in the ordinary course of business including,
without limitation, judgment and attachment liens, of the Issuers or any
Subsidiary of the Issuers with respect to obligations that do not exceed $25.0
million at any one time outstanding and that are not incurred in connection with
the borrowing of money or the obtaining of advances or credit (other than trade
credit in the ordinary course of business); (xi) Liens in favor of the Trustee;
(xii) Liens on
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Receivables in connection with Receivables Transaction; (xiii) Liens incurred in
connection with Permitted Refinancing Indebtedness, but only if such Liens
extend to no more assets than the Liens securing the Indebtedness being
refinanced; (xiv) Liens securing Senior Debt; (xv) Liens for taxes, assessments,
governmental charges or claims which are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and if a
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor; (xvi) statutory Liens of
landlords and carriers', warehousemen's, mechanics', suppliers', materialmen's,
repairmen's, or other like Liens (including contractual landlords liens) arising
in the ordinary course of business and with respect to amounts not yet
delinquent or being contested in good faith by appropriate proceedings, if a
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor; (xvii) Liens incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security; (xviii)
Liens incurred or deposits made to secure the performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, government contracts,
performance and return-of-money bonds and other obligations of a like nature
incurred in the ordinary course of business (exclusive of obligations for the
payment of borrowed money); (xix) Liens to secure Indebtedness of any Restricted
Subsidiary, that is a Foreign Subsidiary provided that such Indebtedness is used
by such Restricted Subsidiary to finance operations of such Foreign Subsidiary
outside the United States and Canada; (xx) easements, rights-of-way,
restrictions, minor defects or irregularities in title and other similar charges
or encumbrances not interfering in any material respect with the business of
Foamex or any of its Subsidiaries; and (xxi) Liens arising from filing Uniform
Commercial Code financing statements regarding leases (other than true leases
and true consignments).
"Permitted Refinancing Indebtedness" means any Indebtedness of the Issuers or
any of their respective Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Issuers or any of their respective Restricted
Subsidiaries; provided that: (i) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount of (or accreted value, if applicable), plus prepayment premium
and accrued interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith); (ii) such Permitted Refinancing Indebtedness has a
final maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
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defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Senior Subordinated Notes, such Permitted Refinancing Indebtedness has a
final maturity date later than the final maturity date of, and is subordinated
in right of payment to, the Senior Subordinated Notes on terms at least as
favorable to the Holders of Senior Subordinated Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (iv) such Indebtedness is incurred either by
one of the Issuers or by the Restricted Subsidiary which is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"Post-Petition Interest" means all interest and expenses accrued or accruing
after the commencement of any Insolvency or Liquidation Proceeding in accordance
with and at the contract rate (including, without limitation, any rate
applicable upon default) specified in the agreement or instrument creating,
evidencing or governing any Senior Debt, whether or not, pursuant to applicable
law or otherwise, the claim for such interest is allowed as a claim in such
Insolvency or Liquidation Proceeding.
"Principals" means Trace International Holdings, Inc. and Marshall S. Cogan.
"Public Equity Offering" means a public offering of Equity Interests (other than
Disqualified Stock) of (i) Foamex or FCC; or (ii) Foamex International, Inc. to
the extent the net proceeds thereof are contributed to one of the Issuers as a
capital contribution, that, in each case, results in the net proceeds to either
of the Issuers of at least $25.0 million.
"Receivables" means, with respect to any Person or entity, all of the following
property and interests in property of such Person or entity, whether now
existing or existing in the future or hereafter acquired or arising: (i)
accounts, (ii) accounts receivable incurred in the ordinary course of business,
including without limitation, all rights to payment created by or arising from
sales of goods, leases of goods or the rendition of services no matter how
evidenced, whether or not earned by performance, (iii) all rights to any goods
or merchandise represented by any of the foregoing after creation of the
foregoing, including, without limitation, returned or repossessed goods, (iv)
all reserves and credit balances with respect to any such accounts receivable or
account debtors, (v) all letters of credit, security, or guarantees for any of
the foregoing, (vi) all insurance policies or reports relating to any of the
foregoing, (vii) all collection or deposit accounts relating to any of the
foregoing,
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(viii) all proceeds of the foregoing and (ix) all books and records relating to
any of the foregoing.
"Receivables Subsidiary" means an Unrestricted Subsidiary exclusively engaged in
Receivables Transactions and activities related thereto; provided, however, that
at no time shall the Issuers and their respective Subsidiaries have more than
one Receivables Subsidiary.
"Receivables Transaction" means (i) the sale or other disposition to a third
party of Receivables or an interest therein, or (ii) the sale or other
disposition of Receivables or an interest therein to a Receivables Subsidiary
followed by a financing transaction in connection with such sale or disposition
of such Receivables (whether such financing transaction is effected by such
Receivables Subsidiary or by a third party to whom such Receivables Subsidiary
sells such Receivables or interests therein); provided that in each of the
foregoing, the Issuers or their Restricted Subsidiaries receive at least 80% of
the aggregate principal amount of any Receivables financed in such transaction.
"Registration Rights Agreement" means the Registration Rights Agreement, dated
as of June 12, 1997, by and among the Issuers, the Subsidiary Guarantors and the
Initial Purchasers, as such agreement may be amended, modified or supplemented
from time to time.
"Related Party" with respect to any Principal means (A) any controlling
stockholder, 80% (or more) owned Subsidiary, or spouse or immediate family
member (in the case of an individual) of such Principal 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 Principal and/or such other Persons referred
to in the immediately preceding clause (A) and this clause (B).
"Reorganization Securities" means securities distributed to the Holders of the
Senior Subordinated Notes in an Insolvency or Liquidation Proceeding pursuant to
a plan of reorganization consented to by each class of the Senior Debt, but only
if all of the terms and conditions of such securities (including, without
limitation, term, tenor, interest, amortization, subordination, standstills,
covenants and defaults), are at least as favorable (and provide the same
relative benefits) to the holders of Senior Debt and to the holders of any
security distributed in such Insolvency or Liquidation Proceeding on account of
any such Senior Debt as the terms and conditions of the Senior Subordinated
Notes and this Indenture are, and provide to the holders of Senior Debt.
"Representative" means the trustee, agent or representative for any Senior Debt.
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"Responsible Officer," when used with respect to the Trustee, means any officer
within the corporate trust department of the Trustee (or any successor group of
the Trustee) or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Investment" means an Investment other than a Permitted Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent Person
that is not an Unrestricted Subsidiary.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means all Indebtedness and other Obligations specified below
payable directly or indirectly by either of the Issuers or any of their
respective Restricted Subsidiaries, whether outstanding on the date of this
Indenture or thereafter created, incurred or assumed by either of the Issuers or
any of their respective Restricted Subsidiaries: (i) the principal of, interest
on and all other Obligations related to the New Credit Facility (including
without limitation all loans, letters of credit and other extensions of credit
under the New Credit Facility, and all expenses, fees, reimbursements,
indemnities and other amounts owing pursuant to the New Credit Facility); (ii)
amounts payable in respect of any Hedging Obligations; (iii) all Indebtedness
not prohibited by Section 4.09 hereof that is not expressly pari passu with or
subordinated to the Senior Subordinated Notes, and (iv) all permitted renewals,
extensions, refundings or refinancings thereof. All Post-Petition Interest on
Senior Debt shall constitute Senior Debt. Notwithstanding anything to the
contrary in the foregoing, Senior Debt will not include (i) Indebtedness of
either of the Issuers or any of their respective Restricted Subsidiaries to any
other Restricted Subsidiaries which is not a Subsidiary Guarantor, (ii)
Indebtedness of FCC to Foamex, (iii) any Indebtedness which by the express terms
of the agreement or instrument creating, evidencing or governing the same is
junior or subordinate in right of payment to any item of Senior Debt, (iv) any
trade payable arising from the purchase of goods or materials or for services
obtained in the ordinary course of business, or (v) Indebtedness incurred in
violation of this Indenture. To the extent any payment of Senior Debt (whether
by or on behalf of the Issuers or any of their respective Restricted
Subsidiaries, as proceeds or security or enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential, set aside, or required
to be paid to a trustee, receiver or other similar party under any bankruptcy,
insolvency, receivership or similar law, then if such payment is recovered by or
paid over to, such trustee, receiver or other similar party, the Senior Debt or
part thereof originally intended to be satisfied shall be
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deemed to be reinstated and outstanding as if such payment had not occurred. All
Senior Debt shall be and remain Senior Debt for all purposes of this Indenture,
whether or not subordinated in a bankruptcy, receivership, insolvency or similar
proceeding.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.
"Stated Maturity" means, with respect to any installment of interest, accreted
value or principal on any series of Indebtedness, the date on which such payment
of interest or principal is due or is scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest, accreted value or
principal prior to the date originally scheduled for the payment or accretion
thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation, association
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of that Person (or a combination thereof)
and (ii) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or of one or more Subsidiaries of such
Person (or any combination thereof).
"Subsidiary Guarantors" means General Felt Industries, Inc., Foamex Fibers, Inc.
and those Restricted Subsidiaries required to execute a Note Guarantee pursuant
to Section 4.20 and any other Subsidiary that executes a Note Guarantee.
"Tax Sharing Agreement" means the tax sharing agreement, as of the date of this
Indenture, among Foamex, Trace Foam Company, Inc., FMXI, Inc. and Foamex
International Inc. as in effect on the date of this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as
in effect on the date on which this Indenture is qualified under the TIA, except
as provided in Section 9.03 hereof.
"Trace Note" means the promissory note of Trace International Holdings, Inc.
dated July 7, 1996 payable to Foamex, as amended and restated as part of the
Closing Date Transactions.
"Transfer Restricted Securities" means securities that bear or are required to
bear the legend set forth in Section 2.06 hereof.
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"Trustee" means the party named as such above until a successor replaces it in
accordance with the applicable provisions of this Indenture and thereafter means
the successor serving hereunder.
"United States Government Obligations" means direct obligations of the United
States of America, or any agency or instrumentality thereof the payment of which
the full faith and credit of the United States of America is pledged.
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated by the
Board of Directors of either Issuer as an Unrestricted Subsidiary pursuant to a
Board Resolution; but only to the extent that such Subsidiary: (a) has no
Indebtedness other than Non-Recourse Debt; (b) on the date of such designation
is not party to any agreement, contract, arrangement or understanding with
either of the Issuers or any Restricted Subsidiary of either of the Issuers
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to such Issuer or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of such
Issuer; (c) is a Person with respect to which neither of the Issuers nor any of
their respective Restricted Subsidiaries has any direct or indirect obligation
(x) to subscribe for additional Equity Interests or (y) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results; (d) has not guaranteed or otherwise
directly or indirectly provided credit support for any Indebtedness of either of
the Issuers or any of their respective Restricted Subsidiaries; and (e) has at
least one director on its board of directors that is not a director or executive
officer of either of the Issuers or any of their respective Restricted
Subsidiaries and has at least one executive officer that is not a director or
executive officer of either of the Issuers or any of their respective Restricted
Subsidiaries. Any such designation by the Board of Directors of either Issuer
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by Section 4.07 hereof. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of such
Issuer as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Issuers shall be in
default of such covenant). The Board of Directors of either of the Issuers may
at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of such Issuer of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (i) such Indebtedness is permitted
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under Section 4.09, calculated on a pro forma basis as if such designation had
occurred at the beginning of the four-quarter reference period, and (ii) no
Default or Event of Default would be in existence following such designation.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness at
any date, the number of years obtained by dividing (i) the sum of the products
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment, by (ii) the then outstanding principal amount of
such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted Subsidiary
of such Person all of the outstanding Capital Stock or other ownership interests
of which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Restricted Subsidiaries of such
Person and one or more Wholly Owned Restricted Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction"............................................. 4.11
"Asset Sale Offer".................................................. 3.09
"Change of Control Offer"........................................... 4.15
"Change of Control Payment"......................................... 4.15
"Change of Control Payment Date".................................... 4.15
"DTC"............................................................... 2.03
"Event of Default".................................................. 6.01
"Excess Proceeds"................................................... 4.10
"incur"............................................................. 4.09
"Offer Amount"...................................................... 3.09
"Offer Period"...................................................... 3.09
"Paying Agent"...................................................... 2.03
"Payment Default"................................................... 6.01
"Permitted Consideration"........................................... 4.10
"Permitted Debt".................................................... 4.09
"Purchase Date"..................................................... 3.09
"Purchase Offer".................................................... 3.09
"Registrar"......................................................... 2.03
"Restricted Payments"............................................... 4.07
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SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means each Issuer and Subsidiary Guarantor and any
successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA, defined by
TIA reference to another statute or defined by SEC rule under the TIA have the
meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include the
singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall be deemed
to include substitute, replacement of successor sections or rules adopted by the
SEC from time to time.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage.
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Each Note shall be dated the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Issuers, the
Subsidiary Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
Notes issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the text referred to in footnotes 1 and 2
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without including the text referred to in
footnotes 1 and 2 thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate amount of outstanding Notes from time to time
endorsed thereon and that the aggregate amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the amount of outstanding Notes
represented thereby shall be made by the Trustee or the Note Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
An executive Officer shall sign the Notes for each of the Issuers by
manual or facsimile signature. If an Officer whose signature is on a Note no
longer holds that office at the time a Note is authenticated, the Note shall
nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of each Issuer signed by an
executive Officer thereof, authenticate Notes for original issue up to the
aggregate principal amount stated in paragraph 4 of the Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Issuers to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
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authenticating agent has the same rights as an Agent to deal with the Issuers or
an Affiliate of the Issuers.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Issuers shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Issuers may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Issuers may change any
Paying Agent or Registrar without notice to any Holder. The Issuers shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Issuers fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Issuers or any of
their Subsidiaries may act as Paying Agent or Registrar.
The Issuers initially appoint The Depository Trust Company ("DTC") to
act as Depository with respect to the Global Notes.
The Issuers initially appoint the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Issuers shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
shall notify the Trustee of any default by the Issuers in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Issuers at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Issuers or a
Subsidiary) shall have no further liability for the money. If the Issuers or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Issuers, the
Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply
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with TIA ss. 312(a). If the Trustee is not the Registrar, the Issuers and/or the
Subsidiary Guarantors shall furnish to the Trustee at least seven Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders of Notes and the
Issuers and the Subsidiary Guarantors shall otherwise comply with TIA ss.
312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes are
presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) to exchange such Definitive Notes for an equal principal
amount of Definitive Notes of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the
Registrar duly executed by such Holder or by his
attorney, duly authorized in writing; and
(ii) in the case of a Definitive Note that is a Transfer
Restricted Security, such request shall be accompanied
by the following additional information and documents,
as applicable:
(A) if such Transfer Restricted Security is
being delivered to the Registrar by a Holder for
registration in the name of such Holder, without
transfer, a certification to that effect from
such Holder (in substantially the form of
Exhibit B hereto); or
(B) if such Transfer Restricted Security is
being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A
under the Securities Act or pursuant to an
exemption from registration in accordance with
Rule 144 or Rule 904 under the Securities Act or
pursuant to an effective registration statement
under the Securities Act, a certification to
that effect from such Holder
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(in substantially the form of Exhibit B hereto);
or
(C) if such Transfer Restricted Security is
being transferred in reliance on another
exemption from the registration requirements of
the Securities Act, a certification to that
effect from such Holder (in substantially the
form of Exhibit B hereto) and an Opinion of
Counsel from such Holder or the transferee
reasonably acceptable to the Issuers and to the
Registrar to the effect that such transfer is in
compliance with the Securities Act.
(b) Transfer of a Definitive Note for a Beneficial Interest in a Global Note. A
Definitive Note may not be exchanged for a beneficial interest in a Global Note
except upon satisfaction of the requirements set forth below. Upon receipt by
the Trustee of a Definitive Note, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee, together with:
(i) if such Definitive Note is a Transfer Restricted
Security, a certification from the Holder thereof (in
substantially the form of Exhibit B hereto) to the effect
that such Definitive Note is being transferred by such
Holder to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in accordance with
Rule 144A under the Securities Act; and
(ii)whether or not such Definitive Note is a Transfer
Restricted Security, written instructions from the Holder
thereof directing the Trustee to make, or to direct the
Note Custodian to make, an endorsement on the Global Note
to reflect an increase in the aggregate principal amount
of the Notes represented by the Global Note,
in which case the Trustee shall cancel such Definitive Note in accordance with
Section 2.11 hereof and cause, or direct the Note Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depository and the Note Custodian, the aggregate principal amount of Notes
represented by the Global Note to be increased accordingly. If no Global Notes
are then outstanding, the Issuers shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the Trustee shall
authenticate a new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange of Global
Notes or beneficial interests therein shall be effected through the Depository,
in accordance with this Indenture and the procedures of the Depository therefor,
which
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shall include restrictions on transfer comparable to those set forth herein to
the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note.
(i) Any Person having a beneficial interest in a Global
Note may upon request exchange such beneficial interest
for a Definitive Note. Upon receipt by the Trustee of
written instructions or such other form of instructions as
is customary for the Depository, from the Depository or
its nominee on behalf of any Person having a beneficial
interest in a Global Note, and, in the case of a Transfer
Restricted Security, the following additional information
and documents (all of which may be submitted by
facsimile):
(A) if such beneficial interest is being transferred
to the Person designated by the Depository as being
the beneficial owner, a certification to that effect
from such Person (in substantially the form of
Exhibit B hereto); or
(B) if such beneficial interest is being transferred
to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in accordance
with Rule 144A under the Securities Act or pursuant
to an exemption from registration in accordance with
Rule 144 or Rule 904 under the Securities Act or
pursuant to an effective registration statement
under the Securities Act, a certification to that
effect from the transferor (in substantially the
form of Exhibit B hereto); or
(C) if such beneficial interest is being transferred
in reliance on another exemption from the
registration requirements of the Securities Act, a
certification to that effect from the transferor (in
substantially the form of Exhibit B hereto) and an
Opinion of Counsel from the transferee or transferor
reasonably acceptable to the Issuers and to the
Registrar to the effect that such transfer is in
compliance with the Securities Act,
in which case the Trustee or the Note Custodian, at the
direction of the Trustee, shall, in accordance with the
standing instructions and procedures existing between the
Depository and the Note Custodian, cause the aggregate
principal amount of Global Notes to be reduced accordingly
and, following such reduction, the Issuers shall execute
and, upon receipt of an authentication order in accordance
with
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Section 2.02 hereof, the Trustee shall authenticate and make
available for delivery to the transferee a Definitive Note
in the appropriate principal amount.
(ii)Definitive Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section 2.06(d)
shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions
from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall make such Definitive
Notes available for delivery to the Persons in whose names
such Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding any
other provision of this Indenture (other than the provisions set forth in
subsection (f) of this Section 2.06), a Global Note may not be transferred as a
whole except by the Depository to a nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository.
(f) Authentication of Definitive Notes in Absence of
Depository. If at any time:
(i) the Depository for the Notes notifies the Issuers
that the Depository is unwilling or unable to continue as
Depository for the Global Notes and a successor Depository
for the Global Notes is not appointed by the Issuers
within 90 days after delivery of such notice; or
(ii)the Issuers, at its sole discretion, notifies the
Trustee in writing that it elects to cause the issuance of
Definitive Notes under this Indenture,
then the Issuers shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
make available for delivery, Definitive Notes in an aggregate principal amount
equal to the principal amount of the Global Notes in exchange for such Global
Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii)
and (iii), each Note certificate evidencing Global Notes
and Definitive Notes (and all Notes issued in exchange
therefor or substitution thereof) shall bear legends in
substantially the following form:
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"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)
(a) INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN
PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED
INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF SECURITIES LESS THAN $100,000, AN
OPINION OF COUNSEL THAT SUCH TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
ISSUERS SO REQUEST), (2) TO THE ISSUERS OR (3) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE."
(ii)Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security
represented by a Global Note) pursuant to Rule 144 under
the Securities Act or pursuant to an effective registration
statement under the Securities Act:
(A) in the case of any Transfer Restricted Security
that is a Definitive Note, the Registrar
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shall permit the Holder thereof to exchange such
Transfer Restricted Security for a Definitive Note that
does not bear the legend set forth in (g)(i) above and
rescind any restriction on the transfer of such Transfer
Restricted Security; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted
Security shall not be required to bear the legend set
forth in (g)(i) above, but shall continue to be subject
to the provisions of Section 2.06(c) hereof; provided,
however, that with respect to any request for an
exchange of a Transfer Restricted Security that is
represented by a Global Note for a Definitive Note that
does not bear the legend set forth in (g)(i) above,
which request is made in reliance upon Rule 144, the
Holder thereof shall certify in writing to the Registrar
that such request is being made pursuant to Rule 144
(such certification to be substantially in the form of
Exhibit B hereto).
(iii) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Issuers shall issue and, upon receipt of
an authentication order in accordance with Section 2.02
hereof, the Trustee shall authenticate New Senior Subordinated
Notes in exchange for Senior Subordinated Notes accepted for
exchange in the Exchange Offer, which New Senior Subordinated
Notes shall not bear the legend set forth in (g)(i) above, and
the Registrar shall rescind any restriction on the transfer of
such Notes, in each case unless the Holder of such Senior
Subordinated Notes is either (A) a broker-dealer, (B) a Person
participating in the distribution of the Senior Subordinated
Notes or (C) a Person who is an affiliate (as defined in Rule
144A) of the Issuers.
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in Global Notes have been exchanged for Definitive Notes,
redeemed, repurchased or cancelled, all Global Notes shall be returned to or
retained and cancelled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for Definitive Notes, redeemed, repurchased or cancelled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Notes Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) General Provisions Relating to Transfers and Exchanges.
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(a) To permit registrations of transfers and exchanges, the
Issuers shall execute and the Trustee shall authenticate
Definitive Notes and Global Notes at the Registrar's request.
(b) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Issuers may
require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental
charge payable upon exchange or transfer solely pursuant to
Sections 3.07, 4.10, 4.15 and 9.05 hereto).
(c) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in
whole or in part, except the unredeemed portion of any Note
being redeemed in part.
(d) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or
Global Notes shall be the valid obligations of the Issuers,
evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Definitive Notes or Global Notes
surrendered upon such registration of transfer or exchange.
(e) The Issuers shall not be required:
(A) to issue, to register the transfer of or to exchange
Notes during a period beginning at the opening of business
15 days before the day of mailing of a notice of
redemption of Notes under Section 3.02 hereof and ending
at the close of business on the day of such mailing; or
(B) to register the transfer of or to exchange any Note
so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest
payment date.
(f) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Issuers may deem and
treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment
of principal of and interest on such Notes, and neither the
Trustee, any Agent nor the Issuers shall be affected by notice
to the contrary.
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(g) The Trustee shall authenticate Definitive Notes and Global
Notes in accordance with the provisions of Section 2.02 hereof.
Each Holder of a Note agrees to indemnify the Issuers and the Trustee
against any liability that may result from the transfer, exchange or assignment
of such Holder's Note in violation of any provision of this Indenture and/or
applicable United States federal or state securities law.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Depository Participants or
beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by and to do so when expressly required by terms of, this
Indenture, and to examine the same to determine substantial compliance as to
form with the express requirements hereof.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Issuers
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, the Issuers shall issue and the Trustee, upon the written
order of the Issuers signed by an Officer of each Issuer, shall authenticate a
replacement Note if the Trustee's requirements are met. An indemnity bond must
be supplied by the Holder that is sufficient in the judgment of the Trustee and
the Issuers to protect the Issuers, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Issuers may charge for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Issuers and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because any Issuer or Subsidiary Guarantor or
an Affiliate of any Issuer or Subsidiary Guarantor holds the Note.
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If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Issuers, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by any
Issuer or Subsidiary Guarantor, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with any
Issuer or Subsidiary Guarantor, shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Notes that a
Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until Definitive Notes are ready for delivery, the Issuers may prepare
and the Trustee shall authenticate temporary Notes upon a written order of the
Issuers signed by an Officer of each Issuer. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Issuers consider appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Issuers shall prepare
and the Trustee shall authenticate Definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11. CANCELLATION.
The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall return
cancelled Notes to one of the Issuers. The Issuers may not issue new Notes to
replace Notes that they have paid or that have been delivered to the Trustee for
cancellation.
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SECTION 2.12. DEFAULTED INTEREST.
If the Issuers or the Subsidiary Guarantors default in a payment of
interest on the Notes, they shall pay the defaulted interest in any lawful
manner plus, to the extent lawful, interest payable on the defaulted interest,
to the Persons who are Holders on a subsequent special record date, in each case
at the rate provided in the Notes and in Section 4.01 hereof. The Issuers shall
notify the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Note and the date of the proposed payment. The Issuers shall fix or
cause to be fixed each such special record date and payment date, provided that
no such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. At least 15 days before the special
record date, the Issuers (or, upon the written request of the Issuers, the
Trustee in the name and at the expense of the Issuers) shall mail or cause to be
mailed to Holders a notice that states the special record date, the related
payment date and the amount of such interest to be paid.
SECTION 2.13 CUSIP NUMBERS.
The Issuers in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be effected by any defect in or
omission of such numbers. The Issuers will promptly notify the Trustee of any
change in the "CUSIP" numbers.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Issuers elect to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, the Issuers shall furnish to the
Trustee, at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time,
selection of Notes for redemption will be made by the Trustee in compliance with
the requirements of the principal
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national securities exchange, if any, on which the Notes are listed, or, if the
Notes are not so listed, on a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate; provided that no Notes of $1,000 or
less shall be redeemed in part. Notices of redemption shall be mailed by first
class mail at least 30 but not more than 60 days before the redemption date to
each Holder of Notes to be redeemed at its registered address. If any Note is to
be redeemed in part only, the notice of redemption that relates to such Note
shall state the portion of the principal amount thereof to be redeemed. A new
Note in principal amount equal to the unredeemed portion thereof will be issued
in the name of the Holder thereof upon cancellation of the original Note. Notes
called for redemption become due on the date fixed for redemption. On and after
the redemption date, interest ceases to accrue on Notes or portions of them
called for redemption.
The Trustee shall promptly notify the Issuers in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Issuers shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed (including CUSIP numbers) and
shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the principal amount
of such Note to be redeemed and that, after the redemption date upon surrender
of such Note, a new Note or Notes in principal amount equal to the unredeemed
portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying Agent
to collect the redemption price;
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(f) that, unless the Issuers default in making such redemption payment, interest
on Notes called for redemption ceases to accrue on and after the redemption
date;
(g) the paragraph of the Notes and/or Section of this Indenture pursuant
to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Notes.
At the Issuers' request, the Trustee shall give the notice of
redemption in the Issuers' name and at their expense; provided, however, that
each Issuer shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to the redemption date, the Issuers shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price of
and accrued interest on all Notes to be redeemed on that date. The Trustee or
the Paying Agent shall promptly return to the Issuers any money deposited with
the Trustee or the Paying Agent by the Issuers in excess of the amounts
necessary to pay the redemption price of, and accrued interest on, all Notes to
be redeemed.
If the Issuers comply with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Issuers to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01 hereof.
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SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Issuers shall
issue and, upon the Issuers' written request, the Trustee shall authenticate for
the Holder at the expense of the Issuers a new Note equal in principal amount to
the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) The Notes shall not be redeemable at the Issuers' option prior to
June 15, 2002. Thereafter, the Notes shall be redeemable at the option of the
Issuers, in whole or in part, at any time upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest and Liquidated Damages,
if any, thereon, to the applicable redemption date, if redeemed during the
twelve-month period beginning on June 15 of the years indicated below:
Year Percentage
2002 104.938%
2003 103.292
2004 101.646
2005 and thereafter 100.000
(b) Notwithstanding the foregoing, at any time prior to June 15, 2000,
the Issuers may on any one or more occasions redeem up to 35% of the initially
outstanding aggregate principal amount of Notes at a redemption price equal to
109.875% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the redemption date, with the cash
proceeds of one or more Public Equity Offerings; provided that, in each case, at
least 65% of the initially outstanding aggregate principal amount of Notes
remains outstanding immediately after the occurrence of such redemption; and
provided, further, that such redemption shall occur within 45 days of the date
of the closing of such Public Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.15 hereof, the Issuers
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that the Issuers shall be required to commence an offer
to all Holders to purchase Notes (a "Purchase
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Offer") pursuant to Section 4.10 hereof, an "Asset Sale Offer," or pursuant to
Section 4.15 hereof, a "Change of Control Offer," the Issuers shall follow the
procedures specified below.
The Purchase Offer shall remain open for a period of 20 Business Days
following its commencement (the "Offer Period"). No later than five Business
Days after the termination of the Offer Period (the "Purchase Date"), the
Issuers shall purchase the principal amount of Notes required to be purchased
pursuant to Section 4.10 hereof, in the case of an Asset Sale Offer or 4.15
hereof, in the case of a Change of Control Offer (the "Offer Amount") or, if
less than the Offer Amount has been tendered, all Notes tendered in response to
the Purchase Offer. Payment for any Notes so purchased shall be made in the same
manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Purchase Offer.
Upon the commencement of a Purchase Offer, the Issuers shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Purchase Offer.
The Purchase Offer shall be made to all Holders. The notice, which shall govern
the terms of the Purchase Offer, shall state:
(a) that the Purchase Offer is being made pursuant to this Section
3.09 and Section 4.10 or 4.15 hereof, as applicable, and the length of
time the Purchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrue interest;
(d) that, unless the Issuers default in making such payment, any Note
accepted for payment pursuant to the Purchase Offer shall cease to
accrue interest and Liquidated Damages, if any, after the Purchase
Date;
(e) that Holders electing to have a Note purchased pursuant to a
Purchase Offer may only elect to have all of such Note purchased and
may not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any
Purchase Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on
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the reverse of the Note duly completed, or transfer by book-entry
transfer, to the Issuers, a depository, if appointed by the Issuers,
or a Paying Agent at the address specified in the notice prior to the
expiration of the Offer Period;
(g) that Holders shall be entitled to withdraw their election if the
Issuers, the depository or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Note the Holder delivered for purchase,
the certificate number (in the case of a Definitive Note) and a
statement that such Holder is withdrawing his election to have such
Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Issuers shall select the Notes
to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Issuers so that only Notes in denominations
of $1,000, or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered (or transferred by book-entry transfer).
On or before 10:00 a.m. (New York City time) on each Purchase Date, the Issuers
shall irrevocably deposit with the Trustee or Paying Agent in immediately
available funds the aggregate purchase price with respect to a principal amount
of Notes equal to the Offer Amount (or if less the principal amount of the Notes
delivered prior to the expiration of the Offer Period), together with accrued
and unpaid interest and Liquidated Damages, if any, thereon, to be held for
payment in accordance with the terms of this Section 3.09. On the Purchase Date,
the Issuers shall, to the extent lawful, (i) accept for payment, on a pro rata
basis to the extent necessary, the Offer Amount of Notes or portions thereof
tendered pursuant to the Purchase Offer, or if less than the Offer Amount has
been tendered, all Notes tendered, (ii) deliver or cause the Paying Agent or
depository, as the case may be, to deliver to the Trustee Notes so accepted and
(iii) deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Issuers in accordance with the
terms of this Section 3.09. The Issuers, the Depository or the Paying Agent, as
the case may be, shall promptly (but in any case not later than three Business
Days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Issuers for purchase, plus any accrued and unpaid interest and Liquidated
Damages, if any, thereon, and the Issuers shall promptly issue a new Note, and
the Trustee, shall authenticate and mail or deliver such new Note, to such
Holder, equal in principal amount to any unpurchased portion
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of such Holder's Notes surrendered. Any Note not so accepted shall be promptly
mailed or delivered by the Issuers to the Holder thereof. The Issuers shall
publicly announce in a newspaper of general circulation or in a press release
provided to a nationally recognized financial wire service the results of the
Purchase Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase pursuant
to this Section 3.09 shall be made pursuant to the provisions of Sections 3.02
through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Issuers shall pay or cause to be paid the principal of, premium, if any, and
interest on the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, and interest shall be considered paid on the date
due if the Paying Agent, if other than the Issuers or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Issuers in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Issuers shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Issuers shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Issuers shall maintain in the Borough of Manhattan, the City of New York, an
office or agency (which may be an office of the Trustee or an affiliate of the
Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Issuers in respect of the Notes and this Indenture may be served. The
Issuers shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Issuers
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
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The Issuers may also from time to time designate one or more other offices or
agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Issuers
of its obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York for such purposes. The Issuers shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Issuers hereby designate the Corporate Trust Office of the Trustee as one
such office or agency of the Issuers in accordance with Section 2.03.
SECTION 4.03. REPORTS.
Whether or not required by the rules and regulations of the Commission, so long
as any Notes are outstanding, the Issuers shall furnish to the Trustee and the
Holders of Notes (i) all quarterly and annual financial information that would
be required to be contained in a filing with the Commission on Forms 10-Q and
10-K if the Issuers were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" that
describes the financial condition and results of operations of the Issuers and
their consolidated Subsidiaries and, with respect to the annual information
only, a report thereon by Foamex's certified independent accountants and (ii)
all current reports that would be required to be filed with the Commission on
Form 8-K if the Issuers were required to file such reports. In addition, whether
or not required by the rules and regulations of the Commission, the Issuers
shall file a copy of all such information and reports with the Commission for
public availability (unless the Commission will not accept such a filing) and
make such information available to securities analysts and prospective investors
upon request. In addition, the Issuers have agreed that, for so long as any
Notes remain outstanding, they shall furnish to the Holders and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. Delivery
of such reports, information and documents to the Trustee is for informational
purposes only and the Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including each of the Issuers' compliance with
any of its covenants hereunder (as to which the Trustee is entitled to rely on
Officers' Certificates).
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) Each Issuer shall deliver to the Trustee, within 90 days after the end of
each fiscal year, an Officers' Certificate which need not comply with Section
13.05, stating that a review of the
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activities of such Issuer and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether such Issuer has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge such Issuer
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action such Issuer is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action such Issuer is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the American
Institute of Certified Public Accountants, the year-end financial statements
delivered pursuant to Section 4.03(a) above shall be accompanied by a written
statement of such Issuer's independent public accountants (who shall be a firm
of established national reputation) that in making the examination necessary for
certification of such financial statements, nothing has come to their attention
that would lead them to believe that such Issuer has violated any provisions of
Article Four or Article Five hereof, insofar as they relate to accounting
matters, or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such accountants shall not
be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) Each Issuer shall, so long as any of the Notes are outstanding, deliver to
the Trustee, forthwith upon any Officer becoming aware of any Default or Event
of Default, an Officers' Certificate specifying such Default or Event of Default
and what action such Issuer is taking or proposes to take with respect thereto.
SECTION 4.05. TAXES.
The Issuers shall pay, and shall cause each of their respective Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
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The Issuers and the Subsidiary Guarantors covenant (to the extent that they may
lawfully do so) that they shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Issuers and
the Subsidiary Guarantors (to the extent that they may lawfully do so) hereby
expressly waive all benefit or advantage of any such law, and covenants that
they shall not, by resort to any such law, hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
Each of the Issuers shall not, and shall not permit any of their respective
Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other payment or distribution on account of the Issuers' or
any of their respective Restricted Subsidiaries' Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving the Issuers (other than cash in lieu of fractional shares)) or to the
direct or indirect holders of the Issuers' or any of their respective Restricted
Subsidiaries' Equity Interests in their capacity as such (other than dividends
or distributions payable (a) in additional Equity Interests (other than
Disqualified Stock) of the Issuers or (in the case of a dividend, other payment
or distribution on account of the Equity Interest of a Restricted Subsidiary) of
such Restricted Subsidiary or (b) to the Issuers or their Restricted
Subsidiaries); (ii) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or consolidation
involving the Issuers) any Equity Interests of the Issuers or any direct or
indirect parent of the Issuers; (iii) make any Investment in any Unrestricted
Subsidiary; (iv) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness (other than
the Notes) that is pari passu with or subordinated to the Notes or the Note
Guarantees, except a payment of interest or principal at Stated Maturity; or (v)
make any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (v) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) Foamex would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant
to the
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Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Issuers and their respective
Restricted Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by clauses (ii), (iii), (iv), (vi),
(vii), (viii), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi) and (xvii)
of the next succeeding paragraph), is less than the sum of (i) 50% of
the Consolidated Net Income of Foamex for the preceding four-quarter
period, plus (ii) 100% of the aggregate net cash proceeds received by
Foamex from the issue or sale since the date of this Indenture of
Equity Interests of Foamex (other than Disqualified Stock) or of
Disqualified Stock or debt securities of Foamex that have been
converted into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible debt securities) sold to a
Subsidiary of the Issuers and other than Disqualified Stock or
convertible debt securities that have been converted into Disqualified
Stock) or of capital contributions to the Issuers, plus (iii) to the
extent that any Restricted Investment that was made after the date of
this Indenture is sold for cash or otherwise liquidated or repaid for
cash (less the cost of disposition, if any), or the cash return,
including, without limitation, any cash dividends or distributions,
with respect to such Restricted Investment or from any Unrestricted
Subsidiary.
The foregoing provisions shall not prohibit (i) the payment of any dividend or
distribution within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any Pari Passu Debt, or subordinated Indebtedness or Equity
Interests of the Issuers or any Restricted Subsidiary in exchange for, or out of
the net cash proceeds of the substantially concurrent sale or issuance (other
than to a Restricted Subsidiary of the Issuers) of, Equity Interests of the
Issuers or any Restricted Subsidiary (other than any Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement, defeasance or other acquisition shall
be excluded from clause (c) (ii) of the preceding paragraph; (iii) the
defeasance, redemption, repurchase or other acquisition of Pari Passu Debt or
subordinated Indebtedness with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness; (iv) the payment of any dividend or
distribution by a Restricted Subsidiary of the Issuers to the holders of its
Equity Interests on a pro rata basis; (v) the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Issuers, any
Restricted Subsidiary of the Issuers, or any direct or indirect parent of the
Issuers or their respective Restricted Subsidiaries held by any member of the
Issuers' (or any of its Restricted Subsidiaries') management
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pursuant to any management equity subscription agreement or stock option
agreement either (a) in effect as of the date of this Indenture; provided that
the aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $2.5 million in any twelve-month period and no
Default or Event of Default shall have occurred and be continuing immediately
after such transaction or (b) upon the termination of such person's employment;
(vi) the advancement of payment or payment of distributions pursuant to the Tax
Sharing Agreement and the making of up to $17.0 million of loans or advances
pursuant to the Tax Advance Agreement dated as of December 11, 1996 between FJPS
and Foamex, as amended to the date hereof; (vii) the payment by Foamex of a
management fee pursuant to the Management Services Agreement in an amount not to
exceed $3.0 million per annum; (viii) distributions to Foamex International Inc.
and its Subsidiaries which are utilized to pay the debt service and other
expenses of Foamex Aviation Corp., the aggregate amount of which shall not
exceed $2.0 million in any twelve-month period; (ix) additional payments in an
aggregate amount not to exceed $25.0 million; (x) Contributions to a Restricted
Subsidiary if such Subsidiary (a) executes and delivers to the Trustee a
supplemental indenture in form reasonably satisfactory to the Trustee pursuant
to which such Restricted Subsidiary shall guarantee all of the Obligations of
the Issuers with respect to this Indenture and the Notes and (b) delivers to the
Trustee an Opinion of Counsel reasonably satisfactory to the Trustee to the
effect that such supplemental indenture, has been duly executed and delivered by
such Restricted Subsidiary and is in compliance with the terms of this
Indenture; (xi) distributions, loans or advances to the holders of the Equity
Interests of the Issuers in an amount sufficient to pay all or a portion of the
principal of, interest or premium, if any, on the Foamex-JPS Automotive L.P.
Senior Secured Discount Debentures due 2004; (xii) distributions, loans or
advances to holders of the Equity Interests of the Issuers in an amount
sufficient to enable Foamex International Inc. to pay its reasonable, out of
pocket operating and administrative expenses, including without limitation,
directors fees, legal and audit expenses, SEC compliance expenses and corporate
franchise and other taxes; provided that no such expense payments shall be made
to an Affiliate (other than a director or officer of the Issuers whose status as
an Affiliate results solely from his position as a director or officer of the
Issuers) of Foamex International Inc.; (xiii) Investments received by the
Issuers or any of their Restricted Subsidiaries as non-cash consideration from
Asset Sales to the extent permitted by Section 4.10; (xiv) the Closing Date
Transactions; (xv) payments made pursuant to the Great Western Note; (xvi)
payments made to purchase any Indebtedness subject to the Closing Date
Transactions that is not purchased pursuant to such Transaction; and (xvii) the
issuance or sale of Equity Interests of Foamex Latin America to key executives
of Foamex Latin America not to exceed 5% of the outstanding Equity Interests of
Foamex Latin America.
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The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default; provided
that in no event shall the business currently operated by any Subsidiary
Guarantor be transferred to or held by an Unrestricted Subsidiary. For purposes
of making such determination, all outstanding Investments by either Issuer and
their respective Restricted Subsidiaries (except to the extent repaid in cash)
in the Subsidiary so designated shall be deemed to be Restricted Payments at the
time of such designation and shall be included for purposes of calculating the
aggregate amount of Restricted Payments under clause (c) of first paragraph of
this covenant. All such outstanding Investments shall be deemed to constitute
Investments in an amount equal to the fair market value of such Investments at
the time of such designation. Such designation shall only be permitted if such
Restricted Payment would be permitted at such time and if such Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the fair market
value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Issuers or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any individual or series of related non-cash Restricted Payments
(other than the Closing Date Transactions) shall be determined by the Board of
Directors whose resolution with respect thereto shall be delivered to the
Trustee, such determination to be based upon an opinion or appraisal issued by
an accounting, appraisal or investment banking firm of national standing, as
applicable, if such fair market value exceeds $1.0 million. In connection with
each Restricted Payment, the Issuers shall deliver to the Trustee, prior to or
within 60 days of the making of such Restricted Payment, an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Issuers shall not, and shall not permit any of their respective Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary which is not a Subsidiary Guarantor to (i)(a) pay
dividends or make any other distributions to the Issuers or any of their
respective Restricted Subsidiaries (1) on its Capital Stock or (2) with respect
to any other interest or participation in, or measured by, its profits, or (b)
pay any indebtedness owed to the Issuers or any of their respective Restricted
Subsidiaries, (ii) make loans or advances to the Issuers or any of their
respective Restricted Subsidiaries or (iii) transfer any
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of its properties or assets to the Issuers or any of their respective Restricted
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (a) Existing Indebtedness as in effect on the date of this Indenture,
(b) the New Credit Facility as in effect as of the date of this Indenture, and
any amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive with respect to such
dividend and other payment restrictions than those contained in the New Credit
Facility as in effect on the date of this Indenture, (c) this Indenture and the
Notes, (d) applicable law, (e) any instrument governing Indebtedness or Capital
Stock of a Person acquired by the Issuers or any of their respective Restricted
Subsidiaries as in effect at the time of such acquisition (except to the extent
such Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person and its
Subsidiaries, or the property or assets of the Person and its Subsidiaries, so
acquired, provided that, in the case of Indebtedness, such Indebtedness was
permitted by the terms of this Indenture to be incurred, (f) by reason of
customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices, (g) purchase money
obligations for property acquired that impose restrictions of the nature
described in clause (iii) above on the property so acquired, (h) Permitted
Refinancing Indebtedness, provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced, (i) any instrument or agreement governing Indebtedness
permitted to be incurred under this Indenture, which is secured by a Lien
permitted to be incurred under this Indenture, which encumbrance or restriction
is not applicable to any property or assets other than the property or assets
subject to such Lien, or (j) restrictions applicable to a Receivables Subsidiary
arising from a Receivables Transaction.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Issuers shall not, and shall not permit any of their respective Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt) and that the
Issuers and the Subsidiary Guarantors shall not issue any Disqualified Stock and
the Issuers shall not permit any of their respective Subsidiaries which are not
Subsidiary Guarantors to issue any shares of preferred stock; provided, however,
that the Issuers and their Subsidiaries may incur Indebtedness (including
Acquired Debt and Indebtedness under the New Credit Facility) or issue shares of
Disqualified Stock or in
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the case of Subsidiaries which are not Subsidiary Guarantors, issue preferred
stock if: the Fixed Charge Coverage Ratio for Foamex's most recently ended four
full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock or preferred stock is issued would have been at least
2.25 to 1, determined on a pro forma basis (including a pro forma application of
the net proceeds therefrom), as if the additional Indebtedness had been
incurred, or the Disqualified Stock or preferred stock had been issued and such
net proceeds had been applied, as the case may be, at the beginning of such
four-quarter period.
The provisions of the first paragraph of this covenant will not apply to the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(i) the incurrence by the Issuers or any of their respective
Subsidiaries of term Indebtedness under the New Credit Facility;
provided that the aggregate principal amount of all term Indebtedness
outstanding under the New Credit Facility after giving effect to such
incurrence, including all term Indebtedness incurred to refund,
refinance or replace any other Indebtedness incurred pursuant to this
clause (i), does not exceed an amount equal to $330.0 million less the
aggregate amount of all Net Proceeds of Asset Sales that have been
applied since the date of this Indenture to repay such term
Indebtedness under the New Credit Facility and resulting in a
permanent reduction of the related commitments pursuant to Section
4.10;
(ii) the incurrence by the Issuers or any of their respective
Subsidiaries of revolving credit Indebtedness and letters of credit
(with letters of credit being deemed to have a principal amount,
without duplication, equal to the maximum potential liability of the
Issuers and their Subsidiaries thereunder) under the New Credit
Facility; provided that the aggregate principal amount of all
revolving credit Indebtedness outstanding under the New Credit
Facility after giving effect to such incurrence, including all
revolving Indebtedness incurred to refund, refinance or replace any
other revolving Indebtedness incurred pursuant to this clause (ii),
does not exceed an amount equal to $150.0 million, less the aggregate
amount of all Net Proceeds of Asset Sales applied to repay such
revolving Indebtedness and resulting in a permanent reduction of the
related commitments pursuant to Section 4.10; provided, however, that
notwithstanding anything to the contrary contained in this Indenture,
in no event shall the amount of Indebtedness which the Issuers and
their Subsidiaries may incur in the aggregate pursuant to clause (i)
and this clause (ii) be less than $150.0 million;
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(iii) the incurrence by the Issuers and their respective Subsidiaries
of the Existing Indebtedness;
(iv) the incurrence by the Issuers and the Subsidiary Guarantors of
Indebtedness represented by the Senior Subordinated Notes;
(v) the incurrence by the Issuers or any of their respective
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case
incurred for the purpose of financing all or any part of the purchase
price or cost of construction or improvement of property, plant or
equipment used in the business of the Issuers or such Subsidiary, in
an aggregate principal amount not to exceed $25.0 million at any time
outstanding;
(vi) the incurrence by the Issuers or any of their respective
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace
Indebtedness that was permitted by this Indenture to be incurred;
(vii) the incurrence by the Issuers or any of their respective
Restricted Subsidiaries of intercompany Indebtedness between or among
the Issuers and any of their respective Restricted Subsidiaries;
provided, however, that (i) if an Issuer is the obligor on such
Indebtedness and the payee is not a Subsidiary Guarantor, such
Indebtedness is expressly subordinated to the prior payment in full in
cash of all Obligations with respect to the Senior Subordinated Notes
and (ii)(A) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other
than an Issuer or a Restricted Subsidiary and (B) any sale or other
transfer of any such Indebtedness to a Person that is not either an
Issuer or a Restricted Subsidiary shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by an Issuer or such
Restricted Subsidiary, as the case may be;
(viii) the incurrence by the Issuers or any of their respective
Subsidiaries of Hedging Obligations;
(ix) the Guarantee by the Issuers or any of their respective
Subsidiaries of Indebtedness of the Issuers or a Restricted Subsidiary
of the Issuers that was permitted to be incurred by another provision
of this covenant;
(x) the incurrence by the Issuers' Unrestricted Subsidiaries of
Non-Recourse Debt and preferred stock, provided, however, that if any
such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted
Subsidiary, such
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event shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Issuers;
(xi) the incurrence by the Issuers or any of their respective
Subsidiaries of additional Indebtedness including, without limitation,
pursuant to the New Credit Facility, in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including
all Permitted Refinancing Indebtedness incurred to refund, refinance
or replace any other Indebtedness incurred pursuant to this clause
(xi), not to exceed $45.0 million;
(xii) Acquired Debt of a Subsidiary in existence at the time of the
acquisition of such Subsidiary, if such Acquired Debt was not incurred
in contemplation of such acquisition and such Acquired Debt is
Non-Recourse Debt (except with respect to such acquired Subsidiary and
its Subsidiaries);
(xiii) Indebtedness of Foamex Canada, Inc. and its Subsidiaries (which
is Non-Recourse Debt, except with respect to such entities) in an
amount, at any time outstanding not to exceed CND$15.0 million;
(xiv) Indebtedness of Foamex Latin America (which is Non-Recourse
Debt, except with respect to such entities) in an amount, at any time
outstanding not to exceed $12.0 million;
(xv) Assets Sales in the form of Receivables Transactions; and
(xvi) Indebtedness of Foamex Asia Inc. and its Subsidiaries (which is
Non-Recourse Debt, except with respect to such entities) in an amount,
at any time outstanding not to exceed $5.0 million.
For purposes of determining compliance with this covenant, in the event that an
item of Indebtedness meets the criteria of more than one of the categories of
Permitted Debt described in clauses (i) through (xvi) above or is entitled to be
incurred pursuant to the first paragraph of this covenant, the Issuers shall, in
their sole discretion, classify such item of Indebtedness in any manner that
complies with this covenant and such item of Indebtedness will be treated as
having been incurred pursuant to only one of such clauses or pursuant to the
first paragraph hereof. Neither the accrual of interest, nor the accretion of
accreted value will be deemed to be an incurrence of Indebtedness for purposes
of this covenant.
SECTION 4.10. ASSET SALES.
Each of the Issuers shall not, and shall not permit any of their respective
Restricted Subsidiaries to, consummate an Asset Sale
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unless (i) such Issuer (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to the fair
market value (evidenced by an Officers' Certificate delivered to the Trustee and
a resolution of the Board of Directors) of the assets or Equity Interests issued
or sold or otherwise disposed of and (ii) at least 80% of the consideration
therefor received by such Issuer or such Restricted Subsidiary is in the form of
(A) cash, (B) assets useful in a Permitted Business not to exceed $30.0 million
in the aggregate over the life of the Notes, or (C) Equity Interests
representing a controlling interest in a Permitted Business not to exceed $30.0
million in the aggregate over the life of the Notes (collectively, the
"Permitted Consideration"); provided that the amount of (x) any liabilities (as
shown on such Issuer's or such Restricted Subsidiary's most recent balance
sheet), of such Issuer or any Restricted Subsidiary (other than contingent
liabilities (except to the extent reflected (or reserved for) on a balance sheet
of the Issuers or any Restricted Subsidiary as of the date prior to the date of
consummation of such transaction) and liabilities that are by their terms
subordinated to the Notes or the Note Guarantees) that are assumed by the
transferee of any such assets and (y) any securities, notes or other obligations
received by such Issuer or any such Restricted Subsidiary from such transferee
that are converted within 90 days by such Issuer or such Restricted Subsidiary
into Permitted Consideration (to the extent so received), shall be deemed to be
Permitted Consideration for purposes of this provision; and provided further,
that the 80% limitation referred to above shall not apply to any Asset Sale in
which the Permitted Consideration portion of the consideration received therefor
is equal to or greater than what the net after-tax proceeds would have been had
such Asset Sale complied with the aforementioned 80% limitation.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the
Issuers may apply such Net Proceeds, at their option, (a) to repay Senior Debt,
or (b) to the acquisition of assets to be used in a Permitted Business. Pending
the final application of any such Net Proceeds, the Issuers may temporarily
reduce the New Credit Facility or otherwise invest such Net Proceeds in any
manner that is not prohibited by this Indenture. Any Net Proceeds from Asset
Sales that are not applied or invested as provided in the first sentence of this
paragraph will be deemed to constitute "Excess Proceeds." When the aggregate
amount of Excess Proceeds exceeds $15.0 million, the Issuers shall be required
to make an offer to all Holders of Notes (an "Asset Sale Offer") to purchase the
maximum principal amount of Notes that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal
amount thereof plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the date of purchase, in accordance with the procedures set forth in
Section 3.09. To the extent that the aggregate amount of Notes tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Issuers may use any
remaining Excess Proceeds for general corporate purposes. If
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the aggregate principal amount of Senior Subordinated Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Senior Subordinated Notes to be purchased on a pro rata basis; provided,
however, that the Issuers shall not be obligated to purchase Senior Subordinated
Notes in denominations other than integral multiples of $1,000. Upon completion
of such offer to purchase, the amount of Excess Proceeds shall be reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Issuers shall not, and shall not permit any of their respective Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms that are no less favorable to the
Issuers or the relevant Subsidiary than those that would have been obtained in a
comparable transaction by the Issuers or such Subsidiary with an unrelated
Person and (ii) the Issuers deliver to the Trustee (a) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $1.0 million, a resolution of the Board of
Directors set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above and that such Affiliate Transaction
has been approved by a majority of the members of the Board of Directors and (b)
with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million, an
opinion as to the fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment banking
firm of national standing; provided that (m) prepaid expenses and loans or
advances to employees and similar items in the ordinary course of business; (n)
the advancement of payment or payment of distributions pursuant to the Tax
Sharing Agreement and the making of loans or advances pursuant to the Tax
Advance Agreement dated as of December 11, 1996 between FJPS and Foamex, as
amended to the date hereof; (o) the payment by Foamex of a management fee
pursuant to the Management Services Agreement in an amount not to exceed $3.0
million per annum; (p) distributions to Foamex International Inc. and its
Subsidiaries which are utilized to pay the debt service and other expenses of
Foamex Aviation Corp., the aggregate amount of which shall not exceed $2.0
million in any twelve-month period; (q) the issuance or sale of Equity Interests
of Foamex Latin America to key executives of Foamex Latin America, not to exceed
5% of the outstanding Equity Interests of Foamex Latin America; (r) Investments
in the Trace Note not to exceed $5.0 million; (s) Investments in the Trace
Global Opportunity Fund not to exceed $5.0 million; (t) borrowings of up to $5.0
million by Trace International Holdings, Inc. from the
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Issuers and their respective Subsidiaries; (u) the Closing Date Transactions;
(v) transactions pursuant to the Supply Agreement with Foamex International
Inc., dated as of June 28, 1994; (w) purchases (and sales) of inventory and
services in the ordinary course of business at a price not greater (less) than
the price paid by (charged to) purchasers of a similar quantity of inventory and
services which are not Affiliates of the Issuers, (x) any employment agreement
entered into by the Issuers or any of their respective Restricted Subsidiaries
in the ordinary course of business and consistent with the current market
practice or the past practice of the Issuers or such Restricted Subsidiary; (y)
transactions between or among the Issuers and/or its Restricted Subsidiaries;
and (z) Restricted Payments that are permitted by the provisions of Section
4.07, in each case, shall not be deemed Affiliate Transactions.
SECTION 4.12. LIENS.
The Issuers shall not and shall not permit any of their respective Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom or assign or convey any right to receive income therefrom,
except Permitted Liens.
SECTION 4.13. LINE OF BUSINESS.
The Issuers shall not, and shall not permit any of their respective Restricted
Subsidiaries to, engage in any business other than Permitted Businesses, except
to such extent as would not be material to the Issuers and their respective
Restricted Subsidiaries taken as a whole.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 and Article 12 hereof, the Issuers and the Subsidiary
Guarantors shall do or cause to be done all things necessary to preserve and
keep in full force and effect (i) their respective corporate existences, and the
corporate, partnership or other existence of each of its Subsidiaries, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Issuers or any such Subsidiary and (ii) the
rights (charter and statutory), licenses and franchises of the Issuers and its
Subsidiaries; provided, however, that the Issuers shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Subsidiaries, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Issuers and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders of the Notes.
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
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Upon the occurrence of a Change of Control, each Holder of Notes shall have the
right to require the Issuers to repurchase all or any part (equal to $1,000 or
an integral multiple thereof) of such Holder's Notes pursuant to the offer
described below (the "Change of Control Offer") at an offer price in cash equal
to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of Control,
the Issuers shall mail a notice to each Holder describing the transaction or
transactions that constituted the Change of Control and offering to repurchase
Notes on the date specified in such notice, which date shall be no earlier than
30 days and no later than the fifth Business Day preceding the last day of the
fiscal quarter of Foamex next following the Change of Control date (the "Change
of Control Payment Date"), pursuant to the procedures required by this Indenture
and described in such notice. The Issuers shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the Notes as a result of a Change of Control.
On the Change of Control Payment Date, the Issuers shall, to the extent lawful,
(1) accept for payment all Notes or portions thereof properly tendered pursuant
to the Change of Control Offer, (2) deposit with the Paying Agent an amount
equal to the Change of Control Payment in respect of all Notes or portions
thereof so tendered and (3) deliver or cause to be delivered to the Trustee the
Notes so accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the Issuers.
The Paying Agent shall promptly mail to each Holder of Notes so tendered the
Change of Control Payment for such Notes, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such new Note will be in a principal
amount of $1,000 or an integral multiple thereof. Prior to complying with the
provisions of this covenant, but in any event prior to the Change of Control
Payment Date, the Issuers shall either repay all outstanding Senior Debt or
obtain the requisite consents, if any, under all agreements governing
outstanding Senior Debt to permit the repurchase of Notes required by this
covenant. The Issuers shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
The Issuers shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Indenture applicable to a Change of Control Offer made by the Issuers
and
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purchases all Senior Subordinated Notes validly tendered and not withdrawn under
such Change of Control Offer.
SECTION 4.16. ANTI-LAYERING.
The Issuers shall not incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is both (a) subordinate or junior in
right of payment to any Senior Debt and (b) senior in any respect in right of
payment to the Senior Subordinated Notes. No Subsidiary Guarantor shall incur,
create, issue, assume, guarantee or otherwise become liable for any Indebtedness
that is both (a) subordinate or junior in right of payment to its Senior Debt
and (b) senior in right of payment to its Note Guarantee.
SECTION 4.17. SALE AND LEASEBACK TRANSACTIONS.
The Issuers shall not, and shall not permit any of their respective Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Issuers may enter into a sale and leaseback transaction if (i) the Issuers
could have (a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to Section 4.09 and (b)
incurred a Lien to secure such Indebtedness pursuant to Section 4.12 and (ii)
the gross cash proceeds of such sale and leaseback transaction are at least
equal to the fair market value (in the case of gross cash proceeds in excess of
$5.0 million as determined in good faith by the Board of Directors and set forth
in an Officers' Certificate delivered to the Trustee) of the property that is
the subject of such sale and leaseback transaction.
SECTION 4.18 LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES.
The Issuers (i) shall not, and shall not permit any Restricted Subsidiary of the
Issuers to, transfer, convey, sell, lease or otherwise dispose of any Capital
Stock of any Restricted Subsidiary of the Issuers to any Person (other than the
Issuers or a Restricted Subsidiary of the Issuers), unless (a) such transfer,
conveyance, sale, lease or other disposition is of all the Capital Stock of such
Restricted Subsidiary and (b) the cash Net Proceeds from such transfer,
conveyance, sale, lease or other disposition are applied in accordance with
Section 4.10, and (ii) shall not permit any Restricted Subsidiary of the Issuers
to issue any of its Equity Interests (other than, if necessary, shares of its
Capital Stock constituting directors' qualifying shares) to any Person other
than to the Issuers or a Restricted Subsidiary of the Issuers; provided,
however, the foregoing restrictions shall not apply to (A) Investments in the
entities described under clause (o) of the definition of Permitted Investments;
(B) transfers, conveyances, sales, leases or other dispositions (collectively
"dispositions") of any Capital Stock of any Restricted Subsidiary that have a
fair market value at the
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time of such disposition of less than $1.0 million; or (C) a public offering of
Equity Interests of Foamex Latin America which results in the net proceeds to
Foamex Latin America of at least $15.0 million.
SECTION 4.19 PAYMENTS FOR CONSENT.
Neither the Issuers nor any of their respective Restricted Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
or is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
SECTION 4.20 ADDITIONAL GUARANTEES.
(i) If the Issuers or any of their respective Restricted Subsidiaries shall,
after the date of this Indenture, transfer or cause to be transferred, including
by way of any Investment, in one or a series of transactions (whether or not
related), any assets, businesses, divisions, real property or equipment having
an aggregate fair market value (as determined in good faith by the Board of
Directors) in excess of $1.0 million to any Restricted Subsidiary that is not a
Subsidiary Guarantor or a Foreign Subsidiary, (ii) if Foamex or any of its
Restricted Subsidiaries shall acquire another Restricted Subsidiary other than a
Foreign Subsidiary having total assets with a fair market value (as determined
in good faith by the Board of Directors) in excess of $1.0 million, or (iii) if
any Restricted Subsidiary other than a Foreign Subsidiary shall incur Acquired
Debt in excess of $1.0 million, then the Issuers shall, at the time of such
transfer, acquisition or incurrence, (i) cause such transferee, acquired
Restricted Subsidiary or Restricted Subsidiary incurring Acquired Debt (if not
then a Subsidiary Guarantor) to execute a Note Guarantee of the Obligations of
the Issuers under the Senior Subordinated Notes in the form set forth in this
Indenture and (ii) deliver to the Trustee an Opinion of Counsel, in form
reasonably satisfactory to the Trustee, that such Note Guarantee is a valid,
binding and enforceable obligation of such transferee, acquired Restricted
Subsidiary or Restricted Subsidiary incurring Acquired Debt, subject to
customary exceptions for bankruptcy, fraudulent conveyance and equitable
principles. Notwithstanding the foregoing, the Issuers or any of their
Restricted Subsidiaries may make a Restricted Investment in any Wholly Owned
Restricted Subsidiary of the Issuers without compliance with this covenant
provided that such Restricted Investment is permitted by Section 4.07.
ARTICLE 5
SUCCESSORS
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SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Issuers may not consolidate or merge with or into (whether or not the
Issuers are the surviving corporation), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of their properties or assets
in one or more related transactions, to another corporation, Person or entity
unless (i) such Issuer is the surviving corporation or the entity or the Person
formed by or surviving any such consolidation or merger (if other than such
Issuer) or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is organized and existing under the laws of the
United States, any state thereof or the District of Columbia provided that FCC
may not consolidate or merge with or into any entity other than a corporation
satisfying such requirements for so long as Foamex remains a partnership; (ii)
the entity or Person formed by or surviving any such consolidation or merger (if
other than such Issuer) or the entity or Person to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made assumes
all the obligations of such Issuer under the Notes and this Indenture pursuant
to a supplemental indenture in a form reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of Default exists;
and (iv) except in the case of a merger of an Issuer with or into one of its
Wholly Owned Restricted Subsidiaries, the Issuer or the entity or Person formed
by or surviving any such consolidation or merger (if other than the Issuer), or
to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made (A) shall have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of such Issuer
immediately preceding the transaction and (B) shall, at the time of such
transaction and after giving pro forma effect thereto as if such transaction had
occurred at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.09 hereof. In
the case of a sale, assignment, lease, transfer, conveyance or other disposition
of all or substantially all of the assets of an Issuer, upon the assumption
provided for in clause (ii) above, such Issuer shall be discharged from all
further liability and obligation under this Indenture.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Issuers in accordance with Section 5.01 hereof, the successor corporation formed
by such consolidation or into or with which the Issuers is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this
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Indenture referring to the "Issuers" shall refer instead to the successor
corporation and not to the Issuers), and may exercise every right and power of
the Issuers under this Indenture with the same effect as if such successor
Person had been named as the Issuers herein; provided, however, that the
predecessor Issuers shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all or
substantially all of the Issuers' assets as provided in the last sentence of
Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) the Issuers default for 30 days in the payment when due of
interest on, or Liquidated Damages with respect to, the Notes
(whether or not prohibited by the subordination provisions of this
Indenture);
(b) the Issuers default in payment when due of the principal of or
premium, if any, on the Notes (whether or not prohibited by the
subordination provisions of this Indenture);
(c) the Issuers fail to comply with Section 4.15, or to consummate a
mandatory Asset Sale Offer pursuant to Section 4.10 or to comply with
Article 5;
(d) the Issuers fail for 60 days after notice to comply with any of
their other agreements in this Indenture or the Notes;
(e) the Issuers default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Issuers or any
of their respective Restricted Subsidiaries (or the payment of which
is Guaranteed by the Issuers or any of their respective Restricted
Subsidiaries) whether such Indebtedness or Guarantee now exists, or
is created after the date of this Indenture, which default (a) is
caused by a failure to pay principal of, interest or premium, if any,
on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a "Payment
Default") or (b) results in the acceleration of such Indebtedness
prior to its Stated Maturity and, in each case, the principal amount
of any such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a Payment Default
or the Stated Maturity of which has been so accelerated, aggregates
$20.0 million or more;
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(f) the Issuers or any of their respective Restricted Subsidiaries
fail to pay final judgments aggregating in excess of $10.0 million,
which judgments are not paid, discharged or stayed for a period of 60
days after entry thereof;
(g) the Issuers or any of their respective Significant Subsidiaries
or any group of Subsidiaries that, taken as a whole, would constitute
a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a custodian
of it or for all or substantially all of its
property,
(iv) makes a general assignment for the benefit of
its creditors, or
(v) generally is not paying its debts as they
become due; or
(h) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Issuers or any of
its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an
involuntary case;
(ii) appoints a custodian of the Issuers or any of
their respective Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary or for
all or substantially all of the property of the
Issuers or any of their Significant Subsidiaries
or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
or
(iii) orders the liquidation of the Issuers or any
of their respective Significant Subsidiaries or
any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
SECTION 6.02. ACCELERATION.
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If any Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Notes may declare all
the Notes to be due and payable immediately provided, however, that if any
Indebtedness or Obligation is outstanding pursuant to the New Credit Facility,
upon a declaration of acceleration by the holders of the Notes or the Trustee,
all principal and interest under this Indenture shall be due and payable upon
the earlier of (x) the day which five Business Days after the provision to the
Issuers, the Credit Agent and the Trustee of such written notice of acceleration
or (y) the date of acceleration of any Indebtedness under the New Credit
Facility; and provided, further, that in the event of an acceleration based upon
an Event of Default set forth in clause (e) above, such declaration of
acceleration shall be automatically annulled if the holders of Indebtedness
which is the subject of such failure to pay at maturity or acceleration have
rescinded their declaration of acceleration in respect of such Indebtedness or
such failure to pay at maturity shall have been cured or waived within 30 days
thereof and no other Event of Default has occurred during such 30-day period
which has not been cured, paid or waived. Notwithstanding the foregoing, in the
case of an Event of Default as described in (g) and (h) of Section 6.01 hereof
all outstanding Notes will become due and payable without further action or
notice. Holders of the Notes may not enforce this Indenture or the Notes except
as provided in this Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest.
If an Event of Default occurs on or after June 15, 2002 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding payment of the premium that the Issuers would have had
to pay if the Issuers then had elected to redeem the Notes pursuant to Section
3.07 hereof, then, upon acceleration of the Notes, an equivalent premium shall
also become and be immediately due and payable, to the extent permitted by law,
anything in this Indenture or in the Notes to the contrary notwithstanding. If
an Event of Default occurs prior to June 15, 2002 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding the prohibition on redemption of the Notes prior to
such date, then, upon acceleration of the Notes, an additional premium shall
also become and be immediately due and payable in an amount, for each of the
years beginning on June 15 of the years set forth below, as set forth below
(expressed as percentages of principal amount to the date of payment that would
otherwise be due but for the provisions of this sentence):
Year Percentage
- ---- ----------
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1998 109.875%
1999 108.641%
2000 107.406%
2001 106.172%
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the
Notes or does not produce any of them in the proceeding. A delay or omission by
the Trustee or any Holder of a Note in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may on behalf of the Holders of all
of the Notes waive an existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of the
principal of or premium or Liquidated Damages, if any, or interest on, the Notes
(except a rescission of an acceleration of the Notes by the Holders of at least
a majority in aggregate principal amount of the Notes and a waiver of the
payment default that resulted form such acceleration). Upon any such waiver,
such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of other Holders of Notes or that may involve the Trustee in
personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture or the
Notes only if:
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(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision
of indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Note to receive payment of principal, premium and Liquidated Damages, if
any, and interest on the Note, on or after the respective due dates expressed in
the Note (including in connection with an offer to purchase), or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Issuers for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes
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allowed in any judicial proceedings relative to the Issuers (or any other
obligor upon the Notes), its creditors or its property and shall be entitled and
empowered to collect, receive and distribute any money or other property payable
or deliverable on any such claims and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall pay out the
money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under Section
7.07 hereof, including payment of all compensation, expense and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection;
Second: to holders of Senior Debt to the extent required by Article 10 or
Article 12 hereof;
Third: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any and
interest, respectively; and
Fourth: to the Issuers or to such party as a court of competent jurisdiction
shall direct.
The Trustee may fix a record date and payment date for any payment to Holders of
Notes pursuant to this Section 6.10.
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SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this Indenture or
in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant. This
Section does not apply to a suit by the Trustee, a suit by a Holder of a Note
pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in its exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the express
provisions of this Indenture and the Trustee need perform only those
duties that are specifically set forth in this Indenture and no others,
and no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee,
the Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
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(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend or risk
its own funds or incur any liability. The Trustee shall be under no obligation
to exercise any of its rights and powers under this Indenture at the request of
any Holders, unless such Holder shall have offered to the Trustee security and
indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by it
except as the Trustee may agree in writing with the Issuers. Money held in trust
by the Trustee need not be segregated from other funds except to the extent
required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to take in
good faith that it believes to be authorized or within the rights or powers
conferred upon it by this Indenture.
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(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Issuers or the Subsidiary Guarantors shall
be sufficient if signed by an Officer of any Issuer or any Subsidiary Guarantor,
as applicable.
(f) The Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of the
Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) The Trustee shall not be deemed to have notice of any Default or Event of
Default unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Notes and this Indenture.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuers, the Subsidiary
Guarantors or any Affiliate of the Issuers or the Subsidiary Guarantors with the
same rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Notes, it shall not be accountable
for the Issuers' use of the proceeds from the Notes or any money paid to the
Issuers or upon the Issuers' direction under any provision of this Indenture, it
shall not be responsible for the use or application of any money received by any
Paying Agent other than the Trustee, and it shall not be responsible for any
statement or recital herein or any statement in the Notes or any other document
in connection with the sale of the Notes or pursuant to this Indenture other
than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default
or Event of Default within 90 days after it occurs. Except in the case of a
Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long
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as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following the date of
this Indenture, and for so long as Notes remain outstanding, the Trustee shall
mail to the Holders of the Notes a brief report dated as of such reporting date
that complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a)
has occurred within the twelve months preceding the reporting date, no report
need be transmitted). The Trustee also shall comply with TIA ss. 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of Notes shall
be mailed to the Issuers and filed with the SEC and each stock exchange on which
the Notes are listed in accordance with TIA ss. 313(d). The Issuers shall
promptly notify the Trustee when the Notes are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Issuers and the Subsidiary Guarantors shall pay to the Trustee from time to
time such compensation as the Trustee and the Issuers and the Subsidiary
Guarantors shall from time to time agree in writing for its acceptance of this
Indenture and services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuers
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Issuers and the Subsidiary Guarantors shall indemnify each of the Trustee
and any predecessor Trustee against any and all losses, liabilities, damages,
claims or expenses (including taxes (other than taxes based on the income of the
Trustee) incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Issuers and the Subsidiary
Guarantors (including this Section 7.07) and defending itself against any claim
(whether asserted by the Issuers, the Subsidiary Guarantors or any Holder or any
other person) or liability in connection with the exercise or performance of any
of its powers or duties hereunder, except to the extent any such loss, liability
or expense may be attributable to its negligence or bad faith. The Trustee shall
notify the Issuers and the Subsidiary Guarantors promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Issuers and the
Subsidiary Guarantors shall not
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relieve the Issuers and the Subsidiary Guarantors of their respective
obligations hereunder. The Issuers shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Issuers
shall pay the reasonable fees and expenses of such counsel. The Issuers and the
Subsidiary Guarantors need not pay for any settlement made without their
consent, which consent shall not be unreasonably withheld.
The obligations of the Issuers under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Issuers' and the Subsidiary Guarantors payment obligations in this
Section, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of Default
specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to the extent
applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor Trustee
shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the trust
hereby created by so notifying the Issuers. The Holders of Notes of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuers in writing. The Issuers may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Issuers shall promptly appoint a successor Trustee.
Within one year after the successor Trustee takes office, the Holders of a
majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
If a successor Trustee does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Issuers, or the Holders
of Notes of at least 10% in principal amount of the then outstanding Notes may
petition, at the expense of the Issuers, any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been a
Holder of a Note for at least six months, fails to comply with Section 7.10,
such Holder of a Note may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Issuers. Thereupon, the resignation or removal of
the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Holders of the Notes.
The retiring Trustee shall promptly transfer all property held by it as Trustee
to the successor Trustee, provided all sums owing to the Trustee hereunder have
been paid and subject to the Lien provided for in Section 7.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the
Issuers' obligations under Section 7.07 hereof shall continue for the benefit of
the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation organized
and doing business under the laws of the United States of America or of any
state thereof that is authorized under such laws to exercise corporate trustee
power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
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This Indenture shall always have a Trustee who satisfies the requirements of TIA
ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUERS.
The Trustee is subject to TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. TERMINATION OF ISSUERS' OBLIGATIONS.
This Indenture shall cease to be of further effect (except that the Issuers' and
the Subsidiary Guarantors' obligations under Section 7.07 and 8.04 and the
Issuers' Trustee's and Paying Agent's obligations under Section 8.03 shall
survive) when all outstanding Notes theretofore authenticated and issued have
been delivered (other than destroyed, lost or stolen Notes which have been
replaced or paid) to the Trustee for cancellation and the Issuers have paid all
sums payable by the Issuers hereunder. In addition, the Issuers may terminate
all of their obligations under this Indenture if:
(1) the Issuers irrevocably deposit in trust with the Trustee or at the option
of the Trustee, with a trustee reasonably satisfactory to the Trustee and the
Issuers under the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, money or United States Government Obligations
sufficient (as certified by an independent public accountant designated by the
Issuers) to pay principal and interest on the Notes to maturity or redemption,
as the case may be, and to pay all other sums payable by them hereunder,
provided that (i) the trustee of the irrevocable trust shall have been
irrevocably instructed to pay such money or the proceeds of such United States
Government Obligations to the Trustee and (ii) the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such United States
Government Obligations to the payment of said principal and interest with
respect to the Notes;
(2) the Issuers and the Subsidiary Guarantors deliver to the Trustee an
Officers' Certificate stating that all conditions precedent to satisfaction and
discharge of this Indenture have been complied with, and an Opinion of Counsel
to the same effect; and
(3) no Event of Default or event (including such deposit) which, with notice or
lapse of time, or both, would become an Event of Default with respect to the
Notes shall have occurred and be continuing on the date of such deposit.
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Then, this Indenture shall cease to be of further effect (except as provided
this paragraph), and the Trustee, on demand of the Issuers, shall execute proper
instruments acknowledging confirmation of and discharge under this Indenture.
The Issuers may make the deposit only if Article 10 hereof does not prohibit
such payment. However, the Issuers' obligations in Section 2.03, 2.04, 2.05,
2.06, 2.07, 4.01, 7.07, 7.08, 8.03 and 8.04, and the Trustee's and Paying
Agent's obligations in Section 8.03 shall survive until the Notes are no longer
outstanding. Thereafter, only the Issuers', Trustee's and Paying Agents'
obligations in Section 8.03 shall survive.
After such irrevocable deposit made pursuant to this Section 8.01 and
satisfaction of the other conditions set forth herein, the Trustee upon request
shall acknowledge in writing the discharge of the Issuers' and the Subsidiary
Guarantors' obligations under this Indenture except for those surviving
obligations specified above.
In order to have money available on a payment date to pay principal or interest
on the Notes, the United States Government Obligations shall be payable as to
principal or interest at least one Business Day before such payment date in such
amounts as will provide the necessary money. United States Government
Obligations shall not be callable at the issuer's options.
The Issuers shall pay and indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against the United States Government Obligations
deposited pursuant to this Section 8.01 or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of outstanding Notes.
SECTION 8.02. APPLICATION OF TRUST MONEY.
The Trustee or a trustee satisfactory to the Trustee and the Issuers shall hold
in trust money or United States Government Obligations deposited with it
pursuant to Section 8.01. It shall apply the deposited money and the money from
United States Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal and interest on the Notes.
SECTION 8.03. REPAYMENT TO ISSUERS.
The Trustee and the Paying Agent shall promptly pay to the Issuers upon written
request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Issuers upon written request
any money held by them for the payment of principal or interest that remains
unclaimed for 2 years after the date upon which such payment shall have become
due; provided, however, that the Issuers shall have either caused notice of such
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payment to be mailed to each Holder of the Notes entitled thereto no less than
30 days prior to such repayment or within such period shall have published such
notice in a financial newspaper of widespread circulation published in the City
of New York including, without limitation, The Wall Street Journal. After
payment to the Issuers, Holders of the Notes entitled to the money must look to
the Issuers for payment as general creditors unless an applicable abandoned
property law designates another person, and all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
SECTION 8.04. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or United States
Government Obligations in accordance with Section 8.02 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Issuers' obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01 until such
time as the Trustee or Paying Agent is permitted to apply all such money or
United States Government Obligations in accordance with Section 8.02; provided,
however, that if the Issuers have made any payment of interest on or principal
of any Notes because of the reinstatement of its obligations, the Issuers shall
be subrogated to the rights of the Holders of such Notes to receive such payment
from the money or United States Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Issuers and the Trustee may
amend or supplement this Indenture or the Notes without the consent of any
Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption and discharge of the Issuers' and
the Subsidiary Guarantors' obligations to Holders of Notes in the case
of a merger, consolidation or sale of assets or Capital Stock pursuant
to Article 5 or Article 11 hereof, as applicable;
(d) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect the
legal rights under this Indenture of any such Holder;
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(e) to comply with requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the TIA; or
(f) to allow any Subsidiary to Guarantee the Notes.
Upon the request of the Issuers accompanied by a resolution of their respective
Boards of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Issuers and
the Subsidiary Guarantors in the execution of any amended or supplemental
Indenture authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations that may be therein contained,
but the Trustee shall not be obligated to enter into such amended or
supplemental Indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Issuers and the Trustee may
amend or supplement this Indenture and the Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the Notes then outstanding (including consents obtained in connection with a
tender offer or exchange offer for the Notes), and, subject to Sections 6.04 and
6.07 hereof, any existing Default or Event of Default (other than a Default or
Event of Default in the payment of the principal of, premium, if any, or
interest on the Notes, except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of this Indenture or
the Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for the Notes). Notwithstanding
the foregoing, any amendment to the provisions of Article 10 or Article 12 of
this Indenture (which relate to subordination) shall require the consent of the
Holders of at least 75% in aggregate principal amount of the Notes then
outstanding if such amendment would adversely affect the rights of Holders of
Notes.
Upon the request of the Issuers accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Issuers and the Subsidiary Guarantors in the execution of such
amended or supplemental Indenture unless such amended or supplemental Indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
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It shall not be necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes effective,
the Issuers shall mail to the Holders of Notes affected thereby a notice briefly
describing the amendment, supplement or waiver. Any failure of the Issuers to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such amended or supplemental Indenture or waiver.
Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate
principal amount of the Notes then outstanding may waive compliance in a
particular instance by the Issuers or the Subsidiary Guarantors with any
provision of this Indenture or the Notes. However, without the consent of each
Holder affected, an amendment or waiver may not (with respect to any Notes held
by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes
(other than provisions relating to Sections 4.10 and 4.15);
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a Default or Event of Default in the payment of principal of
or premium or Liquidated Damages, if any, or interest on the Notes
(except a rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount of the Notes and a
waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or premium, if any, or interest on the Notes;
(g) waive a redemption payment with respect to any Note (other than a
payment required by Section 4.10 or 4.15); or
(h) make any change in the foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
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Every amendment or supplement to this Indenture or the Notes shall be set forth
in a amended or supplemental Indenture that complies with the TIA as then in
effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to it by a
Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. An amendment, supplement or waiver becomes effective in accordance with
its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment, supplement or
waiver on any Note thereafter authenticated. The Issuers in exchange for all
Notes may issue and the Trustee shall authenticate new Notes that reflect the
amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not affect
the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture authorized pursuant
to this Article Nine if the amendment or supplement does not adversely affect
the rights, duties, liabilities or immunities of the Trustee. The Issuers and
the Subsidiary Guarantors may not sign an amendment or supplemental Indenture
until their respective Boards of Directors approve it. In executing any amended
or supplemental indenture, the Trustee shall be entitled to receive and (subject
to Section 7.01) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental indenture is authorized or permitted by this Indenture, that it
is not inconsistent herewith, and that it will be valid and binding upon the
Issuers and the Subsidiary Guarantors in accordance with its terms.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Issuers agree, and each Holder of Notes by accepting a Note agrees, that the
Indebtedness evidenced by the Note is subordinated in right of payment, to the
extent and in the manner provided in this Article, to the prior payment in full
of all Senior Debt (whether outstanding on the date hereof or hereafter
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created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of Senior Debt.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution of assets of the Issuers of any kind or
character, whether in cash, property or securities, to creditors in any
Insolvency or Liquidation Proceeding with respect to either Issuer all amounts
due or to become due under or with respect to all Senior Debt shall first be
paid in full before any payment is made on account of the Notes, except that the
Holders of Notes may receive Reorganization Securities. Upon any such Insolvency
or Liquidation Proceeding, any payment or distribution of assets of Foamex or
FCC of any kind or character, whether in cash, property or securities (other
than Reorganization Securities), to which the Holders of the Notes or the
Trustee would be entitled shall be paid by Foamex or FCC or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, or by the Holders of the Notes or by the Trustee if
received by them, directly to the holders of Senior Debt (pro rata to such
holders on the basis of the amounts of Senior Debt held by such holders) or
their Representative or Representatives, as their interests may appear, for
application to the payment of the Senior Debt remaining unpaid until all such
Senior Debt has been paid in full, after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of Senior
Debt.
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
(a) In the event of and during the continuation of any default in the payment
of principal of, interest or premium, if any, on any Senior Debt, or any
Obligation owing from time to time under or in respect of Senior Debt, or in the
event that any event of default (other than a payment default) with respect to
any Senior Debt shall have occurred and be continuing and shall have resulted in
such Senior Debt becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, or (b) if any event of
default other than as described in clause (a) above with respect to any
Designated Senior Debt shall have occurred and be continuing permitting the
holders of such Designated Senior Debt (or their Representative or
Representatives) to declare such Designated Senior Debt due and payable prior to
the date on which it would otherwise have become due and payable, then no
payment shall be made by or on behalf of Foamex or FCC on account of the Notes
(other than payments in the form of Reorganization Securities) (x) in case of
any payment or nonpayment default specified in (a), unless and until such
default shall have been cured or waived in writing in accordance with the
instruments governing such Senior Debt or such acceleration shall have been
rescinded or annulled, or (y) in case of any nonpayment event of default
specified in (b), during the period (a "Payment Blockage Period") commencing on
the date the Issuers or the Trustee receive written notice (a
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"Payment Notice") of such event of default (which notice shall be binding on the
Trustee and the Holders of Notes as to the occurrence of such a payment default
or nonpayment event of default) from the Credit Agent (or other holders of
Designated Senior Debt or their Representative or Representatives) and ending on
the earliest of (A) 179 days after such date, (B) the date, if any, on which
such Designated Senior Debt to which such default relates is paid in full or
such default is cured or waived in writing in accordance with the instruments
governing such Designated Senior Debt by the holders of such Designated Senior
Debt and (C) the date on which the Trustee receives written notice from the
Credit Agent (or other holders of Designated Senior Debt or their Representative
or Representatives), as the case may be, terminating the Payment Blockage
Period. During any consecutive 360-day period, the aggregate of all Payment
Blockage Periods shall not exceed 179 days and there shall be a period of at
least 181 consecutive days in each consecutive 360-day period when no Payment
Blockage Period is in effect. No event of default which existed or was
continuing with respect to the Senior Debt to which notice commencing a Payment
Blockage Period was given on the date such Payment Blockage Period commenced
shall be or be made the basis for the commencement of any subsequent Payment
Blockage Period unless such event of default is cured or waived for a period of
not less than 90 consecutive days.
SECTION 10.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default, the
Issuers shall promptly notify holders of Senior Debt of the acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder of a Note receives any payment of
any Obligations with respect to the Notes at a time when such payment is
prohibited by Section 10.03 hereof, such payment shall be held by the Trustee or
such Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to, the holders of Senior Debt as their
interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to perform
only such obligations on the part of the Trustee as are specifically set forth
in this Article 10, and no implied covenants or obligations with respect to the
holders of Senior Debt shall be read into this Indenture against the
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Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders of the Notes or
the Issuers or any other Person money or assets to which any holders of Senior
Debt shall be entitled by virtue of this Article 10, except if such payment is
made as a result of the willful misconduct or gross negligence of the Trustee.
SECTION 10.06. NOTICE BY THE ISSUERS.
The Issuers shall promptly notify the Trustee and the Paying Agent of any facts
known to the Issuers that would cause a payment of any Obligations with respect
to the Notes to violate this Article, but failure to give such notice shall not
affect the subordination of the Notes to the Senior Debt as provided in this
Article.
SECTION 10.07. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are paid in full,
Holders of the Notes shall be subrogated (equally and ratably with all other
Pari Passu Debt) to the rights of holders of Senior Debt to receive
distributions applicable to Senior Debt to the extent that distributions
otherwise payable to the Holders of the Notes have been applied to the payment
of Senior Debt. A distribution made under this Article to holders of Senior Debt
that otherwise would have been made to Holders of the Notes is not, as between
the Issuers and Holders of the Notes, a payment by the Issuers on the Notes.
SECTION 10.08. RELATIVE RIGHTS.
This Article defines the relative rights of Holders of the Notes and holders of
Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Issuers and Holders of the Notes, the
obligations of the Issuers, which are absolute and unconditional, to
pay principal of and interest on the Notes in accordance with their
terms;
(2) affect the relative rights of Holders of the Notes and creditors
of the Issuers other than their rights in relation to holders of
Senior Debt; or
(3) prevent the Trustee or any Holder of the Notes from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt to receive distributions
and payments otherwise payable to Holders of the Notes.
If the Issuers fail because of this Article to pay principal of or interest on a
Note on the due date, the failure is still a Default or Event of Default.
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SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY THE ISSUERS.
No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Issuers or any Holder or by the failure of the Issuers or any Holder
to comply with this Indenture.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt, or any of them, may, at any time and from time to time,
without the consent of or notice to the Holders of the Notes, without incurring
any liabilities to any Holder of any Notes and without impairing or releasing
the subordination and other benefits provided in this Indenture or the
obligations of the Holders of the Notes to the holders of the Senior Debt, even
if any right of reimbursement or subrogation or other right or remedy of any
Holder of Notes is affected, impaired or extinguished thereby, do any one or
more of the following:
(1) change the manner, place or terms of payment or change or extend the
time of payment of, or renew, exchange, amend, increase or alter, the
terms of any Senior Debt, any security therefor or guaranty thereof or any
liability of any obligor thereon (including any guarantor) to such holder,
or any liability incurred directly or indirectly in respect thereof or
otherwise amend, renew, exchange, extend, modify, increase or supplement
in any manner any Senior Debt or any instrument evidencing or guaranteeing
or securing the same or any agreement under which Senior Debt is
outstanding;
(2) sell, exchange, release, surrender, realize upon, enforce or
otherwise deal with in any manner and in any order any property pledged,
mortgaged or otherwise securing Senior Debt or any liability of any
obligor thereon, to such holder, or any liability incurred directly or
indirectly in respect thereof;
(3) settle or compromise any Senior Debt or any other liability of any
obligor of the Senior Debt to such holder or any security therefor or any
liability incurred directly or indirectly in respect thereof and apply any
sums by whomsoever paid and however realized to any liability (including,
without limitation, Senior Debt) in any manner or order; and
(4) fail to take or to record or to otherwise perfect, for any reason or
for no reason, any lien or security interest securing Senior Debt by
whomsoever granted, exercise or delay in or refrain from exercising any
right or remedy against any obligor or any guarantor or any other person,
elect any remedy and otherwise deal freely with any obligor and any
security for the Senior Debt or any liability of any obligor to such
holder or any liability incurred directly or indirectly in respect
thereof.
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SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of Senior
Debt, the distribution may be made and the notice given to their Representative.
Upon any payment or distribution of assets of the Issuers referred to in this
Article 10, the Trustee and the Holders of the Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders of the
Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Issuers, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment or distribution by the
Trustee, and the Trustee and the Paying Agent may continue to make payments on
the Notes, unless the Trustee shall have received at its Corporate Trust Office
at least three Business Days prior to the date of such payment written notice of
facts that would cause the payment of any Obligations with respect to the Notes
to violate this Article. Only the Issuers or a Representative may give the
notice. Nothing in this Article 10 shall impair the claims of, or payments to,
the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior Debt with
the same rights it would have if it were not Trustee. Any Agent may do the same
with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes and directs
the Trustee on the Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article 10, and
appoints the Trustee to act as the Holder's attorney-in-fact for any and all
such purposes, including without limitation the timely filing of a claim for the
unpaid balance of the Notes held by such Holder in the form required in any
Insolvency or Liquidation Proceeding and causing such claim to be approved. If
the Trustee does not file a proper proof of claim or proof of debt in the form
required in any proceeding referred to in Section 6.09 hereof at least 30 days
before the expiration of the time of such claim, the Representatives of the
Designated Senior Debt, including the
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Credit Agent, are hereby authorized to file an appropriate claim for and on
behalf of the Holders of the Notes.
SECTION 10.13. AMENDMENTS.
Any amendment to the provisions of this Article 10 shall require the consent of
the Holders of at least 75% in aggregate amount of Notes then outstanding if
such amendment would adversely affect the rights of the Holders of Notes.
ARTICLE 11
GUARANTEE OF NOTES
SECTION 11.01. NOTE GUARANTEE.
Subject to Section 11.06 hereof, each of the Subsidiary Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes and the Obligations of the Issuers hereunder and thereunder, that: (a)
the principal of, premium, if any, interest and Liquidated Damages, if any, on
the Notes will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal, premium, if any, (to the extent permitted by
law) interest on any interest, if any, and Liquidated Damages, if any, on the
Notes, and all other payment Obligations of the Issuers to the Holders or the
Trustee hereunder or thereunder will be promptly paid in full and performed, all
in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
Obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, subject to any applicable
grace period, whether at stated maturity, by acceleration, redemption or
otherwise. Failing payment when so due of any amount so guaranteed for whatever
reason the Subsidiary Guarantors will be jointly and severally obligated to pay
the same immediately. An Event of Default under this Indenture or the Notes
shall constitute an event of default under the Note Guarantees, and shall
entitle the Holders to accelerate the Obligations of the Subsidiary Guarantors
hereunder in the same manner and to the same extent as the Obligations of the
Issuers. The Subsidiary Guarantors hereby agree that their Obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, the recovery of any judgment against the Issuers,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Subsidiary Guarantor.
Each Subsidiary Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with
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a court in the event of insolvency or bankruptcy of the Issuers, any right to
require a proceeding first against the Issuers, protest, notice and all demands
whatsoever and covenants that this Note Guarantee will not be discharged except
by complete performance of the Obligations contained in the Notes and this
Indenture. If any Holder or the Trustee is required by any court or otherwise to
return to the Issuers, the Subsidiary Guarantors, or any Note Custodian,
Trustee, liquidator or other similar official acting in relation to either the
Issuers or the Subsidiary Guarantors, any amount paid by either to the Trustee
or such Holder, this Note Guarantee, to the extent theretofore discharged, shall
be reinstated in full force and effect. Each Subsidiary Guarantor agrees that it
shall not be entitled to, and hereby waives, any right of subrogation in
relation to the Holders in respect of any Obligations guaranteed hereby. Each
Subsidiary Guarantor further agrees that, as between the Subsidiary Guarantors,
on the one hand, and the Holders and the Trustee, on the other hand, (x) the
maturity of the Obligations guaranteed hereby may be accelerated as provided in
Article 6 for the purposes of this Note Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such Obligations as provided in Article 6 hereof, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by the Subsidiary Guarantors for the purpose of this Note Guarantee. The
Subsidiary Guarantors shall have the right to seek contribution from any
non-paying Subsidiary Guarantor so long as the exercise of such right does not
impair the rights of the Holders under the Note Guarantees.
SECTION 11.02. EXECUTION AND DELIVERY OF NOTE GUARANTEE.
To evidence its Note Guarantee set forth in Section 11.01, each Subsidiary
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form of Exhibit C shall be endorsed by an Officer of such Subsidiary
Guarantor on each Note authenticated and delivered by the Trustee and that this
Indenture shall be executed on behalf of such Subsidiary Guarantor, by manual or
facsimile signature, by an Officer of such Subsidiary Guarantor.
Each Subsidiary Guarantor hereby agrees that its Note Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note Guarantee no
longer holds that office at the time the Trustee authenticates the Note on which
a Note Guarantee is endorsed, the Note Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Note
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Guarantee set forth in this Indenture on behalf of the Subsidiary Guarantors.
SECTION 11.03. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS
(a) Except as set forth in Articles 4 and 5 hereof, nothing contained in this
Indenture shall prohibit a merger between a Subsidiary Guarantor and another
Subsidiary Guarantor or a merger between a Subsidiary Guarantor and the Issuers.
(b) Except as provided in Section 11.03(a) hereof or in a transaction referred
to in Section 11.04 hereof, no Subsidiary Guarantor may consolidate with or
merge with or into (whether or not such Subsidiary Guarantor is the surviving
Person), another corporation, Person or entity whether or not affiliated with
such Subsidiary Guarantor unless, subject to the provisions of the following
paragraph, (i) the Person formed by or surviving any such consolidation or
merger (if other than such Subsidiary Guarantor) assumes all the obligations of
such Subsidiary Guarantor pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Notes and the
Indenture; (ii) immediately after giving effect to such transaction, no Default
or Event of Default exists; (iii) such Subsidiary Guarantor, or any Person
formed by or surviving any such consolidation or merger, would have Consolidated
Net Worth (immediately after giving effect to such transaction), equal to or
greater than the Consolidated Net Worth of such Guarantor immediately preceding
the transaction; and (iv) Foamex would be permitted by virtue of Foamex's pro
forma Fixed Charge Coverage Ratio, immediately after giving effect to such
transaction, to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph of Section
4.09. The requirements of clauses (iii) and (iv) of this paragraph will not
apply in the case of a consolidation with or merger with or into any other
Person if the acquisition of all of the Equity Interests in such Person would
have complied with the provisions of Sections 4.07 and 4.09 hereof.
(c) In the case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and substantially in the form of Exhibit D hereto, of
the Note Guarantee endorsed upon the Notes and the due and punctual performance
of all of the covenants and conditions of this Indenture to be performed by the
Subsidiary Guarantor, such successor Person shall succeed to and be substituted
for the Subsidiary Guarantor with the same effect as if it had been named herein
as a Subsidiary Guarantor; provided that, solely for purposes of computing
Consolidated Net Income for purposes of clause (b) of the first paragraph of
Section 4.07 hereof, the Consolidated Net Income of any Person other than the
Issuers and their respective Restricted Subsidiaries shall only be included for
periods subsequent to the effective time of such merger,
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consolidation, combination or transfer of assets. Such successor Person
thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Issuers and delivered to the Trustee. All of the Note
Guarantees so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note
Guarantees had been issued at the date of the execution hereof.
SECTION 11.04. RELEASES FOLLOWING SALE OF ASSETS, MERGER, SALE OF CAPITAL
STOCK ETC..
In the event of (a) a sale or other disposition of all of the assets of any
Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a sale or
other disposition of all of the capital stock of any Subsidiary Guarantor, or
(b) that either of the Issuers designates a Subsidiary Guarantor to be an
Unrestricted Subsidiary, or such Subsidiary Guarantor ceases to be a Subsidiary
of the Issuers, then such Subsidiary Guarantor (in the event of a sale or other
disposition, by way of such a merger, consolidation or otherwise, of all of the
capital stock of such Subsidiary Guarantor or any such designation) or the
entity acquiring the property (in the event of a sale or other disposition of
all of the assets of such Subsidiary Guarantor) shall be released and relieved
of any obligations under its Note Guarantee; provided that the Net Proceeds of
such sale or other disposition are applied in accordance with the provisions of
Sections 4.10 and 4.15 hereof. In the case of a sale, assignment, lease,
transfer, conveyance or other disposition of all or substantially all of the
assets of a Subsidiary Guarantor, upon the assumption provided for in clause (i)
of Section 11.03(b) hereof such Subsidiary Guarantor shall be discharged from
all further liability and obligation under the Indenture. Upon delivery by the
Issuers to the Trustee of an Officers' Certificate to the effect of the
foregoing, the Trustee shall execute any documents reasonably required in order
to evidence the release of any Subsidiary Guarantor from its Obligation under
its Note Guarantee. Any Subsidiary Guarantor not released from its Obligations
under its Note Guarantee shall remain liable for the full amount of principal
of, premium, if any, interest and Liquidated Damages, if any, on the Notes and
for the other Obligations of such Subsidiary Guarantor under the Indenture as
provided in this Article 11.
SECTION 11.05. ADDITIONAL SUBSIDIARY GUARANTORS.
Any Person that was not a Subsidiary Guarantor on the date of this Indenture may
become a Subsidiary Guarantor by executing and delivering to the Trustee (a) a
supplemental indenture in substantially the form of Exhibit D, and (b) an
Opinion of Counsel to the effect that such supplemental indenture has been duly
authorized and executed by such Person and constitutes the
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legal, valid, binding and enforceable obligation of such Person (subject to such
customary exceptions concerning creditors rights', fraudulent transfers, public
policy and equitable principles as may be acceptable to the Trustee in its
discretion).
SECTION 11.06. LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY.
For purposes hereof, each Subsidiary Guarantor's liability shall be limited to
the lesser of (i) the aggregate amount of the Obligations of the Issuers under
the Notes and this Indenture and (ii) the amount, if any, which would not have
(A) rendered such Subsidiary Guarantor "insolvent" (as such term is defined in
the United States Bankruptcy Code and in the Debtor and Creditor Law of the
State of New York) or (B) left such Subsidiary Guarantor with unreasonably small
capital at the time its Note Guarantee of the Notes was entered into; provided
that, it will be a presumption in any lawsuit or other proceeding in which a
Subsidiary Guarantor is a party that the amount guaranteed pursuant to the Note
Guarantee is the amount set forth in clause (i) above unless any creditor, or
representative of creditors of such Subsidiary Guarantor, or debtor in
possession or trustee in bankruptcy of the Subsidiary Guarantor, otherwise
proves in such a lawsuit that the aggregate liability of the Subsidiary
Guarantor is the amount set forth in clause (ii) above. In making any
determination as to solvency or sufficiency of capital of a Subsidiary Guarantor
in accordance with the previous sentence, the right of such Subsidiary Guarantor
to contribution from other Subsidiary Guarantors, and any other rights such
Subsidiary Guarantor may have, contractual or otherwise, shall be taken into
account.
SECTION 11.07. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Issuers and be then acting hereunder, the term "Trustee" as
used in this Article 11 shall in each case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully and for all intents and purposes as if such Paying Agent were
named in this Article 11 in place of the Trustee.
ARTICLE 12
SUBORDINATION OF NOTE GUARANTEE
SECTION 12.01. AGREEMENT TO SUBORDINATE.
The Subsidiary Guarantors agree, and each Holder by accepting a Note agrees,
that all Guarantee Obligations, shall be subordinated in right of payment, to
the extent and in the manner provided in this Article 12, to the prior payment
in full of all Guarantor Senior Debt, whether outstanding on the date hereof or
thereafter incurred and that the subordination is for the benefit of the holders
of Senior Debt.
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SECTION 12.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution of assets of the Subsidiary Guarantors of any
kind or character, whether in cash, property or securities, to creditors in any
Insolvency or Liquidation Proceeding with respect to any Subsidiary Guarantor
all amounts due or to become due under or with respect to all Senior Debt shall
first be paid in full before any payment is made on account of the Notes, except
that the Holders of Notes may receive Reorganization Securities. Upon any such
Insolvency or Liquidation Proceeding, any payment or distribution of assets of
any Subsidiary Guarantor of any kind or character, whether in cash, property or
securities (other than Reorganization Securities), to which the Holders of the
Notes or the Trustee would be entitled shall be paid by the Subsidiary
Guarantors or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, or by the Holders of the
Notes or by the Trustee if received by them, directly to the holders of Senior
Debt (pro rata to such holders on the basis of the amounts of Senior Debt held
by such holders) or their Representative or Representatives, as their interests
may appear, for application to the payment of the Senior Debt remaining unpaid
until all such Senior Debt has been paid in full, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
Senior Debt.
SECTION 12.03. DEFAULT ON DESIGNATED SENIOR DEBT.
(a) In the event of and during the continuation of any default in the payment
of principal of, interest or premium, if any, on any Senior Debt, or any
Obligation owing from time to time under or in respect of Senior Debt, or in the
event that any event of default (other than a payment default) with respect to
any Senior Debt shall have occurred and be continuing and shall have resulted in
such Senior Debt becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, or (b) if any event of
default other than as described in clause (a) above with respect to any
Designated Senior Debt shall have occurred and be continuing permitting the
holders of such Designated Senior Debt (or their Representative or
Representatives) to declare such Designated Senior Debt due and payable prior to
the date on which it would otherwise have become due and payable, then no
payment shall be made by or on behalf of any Subsidiary Guarantor on account of
the Notes (other than payments in the form of Reorganization Securities) (x) in
case of any payment or nonpayment default specified in (a), unless and until
such default shall have been cured or waived in writing in accordance with the
instruments governing such Senior Debt or such acceleration shall have been
rescinded or annulled, or (y) in case of any nonpayment event of default
specified in (b), during the period (a "Payment Blockage Period") commencing on
the date the Subsidiary Guarantors or the Trustee receive written notice (a
"Payment Notice") of such event of default (which notice shall be binding on the
Trustee and the Holders of
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Notes as to the occurrence of such a payment default or nonpayment event of
default) from the Credit Agent (or other holders of Designated Senior Debt or
their Representative or Representatives) and ending on the earliest of (A) 179
days after such date, (B) the date, if any, on which such Designated Senior Debt
to which such default relates is paid in full or such default is cured or waived
in writing in accordance with the instruments governing such Designated Senior
Debt by the holders of such Designated Senior Debt and (C) the date on which the
Trustee receives written notice from the Credit Agent (or other holders of
Designated Senior Debt or their Representative or Representatives), as the case
may be, terminating the Payment Blockage Period. During any consecutive 360-day
period, the aggregate of all Payment Blockage Periods shall not exceed 179 days
and there shall be a period of at least 181 consecutive days in each consecutive
360-day period when no Payment Blockage Period is in effect. No event of default
which existed or was continuing with respect to the Senior Debt to which notice
commencing a Payment Blockage Period was given on the date such Payment Blockage
Period commenced shall be or be made the basis for the commencement of any
subsequent Payment Blockage Period unless such event of default is cured or
waived for a period of not less than 90 consecutive days.
SECTION 12.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default, the
Subsidiary Guarantor shall promptly notify such Representatives of Guarantor
Senior Debt of the acceleration.
SECTION 12.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder of a Note receives any payment of
any Obligations with respect to the Notes at a time when such payment is
prohibited by Section 12.03 hereof, such payment shall be held by the Trustee or
such Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to, the holders of Senior Debt as their
interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to perform
only such obligations on the part of the Trustee as are specifically set forth
in this Article 12, and no implied covenants or obligations with respect to the
holders of Senior Debt shall be read into this Indenture against the Trustee.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Debt, and shall not be liable to
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any such holders if the Trustee shall pay over or distribute to or on behalf of
Holders of the Notes or the Issuers or any other Person money or assets to which
any holders of Senior Debt shall be entitled by virtue of this Article 12,
except if such payment is made as a result of the willful misconduct or gross
negligence of the Trustee.
SECTION 12.06. NOTICE BY SUBSIDIARY GUARANTOR.
The Subsidiary Guarantors shall promptly notify the Trustee and the Paying Agent
of any facts known to the Subsidiary Guarantors that would cause a payment of
any Obligations with respect to the Notes to violate this Article, but failure
to give such notice shall not affect the subordination of the Notes to the
Senior Debt as provided in this Article.
SECTION 12.07. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are paid in full,
Holders of the Notes shall be subrogated (equally and ratably with all Pari
Passu Debt) to the rights of holders of Senior Debt to receive distributions
applicable to Senior Debt to the extent that distributions otherwise payable to
the Holders of the Notes have been applied to the payment of Senior Debt. A
distribution made under this Article to holders of Senior Debt that otherwise
would have been made to Holders of the Notes is not, as between the Subsidiary
Guarantors and Holders of the Notes, a payment by the Subsidiary Guarantors on
the Notes.
SECTION 12.08. RELATIVE RIGHTS.
This Article defines the relative rights of Holders of the Notes and holders of
Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Issuers and Holders of the Notes, the
obligations of the Issuers, which are absolute and unconditional, to
pay principal of and interest on the Notes in accordance with their
terms;
(2) affect the relative rights of Holders of the Notes and creditors
of the Issuers other than their rights in relation to holders of
Senior Debt; or
(3) prevent the Trustee or any Holder of the Notes from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt to receive distributions
and payments otherwise payable to Holders of the Notes.
If the Issuers fail because of this Article to pay principal of or interest on a
Note on the due date, the failure is still a Default or Event of Default.
SECTION 12.09. SUBORDINATION MAY NOT BE IMPAIRED BY SUBSIDIARY GUARANTOR.
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No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Issuers or any Holder or by the failure of the Issuers or any Holder
to comply with this Indenture.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt, or any of them, may, at any time and from time to time,
without the consent of or notice to the Holders of the Notes, without incurring
any liabilities to any Holder of any Notes and without impairing or releasing
the subordination and other benefits provided in this Indenture or the
obligations of the Holders of the Notes to the holders of the Senior Debt, even
if any right of reimbursement or subrogation or other right or remedy of any
Holder of Notes is affected, impaired or extinguished thereby, do any one or
more of the following:
(1) change the manner, place or terms of payment or change or extend the
time of payment of, or renew, exchange, amend, increase or alter, the
terms of any Senior Debt, any security therefor or guaranty thereof or any
liability of any obligor thereon (including any guarantor) to such holder,
or any liability incurred directly or indirectly in respect thereof or
otherwise amend, renew, exchange, extend, modify, increase or supplement
in any manner any Senior Debt or any instrument evidencing or guaranteeing
or securing the same or any agreement under which Senior Debt is
outstanding;
(2) sell, exchange, release, surrender, realize upon, enforce or
otherwise deal with in any manner and in any order any property pledged,
mortgaged or otherwise securing Senior Debt or any liability of any
obligor thereon, to such holder, or any liability incurred directly or
indirectly in respect thereof;
(3) settle or compromise any Senior Debt or any other liability of any
obligor of the Senior Debt to such holder or any security therefor or any
liability incurred directly or indirectly in respect thereof and apply any
sums by whomsoever paid and however realized to any liability (including,
without limitation, Senior Debt) in any manner or order; and
(4) fail to take or to record or to otherwise perfect, for any reason or
for no reason, any lien or security interest securing Senior Debt by
whomsoever granted, exercise or delay in or refrain from exercising any
right or remedy against any obligor or any guarantor or any other person,
elect any remedy and otherwise deal freely with any obligor and any
security for the Senior Debt or any liability of any obligor to such
holder or any liability incurred directly or indirectly in respect
thereof.
SECTION 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
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Whenever a distribution is to be made or a notice given to holders of Senior
Debt, the distribution may be made and the notice given to their Representative.
Upon any payment or distribution of assets of the Issuers referred to in this
Article 12, the Trustee and the Holders of the Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders of the
Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Issuers, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 12.
SECTION 12.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 12 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment or distribution by the
Trustee, and the Trustee and the Paying Agent may continue to make payments on
the Notes, unless the Trustee shall have received at its Corporate Trust Office
at least three Business Days prior to the date of such payment written notice of
facts that would cause the payment of any Obligations with respect to the Notes
to violate this Article. Only the Issuers or a Representative may give the
notice. Nothing in this Article 12 shall impair the claims of, or payments to,
the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior Debt with
the same rights it would have if it were not Trustee. Any Agent may do the same
with like rights.
SECTION 12.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes and directs
the Trustee on the Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article 12, and
appoints the Trustee to act as the Holder's attorney-in-fact for any and all
such purposes, including without limitation the timely filing of a claim for the
unpaid balance of the Notes held by such Holder in the form required in any
Insolvency or Liquidation Proceeding and causing such claim to be approved. If
the Trustee does not file a proper proof of claim or proof of debt in the form
required in any proceeding referred to in Section 6.09 hereof at least 30 days
before the expiration of the time of such claim, the Representatives of the
Designated Senior Debt, including the Credit Agent, are hereby authorized to
file an appropriate claim for and on behalf of the Holders of the Notes.
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SECTION 12.13. AMENDMENTS.
Any amendment to the provisions of this Article 12 shall require the consent of
the Holders of at least 75% in aggregate amount of Notes then outstanding if
such amendment would adversely affect the rights of the Holders of Notes.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA ss.318(c), the imposed duties shall control.
SECTION 13.02. NOTICES.
Any notice or communication by the Issuers, the Subsidiary Guarantors or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Issuers or the Subsidiary Guarantors:
Foamex International Inc.
375 Park Avenue
11th Floor
New York, New York 10152
Telecopier No.: (212) 593-1363
Attention: President & CEO
With a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Telecopier No.: (212) 821-8111
Attention: Jack H. Nusbaum
If to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 W
New York, New York 10286
Telecopier No.: (212) 815-5915
Attention: Lucille Firrincieli
The Issuers, the Subsidiary Guarantors or the Trustee, by notice to the others
may designate additional or different addresses for subsequent notices or
communications.
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All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier promising next Business Day delivery.
Any notice or communication to a Holder shall be mailed by first class mail or
by overnight air courier promising next Business Day delivery to its address
shown on the register kept by the Registrar. Any notice or communication shall
also be so mailed to any Person described in TIA ss. 313(c), to the extent
required by the TIA. Failure to mail a notice or communication to a Holder or
any defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within the
time prescribed, it is duly given, whether or not the addressee receives it.
If the Issuers mails a notice or communication to Holders, it shall mail a copy
to the Trustee and each Agent at the same time.
SECTION 13.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Issuers, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Issuers or the Subsidiary Guarantors to
the Trustee to take any action under this Indenture (other than the initial
issuance of the Senior Subordinated Notes), such Issuer or Subsidiary Guarantor
shall furnish to the Trustee upon request:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 13.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section
13.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
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Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss.
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 13.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of Holders.
The Registrar or Paying Agent may make reasonable rules and set reasonable
requirements for its functions.
SECTION 13.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND STOCKHOLDERS.
No director, officer, employee, partner, incorporator or stockholder of the
Issuers or any of their Restricted Subsidiaries, as such, shall have any
liability for any obligations of the Issuers or any Subsidiary Guarantor under
the Notes, this Indenture, the Note Guarantees or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes.
SECTION 13.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE
THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.
SECTION 13.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Issuers or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 13.10. SUCCESSORS.
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All agreements of the Issuers and the Subsidiary Guarantors in this Indenture,
the Notes and the Note Guarantees shall bind their respective successors and
assigns. All agreements of the Trustee in this Indenture shall bind its
successors and assigns.
SECTION 13.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 13.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each signed copy
shall be an original, but all of them together represent the same agreement.
SECTION 13.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part of this Indenture and shall in no way modify or
restrict any of the terms or provisions hereof.
[Signatures on following page]
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SIGNATURES
Dated as of June 12, 1997 FOAMEX L.P.
By its Managing General
Partner FMXI, Inc.
By:/s/ Philip N. Smith, Jr.
Name: Philip N. Smith, Jr.
Title: Vice President
FOAMEX CAPITAL CORPORATION
By:/s/ Philip N. Smith, Jr.
Name: Philip N. Smith, Jr.
Title: Vice President
GENERAL FELT INDUSTRIES, INC.
By:/s/ Philip N. Smith, Jr.
Name: Philip N. Smith, Jr.
Title: Vice President
FOAMEX FIBERS, INC.
By:/s/ Philip N. Smith, Jr.
Name: Philip N. Smith, Jr.
Title: Vice President
THE BANK OF NEW YORK,
as Trustee
By:/s/ Lucille Firrincieli
Name: Lucille Firrincieli
Title: Assistant Vice
President
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EXHIBIT A
(Face of Senior Subordinated Note for QIBs)
9_% Senior Subordinated Notes due 2007
No. 1 $_______________
CUSIP NO.344126AE7
FOAMEX L.P. and
FOAMEX CAPITAL CORPORATION
promise to pay to Cede & Co. or registered assigns, the principal
sum of ___________ Dollars on June 15, 2007.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
FOAMEX L.P.
By its Managing General Partner FMXI, Inc.
By:
Name:
Title:
FOAMEX CAPITAL CORPORATION
By:
Name:
Title:
This is one of the Senior
Subordinated Notes referred to
in the within-mentioned
Indenture:
Dated: ________
The Bank of New York,
as Trustee
By:
(Authorized Signatory)
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EXHIBIT A-1
(Face of Senior Subordinated Note for IAIs)
9_% Senior Subordinated Notes due 2007
No. 1 $_______________
CUSIP NO.344126AF4
FOAMEX L.P. and
FOAMEX CAPITAL CORPORATION
promise to pay to Cede & Co. or registered assigns, the principal
sum of ___________ Dollars on June 15, 2007.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
FOAMEX L.P.
By its Managing General Partner FMXI, Inc.
By:
Name:
Title:
FOAMEX CAPITAL CORPORATION
By:
Name:
Title:
This is one of the Senior
Subordinated Notes referred to
in the within-mentioned
Indenture:
Dated: ________
The Bank of New York,
as Trustee
By:
(Authorized Signatory)
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(Back of Senior Subordinated Note)
9_% Series Senior Subordinated Notes due 2007
[Unless and until it is exchanged in whole or in part for Senior Notes in
definitive form, this Senior Note may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.]1/
[THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) INSIDE
THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF THE
SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) or (7) OF THE SECURITIES ACT (AN
"INSTITUTIONAL ACCREDITED INVESTOR") THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF SECURITIES LESS
__________________
1. This paragraph should be included only if the Note is issued in global form.
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THAN $100,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
ISSUERS SO REQUESTS), (2) TO THE ISSUERS OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.]2/
_______________________
2. This paragraph should be removed upon the exchange of Senior Subordinated
Notes for New Senior Subordinated Notes in the Exchange Offer or upon the
registration of the Senior Subordinated Notes pursuant to the terms of the
Registration Rights Agreement
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Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Foamex L.P., a Delaware limited partnership and Foamex
Capital Corporation, a Delaware corporation, or their respective
successors (each an "Issuer" and together, the "Issuers"), promise to
pay interest on the principal amount of this Note at the rate of 9_%
per annum and shall pay the Liquidated Damages, if any, payable
pursuant to Section 5 of the Registration Rights Agreement referred to
below. The Issuers will pay interest and Liquidated Damages, if any,
in United States dollars (except as otherwise provided herein)
semi-annually in arrears on June 15 and December 15, commencing on
December 15, 1997, or if any such day is not a Business Day, on the
next succeeding Business Day (each an "Interest Payment Date").
Interest on the Notes shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date
of issuance; provided that if there is no existing Default or Event of
Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date, except in the case of the original
issuance of Notes, in which case interest shall accrue from the date
of authentication. The Issuers shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal at the rate equal to 1% per annum in excess of the
then applicable interest rate on the Notes to the extent lawful; it
shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at
the same rate to the extent lawful.
2. METHOD OF PAYMENT. The Issuers will pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the
Persons who are registered Holders of Notes at the close of business
on the June 1 or December 1 next preceding the Interest Payment Date,
even if such Notes are cancelled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.13
of the Indenture with respect to defaulted interest. The Notes shall
be payable as to principal, premium, if any, interest and Liquidated
Damages, if any, at the office or agency of the Issuers maintained for
such purpose within or without the City and State of New York, or, at
the option of the Issuers, payment of interest and Liquidated Damages,
if any, may be made by check mailed to the Holders at their addresses
set forth in the register of Holders; provided that payment by wire
transfer of immediately available funds shall be required with respect
to principal of, and
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interest, premium and Liquidated Damages, if any, on, all Global Notes
and all other Notes the Holders of which shall have provided written
wire transfer instructions to the Issuers or the Paying Agent. Such
payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of
public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the
Trustee under the Indenture, shall act as Paying Agent and Registrar.
The Issuers may change any Paying Agent or Registrar without notice to
any Holder. The Issuers or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Issuers issued the Notes under an Indenture dated as
of June 12, 1997 ("Indenture") among the Issuers, the Subsidiary
Guarantors and the Trustee. The terms of the Notes include those
stated in the Indenture and those made a part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code
ss.ss. 77aaa-77bbbb) (the "TIA"). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Notes are general unsecured Obligations
of the Issuers limited to $150,000,000 in aggregate principal amount,
plus amounts, if any, sufficient to pay premium, if any, interest or
Liquidated Damages, if any, on outstanding Notes as set forth in
Paragraph 2 hereof.
5. OPTIONAL REDEMPTION.
Except as set forth in the next paragraph, the Notes shall not be
redeemable at the Issuers' option prior to June 15, 2002. Thereafter,
the Notes shall be redeemable at the option of the Issuers, in whole
or in part, at any time upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the applicable redemption date,
if redeemed during the twelve-month period beginning on June 15 of the
years indicated below:
Year Percentage
- ---- ----------
2002 104.938%
2003 103.292
2004 101.646
2005 and thereafter 100.000
Notwithstanding the foregoing, at any time prior to June 15, 2000, the
Issuers may on any one or more occasions redeem up to 35% of the
initially outstanding aggregate principal amount of Notes at a
redemption price equal to
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109.875% of the principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the redemption
date, with the cash proceeds of one or more Public Equity Offerings;
provided that, in each case, at least 65% of the initially outstanding
aggregate principal amount of Notes remains outstanding immediately
after the occurrence of such redemption; and provided, further, that
such redemption shall occur within 45 days of the date of the closing
of such Public Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Issuers shall not be
required to make mandatory redemption or sinking fund payments with
respect to the Notes.
7. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least
30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes
in denominations larger than $1,000 may be redeemed in part but only
in whole multiples of $1,000, unless all of the Notes held by a Holder
are to be redeemed. On and after the redemption date, interest and
Liquidated Damages, if any, ceases to accrue on the Notes or portions
thereof called for redemption.
8. SUBORDINATION. The Notes are subordinated to Senior Debt, which is
all Indebtedness and other Obligations specified below payable
directly or indirectly by Foamex or FCC, or any of their respective
Restricted Subsidiaries whether outstanding on the date of the
Indenture or thereafter created, incurred or assumed by Foamex or FCC
or any of their respective Restricted Subsidiaries: (i) the principal
of, interest on and all other Obligations related to the New Credit
Facility (including without limitation all loans, letters of credit
and other extensions of credit under the New Credit Facility, and all
expenses, fees, reimbursements, indemnities and other amounts owing
pursuant to the New Credit Facility); (ii) amounts payable in respect
of any Hedging Obligations; (iii) all Indebtedness not prohibited by
Section 4.09 hereof that is not expressly pari passu with or
subordinated to the Senior Subordinated Notes, and (iv) all permitted
renewals, extensions, refundings or refinancings thereof. All
Post-Petition Interest on Senior Debt shall constitute Senior Debt.
Notwithstanding anything to the contrary in the foregoing, Senior Debt
will not include (i) Indebtedness of either of the Issuers or any of
their respective Restricted Subsidiaries to any other Restricted
Subsidiaries which is not a Subsidiary Guarantor, (ii) Indebtedness of
FCC to Foamex, (iii) any Indebtedness which by the express terms of
the agreement or instrument creating, evidencing or governing the same
is junior or subordinate in right of
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payment to any item of Senior Debt, (iv) any trade payable arising
from the purchase of goods or materials or for services obtained in
the ordinary course of business, or (v) Indebtedness incurred in
violation of the Indenture. To the extent provided in the Indenture,
Senior Debt must be paid before the Notes may be paid. The Issuers
agree and each Holder of Notes by accepting a Note consents and agrees
to the subordination provided in the Indenture and authorizes the
Trustee to give it effect.
9. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
shall have the right to require the Issuers to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of such
Holder's Notes pursuant to the offer described below (the "Change of
Control Offer") at an offer price in cash equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of
Control, the Issuers shall mail a notice to each Holder describing the
transaction or transactions that constituted the Change of Control and
offering to repurchase Notes on the date specified in such notice,
which date shall be no earlier than 30 days and no later than the
fifth Business Day preceding the last day of the fiscal quarter of
Foamex next following the Change of Control date (the "Change of
Control Payment Date"), pursuant to the procedures required by the
Indenture and described in such notice.
(b) In connection with one or more Asset Sales, when the aggregate
amount of Excess Proceeds exceeds $15.0 million, the Issuers shall be
required to make an offer to all Holders of Notes (an "Asset Sale
Offer") to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds, at an offer price in cash in an
amount equal to 100% of the principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the date of
purchase, in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Notes tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Issuers may use any remaining Excess Proceeds for general corporate
purposes. If the aggregate principal amount of Senior Subordinated
Notes surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Senior Subordinated Notes to be
purchased on a pro rata basis; provided, however, that the Issuers
shall not be obligated to purchase Senior Subordinated Notes in
denominations other than integral multiples of $1,000. Upon completion
of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero.
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(c) Holders of the Notes that are the subject of an offer to purchase
will receive a Change of Control Offer or Asset Sale Offer from the
Issuers prior to any related purchase date and may elect to have such
Notes purchased by completing the form titled "Option of Holder to
Elect Purchase" appearing below.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in initial denominations of $1,000 and integral
multiples of $1,000. The transfer of the Notes may be registered and
the Notes may be exchanged as provided in the Indenture. The Registrar
and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Issuers may
require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Issuers need not exchange or register
the transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part.
Also, it need not exchange or register the transfer of any Notes for a
period of 15 days before the mailing of a notice of redemption of
Notes or during the period between a record date and the corresponding
Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to the following
paragraphs, the Indenture and the Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding (including consents obtained in
connection with a tender offer or exchange offer for the Notes), and,
any existing Default or Event of Default (other than a Default or
Event of Default in the payment of the principal of, premium, if any,
or interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision
of the Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding
Notes (including consents obtained in connection with a tender offer
or exchange offer for the Notes). In addition, any amendment to
Article 10 or Article 12 of the Indenture requires the consent of the
Holders of at least 75% in aggregate principal amount of the Notes
then outstanding if such amendment would adversely affect the rights
of the Holders of the Notes.
Without the consent of any Holder of Notes, the Issuers and the
Trustee may amend or supplement the Indenture or the Notes without the
consent of any Holder of a Note: to cure any ambiguity, defect or
inconsistency; to provide for uncertificated Notes in addition to or
in place of certificated Notes; to provide for the assumption and
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discharge of the Issuers' and the Subsidiary Guarantors' obligations
to Holders of Notes in the case of a merger or consolidation pursuant
to Article 5 or Article 11 of the Indenture, as applicable; to make
any change that would provide any additional rights or benefits to the
Holders of Notes or that does not adversely affect the legal rights
under the Indenture of any such Holder; to comply with requirements of
the Commission in order to effect or maintain the qualification of the
Indenture under the TIA; or to allow any Subsidiary Guarantor to
guarantee the Notes.
13. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on, or Liquidated Damages
with respect to, the Notes (whether or not prohibited by the
subordination provisions of the Indenture); (ii) default in payment
when due of the principal of or premium, if any, on the Notes (whether
or not prohibited by the subordination provisions of the Indenture);
(iii) failure to comply with Section 4.15, or to consummate a
mandatory Offer to purchase pursuant to Section 4.10 or to comply with
Article 5; (iv) failure for 60 days after notice to comply with any of
their other agreements in the Indenture or the Senior Subordinated
Notes; (v) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Issuers or any of
their respective Restricted Subsidiaries (or the payment of which is
Guaranteed by the Issuers or any of their respective Restricted
Subsidiaries) whether such Indebtedness or Guarantee now exists, or is
created after the date of the Indenture, which default (a) is caused
by a failure to pay principal of, interest or premium, if any, on such
Indebtedness prior to the expiration of the grace period provided in
such Indebtedness on the date of such default (a "Payment Default") or
(b) results in the acceleration of such Indebtedness prior to its
Stated Maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the
Stated Maturity of which has been so accelerated, aggregates $20.0
million or more; (vi) failure by the Issuers of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $10.0
million, which judgments are not paid, discharged or stayed for a
period of 60 days after entry thereof; or (vii) certain events of
bankruptcy or insolvency with respect to the Issuers or any of its
their respective Restricted Subsidiaries or any group of Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary.
14. TRUSTEE DEALINGS WITH THE ISSUERS. The Trustee, in its individual
or any other capacity, may make loans to, accept
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deposits from, and perform services for the Issuers, the Subsidiary
Guarantors or their respective Affiliates, and may otherwise deal with
the Issuers, the Subsidiary Guarantors or their respective Affiliates,
as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
partner, incorporator or stockholder of the Issuers or any of their
Restricted Subsidiaries, as such, shall have any liability for any
obligations of the Issuers or any Subsidiary Guarantor under the
Notes, the Indenture, the Note Guarantees or for any claim based on,
in respect of, or by reason of, such obligations or their creation.
Each Holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for
issuance of the Notes.
16. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right
of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of the Notes under the
Indenture, Holders of Transferred Restricted Securities (as defined in
the Registration Rights Agreement) shall have all the rights set forth
in the Registration Rights Agreement, dated as of the date hereof,
among the Issuers, the Subsidiary Guarantors and the Initial Purchaser
(the "Registration Rights Agreement").
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers
has caused CUSIP numbers to be printed on the Notes and the Trustee
may use CUSIP numbers in notices of redemption as a convenience to the
Holders. No representation is made as to the accuracy of such numbers
either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification
numbers placed thereon.
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The Issuers shall furnish to any Holder upon written request and without charge
a copy of the Indenture and/or the Registration Rights Agreement. Requests may
be made to:
Foamex L.P.
1000 Columbia Avenue
Linwood, PA 19061
Telecopy: (610) 859-3069
Attention: Secretary
108
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
to transfer this Note on the books of the Issuers. The agent may substitute
another to act for him.
Date: __________________
Your Signature: ______________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*:
* Signature must be guaranteed by an eligible guarantor institution
within the meaning of Securities and Exchange Commission Rule 17Ad-15
(including banks, stock brokers, savings and loan associations,
national securities exchanges, registered securities associations,
clearing agencies and credit unions) with membership or participation
in an approved signature guarantee medallion program if this Security
is to be delivered other than to and in the name of the registered
holder.
109
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuers pursuant to
Section 4.10 or 4.15 of the Indenture, check the box below:
[GRAPHIC OMITTED] Section 4.10 [GRAPHIC OMITTED] Section 4.15
If you want to elect to have only part of the Note purchased by the Issuers
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased: $___________
Date: Your
Signature:_____________
(Sign exactly as your name appears on the Note)
Tax Identification No.:
Signature Guarantee.*
* Signature must be guaranteed by an eligible guarantor institution
within the meaning of Securities and Exchange Commission Rule 17Ad-15
(including banks, stock brokers, savings and loan associations,
national securities exchanges, registered securities associations,
clearing agencies and credit unions) with membership or participation
in an approved signature guarantee medallion program if this Security
is to be delivered other than to and in the name of the registered
holder.
110
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SCHEDULE OF EXCHANGES OF NOTES3/
The following exchanges of a part of this Global Note for other Notes have been
made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Date of Exchange Amount of decrease Amount of increase Principal Amount of Signature of
in Principal Amount in Principal Amount this Global Note authorized
of this Global Note of this Global Note following such signatory of
decrease (or Trustee or Note
increase) Custodian
</TABLE>
______________________
3. This should be included only if the Note is issued in global form.
111
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EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF NOTES
Re: 9_% Senior Subordinated Notes due 2007 of Foamex L.P. and Foamex Capital
Corporation.
This Certificate relates to $_____ principal amount of Notes held in * ________
book-entry or *_______ definitive form by ________________ (the "Transferor").
The Transferor*:
[GRAPHIC OMITTED] has requested the Trustee by written order to deliver in
exchange for its beneficial interest in the Global Note held by the Depository a
Note or Notes in definitive, registered form of authorized denominations in an
aggregate principal amount equal to its beneficial interest in such Global Note
(or the portion thereof indicated above); or
[GRAPHIC OMITTED] has requested the Trustee by written order to exchange or
register the transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the Transferor
does hereby certify that Transferor is familiar with the Indenture relating to
the above captioned Notes and as provided in Section 2.06 of such Indenture, the
transfer of this Note does not require registration under the Securities Act (as
defined below) because:*
[GRAPHIC OMITTED] Such Note is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section
2.06(d)(i)(A) of the Indenture).
[GRAPHIC OMITTED] Such Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")) in reliance on Rule 144A (in satisfaction of Section
2.06(a)(ii)(B), Section 2.06(b)(A) or Section 2.06(d)(i) (B) of the Indenture)
or pursuant to an exemption from registration in accordance with Rule 904 under
the Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or Section
2.06(d)(i)(B) of the Indenture.)
__________________
*Check applicable box.
112
<PAGE>
[GRAPHIC OMITTED] Such Note is being transferred in accordance with
Rule 144 under the Securities Act, or pursuant to an effective registration
statement under the Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or
Section 2.06(d)(i)(B) of the Indenture).
[GRAPHIC OMITTED] Such Note is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act, other than Rule 144A, Rule 144 or Rule 904 under the Securities
Act. An Opinion of Counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 2.06(a)(ii)(C) or Section 2.06(d)(i)(C) of the
Indenture).
[INSERT NAME OF TRANSFEROR]
By:
Date: ____________________________
________________
*Check applicable box.
113
<PAGE>
EXHIBIT C
---------
SUBSIDIARY GUARANTEE
Subject to Section 11.06 of the Indenture, each Subsidiary Guarantor
hereby, jointly and severally, unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of the
Indenture, the Notes and the Obligations of the Issuers under the Notes or under
the Indenture, that: (a) the principal of, premium, if any, interest and
Liquidated Damages, if any, on the Notes will be promptly paid in full when due,
subject to any applicable grace period, whether at maturity, by acceleration,
redemption or otherwise, and interest on overdue principal, premium, if any, (to
the extent permitted by law) interest on any interest, if any, and Liquidated
Damages, if any, on the Notes and all other payment Obligations of the Issuers
to the Holders or the Trustee under the Indenture or under the Notes will be
promptly paid in full and performed, all in accordance with the terms thereof;
and (b) in case of any extension of time of payment or renewal of any Notes or
any of such other payment Obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
subject to any applicable grace period, whether at stated maturity, by
acceleration, redemption or otherwise. Failing payment when so due of any amount
so guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and
severally obligated to pay the same immediately.
The obligations of the Subsidiary Guarantor to the Holders and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article 11 of the Indenture, and reference is hereby made to such
Indenture for the precise terms of this Subsidiary Guarantee. The terms of
Article 11 of the Indenture are incorporated herein by reference. This
Subsidiary Guarantee is subject to release as and to the extent provided in
Section 11.04 of the Indenture.
This is a continuing Guarantee and shall remain in full force and
effect and shall be binding upon each Subsidiary Guarantor and its respective
successors and assigns to the extent set forth in the Indenture until full and
final payment of all of the Issuers' Obligations under the Notes and the
Indenture and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a
Subsidiary Guarantee of payment and not a guarantee of collection.
114
<PAGE>
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
For purposes hereof, each Subsidiary Guarantor's liability shall be
limited to the lesser of (i) the aggregate amount of the Obligations of the
Issuers under the Notes and the Indenture and (ii) the amount, if any, which
would not have (A) rendered such Subsidiary Guarantor "insolvent" (as such term
is defined in the Bankruptcy Law and in the Debtor and Creditor Law of the State
of New York) or (B) left such Subsidiary Guarantor with unreasonably small
capital at the time its Subsidiary Guarantee of the Notes was entered into;
provided that, it will be a presumption in any lawsuit or other proceeding in
which a Subsidiary Guarantor is a party that the amount guaranteed pursuant to
the Subsidiary Guarantee is the amount set forth in clause (i) above unless any
creditor, or representative of creditors of such Subsidiary Guarantor, or debtor
in possession or trustee in bankruptcy of such Subsidiary Guarantor, otherwise
proves in such a lawsuit that the aggregate liability of the Subsidiary
Guarantor is limited to the amount set forth in clause (ii) above. The Indenture
provides that, in making any determination as to the solvency or sufficiency of
capital of a Subsidiary Guarantor in accordance with the previous sentence, the
right of such Subsidiary Guarantors to contribution from other Subsidiary
Guarantors and any other rights such Subsidiary Guarantors may have, contractual
or otherwise, shall be taken into account.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
Dated as of June 12, 1997
GENERAL FELT INDUSTRIES, INC.
By:
Name:
Title:
FOAMEX FIBERS, INC.
By:
Name:
Title:
115
<PAGE>
EXHIBIT D
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated
as of _______ __, 1997 between Subsidiary Guarantor (the "New Subsidiary
Guarantor"), a direct or indirect domestic Restricted Subsidiary of either
Foamex L.P., a delaware limited partnership ("Foamex") or Foamex Capital
Corporation ("FCC" each of Foamex and FCC an "Issuer" and together, the
"Issuers") and The Bank of New York, as trustee under the indenture referred to
below (the "Trustee"). Capitalized terms used herein and not defined herein
shall have the meaning ascribed to them in the Indenture (as defined below).
W I T N E S S E T H
WHEREAS, the Issuers has heretofore executed and delivered to
the Trustee an indenture (the "Indenture"), dated as of June 12, 1997, providing
for the issuance of an aggregate principal amount of $150,000,000 of 9_% Senior
Subordinated Notes due 2007 (the "Notes");
WHEREAS, Section 11.05 of the Indenture provides that under
certain circumstances the Issuers may cause, and Section 11.03 of the Indenture
provides that under certain circumstances the Issuers must cause, certain of its
subsidiaries to execute and deliver to the Trustee a supplemental indenture
pursuant to which such subsidiaries shall unconditionally guarantee all of the
Issuers' Obligations under the Notes pursuant to a Note Guarantee on the terms
and conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the
Trustee is authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the New Subsidiary Guarantor and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO NOTE GUARANTEE. The New Subsidiary Guarantor
hereby agrees, jointly and severally with all other Subsidiary Guarantors, to
guarantee the Issuers' Obligations under the Notes and the Indenture on the
terms and subject to the conditions set forth in Article 11 and Article 12 of
the Indenture and to be bound by all other applicable provisions of the
Indenture.
116
<PAGE>
3. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, shareholder or agent of any
Subsidiary Guarantor, as such, shall have any liability for any obligations of
the Issuers or any Subsidiary Guarantor under the Notes, any Note Guarantees,
the Indenture or this Supplemental Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.
4. NEW YORK LAW TO GOVERN. The internal law of the State of New
York shall govern and be used to construe this Supplemental Indenture.
5. COUNTERPARTS The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
6. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
7. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the correctness of the recitals
of fact contained herein, all of which recitals are made solely by the New
Subsidiary Guarantor.
8. EFFECT OF SUPPLEMENTAL INDENTURE. Except as amended by this
Supplemental Indenture, the terms and provisions of the Indenture shall remain
in full force and effect.
117
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.
Dated: ________________ [NAME OF NEW
SUBSIDIARY GUARANTOR]
By:
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
Name:
Title:
118
<PAGE>
EXECUTION COPY
FOAMEX L.P.
FOAMEX CAPITAL CORPORATION
GENERAL FELT INDUSTRIES, INC.
FOAMEX FIBERS, INC.
-----------------
$150,000,000
9_% SENIOR SUBORDINATED NOTES DUE 2007
-----------------
INDENTURE
Dated as of June 12, 1997
-----------------
-----------------
THE BANK OF NEW YORK
-----------------
Trustee
119
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.10
(b) 7.10
(c) N.A.
311 (a) 7.11
(b) 7.11
(c) N.A.
312 (a) 2.05
(b) 11.03
(c) 11.03
313 (a) 7.06
(b)(1) 10.03
(b)(2) 7.07
(c) 7.06;11.02
(d) 7.06
314 (a) 4.03;11.02
(b) 10.02
(c)(1) 11.04
(c)(2) 11.04
(c)(3) N.A.
(d) 10.03, 10.04, 10.05
(e) 11.05
(f) N.A.
315 (a) 7.01
(b) 7.05,11.02
(c) 7.01
(d) 7.01
(e) 6.11
316 (a)(last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
(c) 2.12
317 (a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318 (a) 11.01
(b) N.A.
(c) 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
120
<PAGE>
TABLE OF CONTENTS
Page
EXHIBITS
Exhibit A
FORM OF NOTE
Exhibit B CERTIFICATE OF TRANSFEROR
Exhibit C FORM OF SUBSIDIARY GUARANTEE
Exhibit D FORM OF SUPPLEMENTAL INDENTURE
121
<PAGE>
===============================================================================
EXECUTION COPY
FOAMEX L.P.
FOAMEX CAPITAL CORPORATION
GENERAL FELT INDUSTRIES, INC.
FOAMEX FIBERS, INC.
----------------------------------------
$150,000,000
97/8% SENIOR SUBORDINATED NOTES DUE 2007
----------------------------------------
-------------------
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JUNE 12, 1997
-------------------
Donaldson, Lufkin & Jenrette
Securities Corporation
Salomon Brothers Inc
Scotia Capital Markets (USA) Inc.
===============================================================================
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
entered into as of June 12, 1997, by and among Foamex L.P., a Delaware limited
partnership ("Foamex"), Foamex Capital Corporation, a Delaware corporation
("FCC" and, together with Foamex (the "Issuers"), General Felt Industries, Inc.,
a Delaware corporation ("General Felt"), Foamex Fibers, Inc., a Delaware
corporation ("Foamex Fibers" and, together with General Felt the "Subsidiary
Guarantors"), Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"),
Salomon Brothers Inc ("Salomon") and Scotia Capital Markets (USA) Inc. ("Scotia
Capital" and, together with DLJ and Salomon, the "Initial Purchasers"), who have
agreed to purchase the Issuers' 97/8% Senior Subordinated Notes due 2007 (the
"Senior Subordinated Notes") pursuant to the Purchase Agreement (as defined
below).
This Agreement is made pursuant to the Purchase Agreement, dated May
29, 1997 (the "Purchase Agreement"), by and among the Issuers, the Subsidiary
Guarantors and the Initial Purchasers. In order to induce the Initial Purchasers
to purchase the Senior Subordinated Notes, the Issuers have agreed to provide
the registration rights set forth in this Agreement. The execution and delivery
of this Agreement is a condition to the obligations of the Initial Purchasers
set forth in the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: New Senior Subordinated
Notes that are acquired by a Broker-Dealer in the Exchange Offer in exchange for
Senior Subordinated Notes that such Broker-Dealer acquired for its own account
as a result of market-making activities or other trading activities (other than
Senior Subordinated Notes acquired directly from the Issuers or any of their
respective affiliates).
Business Day: Any day except a Saturday, Sunday or other day in the
City of New York, or in the city of the corporate trust office of the Trustee,
on which banks are authorized to close.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the New Senior Subordinated Notes to be issued in the Exchange
Offer, (b) the maintenance of such Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the
minimum period required pursuant to Section 3(b) hereof and (c) the delivery by
the Issuers to the Registrar under the Indenture of New Senior Subordinated
Notes in the same aggregate principal amount as the aggregate principal amount
of Senior Subordinated Notes validly tendered by Holders thereof pursuant to the
Exchange Offer.
2
<PAGE>
Damages Payment Date: With respect to the Transfer Restricted
Securities, each Interest Payment Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Issuers under the Act of the
New Senior Subordinated Notes pursuant to the Exchange Offer Registration
Statement pursuant to which the Issuers shall offer the Holders of all
outstanding Transfer Restricted Securities the opportunity to exchange all such
outstanding Transfer Restricted Securities for New Senior Subordinated Notes in
an aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Senior Subordinated Notes to certain "qualified
institutional buyers," as such term is defined in Rule 144A under the Act and to
certain "accredited investors," as such term is defined in Rule 501(a)(1), (2),
(3), (5) or (7) of Regulation D under the Act.
Global Note Holder: As defined in the Indenture.
Holders: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated the Closing Date, among the Issuers,
the Subsidiary Guarantors and The Bank of New York, as trustee (the "Trustee"),
pursuant to which the Notes are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Offering Memorandum: As defined in the Purchase Agreement.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
Record Holder: With respect to any Damages Payment Date, each Person
who is a Holder of Notes on the record date with respect to the Interest Payment
Date on which such Damages Payment Date shall occur.
3
<PAGE>
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Issuers and
the Subsidiary Guarantors relating to (a) an offering of New Senior Subordinated
Notes pursuant to an Exchange Offer or (b) the registration for resale of
Transfer Restricted Securities pursuant to the Shelf Registration Statement, in
each case, (i) which is filed pursuant to the provisions of this Agreement and
(ii) including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.
Notes: The Senior Subordinated Notes and the New Senior Subordinated
Notes.
New Senior Subordinated Notes: The Issuers' 97/8% New Senior
Subordinated Notes due 2007 to be issued pursuant to the Indenture (i) in the
Exchange Offer or (ii) upon the request of any Holder of Senior Subordinated
Notes covered by a Shelf Registration Statement, in exchange for such Senior
Subordinated Notes.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to occur
of (a) the date on which such Note is exchanged in the Exchange Offer and
entitled to be resold to the public by the Holder thereof without complying with
the prospectus delivery requirements of the Act, (b) the date on which such Note
has been disposed of in accordance with a Shelf Registration Statement, (c) the
date on which such Note is disposed of by a Broker-Dealer pursuant to the "Plan
of Distribution" contemplated by the Exchange Offer Registration Statement
(including delivery of the Prospectus contained therein) or (d) the date on
which such Note is distributed to the public pursuant to Rule 144 under the Act.
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Issuers are sold to an underwriter for reoffering to the
public.
2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person owns Transfer Restricted Securities of
record.
3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have been
complied with), the Issuers and the Subsidiary Guarantors shall (i) cause to be
filed with the Commission, on or prior to 45 days after the Closing Date, the
Exchange Offer Registration Statement, (ii) use their respective reasonable best
efforts to cause such Exchange Offer Registration Statement to become effective
at the earliest possible time, but in no event later than 120 days after the
Closing Date, (iii) in connection with the foregoing, (A) file all pre-effective
amendments to such Exchange Offer Registration Statement as may be necessary in
order to cause such Exchange Offer Registration Statement to become effective,
(B) file, if
4
<PAGE>
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all necessary
filings, if any, in connection with the registration and qualification of the
New Senior Subordinated Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer and
(iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting registration of the New Senior Subordinated Notes to
be offered in exchange for the Senior Subordinated Notes that are Transfer
Restricted Securities and to permit sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers as contemplated by Section 3(c) below.
(b) The Issuers and the Subsidiary Guarantors shall use their
respective reasonable best efforts to cause the Exchange Offer Registration
Statement to be effective continuously, and shall keep the Exchange Offer open,
for a period of not less than the minimum period required under applicable
federal and state securities laws to Consummate the Exchange Offer; provided,
however, that in no event shall such period be less than 20 Business Days. The
Issuers and the Subsidiary Guarantors shall cause the Exchange Offer to comply
with all applicable federal and state securities laws. No securities other than
the Notes shall be included in the Exchange Offer Registration Statement. The
Issuers and the Subsidiary Guarantors shall use their respective reasonable best
efforts to cause the Exchange Offer to be Consummated no later than 30 Business
Days after the Exchange Offer Registration Statement has become effective.
(c) The Issuers shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Restricted Broker-Dealer who holds Senior Subordinated Notes
that are Transfer Restricted Securities and that were acquired for the account
of such Broker-Dealer as a result of market-making activities or other trading
activities, may exchange such Senior Subordinated Notes (other than Transfer
Restricted Securities acquired directly from the Issuers or any affiliate of
either of the Issuers) pursuant to the Exchange Offer; however, such
Broker-Dealer may be deemed to be an "underwriter" within the meaning of the Act
and must, therefore, deliver a prospectus meeting the requirements of the Act in
connection with its initial sale of each New Senior Subordinated Note received
by such Broker-Dealer in the Exchange Offer, which prospectus delivery
requirement may be satisfied by the delivery by such Broker-Dealer of the
Prospectus contained in the Exchange Offer Registration Statement. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers that the Commission may require in order to permit such sales
pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Notes held by any such Broker-Dealer
except to the extent required by the Commission.
The Issuers and the Subsidiary Guarantors shall use their respective
reasonable best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 6(c) below to the extent necessary to ensure that it is available for
sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers, and to ensure that such Registration Statement conforms with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of 120 days from
the date on which the Exchange Offer is Consummated.
The Issuers and the Subsidiary Guarantors shall provide sufficient
copies of the latest version of such Prospectus to such Restricted
Broker-Dealers, in such amounts as may reasonably be requested, promptly upon
request, and in no event later than two Business Days after such request, at any
time during such 120-day period in order to facilitate such sales.
5
<PAGE>
4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Issuers are not required to file an
Exchange Offer Registration Statement with respect to the New Senior
Subordinated Notes because the Exchange Offer is not permitted by applicable law
(after the procedures set forth in Section 6(a)(i) below have been complied
with) or (ii) if any Holder of Transfer Restricted Securities shall notify the
Issuers within 20 Business Days following the Consummation of the Exchange Offer
that (A) such Holder is prohibited by law or Commission policy from
participating in the Exchange Offer or (B) such Holder may not resell the New
Senior Subordinated Notes acquired by it in the Exchange Offer to the public
without delivering a prospectus and the Prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales by
such Holder or (C) such Holder is a Broker-Dealer and holds Senior Subordinated
Notes acquired directly from the Issuers or one of their respective affiliates,
then the Issuers and the Subsidiary Guarantors shall (x) cause to be filed on or
prior to the earliest of (1) 30 days after the date on which the Issuers are
notified by the Commission or otherwise determines that they are not required to
file the Exchange Offer Registration Statement pursuant to clause (i) above and
(2) 30 days after the date on which the Issuers receive the notice specified in
clause (ii) above, a shelf registration statement pursuant to Rule 415 under the
Act, (which may be an amendment to the Exchange Offer Registration Statement (in
either event, the "Shelf Registration Statement")), relating to all Transfer
Restricted Securities the Holders of which shall have provided the information
required pursuant to Section 4(b) hereof, and (y) use their respective
reasonable best efforts to cause such Shelf Registration Statement to become
effective at the earliest possible time, but in no event later than 120 days
after the date on which the Issuers become obligated to file such Shelf
Registration Statement. If, after the Issuers have filed an Exchange Offer
Registration Statement which satisfies the requirements of Section 3(a) above,
the Issuers are required to file and make effective a Shelf Registration
Statement solely because the Exchange Offer shall not be permitted under
applicable federal law, then the filing of the Exchange Offer Registration
Statement shall be deemed to satisfy the requirements of clause (x) above. Such
an event shall have no effect on the requirements of clause (y) above, or on the
Effectiveness Target Date as defined in Section 5 below. The Issuers and the
Subsidiary Guarantors shall use their respective reasonable best efforts to keep
the Shelf Registration Statement discussed in this Section 4(a) continuously
effective, supplemented and amended as required by and subject to the provisions
of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a), and to ensure that it conforms
with the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of at
least two years (as extended pursuant to Section 6(c)(i)) following the date on
which such Shelf Registration Statement first becomes effective under the Act or
such shorter period ending when all of the Transfer Restricted Securities
available for sale thereunder have been sold pursuant thereto; provided,
however, the Issuers shall not be required to keep such Shelf Registration
Statement effective where the only Transfer Restricted Securities which have not
been sold pursuant to the Shelf Registration Statement are Transfer Restricted
Securities held by Holders who would not have been able to trigger the Issuers'
Shelf Registration Statement filing obligations pursuant to Section 4(a)(ii)(A),
(B) or (C) hereof. In the event of an Underwritten Offering pursuant to the
Shelf Registration Statement, no securities other than the Senior Subordinated
Notes shall be included in the Shelf Registration Statement.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Issuers in writing, within 20 days after receipt of a request therefor, such
information specified in Item 507 of Regulation S-K under the Act for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of
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Transfer Restricted Securities shall be entitled to Liquidated Damages pursuant
to Section 5 hereof unless and until such Holder shall have provided all such
information. Each Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Issuers all information required to
be disclosed in order to make the information previously furnished to the
Issuers by such Holder not materially misleading.
5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) any such Registration Statement has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
Exchange Offer has not been Consummated within 30 Business Days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded immediately by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself immediately declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), the Issuers hereby agree
to pay to each Holder of Transfer Restricted Securities, for the first 90-day
period immediately following the occurrence of such Registration Default,
liquidated damages in an amount equal to $.05 per week per $1,000 principal
amount of Notes constituting Transfer Restricted Securities held by such Holder
for each week or portion thereof that the Registration Default continues. The
amount of the liquidated damages payable to each Holder shall increase by an
additional $.05 per week per $1,000 in principal amount of Transfer Restricted
Securities with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum amount of liquidated damages of $.50
per week per $1,000 principal amount of Transfer Restricted Securities held by
such Holder. Notwithstanding anything to the contrary set forth herein, (1) upon
filing of the Exchange Offer Registration Statement (and/or, if applicable, the
Shelf Registration Statement), in the case of (i) above, (2) upon the
effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of (ii) above, (3)
upon Consummation of the Exchange Offer, in the case of (iii) above, or (4) upon
the filing of a post-effective amendment to the Registration Statement or an
additional Registration Statement that causes the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement) to again be
declared effective or made usable in the case of (iv) above, the liquidated
damages payable with respect to the Transfer Restricted Securities as a result
of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Global Note Holder
by wire transfer of immediately available funds or by federal funds check and to
Holders of Certificated Securities by wire transfer to the accounts specified by
them or by mailing checks to their registered addresses if no such accounts have
been specified on each Damages Payment Date. All obligations of the Issuers and
the Subsidiary Guarantors set forth in the preceding paragraph that are
outstanding with respect to any Transfer Restricted Security at the time such
security ceases to be a Transfer Restricted Security shall survive until such
time as all such obligations with respect to such security shall have been
satisfied in full.
6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Issuers and the Subsidiary Guarantors shall comply with all
applicable provisions of Section 6(c) below, shall use their respective
reasonable best efforts to effect such exchange and to permit the sale
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of Broker-Dealer Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof (which shall be in a
manner consistent with the terms of this Agreement), and shall comply with all
of the following provisions:
(i) If, following the date hereof and prior to Consummation of
the Exchange Offer, there has been published a change in Commission
policy with respect to exchange offers such as the Exchange Offer, such
that in the reasonable judgment of counsel to the Issuers there is a
substantial question as to whether the Exchange Offer is permitted by
applicable federal law or Commission policy, the Issuers and the
Subsidiary Guarantors hereby agree to seek a no-action letter or other
favorable decision from the Commission allowing the Issuers and the
Subsidiary Guarantors to Consummate an Exchange Offer for such Senior
Subordinated Notes. The Issuers and the Subsidiary Guarantors hereby
agree to pursue the issuance of such a decision to the Commission staff
level but shall not be required to take commercially unreasonable
action to effect a change of Commission policy. In connection with the
foregoing, the Issuers and the Subsidiary Guarantors hereby agree,
however, but subject to the proviso set forth above, to take all such
other actions as are reasonably requested by the Commission or
otherwise required in connection with the issuance of such decision,
including without limitation (A) participating in telephonic
conferences with the Commission, (B) delivering to the Commission staff
an analysis prepared by counsel to the Issuers setting forth the legal
bases, if any, upon which such counsel has concluded that such an
Exchange Offer should be permitted and (C) diligently pursuing a
resolution (which need not be favorable) by the Commission staff of
such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Issuers,
prior to the Consummation of the Exchange Offer, a written
representation to the Issuers and the Subsidiary Guarantors (which may
be contained in the letter of transmittal contemplated by the Exchange
Offer Registration Statement) to the effect that (A) it is not an
affiliate of either of the Issuers, (B) it is not engaged in, and does
not intend to engage in, and has no arrangement or understanding with
any person to participate in, a distribution of the New Senior
Subordinated Notes to be issued in the Exchange Offer and (C) it is
acquiring the New Senior Subordinated Notes in its ordinary course of
business. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on
the date of this Agreement rely on the position of the Commission
enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and
Exxon Capital Holdings Corporation (available May 13, 1988), as
interpreted in the Commission's letter to Shearman & Sterling dated
July 2, 1993, and similar no-action letters (including, if applicable,
any no-action letter obtained pursuant to clause (i) above), and (2)
must comply with the registration and prospectus delivery requirements
of the Act in connection with a secondary resale transaction and that
such a secondary resale transaction must be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K if the resales are of New Senior Subordinated Notes obtained by
such Holder in exchange for Senior Subordinated Notes acquired by such
Holder directly from either of the Issuers or an affiliate thereof.
(iii) To the extent required by the Commission, prior to
effectiveness of the Exchange Offer Registration Statement, the Issuers
and the Subsidiary Guarantors shall provide a supplemental letter to
the Commission (A) stating that the Issuers and the Subsidiary
Guarantors are registering the Exchange Offer in reliance on the
position of the Commission
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enunciated in Exxon Capital Holdings Corporation (available May 13,
1988), Morgan Stanley and Co., Inc. (available June 5, 1991) and, if
applicable, any no-action letter obtained pursuant to clause (i) above,
(B) including a representation that neither of the Issuers nor any
Subsidiary Guarantor has entered into any arrangement or understanding
with any Person to distribute the New Senior Subordinated Notes to be
received in the Exchange Offer and that based on the representations of
the Holders, to the best of the Issuers' and the Subsidiary Guarantors'
information and belief, each Holder participating in the Exchange Offer
is acquiring the New Senior Subordinated Notes in its ordinary course
of business and has no arrangement or understanding with any Person to
participate in the distribution of the New Senior Subordinated Notes
received in the Exchange Offer and (C) any other undertaking or
representation required by the Commission as set forth in any no-action
letter obtained pursuant to clause (i) above.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement the Issuers and the Subsidiary Guarantors shall comply
with all the provisions of Section 6(c) below and shall use their respective
reasonable best efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended method
or methods of distribution thereof (as indicated in the information furnished to
the Issuers pursuant to Section 4(b) hereof), and pursuant thereto the Issuers
and the Subsidiary Guarantors will prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof within the time periods and otherwise in accordance with
the provisions hereof.
(c) General Provisions. In connection with any Registration Statement
and any related Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Exchange Offer Registration Statement and the related Prospectus, to the extent
that the same are required to be available to permit sales of Broker-Dealer
Transfer Restricted Securities by Restricted Broker-Dealers), the Issuers and
the Subsidiary Guarantors shall:
(i) use their respective reasonable best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain a material misstatement or omission or (B) not
to be effective and usable for resale of Transfer Restricted Securities
during the period required by this Agreement, the Issuers and the
Subsidiary Guarantors shall file promptly an appropriate amendment to
such Registration Statement, (1) in the case of clause (A), correcting
any such misstatement or omission, and (2) in the case of either clause
(A) or (B), use their respective best efforts to cause such amendment
to be declared effective and such Registration Statement and the
related Prospectus to become usable for their intended purpose(s) as
soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, or such shorter
period as will terminate when all Transfer Restricted Securities
covered by such Registration Statement have been sold; cause the
Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Act,
and to comply fully with Rules 424, 430A and 462 as applicable, under
the Act in a timely manner; and comply with the provisions of the Act
with respect to the disposition of all securities
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covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
selling Holders thereof set forth in such Registration Statement or
supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto, when
the same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information relating thereto, (C)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of
the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening
of any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement
thereto or any document incorporated by reference therein untrue, or
that requires the making of any additions to or changes in the
Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes
in the Prospectus in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. If at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws,
the Issuers and the Subsidiary Guarantors shall use their respective
reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
(iv) furnish to the Initial Purchasers, each selling Holder
under any Registration Statement or Prospectus and each of the
underwriter(s) in connection with such sale, if any, before filing with
the Commission, copies of any Registration Statement or any Prospectus
included therein or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such Registration
Statement), which documents (except for post-effective amendments
necessary (i) to avoid a Registration Default, or (ii) in the written
opinion of Foamex's counsel to correct a material misstatement or
omission of fact) will be subject to the review and comment of such
Holders and underwriter(s) in connection with such sale, if any, for a
period of at least five Business Days, and the Issuers will not file
any such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus (including
all such documents incorporated by reference) if the selling Holders of
the Transfer Restricted Securities covered by such Registration
Statement or the underwriter(s) in connection with such sale shall
provide notice to the Issuers within five Business Days after the
receipt thereof to the effect that (A) such Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains a material misstatement or omission or fails to comply
with the applicable requirements of the Act or (B) that any of the
information furnished to the Issuers by such selling Holder or
underwriter, if any, and included in such Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be
filed is incorrect in any respect;
(v) at reasonable times requested by the selling Holders
and/or the underwriters upon reasonable notice, prior to the filing of
any document that is to be incorporated by
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reference into a Registration Statement or Prospectus, provide copies
of such document to the selling Holders and to the underwriter(s) in
connection with such sale, if any, make the Issuers' and the Subsidiary
Guarantors' representatives available for discussion of such document
and other customary due diligence matters, and include such information
in such document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request;
(vi) make available at reasonable times for inspection by the
selling Holders, any managing underwriter participating in any
disposition pursuant to such Registration Statement and any attorney or
accountant retained by such selling Holders or any of such
underwriter(s), all financial and other records, pertinent corporate
documents and properties of each of the Issuers and the Subsidiary
Guarantors and cause the Issuers' and the Subsidiary Guarantors'
officers, directors and employees to supply all information reasonably
requested by any such Holder, underwriter, attorney or accountant in
connection with such Registration Statement or any post-effective
amendment thereto subsequent to the filing thereof and prior to its
effectiveness;
(vii) if requested by any selling Holders or the
underwriter(s) in connection with such sale, if any, promptly include
in any Registration Statement or Prospectus, pursuant to a supplement
or post-effective amendment if necessary, such information as such
selling Holders and underwriter(s), if any, may reasonably request to
have included therein relating to such Holders, the "Plan of
Distribution" of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being
sold to such underwriter(s), the purchase price being paid therefor and
any other terms of the offering of the Transfer Restricted Securities
to be sold in such offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as
practicable after the Issuers are notified of the matters to be
included in such Prospectus supplement or post-effective amendment;
(viii) furnish to each selling Holder and each of the
underwriter(s) in connection with such sale, if any, without charge, at
least one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(ix) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Issuers
and the Subsidiary Guarantors hereby consent to the use (in accordance
with law) of the Prospectus and any amendment or supplement thereto by
each of the selling Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement
thereto;
(x) enter into such agreements (including an underwriting
agreement) and make such representations and warranties and take all
such other actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities
pursuant to any Registration Statement contemplated by this Agreement
as may be reasonably requested by any Holder of Transfer Restricted
Securities or underwriter in connection with any sale or resale
pursuant to any Registration Statement contemplated by this Agreement,
and in such
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connection, whether or not an underwriting agreement is entered into
and whether or not the registration is an Underwritten Registration,
the Issuers and the Subsidiary Guarantors shall:
(A) furnish to each selling Holder and each underwriter, if
any, upon the effectiveness of the Shelf Registration Statement
and to each Restricted Broker-Dealer upon Consummation of the
Exchange Offer:
(1) a certificate, dated as of the date of
effectiveness of the Shelf Registration Statement signed on
behalf of each of the Issuers and the Subsidiary Guarantors
by (x) the President or any Vice President and (y) a
principal financial or accounting officer of each of the
Issuers and the Subsidiary Guarantors confirming, as of the
date thereof, the matters set forth in paragraphs (a)
through (c) of Section 9 of the Purchase Agreement with
respect to the Shelf Registration Statement and such other
similar matters as the Holders, underwriter(s) and/or
Restricted Broker-Dealers may reasonably request;
(2) an opinion, dated as of the date of effectiveness
of the Shelf Registration Statement of counsel for the
Issuers and the Subsidiary Guarantors, covering matters
customarily covered in opinions requested in Underwritten
Offerings and dated the date of effectiveness of the Shelf
Registration Statement; and
(3) customary comfort letters, dated as of the date of
effectiveness of the Shelf Registration Statement from the
Issuers' independent accountants, in the customary form and
covering matters of the type customarily covered in comfort
letters to underwriters in connection with Underwritten
Offerings, and affirming the matters set forth in the
comfort letters delivered pursuant to Section 9(f) of the
Purchase Agreement, without exception;
provided, however, that notwithstanding the foregoing, the
documents to be delivered pursuant to this Section
6(c)(x)(A) may contain such exceptions as are reasonably
necessary under the circumstances as they exist at the time
such documents are delivered;
(B) set forth in full or incorporated by reference in the
underwriting agreement, if any, in connection with any sale or
resale pursuant to any Shelf Registration Statement the
indemnification provisions and procedures of Section 8 hereof
with respect to all parties to be indemnified pursuant to said
Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by the selling Holders, the underwriter(s),
if any, and Restricted Broker-Dealers, if any, to evidence
compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Issuers and the Subsidiary
Guarantors pursuant to this clause (x).
The above shall be done at each closing under such
underwriting or similar agreement, as and to the extent required
thereunder, and if at any time the representations and warranties of
the Issuers and the Subsidiary Guarantors contemplated in (A)(1) above
cease to be true and correct, the Issuers and the Subsidiary Guarantors
shall so advise the underwriter(s), if any,
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selling Holders and each Restricted Broker-Dealer promptly and if
requested by such Persons, shall confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and their respective counsel in connection with the registration
and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the selling
Holders or underwriter(s), if any, may reasonably request and do any
and all other acts or things reasonably necessary or advisable to
enable the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the applicable Registration Statement; provided,
however, that neither of the Issuers nor any Subsidiary Guarantor shall
be required to register or qualify as a foreign corporation where it is
not now so qualified or to take any action that would subject it to the
service of process in suits or to taxation, other than as to matters
and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(xii) issue, upon the request of any Holder of Senior
Subordinated Notes covered by any Shelf Registration Statement
contemplated by this Agreement, New Senior Subordinated Notes, having
an aggregate principal amount equal to the aggregate principal amount
of Senior Subordinated Notes surrendered to the Issuers by such Holder
in exchange therefor or being sold by such Holder; such New Senior
Subordinated Notes to be registered in the name of the purchaser(s) of
such Notes; in return, the Senior Subordinated Notes held by such
Holder shall be surrendered to the Issuers for cancellation;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and to register such
Transfer Restricted Securities in such denominations and such names as
the Holders or the underwriter(s), if any, may request at least two
Business Days prior to such sale of Transfer Restricted Securities;
(xiv) use their respective best efforts to cause the
disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof or the underwriter(s), if any, to consummate
the disposition of such Transfer Restricted Securities, subject to the
proviso contained in clause (xi) above;
(xv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with the
Depository Trust Company;
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(xvii) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation
by any underwriter (including any "qualified independent underwriter")
that is required to be retained in accordance with the rules and
regulations of the NASD, and use their respective best efforts to cause
such Registration Statement to become effective and approved by such
governmental agencies or authorities as may be necessary to enable the
Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities;
(xviii) otherwise use their respective best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any
applicable Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is
defined in paragraph (c) of Rule 158 under the Act);
(xix) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders of Notes to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use their
respective best efforts to cause the Trustee to execute, all documents
that may be required to effect such changes and all other forms and
documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner; and
(xx) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(i) or any notice from the Issuers of the existence of any fact of
the kind described in Section 6(c)(iii)(D) hereof, such Holder will immediately
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof,
or until it is advised in writing by the Issuers that the use of the Prospectus
may be resumed, and has received copies of any additional or supplemental
filings that are incorporated by reference in the Prospectus (the "Advice"). If
so directed by the Issuers, each Holder will deliver to the Issuers (at the
Issuers' expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of either such notice. In the
event the Issuers shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section 6(c)(i)
or Section 6(c)(iii)(D) hereof to and including the date when each selling
Holder covered by such Registration Statement shall have received the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof
or shall have received the Advice.
7. REGISTRATION EXPENSES
(a) All expenses incident to the Issuers' and the Subsidiary
Guarantors' performance of or compliance with this Agreement will be borne by
the Issuers, regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and
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expenses (including filings made by any Initial Purchaser or Holder with the
NASD (and, if applicable, the fees and expenses of any "qualified independent
underwriter") and its counsel that may be required by the rules and regulations
of the NASD); (ii) all fees and expenses of compliance with federal securities
and state Blue Sky or securities laws; (iii) all expenses of printing (including
printing certificates for the New Senior Subordinated Notes to be issued in the
Exchange Offer and printing of Prospectuses); (iv) all fees and disbursements of
counsel for the Issuers, the Subsidiary Guarantors and, in accordance with
Section 7(b) below, the Holders of Transfer Restricted Securities; (v) all
messenger and delivery services and telephone expenses of the Issuers and the
Subsidiary Guarantors; (vi) all application and filing fees in connection with
listing the Notes on a national securities exchange or automated quotation
system pursuant to the requirements hereof and (vii) all fees and disbursements
of independent certified public accountants of the Issuers and the Subsidiary
Guarantors (including the expenses of any special audit and comfort letters
required by or incident to such performance); provided, however, that
notwithstanding the foregoing, the Issuers will not be responsible for any
underwriter's discounts, commissions or fees attributable to the sale of the
Transfer Restricted Securities.
The Issuers will, in any event, bear their and the Subsidiary
Guarantors' internal expenses (including, without limitation, all salaries and
expenses of any of their respective officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees and expenses
of any Person, including special experts, retained by the Issuers or the
Subsidiary Guarantors.
(b) In connection with any Shelf Registration Statement required by
this Agreement, as applicable, the Issuers and the Subsidiary Guarantors will
reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities pursuant to the "Plan of Distribution" contained in or registered
pursuant to the Shelf Registration Statement, as applicable, for the reasonable
fees and disbursements of not more than one counsel, who shall be chosen by the
Holders of a majority in principal amount of the Transfer Restricted Securities
for whose benefit such Registration Statement is being prepared.
8. INDEMNIFICATION
(a) Each of the Issuers and the Subsidiary Guarantors agree, jointly
and severally, to indemnify and hold harmless (i) each Initial Purchaser, (ii)
each Holder, (iii) each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) any Initial Purchaser
or Holder (any of the persons referred to in this clause (iii) being hereinafter
referred to as a "controlling person") and (iv) the respective officers,
directors, partners, employees, representatives and agents of the Initial
Purchasers or any Holder or any controlling person (any person referred to in
clause (i), (ii), (iii) or (iv) in such capacity may hereinafter be referred to
as an "Indemnified Holder"), to the fullest extent lawful, from and against any
and all losses, claims, damages, liabilities, judgments, actions and reasonable
expenses (including without limitation and as incurred, reimbursement of all
costs of investigating, preparing, pursuing or defending any claim or action, or
any investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to any
Indemnified Holder) directly or indirectly caused by, related to, based upon,
arising out of or in connection with any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto),
or any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except insofar as
such losses, claims, damages, liabilities, judgments, actions or expenses are
caused by any untrue statement or
15
<PAGE>
omission or alleged untrue statement or omission that is made in reliance upon
and in conformity with information relating to any Initial Purchaser or any of
the Holders furnished in writing to either of the Issuers by any of the Initial
Purchasers or any of the Holders expressly for use therein; provided however,
that the indemnification contained in this paragraph (a) with respect to any
preliminary prospectus shall not inure to the benefit of any Holder (or to the
benefit of any person controlling any Holder) on account of any such loss,
claim, damage, liability, judgment, action or expense arising from the sale of
Senior Subordinated Notes by such Holder to any person if a copy of the
Prospectus, as it may be amended or supplemented, shall not have been delivered
or sent to such person, at or prior to the written confirmation of such sale,
and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in any preliminary prospectus was
corrected in the Prospectus, as it may have been amended or supplemented;
provided that the Issuers have delivered the Prospectus, as it may be amended or
supplemented, to such Holder in requisite quantity on a timely basis to permit
such delivery or sending. Each of the Issuers and the Subsidiary Guarantors also
agree, jointly and severally, to reimburse each Indemnified Holder for any and
all fees and expenses (including, without limitation, the reasonable fees and
expenses of counsel) as they are incurred in connection with enforcing such
Indemnified Holder's rights under this Agreement (including, without limitation,
its rights under this Section 8). The Issuers shall notify the Initial
Purchasers and any Holder promptly of the institution, threat or assertion of
any claim, proceeding (including any governmental investigation) or litigation
in connection with the matters addressed by this Agreement which involves either
of the Issuers or an Indemnified Holder.
In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
of the Indemnified Holders with respect to which indemnity may be sought against
either of the Issuers or the Subsidiary Guarantors, such Indemnified Holder
shall promptly notify the Issuers in writing (provided, that the failure to give
such notice shall not relieve either of the Issuers or the Subsidiary Guarantors
of their respective obligations pursuant to this Agreement), and the Issuers
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Holder and payment of all fees and expenses
(regardless of whether it is ultimately determined that an Indemnified Holder is
not entitled to indemnification hereunder). Such Indemnified Holder shall have
the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Holder unless (i) the employment of such counsel
shall have been specifically authorized in writing by either of the Issuers,
(ii) the Issuers shall have failed to assume the defense and employ counsel or
(iii) the named parties to any such action (including any impleaded parties)
include both such Indemnified Holder and either of the Issuers or the Subsidiary
Guarantors, and such Indemnified Holder shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to such Issuer or Subsidiary Guarantor (in
which case neither Issuer shall have the right to assume the defense of such
action on behalf of such Indemnified Holder, it being understood, however, that
the Issuers and the Subsidiary Guarantors shall not, in connection with any one
such action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any appropriate local counsel) for all such Indemnified Holders,
which firm shall be designated in writing by the Indemnified Holders, and that
all such fees and expenses shall be reimbursed as they are incurred). None of
the Issuers nor the Subsidiary Guarantors shall be liable for any settlement of
any such action or proceeding effected without the prior written consent of
either of the Issuers, but if settled with the written consent of either of the
Issuers, which consent will not be unreasonably withheld, the Issuers and the
Subsidiary Guarantors agree, jointly and severally, to indemnify and hold
harmless any Indemnified Holder from and against any loss, claim, damage,
liability, judgment, action or expense by reason of any such settlement.
Notwithstanding the foregoing
16
<PAGE>
sentence, if at any time an Indemnified Holder shall have requested either of
the Issuers or the Subsidiary Guarantors to reimburse the Indemnified Holder for
fees and expenses of counsel as contemplated by the second sentence of this
paragraph, the Issuers and the Subsidiary Guarantors agree that they shall be
liable for any settlement of any proceeding effected without either of the
Issuer's written consent if (i) such settlement is entered into more than thirty
(30) business days after receipt by either of the Issuers or the Subsidiary
Guarantors of the aforesaid request, and (ii) none of the Issuers nor the
Subsidiary Guarantors shall have reimbursed the Indemnified Holder in accordance
with such request prior to the date of such settlement. Neither Issuer nor the
Subsidiary Guarantors shall, without the prior written consent of each
Indemnified Holder settle, compromise or consent to the entry of judgment in or
otherwise seek to terminate any pending or threatened action, claim, litigation
or proceeding in respect of which indemnification or contribution may be sought
hereunder by such Indemnified Holder (whether or not any Indemnified Holder is a
party thereto), unless such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Holder from all liability
arising out of such action, claim, litigation or proceeding.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless each of the Issuers and the
Subsidiary Guarantors, any person controlling (within the meaning of Section 15
of the Act or Section 20 of the Exchange Act) either of the Issuers or any
Subsidiary Guarantor, and the officers, directors, partners, employees,
representatives and agents of each such person (the "Issuer Indemnified
Parties"), to the same extent as the foregoing indemnity from each of the
Issuers and the Subsidiary Guarantors to each of the Indemnified Holders, but
only with respect to claims and actions based on information relating to such
Holder furnished in writing by such Holder expressly for use in any Registration
Statement; provided however, that in no case shall any Holder be liable or
responsible for any amount in excess of the amount by which the total received
by such Holder with respect to its sale of Transfer Restricted Securities
pursuant to a Registration Statement exceeds (i) the amount paid by such Holder
for such Transfer Restricted Securities and (ii) the amount of any damages which
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. In case any action
shall be brought against any Issuer Indemnified Party in respect of which
indemnity may be sought against a Holder of Transfer Restricted Securities, such
Holder shall have the rights and duties given the Issuers and the Subsidiary
Guarantors, and the Issuer Indemnified Parties shall have the rights and duties
given to each Holder by the preceding paragraph.
(c) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities, judgments, actions or expenses referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities, judgments, actions or expenses (i)
in such proportion as is appropriate to reflect the relative benefits received
by the indemnifying party (or parties, as applicable), on the one hand, and the
indemnified party (or parties, as applicable), on the other hand, from the
initial placement and the sale of Transfer Restricted Securities pursuant to the
applicable Registration Statement or (ii) if such allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the indemnifying party (or parties, as
applicable), and of the indemnified party (or parties, as applicable), as well
as any other relevant equitable considerations. The relative benefits received
by the Issuers and the Subsidiary Guarantors shall be deemed to be equal to the
total proceeds from the initial placement (net of the Initial Purchasers'
commissions, but before deducting expenses) as set forth on the cover page of
the Offering Memorandum. The relative benefits of the Initial Purchasers shall
be deemed to be equal to the total purchase discounts and commissions as set
forth on the cover page of the Offering Memorandum and benefits received by any
other Indemnified Holders shall be
17
<PAGE>
deemed to be equal to the total proceeds received by such Holder upon its sale
of Senior Subordinated Notes. The relative fault of each of the Issuers and the
Subsidiary Guarantors, on the one hand, and the Indemnified Holders, on the
other hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact related to information supplied by either of
the Issuers and the Subsidiary Guarantors, on the one hand or by the Indemnified
Holders, on the other hand and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Issuers, the Subsidiary Guarantors, the Initial Purchasers and each
Holder of Transfer Restricted Securities agree that it would not be just and
equitable if contribution pursuant to this Section 8(c) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities, judgments, actions or expenses referred to
in the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, no Initial
Purchaser (and such Initial Purchaser's related Indemnified Holders, shall be
required to contribute, in the aggregate, any amount in excess of the amount
equal to (A) the amount of the total purchase discounts and commissions
applicable to such Transfer Restricted Securities less (B) any amount paid or
contributed by the Initial Purchasers under the Purchase Agreement; nor shall
any Holder or its related Indemnified Holders be required to contribute, in the
aggregate, any amount in excess of the amount by which the total received by
such Holder with respect to the sale of its Transfer Restricted Securities
pursuant to a Registration Statement exceeds the sum of (A) the amount paid by
such Holder for such Transfer Restricted Securities plus (B) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
The indemnity and contribution agreements of each of the Issuers and
the Subsidiary Guarantors contained in this Section 8 are in addition to any
liability or obligation which either of the Issuers and the Subsidiary
Guarantors may otherwise have to the Indemnified Holders.
9. RULE 144A
The Issuers and the Subsidiary Guarantors hereby agree with each
Holder, for so long as any Transfer Restricted Securities remain outstanding and
during any period in which the Issuers and the Subsidiary Guarantors are not
subject to Section 13 or 15(d) of the Securities Exchange Act, to make
available, upon request of any Holder of Transfer Restricted Securities, to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
10. UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in customary underwriting arrangements entered
into in connection therewith and (b) completes and executes all
18
<PAGE>
reasonable questionnaires, powers of attorney, lock-up letters and other
documents required under the terms of such underwriting arrangements.
11. SELECTION OF UNDERWRITERS
For any Underwritten Offering of Notes, the investment banker or
investment bankers and manager or managers for any Underwritten Offering of
Notes, that will administer such offering will be selected by the Holders of a
majority in aggregate principal amount of the Transfer Restricted Securities
included in such offering, and shall be subject to the approval of the Issuers,
which approval shall not be unreasonably withheld; provided however, that a
Registration Default shall not be deemed to have occurred if such Registration
Default directly or indirectly arose out of any willful or gross negligence by
such underwriters. Such investment bankers and managers are referred to herein
as the "underwriters."
12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to exercise
all rights provided herein, in the Indenture, the Purchase Agreement or granted
by law, including recovery of liquidated or other damages, will be entitled to
specific performance of its rights under this Agreement. The Issuers and the
Subsidiary Guarantors agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by them of the
provisions of this Agreement and hereby agree to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither of the Issuers nor any
Subsidiary Guarantor will, on or after the date of this Agreement, enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Issuers' and the Subsidiary Guarantors' securities under any agreement in
effect on the date hereof.
(c) Adjustments Affecting the Notes. Neither of the Issuers nor any
Subsidiary Guarantor will take any action with respect to the Notes that would
materially and adversely affect the ability of the Holders to Consummate any
Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 12(d)(i), the Issuers have obtained the written consent
of the Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Issuers have obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities. Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof that relates exclusively to the rights of
Holders whose securities are being tendered pursuant to the Exchange Offer and
that does not affect directly or indirectly the rights of other Holders whose
securities are not being tendered pursuant to such Exchange Offer may be given
by the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities subject to such Exchange Offer.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
19
<PAGE>
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under
the Indenture;
With a copy to:
Latham & Watkins
885 Third Avenue
New York, New York 10022
Telecopier No.: (212) 751-4864
Attention: Philip E. Coviello, Jr.
(ii) if to any Issuer or Subsidiary Guarantor:
Foamex International Inc.
375 Park Avenue, 11th Floor
New York, New York
Telecopier No.: (212) 593-1363
Attention: Chief Financial Officer
With a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022-4677
Telecopier No.: (212) 821-8111
Attention: Laurence D. Weltman
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier promising overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities directly from such Holder at a time when such
Holder could not transfer such Transfer Restricted Securities pursuant to a
Shelf Registration Statement. Each Holder of Transfer Restricted Securities
agrees to be bound by and comply with the terms and provisions of this
Agreement.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
20
<PAGE>
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such subject matter.
[signature page follows]
21
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
FOAMEX L.P.
By its Managing General Partner FMXI, Inc.
By:/s/ Philip N. Smith, Jr.
---------------------------------------
Name: Philip N. Smith, Jr.
Title: Vice President
FOAMEX CAPITAL CORPORATION
By:/s/ Philip N. Smith, Jr.
---------------------------------------
Name: Philip N. Smith, Jr.
Title: Vice President
GENERAL FELT INDUSTRIES, INC.
By:/s/ Philip N. Smith, Jr.
---------------------------------------
Name: Philip N. Smith, Jr.
Title: Vice President
FOAMEX FIBERS, INC.
By:/s/ Philip N. Smith, Jr.
---------------------------------------
Name: Philip N. Smith, Jr.
Title: Vice President
On behalf of each of the Initial
Purchasers by Donaldson, Lufkin &
Jenrette Securities Corporation
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:/s/ Ajay Patel
---------------------------------------
Name: Ajay Patel
Title: Senior Vice President
22
<PAGE>
[Execution Form]
================================================================================
CREDIT AGREEMENT
Dated as of June 12, 1997
among
FOAMEX L.P.
GENERAL FELT INDUSTRIES, INC.
TRACE FOAM COMPANY, INC.
FMXI, INC.
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS ISSUING BANKS
and
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, amended
and restated, supplemented or modified from time to time, the "Agreement") is
entered into among Foamex L.P., a Delaware limited partnership ("Foamex"),
General Felt Industries, Inc., a Delaware corporation ("GFI"; and together with
Foamex, the "Borrowers"), Trace Foam Company, Inc., a Delaware corporation and
general partner of Foamex ("Trace Foam"), FMXI, Inc., a Delaware corporation and
general partner of Foamex ("FMXI"), the institutions from time to time a party
hereto as Lenders, whether by execution of this Agreement or an Assignment and
Acceptance, the institutions from time to time a party hereto as Issuing Banks,
whether by execution of this Agreement or an Assignment and Acceptance, 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, Foamex desires, among other things,
(a) to refinance in full all of its outstanding indebtedness under
that certain Third Amended and Restated Credit Agreement dated as of
July 30, 1996, as amended (the "Existing Credit Agreement"), among
Foamex, GFI, Trace Foam, FMXI, the lenders thereunder, the issuing
banks thereunder and the administrative agents thereunder; and
(b) to make a tender offer to acquire at least the Required
Minimum Tender Amount of each of the outstanding Senior Notes, the
Senior Secured Notes, the Subordinated Debentures, the 1993
Subordinated Debentures and the Discount Debentures and to consummate
the other related transactions as outlined in the New Foamex
Subordinated Note Offering Memorandum (collectively, the
"Refinancing");
WHEREAS, in connection with the Refinancing, and subject to the terms
of this Agreement (including Article V), the Borrowers desire to obtain from the
Lenders
(a) in the case of Foamex, a Term Loan A Commitment pursuant to
which Borrowings of Term A Loans will be made by Foamex from time to
time on and subsequent to the Effective Date but prior to the Term A
Loan Commitment Termination Date in a maximum aggregate principal
amount not to exceed $120,000,000;
(b) in the case of Foamex, a Term B Loan Commitment and a Term C
Loan Commitment pursuant to which Borrowings of
<PAGE>
Term B Loans and Term C Loans will be made by Foamex in a maximum
aggregate principal amount not to exceed $110,000,000 in respect of
Term B Loans and $100,000,000 in respect of Term C Loans to Foamex in a
single Borrowing to occur on the Effective Date;
(c) a Revolving Loan 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 $150,000,000 will be made to the Borrowers from time to time
on and subsequent to the Effective Date but 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
Maximum 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 2.04(d); and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to extend such
Commitments and make such Loans to the Borrowers and issue (or participate in)
Letters of Credit for the account of the Borrowers;
NOW, THEREFORE, in consideration of the above premises each of the
Borrowers, Trace Foam, FMXI, the Lenders, the Issuing Banks and the
Administrative Agents agree as follows:
ARTICLE I.
DEFINITIONS
1.1. 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 busi-
-2-
<PAGE>
ness), 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.
"Administrative Agents" has the meaning ascribed to such term in the
preamble and their respective successors pursuant to Section 12.07.
"Affiliate", as applied to any Person, means any other Person that
directly or indirectly controls, is controlled by, or 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.
"Applicable Commitment Fee Margin" means at all times during the
applicable periods set forth below with respect to the fees payable to the
Lenders pursuant to Section 4.03(c), the applicable percentage set forth below
under the column entitled "Applicable Commitment Fee Margin":
Total Net Debt to Applicable Commitment
EBDAIT Ratio Fee Margin
-----------------
Less than 4.0:1 0.375%
Greater than or equal 0.500%
to 4.0:1
The Total Net Debt to EBDAIT Ratio used to compute the Applicable
Commitment Fee Margin shall be the Total Net Debt to EBDAIT Ratio set forth in
the Compliance Certificate most recently delivered by the Borrowers to the
Administrative Agents; changes in the Applicable Commitment Fee Margin resulting
from a change in the Total Net Debt to EBDAIT Ratio shall become effective upon
delivery by the Borrowers to the Administrative Agents of a new Compliance
Certificate pursuant to Section 7.01(d)(ii). Notwithstanding anything to the
contrary set forth in this Agreement (including the then effective Total Net
Debt to EBDAIT Ratio), the Applicable Commitment Fee Margin for the period
commencing on the Effective Date and ending on the earlier of November 17, 1997
or the delivery of the Compliance Certificate in respect of the Borrowers' third
fiscal quarter of
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Fiscal Year 1997 shall be 0.50%. If the Borrowers shall fail to deliver
a Compliance Certificate within 50 days after the end of any Fiscal Quarter (or
within 60 days, in the case of the last Fiscal Quarter of the Fiscal Year) as
required pursuant to Section 7.01(d)(ii), the Applicable Commitment Fee Margin
from and including the 51st (or 61st, as the case may be) day after the end of
such Fiscal Quarter to but not including the date the Borrowers deliver to the
Administrative Agents a Compliance Certificate shall conclusively equal the
highest Applicable Commitment Fee Margin set forth above. If the Borrowers
deliver a Compliance Certificate pursuant to Section 7.01(d) (an "Annual
Compliance Certificate") with respect to the audited annual financial statements
of Foamex and its Subsidiaries for a Fiscal Year which shows a variance in the
computation of the Total Net Debt to EBDAIT Ratio from such computation set
forth in the Compliance Certificate delivered pursuant to Section 7.01(d) (a
"Monthly Compliance Certificate") in connection with the last month of such
Fiscal Year and the result of such variance is that the Borrowers received a
decrease in the Applicable Commitment Fee Margin upon the delivery of the
Monthly Compliance Certificate which they would not have been entitled to
receive based upon the Annual Compliance Certificate, then the Borrowers shall,
within five days, deliver to the Funding Agent for the pro rata distribution to
the Lenders entitled to receive such payment, an amount equal to the difference
between the commitment fee payable pursuant to Section 4.03(c) which would have
been payable if such higher Applicable Commitment Fee Margin had been in effect
and the actual accrual of such incorrect Applicable Commitment Fee Margin.
"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 during the applicable periods
set forth below
(a) with respect to the unpaid principal amount of each Term A
Loan and Revolving Loan maintained as a Base Rate Loan, the applicable
percentage set forth in subclause (i) below under the column entitled
"Applicable Margin for Base Rate Loans", with respect to the unpaid
principal amount of each Term B Loan maintained as a Base Rate Loan,
the applicable percentage set forth in subclause (ii) below under the
column entitled "Applicable Margin for Term B Base Rate Loans" and with
respect to the unpaid principal amount of each Term C Loan maintained
as a Base Rate Loan, the applicable percentage set forth in subclause
(iii) below under the column entitled "Applicable Margin for Term C
Base Rate Loans"; and
(b) with respect to the unpaid principal amount of each Term A
Loan and Revolving Loan maintained as a LIBO
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Rate Loan, the applicable percentage set forth in subclause (i) below
under the column entitled "Applicable Margin for LIBO Rate Loans", with
respect to the unpaid principal amount of each Term B Loan maintained
as a LIBO Rate Loan, the applicable percentage in subclause (ii) below
under the column entitled "Applicable Margin for Term B LIBO Rate
Loans" and with respect to the unpaid principal amount of each Term C
Loan maintained as a LIBO Rate Loan, the applicable percentage in
subclause (iii) below under the column entitled "Applicable Margin for
Term C LIBO Rate Loans":
(i) For Term A Loans and Revolving Loans:
Total Net Debt Applicable Applicable
to EBDAIT Margin For Margin For
Ratio Base Rate Loans LIBO Rate Loans
- -------------- --------------- ---------------
Less than 2.5:1 0.000% 0.625%
Greater than or equal to 2.5:1 and
less than 3.0:1 0.000% 0.875%
Greater than or equal to 3.0:1 and
less than 3.5:1 0.125% 1.125%
Greater than or equal to 3.5:1 and
less than 4.0:1 0.375% 1.375%
Greater than or equal to 4.0:1 and
less than 4.5:1 0.875% 1.875%
Greater than or equal to 4.5:1 1.125% 2.125%;
(ii) For Term B Loans:
Total Net Debt Applicable Applicable
to EBDAIT Margin For Term B Margin For Term B
Ratio Base Rate Loans LIBO Rate Loans
- --------------- --------------- ---------------
Less than 4.0:1 0.875% 1.875%
Greater than or equal to 4.00:1 and
less than 4.50:1 1.125% 2.125%
Greater than or
equal to 4.50:1
1.375% 2.375%; and
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(iii) For Term C Loans:
Total Net Debt Applicable Applicable
to EBDAIT Margin For Term C Margin For Term C
Ratio Base Rate Loans LIBO Rate Loans
- --------------- --------------- ---------------
Less than 4.0:1 1.125% 2.125%
Greater than or equal to 4.0:1 and
less than 4.5:1
1.375% 2.375%
Greater than or equal to 4.5:1
1.625% 2.625%
The Total Net Debt to EBDAIT Ratio used to compute the Applicable
Margin following the Effective Date shall be the Total Net Debt to EBDAIT Ratio
set forth in the Compliance Certificate most recently delivered by the Borrowers
to the Administrative Agents; changes in the Applicable Margin resulting from a
change in the Total Net Debt to EBDAIT Ratio shall become effective as to all
Loans upon delivery by the Borrowers to the Administrative Agents of a new
Compliance Certificate pursuant to Section 7.01(d)(ii). Notwithstanding anything
to the contrary set forth in this Agreement (including the then effective Total
Net Debt to EBDAIT Ratio), the Applicable Margin for (i) Term A Loans and
Revolving Loans shall be 1.875% for LIBO Rate Loans and 0.875% for Base Rate
Loans, (ii) Term B Loans shall be 2.125% for LIBO Rate Loans and 1.125% for Base
Rate Loans and (iii) Term C Loans shall be 2.375% for LIBO Rate Loans and 1.375%
for Base Rate Loans, in each case for the period commencing on the Effective
Date and ending on the earlier of November 17, 1997 or the delivery of the
Compliance Certificate in respect of the Borrowers' third fiscal quarter of
Fiscal Year 1997. If the Borrowers shall fail to deliver a Compliance
Certificate within 50 days after the end of any Fiscal Quarter (or within 60
days, in the case of the last Fiscal Quarter of the Fiscal Year) as required
pursuant to Section 7.01(d)(ii), the Applicable Margin from and including the
51st (or 61st, as the case may be) day after the end of such Fiscal Quarter to
but not including the date the Borrowers deliver to the Administrative Agents a
Compliance Certificate shall conclusively equal the highest Applicable Margin
set forth above. If the Borrowers deliver a Compliance Certificate pursuant to
Section 7.01(d) (an "Annual Compliance Certificate") with respect to the audited
annual financial statements of Foamex and its Subsidiaries for a Fiscal Year
which shows a variance in the computation of the Total Net Debt to EBDAIT Ratio
from such computation set forth in the Compliance Certificate delivered pursuant
to Section 7.01(d) (a "Monthly Compliance Certificate") in connection with the
last month of such Fiscal Year and the result of such variance is that
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the Borrowers received a decrease in the Applicable Margin upon the delivery of
the Monthly Compliance Certificate which they would not have been entitled to
receive based upon the Annual Compliance Certificate, then the Borrowers shall,
within five days, deliver to the Funding Agent for the pro rata distribution to
the Lenders entitled to receive such payment, an amount equal to the difference
between the interest which would have accrued on the Loans which would have been
payable if such higher Applicable Margin had been in effect and the actual
accrual of interest on the Loans based upon the incorrect Applicable Margin. Any
change in the Applicable Margin shall be effective as of the effective date of
any such change in the Applicable Margin with respect to any Loans then
outstanding.
"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).
"Benefit Plan" means a defined benefit plan as defined in Section 3(35)
of ERISA (other than a Multiemployer Plan) in respect of which either Borrower
or any ERISA Affiliate is, or within the immediately preceding six (6) years
was, an "employer" as defined in Section 3(5) of ERISA and which is subject to
Title IV of ERISA.
"Borrowers" has the meaning assigned thereto in the preamble.
"Borrowing" means a borrowing consisting of Loans of the same type
made, continued or converted on the same day.
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<PAGE>
"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 Foamex 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 Foamex or its Subsidiaries on a consolidated basis (whether
payable in cash or other Property or accrued as a liability (but without
duplication)) during such period that, in conformity with GAAP, are required to
be included in fixed asset accounts as reflected in the consolidated balance
sheets of Foamex or its Subsidiaries; provided, however, (i) Capital
Expenditures shall include, whether or not such a designation would be in
conformity with GAAP, (A) that portion of Capital Leases which is capitalized on
the consolidated balance sheet of Foamex and its Subsidiaries and (B)
expenditures for Equipment which is purchased simultaneously with the trade-in
of existing Equipment owned by either Foamex or any of its Subsidiaries, to the
extent the gross purchase price of the purchased Equipment exceeds the book
value of the Equipment being traded in at such time; and (ii) Capital
Expenditures shall exclude, whether or not such a designation would be in
conformity with GAAP, expenditures made in connection with the replacement or
restoration of Property, to the extent reimbursed or financed from insurance or
condemnation proceeds which do not result in a permanent reduction in the
Revolving Loan Commitments pursuant to Section 3.01.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Cash Collateral" means cash or Cash Equivalents held by theCollateral
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.
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<PAGE>
"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
Foamex 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.
"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 and Trace Foam becomes a general partner
of Foamex, (c) FMXI or Trace Foam withdraws as general partner of Foamex
pursuant to the Partnership Agreement or otherwise, (d) Marshall S. Cogan ceases
(i) to control at least fifty-one percent (51%) of the Equity Interests in TIHI
entitled to elect a majority of the board of directors or (ii) to legally and
beneficially own, directly or indirectly and of record, at least thirty
percent,(30%) of the issued and outstanding Equity Interests in TIHI, (e) TIHI
ceases to legally and beneficially own, directly or indirectly and of record,
one hundred percent (100%) of the issued and outstanding Equity Interests in
Trace Foam, whether due to the sale of Trace Foam or any of its parent entities,
foreclosure upon the stock of Trace Foam or otherwise, (f) TIHI and Trace Foam
cease to legally and beneficially own and control, directly or indirectly and of
record, at least thirty percent (30%) of the voting Equity Interests in Foamex
International, (g) any Person or group of Persons (within the meaning of Section
13 or 14 of the Securities Exchange Act) other than TIHI and its wholly-owned
Subsidiaries has acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of the
Equity Interests in Foamex International in the aggregate amount in excess of
twenty percent (20%) but only if such Person or group owns Equity Interests in
excess of the Equity Interests owned directly or
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<PAGE>
indirectly by TIHI and Trace Foam, (h) there is a sale, transfer or other
assignment or disposition of any of the Equity Interests in Foamex by FMXI or
Trace Foam, (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), (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.
"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.
"Commercial Letter of Credit" means any documentary letter of credit
issued by an Issuing Bank pursuant to Section 2.03 for the account of either
Borrower which is drawable uponpresentation of documents evidencing the sale or
shipment of goods purchased by such Borrower in the ordinary course of its
business.
"Commitments" means, collectively, the Term A Loan Commitments, the
Term B Loan Commitments, the Term C Loan Commitments and the Revolving Loan
Commitments.
"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
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(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 Borrowers
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 Foamex; or
(e) the commencement date of any action (in a proceeding, at law,
equity or otherwise) todissolve Foamex.
"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 and with respect to GFI, the account named "CUSA f/a/o GFI
Concentration Account" Account No. 4060-5549 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 Foamex 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
Foamex and its Subsidiaries (including the principal component of Capital Lease
obligations), plus (c) charges for federal, state, local and foreign income
taxes actually paid during such period, plus (d) payments made to
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the partners or any Affiliate of Foamex permitted to be made under Sections
9.06(iii), 9.06(iv)(x) (to the extent not already included in the calculation of
EBDAIT) or 9.06(vi).
"Consolidated Interest Expense" means, for any period, total interest
expense, whether paid or accrued (without duplication) (including the interest
component of Capital Leases), of Foamex and its Subsidiaries on a consolidated
basis, including, without limitation, all bank fees, commissions, discounts and
other fees and charges owed with respect to letters of credit and net costs (and
reduction for net benefits) under interest rate Hedging Obligations.
"Consolidated Net Income" means, for any period, the net earnings (or
loss) after taxes of Foamex and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP (excluding, however, (i) the effects of hyperinflation accounting as set
forth in FAS 52, or other similar pronouncements in effect from time to time by
the FASB or the Securities and Exchange Commission, (ii) any charges to net
income relating to the Refinancing and relating to the Delayed Purchases and
(iii) any losses resulting from the sale of Perfect Fit Industries, Inc. and the
application of proceeds therefrom).
"Consolidated Working Capital" means, as of any date of determination,
the difference of (i) the current assets (other than cash and Cash Equivalents)
of Foamex 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 Foamex and its
Subsidiaries) of Foamex 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 and (b) with respect to
any partnership (whether limited or general) or limited liability company, (i)
the certificate of partnership (or equivalent filings), (ii) the partnership
agreement (or the equivalent organizational documents) of such partnership or
limited liability company and (iii) any document setting forth the designation,
amount and/or relative rights, limitation and preferences of any of such
partnership's Equity Interests.
"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
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as these terms are defined in federal, state or local laws or regulations.
"Contractual Obligation", as applied to any Person, means any provision
of any Securities issued by that Person or any indenture, mortgage, deed of
trust, security agreement, pledge agreement, guaranty, contract, undertaking,
agreement or instrument to which that Person is a party or by which it or any of
its properties is bound, or to which it or any of its properties is subject.
"Credit Agents" means the Collateral Agent, Funding Agent,
Administrative Agent, Intercreditor Agent and Intercreditor Collateral Agent.
"Credit Extensions" means all Loans and Letter of Credit Obligations.
"Credit Parties" means each 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 (4)
(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 Foamex 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
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securing bonds to stay judgments or in connection with 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 Foamex or any of its Subsidiaries.
"Delayed Purchase" means the redemption or purchase of the Senior
Notes, the Senior Secured Notes, the Discount Debentures, the 1993 Subordinated
Debentures and the Subordinated Debentures not acquired on the Effective Date
pursuant to the Tender Offer so long as (a) any such redemption is made in
accordance with the terms of the indenture under which such Indebtedness was
issued or (b) any such purchase or other acquisition of such Indebtedness is (i)
made from a Person that is not an Affiliate of the Borrowers and (ii) for a
consideration payable solely in cash and in an amount not to exceed (x) the
principal amount of such Indebtedness plus (y) an amount equal to the product of
$4,000,000 multiplied by a fraction, the numerator of which is the principal or
accreted amount, as the case may be, of the Indebtedness so purchased or
redeemed and the denominator of which is the aggregate principal and accreted
amount of all the Senior Notes, the Senior Secured Notes, the Discount
Debentures, the 1993 Subordinated Debentures and the Subordinated Debentures not
acquired by Foamex on the Effective Date.
"Delayed Purchase Blockage Amount" means, from and after the Effective
Date (after giving effect to the Refinancing consummated on the Effective Date),
an amount equal to the excess of (a) the sum of (i) the aggregate principal
amount of all Senior Notes, Senior Secured Notes, 1993 Subordinated Debentures
and Subordinated Debentures then outstanding plus (ii) the then accreted value
of the Discount Debentures then outstanding plus (iii) the aggregate redemption
premium in effect with respect to all such Indebtedness plus (iv) an amount
equal to six months' cash interest on all such Indebtedness (other than the
Discount Debentures) plus (v) $4,000,000 (subject to reduction as set forth in
the immediately succeeding sentence) over (b) the Term A Loan Commitments then
in effect. The amount of the Delayed Purchase Blockage Amount will be reduced
upon the date of the consummation of a Delayed Purchase by an amount equal to
the sum of (w) the principal (or accreted) amount of the Indebtedness so
acquired plus (x) any redemption premium payable in respect thereto under the
terms of the relevant indenture plus (y) an amount equal to six months' interest
on such Indebtedness so acquired plus (z) in the case of the amount set forth in
clause (v) above, an amount equal to the product of $4,000,000 multiplied by a
fraction, the numerator of which is the principal or accreted amount, as the
case may be, of the Indebtedness so purchased or redeemed and the denominator of
which is the
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aggregate principal and accreted amount of all the Senior Notes, the Senior
Secured Notes, the Discount Debentures, the 1993 Subordinated Debentures and the
Subordinated Debentures not acquired by Foamex on the Effective Date.
"Discount Debenture Indenture" means the Indenture dated as of June 28,
1994 among New Partners, Foamex-JPS Capital Corporation and Foamex
International, as guarantor, and Fleet National Bank (as successor in interest
to Shawmut Bank Connecticut, National Association) as Trustee, as such agreement
may be amended, supplemented or otherwise modified from time to time.
"Discount Debentures" means the Series B Senior Secured Discount
Debentures due 2004 issued by New Partners and Foamex-JPS Capital Corporation,
and governed by the terms of the Discount Debenture Indenture.
"Discount Debenture Supplemental Indenture" means the First
Supplemental Indenture to the Discount Debenture Indenture dated as of May 28,
1997 among New Partners, Foamex-JPS Capital Corporation, Foamex International
and Fleet National Bank.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"Dollars" and "$" mean the lawful money of the United States.
"Domestic Lending Office" means, with respect to any Lender, such
Lender's office, located in the United States, specified as the "Domestic
Lending Office" under its name on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such other United
States office of such Lender as it may from time to time specify by written
notice to the Borrowers and the Funding Agent.
"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
Foamex and its Subsidiaries; 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
Consolidated Net Income minus (ii) interest or investment income.
"Effective Date" means the first date on which all of the conditions
precedent set forth in Section 5.01 hereof shall be satisfied or waived by the
Lenders, but in no event shall such date be later than July 15, 1997.
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"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, reasonably acceptable to the
Administrative Agents and the Borrowers (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 either Borrower, all of such
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 such 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 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 either Borrower; (b) a partnership or other trade
or business (whether or not incorporated) which is under common control (within
the
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meaning of Section 414(c) of the Internal Revenue Code) with either 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 of the Internal Revenue Code, a member of the same affiliated
service group (within the meaning of Section 414(m) of the Internal Revenue
Code) as either Borrower, any corporation described in clause (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) or
against Existing Secured Debt;
plus
(iii) Proceeds of Issuance of Equity Issuances 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;
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) amounts
repaid under the Tax Advance Agreement and (C) repayments of
loans or advances permitted under Section 9.04(v), in each
case, to the extent such amounts were subtracted from the
calculation of Excess
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Cash Flow pursuant to clause (b)(vi) below in respect of such
Fiscal Year or 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 Foamex and its Subsidiaries (other than
Revolving Loan Obligations) and permanent reductions in the
Revolving Loan Commitments;
plus
(iii) all federal, state and foreign income taxes actually
paid in cash by Foamex and its Subsidiaries;
plus
(iv) Capital Expenditures actually made by Foamex and its
Subsidiaries in such Fiscal Year;
plus
(v) all Restricted Junior Payments paid under Sections
9.06(iii), 9.06(iv) (to the extent not already subtracted from the
calculation of EBDAIT) and 9.06(vi);
plus
(vi) all Investments made after the Effective Date permitted
under Sections 9.04(iv), 9.04(v), 9.04(viii), 9.04(ix) and clause
(y) of 9.04(x);
plus
(vii) the net increase in Consolidated Working Capital from
the last day of the immediately preceding Fiscal Year;
plus
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<PAGE>
(viii) ordinary gains from the sale of assets (other than
sales or other transfers described in Section 9.02(i)).
"Existing Credit Agreement" has the meaning ascribed thereto in the
preamble.
"Existing Letters of Credit" means those letters of credit issued by
Citibank, N.A. and Scotiabank for the account of the Borrowers pursuant to the
Existing Credit Agreement having on the Effective Date an aggregate stated
amount of $10,089,605.
"Existing Secured Debt" means, collectively, the Senior Notes, the
Senior Secured Notes and the Discount Debentures.
"Existing Secured Debt Indentures" means, collectively, the Senior Note
Indenture, the Senior Secured Note Indenture and the Discount Debentures
Indenture.
"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.
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"Fiscal Month" means the fiscal month of each Borrower, which shall be
the four- or five-week period (or, in some instances, six-week period at the end
of a Fiscal Year) ending on the Sunday nearest to the last day of a calendar
month during a Fiscal Year.
"Fiscal Year" means the fiscal year of each Borrower, which shall be
the 52- or 53-week period ending on the Sunday nearest to December 31 of each
calendar year.
"Fixed Charge Coverage Ratio" means, with respect to any period, the
ratio of
(a) the result (for such period) of
(i) EBDAIT
minus
(ii) Capital Expenditures of Foamex and its Subsidiaries
minus
(iii) Permitted Aircraft Payments (to the extent not included
in the calculation of EBDAIT).
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 Fibers" means Foamex Fibers, Inc., a Delaware corporation and a
wholly-owned Subsidiary of GFI.
"Foamex Guaranty" means the Guaranty dated as of June 12, 1997 executed
by Foamex in favor of the Administrative Agents, the Lenders and the Issuing
Banks pursuant to which Foamex guarantees all of the Obligations of GFI, as the
same may be amended, supplemented or modified from time to time.
"Foamex Pledge Agreement" means the Foamex Pledge Agreement dated as of
June 12, 1997 between Foamex and the Collateral Agent
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pursuant to which Foamex 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.
"Foamex International" means Foamex International Inc., a Delaware
corporation.
"Foamex International Guaranty" means the Guaranty dated as of June 12,
1997 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 Borrowers, 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 Foamex and Foamex International with respect to
the purchase and resale by Foamex International to Foamex of certain raw
materials, as the same may be amended, supplemented or modified from time to
time.
"Foamex Mexico Group" means, collectively (a) Grupo Foamex de Mexico,
S.A. de C.V., a Mexican corporation, (b) TEFSA, (c) Foamex de Mexico, S.A. de
C.V., a Mexican corporation, and (d) Colchones y de Todo en Espuma, S.A. de
C.V., a Mexican corporation.
"Foreign Employee Benefit Plan" means any employee benefit plan as
defined in Section 3(3) of ERISA which is maintained or contributed to for the
benefit of the employees of either Borrower or any of its Subsidiaries or any of
its ERISA Affiliates and is not covered by ERISA pursuant to ERISA Section
4(b)(4).
"Foreign Pension Plan" means any employee benefit plan as defined in
Section 3(3) of ERISA which (a) is maintained or contributed to for the benefit
of employees of either Borrower or any of Borrower's 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 Foamex 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 Foamex and its Subsidiaries on a consolidated basis prepared
in accordance with GAAP, the principal (or accreted) amount of all Indebtedness
of Foamex and
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its Subsidiaries in respect of borrowed money, evidenced by debt securities,
debentures, acceptances, notes or other similar instruments, in respect of
Capital Lease Obligations, in respect of Reimbursement Obligations or in respect
of the deferred purchase price of property or services, except accounts payable
and accrued expenses arising in the ordinary course of business.
"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 and with respect to any Term Loan, the date of
funding of such Term Loan.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accounting Standards Board or in such other
statements by such other entity as may be in general use by significant segments
of the accounting profession as in effect on the date hereof (unless otherwise
specified herein as in effect on another date or dates).
"General and Limited Partners' Agreement" means the Amended and
Restated General and Limited Partners' Agreement dated as of October 13, 1992
among Trace Foam, Recticel Foam Corporation, FCD Sub, Inc., TIHI and the
Collateral Agent, as such agreement may be amended, supplemented or modified
from time to time.
"General Partners" means, collectively, Trace Foam, as general partner,
and the Managing General Partner.
"GFI" has the meaning ascribed thereto in the preamble.
"GFI Guaranty" means the Guaranty dated as of June 12, 1997 executed by
GFI in favor of the Administrative Agents, the Lenders and the Issuing Banks
pursuant to which GFI guarantees all of the Obligations of Foamex, as the same
may be amended, supplemented or modified from time to time.
"GFI L/C Sublimit" means $10,000,000.
"GFI Pledge Agreement" means the GFI Pledge Agreement dated as of June
12, 1997 between GFI and the Collateral Agent pursuant to which GFI grants a
security interest in all of the Equity Interests of Foamex Fibers and each other
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.
"GFI Sublimit" means $50,000,000.
"Governmental Authority" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial,
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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 Foamex 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.
"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 Interest Rate Contracts and foreign
exchange contracts, net of liabilities owed to such Person by the counterparties
thereon; and (d) all preferred Equity Interests in such Person subject to
mandatory redemption upon the occurrence of any contingency (but only to the
extent such contingency has occurred).
"Intercompany Promissory Note" means an unsecured note in form and
substance satisfactory to the Administrative Agents,
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made by either Borrower or any Subsidiary Guarantor in favor of the other
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 Scotiabank acting in such capacity (and any
successor(s) thereto in such capacity) under any Intercreditor Agreement.
"Intercreditor Agreements" means, collectively, the Senior Note
Intercreditor Agreement and the Senior Secured Note Intercreditor Agreement.
"Intercreditor Collateral Agent" means Citicorp acting in such capacity
(and any successor(s) thereto in such capacity) under any Intercreditor
Agreement.
"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.
"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 a Borrower or a Subsidiary Guarantor which are not
paid within 90 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
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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,
$30,000,000 and (b) in the case of Citibank, $15,000,000.
"Issuing Banks" means Citibank, Scotiabank and each other Lender
approved by the Administrative Agents and the Borrowers who has agreed to become
an Issuing Bank for the purpose of issuing Letters of Credit pursuant to Section
2.03.
"L/C Sublimit" means $30,000,000.
"Lender" means Citicorp, Scotiabank and the other financial
institutions on the signature pages hereof together with their respective
successors and assigns (including, without limitation, any Replacement Lender)
and the Swing Bank.
"Letter of Credit" means any Commercial Letter of Credit or Standby
Letter of Credit.
"Letter of Credit Fee" has the meaning ascribed to such term in Section
4.03(b).
"Letter of Credit Obligations" means, at any particular time, the sum
of (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
Borrowers at such time but not yet issued (unless the request for an unissued
Letter of Credit has been denied pursuant to Section 2.03(c)(i)).
"Letter of Credit Reimbursement Agreement" means, with respect to a
Letter of Credit, such form of application therefor and form of reimbursement
agreement therefor (whether in a single or several documents, taken together) as
the Issuing Bank from which such letter of credit is requested may employ in the
ordinary course of business for its own account, with such modifications thereto
as may be agreed upon by the Issuing Bank and the Borrower for whose account
such letter of credit was issued and as are not materially adverse (in the
judgment of the Issuing Bank) to the interests of the Lenders; provided,
however, in the event of any conflict between the terms of any Letter of Credit
Reimbursement Agreement and this Agreement, the terms of this Agreement shall
control.
"Liabilities and Costs" means all liabilities, obligations,
responsibilities, losses, damages, personal injury, death costs, punitive
damages, economic damages, consequential damages, treble
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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 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.
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"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 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 New Partners, in its capacity as a limited
partner of Foamex.
"Loan Account" has the meaning ascribed to such term in Section
3.05(b).
"Loan Documents" means this Agreement, the Notes, the Security
Agreement, the GFI Security Agreement, the GFI Guaranty, the Subsidiary Security
Agreements, the Foamex Guaranty, the Subsidiary Guarantees, the Foamex
International Guaranty, the General and Limited Partners' Agreement, the TIHI
Subordination Agreement, the GW Subordination Agreement, the Partnership
Guaranty, the Partnership Pledge Agreement, the Foamex Pledge Agreement, the GFI
Pledge Agreement, each Subsidiary Pledge Agreement, 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 either Borrower or any Subsidiary of either
Borrower and any of the Administrative Agents, any Lender or any Issuing Bank
delivered
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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 Borrowers, the General
Partners, FCC, Foamex International and any Subsidiary Guarantor and (b) any
other Subsidiary (or group of Subsidiaries) which is (or constitutes) a
Significant Subsidiary.
"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 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.
"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 and Regulation G.
"Material Adverse Effect" means a material adverse effect upon (a) the
condition (financial or otherwise), business performance, properties,
operations, assets or prospects of either Borrower, or of the Borrowers and
their 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.
"Maximum Revolving Loan Commitment Amount" means, as of any date of
determination, an amount equal to:
(a) the Revolving Loan Commitments in effect at such time
minus
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(b) the sum of
(i) the Delayed Purchase Blockage Amount in effect at such
time and
(ii) any reserves in effect on such date against the
Revolving Loan Commitments established pursuant to Section
3.01(b)(i).
"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 either Borrower or any ERISA Affiliate and which is
subject to Title IV of ERISA.
"Net Cash Proceeds of Sale" means (a) proceeds received by Foamex 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 Foamex 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 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 to Foamex International and TIHI 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 Foamex 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,
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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 Foamex 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 Section 9.04(x)) 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 Foamex and its Subsidiaries (other
than trade receivables due from Affiliates incurred in the ordinary course of
business less than sixty (60) days past due).
"New Foamex Subordinated Note Indenture" means the Indenture dated as
of June 12, 1997 among Foamex, 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 Note Offering Memorandum" means the Offering
Memorandum, dated May 29, 1997, relating to the New Foamex Subordinated Notes.
"New Foamex Subordinated Notes" means the Senior Subordinated Notes
issued by FCC and Foamex in the aggregate principal amount of up to $150,000,000
and governed by the terms of the New Foamex Subordinated Note Indenture.
"New Partners" means Foamex-JPS Automotive L.P., a Delaware limited
partnership.
"New TIHI Loan" means the loan, not in excess of a principal amount of
$5,000,000 outstanding at any time, made by Foamex to TIHI and evidenced by that
certain promissory note dated June 12, 1997.
"1993 Subordinated Debenture" means the Senior Subordinated Debentures
(Series B) issued by FCC and Foamex in the aggregate principal amount of up to
$7,000,000 and governed by the terms of the 1993 Subordinated Debenture
Indenture.
"1993 Subordinated Debenture Indenture" means the Indenture dated as of
March 23, 1993 among Foamex, FCC, GFI as Guarantor and U.S. Trust Company of
Texas, N.A., as Trustee, as such agreement may be amended, amended and restated,
supplemented or modified from time to time.
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"1993 Supplemental Indenture" means the Third Supplemental Indenture to
the 1993 Subordinated Debenture Indenture dated as of May 28, 1997 among GFI,
FCC, Foamex and Fleet National Bank, as Trustee.
"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 Loan 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 E
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 either Borrower
to either Administrative Agent, any Lender, any Issuing Bank, any Affiliate of
either Administrative Agent, any Lender or any Issuing Bank, or any Person
entitled to indemnification pursuant to Section 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 chargeable
to either Borrower under this Agreement or any other Loan Document.
"Obligor" means each Borrower and any other Person (other than the
Credit Agents, the Issuing Banks or any Lender) obligated under any Loan
Document.
"Offer to Purchase" means the Offer to Purchase of Foamex dated May 12,
1997, as amended, pursuant to which Foamex (i) has made a tender offer for the
Senior Secured Notes, the Senior Notes, the Discount Debentures, the
Subordinated Debentures and the 1993 Subordinated Debentures and (ii) solicited
consents to amendments to the related indentures (as set forth therein).
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"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 and (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).
"Old TIHI Loan" means the loan, not in excess of a principal amount of
$4,372,516 plus accrued interest, made by Foamex to TIHI and evidenced by that
certain promissory note dated July 7, 1996, 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 Foamex or any of
its Subsidiaries other than the Obligations.
"Partnership Agreement" means the Fourth Amended and Restated Agreement
of Limited Partnership of Foamex L.P. dated as of December 14, 1993 among Trace
Foam, Foamex International and FMXI, as amended by the First Amendment thereto
dated as of June 28, 1994, 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 June 12, 1997,
issued jointly and severally by Trace Foam and FMXI and Foamex International in
favor of the Collateral Agent as such agreement may be amended, supplemental or
modified from time to time.
"Partnership Pledge Agreement" means the Partnership Pledge Agreement
dated as of June 12, 1997, among Trace Foam, Foamex International, FMXI and the
Collateral Agent pursuant to which the partners of Foamex grant a security
interest in all the Equity Interests of Foamex 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.
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"Pending Proceeds" is defined in Section 3.01(b)(i).
"Permits" means any permit, approval, authorization license, variance,
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Aircraft Payments" means payments to Foamex International
not to exceed $2 million per Fiscal Year in respectof debt service and other
expenses actually incurred by Foamex International or its Subsidiaries relating
to their aircraft.
"Permitted Business" means (a) the manufacture and distribution of
polyurethane and advance polymer foam and activities related thereto and (b)
other businesses engaged in by the Borrowers and their Subsidiaries on the
Effective Date and similar lines of business engaged in by the Borrowers on the
Effective Date, including, but not limited to, the manufacture and distribution
of plastics and related products.
"Permitted Existing Accommodation Obligations" means those
Accommodation Obligations of Foamex or any of its Subsidiaries identified as
such on Schedule 1.01.3.
"Permitted Existing Indebtedness" means the Indebtedness of Foamex and
its Subsidiaries (other than Permitted Subordinated Indebtedness) identified as
such on Schedule 1.01.4.
"Permitted Existing Investments" means those Investments of either
Borrower identified as such on Schedule 1.01.5.
"Permitted Existing Liens" means the Liens on assets of either Borrower
identified as such on Schedule 1.01.6.
"Permitted Subordinated Indebtedness" means Indebtedness evidenced by,
or in respect of, principal and interest on (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 Subordinated Debentures
in a principal amount not exceeding $31,457,000 (including the Accommodation
Obligations of Subsidiary Guarantors party to the related indenture as in effect
on the Effective Date), (c) the 1993 Subordinated Debentures in a principal
amount not exceeding $1,750,000 (including the Accommodation obligations of
Subsidiary Guarantors party to the related indenture as in effect on the
Effective Date), (d) the GW Subordinated Note in a principal amount not
exceeding $7,014,864, (e) any Rallis Claim (as defined in the GW Subordination
Agreement) and (f) any Subordinated Claim (as defined in the TIHI Subordination
Agreement).
"Person" means any natural person, corporation, limited partnership,
general partnership, joint stock company, joint venture, association, company,
trust, bank, trust company, land trust, business trust, limited liability
company or other
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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, Foamex 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, Foamex or any
Subsidiary (which proceeds do not constitute Net Cash Proceeds of Sale) or (b)
Indebtedness (other than Indebtedness permitted under Section 9.01 as in effect
on the Effective Date) of Foamex International (other than Indebtedness
permitted under Sections 4.1.4(A) through (E) and (G) and (H) of the Foamex
International Guaranty), Foamex and/or any of its Subsidiaries, in each case net
of all transaction costs and underwriters' discounts with respect thereto.
"Process Agent" has the meaning ascribed to such term in Section
13.17(a).
"Property" means any and all real property or personal property,
whether tangible or intangible, plant, building, facility, structure,
underground storage tank or unit, Equipment, inventory, general intangibles,
receivables, Equity Interests, Securities, account, deposit, claim, right or
other asset owned, leased or operated by Foamex or any of its Subsidiaries, as
applicable, (including any surface water thereon or adjacent thereto, and soil
and groundwater thereunder).
"Pro Rata Share" means, with respect to any Lender (including, without
limitation, the Swing Bank), (a) with respect to Revolving Loans and Letters of
Credit, the percentage obtained by dividing (i) such Lender's Revolving Loan
Commitment by (ii) the aggregate amount of all Revolving Loan Commitments (in
each case, as reduced from time to time in accordance with the provisions of
this Agreement), (b) with respect to Term A Loans, the percentage obtained by
dividing (i) such Lender's Term A Loan Commitment (or after the Effective Date,
Term A Loans and remaining Term A Loan Commitments) by (ii) the aggregate amount
of all Term A Loan Commitments (or after the Effective Date, Term A Loans and
remaining Term A Loan Commitments) (in each case, as reduced from time to time
in accordance with the provisions of this Agreement), (c) with respect to Term B
Loans, the percentage obtained by dividing (i) such Lender's Term B Loan
Commitment (or
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after the Effective Date, Term B Loans) by (ii) the aggregate amount of all Term
B Loan Commitments, (or after the Effective Date, Term B Loans) and (d) with
respect to Term C Loans, the percentage obtained by dividing (i) such Lender's
Term C Loan Commitment (or after the Effective Date, Term C Loans) by (ii)the
aggregate amount of all Term C Loan Commitments (or after the Effective Date,
Term C 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 Borrowers, Citicorp and Scotiabank.
"Refinancing" has the meaning ascribed to such term in the first
recital.
"Refinancing Transaction Documents" means the Supplemental Indentures,
the Intercreditor Agreements, the Purchase Agreement dated as of May 29, 1997
among the Borrowers, FCC, Foamex Fibers and the other parties thereto, the
Registration Rights Agreement dated as of June 12, 1997 among the Borrower, FCC,
Foamex Fibers and the other parties thereto and all other documents evidencing
the Refinancing.
"Register" has the meaning ascribed to such term in Section 13.01(c).
"Regulation G" means Regulation G of the Federal Reserve Board as in
effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board as in
effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board as in
effect from time to time.
"Reimbursement Date" has the meaning ascribed to such term in Section
2.03(d)(i)(A).
"Reimbursement Obligations" means, as to either Borrower, the aggregate
non-contingent reimbursement or repayment obligations of such Borrower with
respect to amounts drawn under Letters of Credit.
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"Related Obligations" has the meaning ascribed to such term in Section
12.09(e).
"Release" means release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment or into or out of any Property, including the movement of
Contaminants through or in the air, soil, surface water, groundwater or
Property.
"Remedial Action" means actions required to (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.
"Required Minimum Tender Amounts" means (a) 90% of the aggregate
principal amount of the Senior Notes, (b) 90% of the aggregate principal amount
of the Senior Secured Notes, (c) 75% of the aggregate accreted principal amount
of the Discount Debentures, (d) 75% of the aggregate principal amount of the
Subordinated Debentures and (e) 75% of the aggregate principal amount of the
1993 Subordinated Debentures, in each case, outstanding as of May 12, 1997.
"Requirements of Law" means, as to any Person, the Constituent Document
or other organizational or governing documents of such Person, and any law, rule
or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, the Securities Act, the Securities Exchange Act,
Regulations G, U and X, ERISA, 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; that, in
the event any of the Lenders shall have failed to fund its Pro Rata Share of any
Revolving Loan or Term Loan requested by either Borrower which such Lenders are
obligated to fund under the terms of this Agreement without delivering to the
Funding Agent written notice of the failure of
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such Borrower to satisfy the conditions set forth in Section 5.02 and (i) any
such failure to fund has not been cured or (ii) suchconditions 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 Revolving Loan Commitments have been terminated pursuant to the terms of
this Agreement, "Requisite Lenders" means Lenders (without regard to such
Lenders, performance of their respective obligations hereunder) whose aggregate
ratable shares (stated as a percentage) of the aggregate outstanding principal
balance of all Loans and Letter of Credit Obligations are greater than or equal
to fifty-one percent (51%).
"Restricted Junior Payment" means (a) any dividend or distribution,
direct or indirect, on account of any Equity Interests in Foamex or any of its
Subsidiaries now or hereafter outstanding, except in the case of such
Subsidiaries, a dividend payable solely in shares of that class of stock or in
any junior class of stock to the holders of that class, provided that the
issuance of such stock or junior class of stock is not an incurrence of
Indebtedness, (b) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Equity
Interests in Foamex or any of its Subsidiaries now or hereafter outstanding, (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
Foamex or any of its Subsidiaries now or hereafter outstanding and (e) any
payment made by Foamex to the General Partners 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" 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
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principal amount set forth opposite such Lender's name under the heading
"Revolving Loan Commitment" on the signature pages hereof or the signature page
of the Assignment and Acceptance by which it became (or becomes) a Lender, as
modified from time to time pursuant to the terms of this Agreement or to give
effect to any applicable Assignment and Acceptance, and "Revolving Loan
Commitments" means the aggregate principal amount of the Revolving Loan
Commitments of all the Lenders, the maximum amount of which shall not exceed a
principal amount of $150,000,000, as reduced from time to time pursuant to
Section 3.01.
"Revolving Loan Commitment Availability" means, at any time of
determination, the excess of
(a) the Revolving Loan Commitments then in effect
over
(b) the sum of
(i) the amount of Revolving Credit Obligations then
outstanding;
plus
(ii) the Delayed Purchase Blockage Amount then in effect;
plus
(iii) any reserves in effect at such time against the
Revolving Loan Commitments established pursuant to Section
3.01(b)(i).
"Revolving Loan Commitment Termination Date" means the earliest to
occur of
(a) July 15, 1997 (if the Effective Date has not occurred on
or prior to such date);
(b) June 12, 2003; and
(c) 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.
"Scotiabank" means The Bank of Nova Scotia, a Canadian chartered bank.
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"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 Foamex and the Collateral Agent, as such agreement may be amended,
supplemented or modified from time to time.
"Senior Note Indenture" means the Indenture dated as of October 13,
1992 among FCC, Foamex and Fleet National Bank (as successor to Shawmut Bank
Connecticut, National Association (formerly The Connecticut National Bank)), as
Trustee, as such agreement may be amended, supplemented or modified from time to
time.
"Senior Note Intercreditor Agreement" means the Intercreditor
Agreement, dated as of June 12, 1997, between Fleet National Bank, as trustee
for and on behalf of the Senior Secured Note holders, and the Administrative
Agents and agreed to and acknowledged by Foamex and FCC, as such agreement may
be amended, supplemented or modified from time to time.
"Senior Notes" means the 11 1/4% Senior Notes issued by FCC and Foamex
in the aggregate principal amount of $150,000,000 and governed by the terms of
the Senior Note Indenture.
"Senior Secured Note Collateral Documents" means the security
agreements, pledge agreements, collateral assignments and other agreements
evidencing the Liens granted in favor of the Trustee pursuant to the Senior
Secured Note Indenture to secure the obligations of Foamex, FCC and GFI (and any
other "Guarantor" (as defined in the Senior Secured Note Indenture) to the
extent permitted hereby) under the Senior Secured Note Indenture, as such
agreements and assignments may be amended, supplemented or modified from time to
time.
"Senior Secured Note Indenture" means the Indenture dated as of June 3,
1993 among FCC, Foamex, GFI and Fleet National Bank (as successor to Shawmut
Bank, National Association), as Trustee, as such agreement may be amended,
supplemented or modified from time to time.
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"Senior Secured Note Intercreditor Agreement" means the Intercreditor
Agreement, dated as of June 12, 1997, between Fleet National Bank, as trustee
for and on behalf of the Senior Secured Note holders, and the Administrative
Agents and agreed to and acknowledged by Foamex, GFI and FCC, as such agreement
may be amended, supplemented or modified from time to time.
"Senior Secured Notes" means the 9 1/2% Senior Secured Notes issued by
FCC and Foamex in the aggregate principal amount of $160,000,000 and governed by
the terms of the Senior Secured Note Indenture.
"Settlement Date" has the meaning ascribed to such term in Section
2.02(b).
"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.
"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 either Borrower which
is not a Commercial Letter of Credit.
"Subordinated Debenture Indenture" means the Indenture dated as of
October 13, 1992 among FCC, Foamex and Fleet National Bank (as successor to
Shawmut Bank, N.A.), as Trustee, as such agreement may be amended, supplemented
or modified from time to time.
"Subordinated Debentures" means the 11_% Senior Subordinated Debentures
issued by FCC and Foamex in the aggregate principal amount of up to $126,000,000
and governed by the terms of the Subordinated Debenture Indenture.
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"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) GFI, (iii) Foamex
Fibers, (iv) Foamex Latin America, Inc., a Delaware corporation, (v) Foamex
Mexico, Inc., a Delaware corporation, (vi) Foamex Mexico II, Inc., a Delaware
corporation, (vii) Foamex Asia, Inc. and (viii) each Person which becomes a
wholly-owned domestic Subsidiary of Foamex 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 Borrowers 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.
"Subsidiary Pledge Agreement" means each Pledge Agreement executed by a
Subsidiary of a 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 (other than GFI) 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.
"Supplemental Indentures" means the Supplemental Indenture (Senior),
Supplemental Indenture (Senior Secured), Supplemental Indenture (Subordinated),
the 1993 Supplemental Indenture and the Discount Debenture Supplemental
Indenture.
"Supplemental Indenture (Senior)" means the Sixth Supplemental
Indenture to the Senior Note Indenture dated as of May 28, 1997 among GFI, FCC,
Foamex, Foamex International and Fleet National Bank (as successor to Shawmut
Bank Connecticut, National Association (formerly The Connecticut National
Bank)), as Trustee.
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"Supplemental Indenture (Senior Secured)" means the Fourth Supplemental
Indenture to the Senior Secured Note Indenture dated as of May 28, 1997 among
FCC, Foamex, GFI, Foamex International and Fleet National Bank (as successor to
Shawmut Bank, National Association), as Trustee.
"Supplemental Indenture (Subordinated)" means the Fifth Supplemental
Indenture to the Subordinated Debenture Indenture dated as of May 28, 1997 among
GFI, FCC, Foamex, Foamex International and Fleet National Bank (as successor to
Shawmut Bank, N.A.), as Trustee.
"Supply Agreement" means the Supply Agreement in respect of the supply
of prime carpet cushion to GFI dated as of March 23, 1993 between Foamex and
GFI, as the same may be amended, supplemented or 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" is defined in Section 2.02(a).
"Swing Loan Notes" is defined 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, Foamex and New Partners.
"Tax Sharing Agreement" means the First Amended and Restated Tax
Sharing Agreement dated as of December 14, 1993 among Foamex, Trace Foam, Foamex
International and FMXI, as amended on June 12, 1997.
"Taxes" is defined in Section 3.03(a).
"TEFSA" means Transformacion de Espumas y Fieltros, S.A. de C.V., a
Mexican variable capital limited liability stock corporation.
"Term A Loan Commitment" means, with respect to any Lender, the
obligation of such Lender to make Term A Loans 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 "Term A Loans
Commitment" on the signature page hereof or the signature page of the Assignment
and Acceptance by which it became (or becomes) a Lender, as modified from time
to time pursuant to the terms of this Agreement or to give effect to any
applicable Assignment and Acceptance, and "Term A Loan Commitments" means the
aggregate principal amount of the Term A Loan Commitments of all the Lenders,
the maximum amount of which shall not exceed the Term A Loan Commitment Amount.
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"Term A Loan Commitment Amount" means $120,000,000 as reduced from time
to time pursuant to Section 3.01.
"Term A Loan Commitment Termination Date" means the earliest of
(a) July 15, 1997 (if no Term A Loan has been made on or prior to
such date);
(b) June 15, 1998 (if Term A Loans were made on or prior to July
15, 1997); and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (c), the Term A Loan
Commitments shall terminate automatically and without any further action.
"Term A Loans" is defined in Section 2.04(a).
"Term A Note" means a promissory note of Foamex 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 Foamex to such Lender resulting from outstanding Term A Loans,
and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"Term B Loan Commitments" means, with respect to any Lender, the
obligation of such Lender to make Term B Loans 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 "Term B Loan Commitment"
on the signature page hereof or the signature page of the Assignment and
Acceptance by which it became (or becomes) a Lender, as modified from time to
time pursuant to the terms of this Agreement or to give effect to any applicable
Assignment and Acceptance, and "Term B Loan Commitments" means the aggregate
principal amount of the Term B Loan Commitments of all the Lenders, the maximum
amount of which shall not exceed the Term B Loan Commitment Amount.
"Term B Loan Commitment Amount" means on any date, $110,000,000.
"Term B Loan Commitment Termination Date" means the earliest of
(a) July 15, 1997 (if no Term B Loan has been made on or prior to
such date);
(b) the Effective Date (immediately after the making of the Term B
Loans on such date); and
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(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (b) or (c), the Term B Loan
Commitments shall terminate automatically and without any further action.
"Term B Loans" is defined in Section 2.04(b).
"Term B Note" means a promissory note of Foamex 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 Foamex to such Lender resulting from outstanding Term B Loans,
and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"Term C Loan Commitment" means, with respect to any Lender, the
obligation of such Lender to make a Term C Loan 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 "Term C Loans
Commitment" on the signature page hereof or the signature page of the Assignment
and Acceptance by which it became (or becomes) a Lender, as modified from time
to time pursuant to the terms of this Agreement or to give effect to any
applicable Assignment and Acceptance, and "Term C Loan Commitments" means the
aggregate principal; amount of the Term C Loan Commitments of all the Lenders,
the maximum amount of which shall not exceed the Term C Loan Commitment Amount.
"Term C Loan Commitment Amount" means on any date, $100,000,000.
"Term C Loan Commitment Termination Date" means the earliest of
(a) July 15, 1997 (if no Term C Loan has been made on or prior to
such date);
(b) the Effective Date (immediately after the making of the Term C
Loans on such date); and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (b) or (c), the Term C Loan
Commitments shall terminate automatically and without any further action.
"Term C Loans" is defined in Section 2.04(b).
"Term C Note" means a promissory note of Foamex 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
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time), evidencing the aggregate Indebtedness of Foamex 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.
"Termination Event" means (a) a Reportable Event with respect to any
Benefit Plan; (b) the withdrawal of either Borrower or any ERISA Affiliate from
a Benefit Plan during a plan year in which either Borrower or such ERISA
Affiliate was a "substantial employer" as defined in Section 4001(a)(2) of ERISA
or the cessation of operations which results in the termination of employment of
20% of Benefit Plan participants who are employees of either Borrower or any
ERISA Affiliate; (c) the imposition of an obligation on either Borrower or any
ERISA Affiliate under Section 4041 of ERISA to provide affected parties written
notice of intent to terminate a Benefit Plan in a distress termination described
in Section 4041(c) of ERISA; (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 either Borrower or any ERISA
Affiliate from a Multiemployer Plan or a Foreign Pension Plan.
"Term Loans" means, collectively, the Term A Loans, the Term B Loans
and the Term C Loans.
"Term Notes" means, collectively, the Term A Notes, the Term B Notes
and the Term C Notes.
"Term Notice of Borrowing" means a Term Notice of Borrowing
substantially in the form attached hereto as Exhibit B.
"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 Foamex and its
Subsidiaries (on a consolidated basis) outstanding on such date
minus
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(b) the aggregate amount of cash and Cash Equivalents of Foamex
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.
"Trace Foam Sub" means Trace Foam Sub, Inc., a Delaware corporation and
wholly-owned Subsidiary of Trace Foam.
"Transaction Costs" means the fees, costs and expenses payable by
either Borrower in connection with the execution, delivery and performance of
the Loan Documents and the Refinancing Documents.
"Transaction Documents" means the Loan Documents, the Partnership
Agreement, the Foamex International Supply Agreement, the Supply Agreement, the
Refinancing Documents, the Management Agreement, the Tax Sharing Agreement, the
Senior Notes, the Senior Note Indenture, the Subordinated Debentures, the
Subordinated Debenture Indenture, the 1993 Subordinated Debentures, the Discount
Debentures, the Discount Debenture Indenture, the 1993 Subordinated Debenture
Indenture, the Senior Secured Notes, the Senior Secured Note Indenture, the
Senior Secured Note Collateral Documents, the New Foamex Subordinated Notes, the
New Foamex Subordinated Note Indenture, the Intercompany Promissory Notes, the
Supplemental Indentures, the Old TIHI Loan, the New TIHI Loan, the Tax Advance
Agreement and all other agreements entered into prior to or on the Effective
Date pursuant to such agreements.
"Triggering Event" means (a) any Event of Default occurring under
Section 11.01(f) or 11.01(g) or (b) any other Event of 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 Borrowers 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.
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"Unused Commitment Fee" has the meaning ascribed to such term in
Section 4.03(c).
1.2. 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.
1.3. 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.
1.4. 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.
1.5. Other Terms. All other terms contained in this Agreement shall,
unless the context indicates otherwise, have the meanings assigned to such terms
by the UCC to the extent the same are defined therein.
ARTICLE II.
AMOUNTS AND TERMS OF LOANS
2.1. Revolving Credit Facility.
(a) Availability. Subject to the terms and conditions set forth in
this Agreement, each Lender hereby severally and not jointly agrees to
make revolving loans (each individually, a "Revolving Loan" and,
collectively, the "Revolving Loans") to each Borrower from time to time
during the period from the Effective Date to the Business Day next
preceding the 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; provided, however, that at no
time shall the aggregate principal amount of Revolving Credit
Obligations outstanding at any time to GFI exceed the GFI Sublimit in
effect at such
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time. All Revolving Loans comprising the same Borrowing under this
Agreement shall be made by the Lenders simultaneously and
proportionately to their then respective Pro Rata Shares, it being
understood that no Lender shall be responsible for any failure by any
other Lender to perform its obligation to make a Revolving Loan
hereunder nor shall the Revolving Loan Commitment of any Lender be
increased or decreased as a result of any such failure. Subject to the
provisions of this Agreement (including, without limitation, Sections
4.02(f) and 5.02), either Borrower may repay any outstanding Revolving
Loan made to it on any day which is a Business Day and any amounts so
repaid may be reborrowed in accordance with the provisions of this
Section 2.01(a).
(b) Notice of Borrowing. When either Borrower desires to borrow
under this Section 2.01, it shall deliver to the Funding Agent a Notice
of Borrowing, signed by it, no later than 11:00 a.m. (New York time)
(i) on the Business Day immediately preceding the proposed Funding
Date, in the case of a Borrowing of Base Rate Loans and (ii) at least
three (3) Business Days in advance of the proposed Funding Date, in the
case of a Borrowing of LIBO Rate Loans; provided, however, no Borrowing
of LIBO Rate Loans shall be made on the Effective Date. Such Notice of
Borrowing shall specify (i) the Borrower requesting the Revolving Loan,
(ii) the proposed Funding Date (which shall be a Business Day), (iii)
the amount of the proposed Borrowing, (iv) whether the proposed
Borrowing will be of Base Rate Loans or LIBO Rate Loans, (v) in the
case of LIBO Rate Loans, the requested LIBO Rate Interest Period, (vi)
whether the proceeds of the proposed Borrowing will be used for the
payment of the Refinancing or Delayed Purchases, and (vii) 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, either Borrower may give the Funding Agent telephonic notice
of any proposed Borrowing by the time required under this Section
2.01(b), if it confirms such notice by delivery of the Notice of
Borrowing to the Funding Agent promptly, but in no event later than
5:00 p.m. (New York time) on the same day. Any Notice of Borrowing (or
telephonic notice in lieu thereof) given pursuant to this Section
2.01(b) shall be irrevocable.
(c) Making of Revolving Loans. (i) Promptly after receipt of a
Notice of Borrowing under Section 2.01(b) (or telephonic notice in lieu
thereof), the Funding Agent shall notify each Lender by telex or
telecopy, or other similar form of transmission, of the proposed
Borrowing. Each
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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 such Borrower at the Funding
Agent's office in New York, New York on such Funding Date (or on the
date received if later than such Funding Date) and shall disburse such
proceeds in accordance with such Borrower's disbursement instructions
set forth in the applicable Notice of Borrowing. The failure of any
Lender to deposit the amount described above with the Funding Agent on
the applicable Funding Date shall not relieve any other Lender of its
obligations hereunder to make its Revolving Loan on such Funding Date.
(ii) Unless the Funding Agent shall have been notified by
any Lender on the Business Day immediately preceding the
applicable Funding Date in respect of any Borrowing of Revolving
Loans that such Lender does not intend to fund its Revolving Loan
requested to be made on such Funding Date, the Funding Agent may
assume that such Lender has funded its Revolving Loan and is
depositing the proceeds thereof with the Funding Agent on the
Funding Date, and the Funding Agent in its sole discretion may,
but shall not be obligated to, disburse a corresponding amount to
the Borrower specified in the applicable Notice of Borrowing on
the Funding Date. If the Revolving Loan proceeds corresponding to
that amount are advanced to such Borrower by the Funding Agent
but are not in fact deposited with the Funding Agent by such
Lender on or prior to the applicable Funding Date, such Lender
agrees to pay, and in addition such Borrower agrees to repay, to
the Funding Agent forthwith on demand such corresponding amount,
together with interest thereon, for each day from the date such
amount is disbursed to or for the benefit of such Borrower until
the date such amount is paid or repaid to the Funding Agent, in
the case of such Borrower or such Lender, at the interest rate
applicable to such Borrowing. If such Lender shall pay to the
Funding Agent the corresponding amount, the amount so paid shall
constitute such Lender's Revolving Loan, and if both such Lender
and such Borrower shall pay and repay such corresponding amount,
the Funding Agent shall promptly pay to such Borrower such
corresponding amount. This Section 2.01(c)(ii) does not relieve
any Lender of its obligation to make its Loan on any Funding
Date; nor does this Section relieve either Borrower of its
obligation to pay or repay any Lender funding its Loan pursuant
to this Section
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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 and Swing Loans
and Letters of Credit may be used for the following purposes: (i) the
general corporate and working capital needs of the Borrowers and the
Subsidiary Guarantors, (ii) in the case of such Loans, to pay in part
the cost of the Refinancing and Transaction Costs in an amount not to
exceed $65,000,000, in each case, to the extent permitted under the
terms of this Agreement, (iii) Permitted Aircraft Payments and (iv) to
repay the New TIHI Loan to the extent permitted to be made under
Section 9.04.
(e) Revolving Loan Commitment Termination Date. The Revolving Loan
Commitments shall terminate, and all outstanding Obligations shall be
paid in full (or, in the case of contingent Letter of Credit
Obligations outstanding, payment in cash shall be made and deposited 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.
2.2. The Swing Loan Facility.
(a) Making of Swing Loans. Upon receipt of telephonic request
therefor from either Borrower (which, if the Swing Bank so requests,
shall be confirmed in writing by delivery to the Funding Agent of a
Notice of Borrowing from such Borrower within one Business Day
thereafter) no later than 11:00 a.m. (New York time) the same day of
the proposed Funding Date, the Swing Bank, in its sole discretion, may
from time to time make loans to such Borrower solely for the Swing
Bank's own account (the "Swing Loans"), up to an aggregate principal
amount at any one time outstanding which shall not exceed the lesser of
(i) $10,000,000 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 such Borrower in New York, New York on such
Funding Date and shall disburse such funds in Dollars and in
immediately available funds to an account of such Borrower, designated
in the Notice of Borrowing. The Swing Bank shall
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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 5.02 hereof have been
satisfied or (B) an Event of Default has occurred.
(b) Repayment of Swing Loans. On at least a weekly or more
frequent basis, on a settlement date to be selected by the Funding
Agent in its sole discretion (the "Settlement Date"), each Borrower
shall promptly borrow Revolving Loans from all the Lenders pursuant to
Section 2.01 or the following sentence (irrespective of the
satisfaction of the conditions in Section 5.02 or the requirement to
deliver a Notice of Borrowing in Section 2.01(b) which conditions and
requirement, for the purposes of the repayment of Swing Loans to the
Swing Bank, the 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 either Borrower fails
to repay any Swing Loan made to such Borrower within one (1) Business
Day after demand therefor by the Swing Bank or the Funding Agent, and
in any event upon request by the Swing Bank, each other Lender shall
irrevocably and unconditionally purchase from the Swing Bank, without
recourse or warranty, an undivided interest and participation in such
Swing Loan in an amount equal to such other Lender's Pro Rata Share
thereof and shall pay such amount to the Swing Bank in New York, New
York in Dollars and in immediately available funds. If such amount is
not paid to the Swing Bank by any Lender, the
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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
either Borrower of its obligation to pay or repay the Lender funding
its Pro Rata Share of such payment pursuant to this Section interest on
the amount of such payment from the date of such Borrower's failure to
repay such Swing Loan until the date on which such payment is repaid in
full.
2.3. Letters of Credit. Subject to the terms and conditions set forth
in this Agreement, each Issuing Bank hereby severally agrees to issue for the
account of either Borrower one or more Letters of Credit, in an outstanding
amount not to exceed at any time the L/C Sublimit or the GFI 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 Letter of Credit Obligations upon which GFI is or would
be obligated at such time would exceed the GFI L/C Sublimit, (III)
the Revolving Credit Obligations at such time would exceed
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the Maximum Revolving Credit Commitment Amount at such time or
(IV) an obligation to repay Revolving Loans or to deposit Cash
Collateral would arise pursuant to Section 3.01(b)(i), or (B) one
or more of the conditions precedent contained in Section 5.02
would not on such date be satisfied, unless such conditions are
thereafter satisfied and written notice of such satisfaction is
given to the Issuing Bank by the Funding Agent (and an Issuing
Bank shall not otherwise be required to determine that, or take
notice whether, the conditions precedent set forth in Section 5.02
have been satisfied);
(iii) which has an expiration date later than the earlier of
(A) the date one (1) year after the date of issuance (without
regard to any automatic renewal provisions thereof) or (B) the
Business Day next preceding the Revolving Loan Commitment
Termination Date; or
(iv) which is in a currency other than Dollars.
(b) Conditions. In addition to being subject to the satisfaction
of the conditions precedent contained in Section 5.02, the obligation
of an Issuing Bank to issue, amend or extend any Letter of Credit is
subject to the satisfaction in full of the following conditions:
(i) if the Issuing Bank so requests, the Borrower requesting
such issuance, amendment or extension shall have executed and
delivered to such Issuing Bank and the Funding Agent a Letter of
Credit Reimbursement Agreement and such other documents and
materials as may be required pursuant to the terms thereof; and
(ii) the terms of the proposed Letter of Credit shall be
satisfactory to the Issuing Bank in its sole discretion.
(c) Issuance of Letters of Credit. (i) Each Borrower shall give an
Issuing Bank and the Funding Agent written notice that it has selected
such Issuing Bank to issue a Letter of Credit not later than 11:00 a.m.
(New York time) on the third (3rd) Business Day preceding the requested
date for issuance thereof under this Agreement, or such shorter notice
as may be acceptable to such Issuing Bank and the Funding Agent. Such
notice shall be irrevocable unless and until such request is denied by
the applicable Issuing Bank and shall specify (A) the Borrower
requesting the Letter of Credit, (B) that the requested Letter of
Credit is either a Commercial Letter of Credit or a Standby Letter of
Credit, (C) the stated amount of the Letter of Credit requested, (D)
the effective date (which shall be a Business Day) of
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issuance of such Letter of Credit, (E) the date on which such Letter of
Credit is to expire (which shall be a Business Day and no later than
the 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), (F) the Person for whose benefit
such Letter of Credit is to be issued, (G) other relevant terms of such
Letter of Credit and (H) the amount of the then outstanding Letter of
Credit Obligations. Such Issuing Bank shall notify the Funding Agent
immediately upon receipt of a written notice from such Borrower
requesting that a Letter of Credit be issued, or that an existing
Letter of Credit be extended or amended and, upon the Funding Agent's
request therefor, send a copy of such notice to the Funding Agent.
(ii) The Issuing Bank shall give the Funding Agent written
notice, or telephonic notice confirmed promptly thereafter in
writing, of the issuance, amendment or extension of a Letter of
Credit (which notice the Funding Agent shall promptly transmit by
telegram, telex, telecopy, telephone or similar transmission to
each Lender).
(d) Reimbursement Obligations; Duties of Issuing Banks. (i)
Notwithstanding any provisions to the contrary in any Letter of Credit
Reimbursement Agreement applicable to a Letter of Credit:
(A) the Borrower party to such Letter of Credit Reimbursement
Agreement shall reimburse the Issuing Bank for amounts drawn under
such Letter of Credit, in Dollars, no later than the date (the
"Reimbursement Date") which is the earlier of (I) the time
specified in the applicable Letter of Credit Reimbursement
Agreement and (II) one (1) Business Day after such Borrower
receives written notice from the Issuing Bank that payment has
been made under such Letter of Credit by the Issuing Bank; and
(B) all Reimbursement Obligations with respect to any Letter
of Credit shall bear interest at the rate applicable to Base Rate
Loans in accordance with Section 4.01(a) from the date of the
relevant drawing under such Letter of Credit until the
Reimbursement Date and thereafter at the rate applicable to Base
Rate Loans in accordance with Section 4.01(d).
(ii) The Issuing Bank shall give the Funding Agent written
notice, or telephonic notice confirmed promptly thereafter in
writing, of all drawings under a Letter of Credit and the payment
(or the failure to pay when due) by either Borrower on account of
a Reimbursement Obligation (which notice the Funding
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Agent shall promptly transmit by telegram, telex, telecopy or
similar transmission to each Lender).
(iii) No action taken or omitted in good faith by an Issuing
Bank under or in connection with any Letter of Credit shall put
such Issuing Bank under any resulting liability to any Lender,
either Borrower or, so long as it is not issued in violation of
Section 2.03(a), relieve any Lender of its obligations hereunder
to such Issuing Bank. Solely as between the Issuing Banks and the
Lenders, in determining whether to pay under any Letter of Credit,
the respective Issuing Bank shall have no obligation to the
Lenders other than to confirm that any documents required to be
delivered under a respective Letter of Credit appear to have been
delivered and that they appear on their face to comply with the
requirements of such Letter of Credit.
(e) Participations. (i) Immediately upon issuance by an Issuing
Bank of any Letter of Credit in accordance with the procedures set
forth in this Section 2.03 and immediately upon conversion of a letter
of credit of an Issuing Bank to a Letter of Credit pursuant to Section
2.03(k), each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from that Issuing Bank, without
recourse or warranty, an undivided interest and participation in such
Letter of Credit to the extent of such Lender's Pro Rata Share,
including, without limitation, all obligations of either Borrower with
respect thereto (other than amounts owing to the Issuing Bank under
Section 2.03(g)) and any security therefor and guaranty pertaining
thereto.
(ii) If any Issuing Bank makes any payment under any Letter
of Credit issued for the account of either Borrower and such
Borrower does not repay such amount to the Issuing Bank on the
Reimbursement Date, the Issuing Bank shall promptly notify the
Funding Agent, which shall promptly notify each Lender, and each
Lender shall promptly and unconditionally pay to the Funding Agent
for the account of such Issuing Bank, in immediately available
funds, the amount of such Lender's Pro Rata Share of such payment
(net of that portion of such payment, if any, made by such Lender
in its capacity as an Issuing Bank), and the Funding Agent shall
promptly pay to the Issuing Bank such amounts received by it, and
any other amounts received by the Funding Agent for the Issuing
Bank's account, pursuant to this Section 2.03(e). All such
payments shall constitute Revolving Loans made to such Borrower
pursuant to Section 2.01 (irrespective of the satisfaction of the
conditions in Section 5.02 or the requirement in Section 2.01(b)
to deliver a Notice of
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Borrowing which conditions and requirement, for the purpose of
refunding any Reimbursement Obligation owing to any Issuing Bank,
the Lenders irrevocably waive). If a Lender does not make its Pro
Rata Share of the amount of such payment available to the Funding
Agent, such Lender agrees to pay to the Funding Agent for the
account of the Issuing Bank, forthwith on demand, such amount
together with interest thereon after the date such payment was
first due at the Federal Funds Rate. The failure of any Lender to
make available to the Funding Agent for the account of an Issuing
Bank its Pro Rata Share of any such payment shall neither relieve
any other Lender of its obligation hereunder to make available to
the Funding Agent for the account of such Issuing Bank such other
Lender's Pro Rata Share of any payment on the date such payment is
to be made nor increase the obligation of any other Lender to make
such payment to the Funding Agent. This Section does not relieve
any Lender of its obligations to purchase Pro Rata Share
participations in Letters of Credit; nor does this Section relieve
such Borrower of its obligation to pay or repay any Issuing Bank
funding its Pro Rata Share of such payment pursuant to this
Section interest on the amount of such payment from such date such
payment is to be made until the date on which payment is repaid in
full.
(iii) Whenever an Issuing Bank receives a payment on account
of a Reimbursement Obligation, including any interest thereon, as
to which the Funding Agent has previously received proceeds of
Revolving Loans from any Lender for the account of such Issuing
Bank pursuant to this Section 2.03(e), such Issuing Bank shall
promptly pay to the Funding Agent an amount equal to such Lenders
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
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described in Section 5.02) which conditions, for the purposes of
the repayment of Letters of Credit to the Issuing Bank, the
Lenders irrevocably waive under all circumstances, including,
without limitation, any of the following circumstances:
(A) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(B) the existence of any claim, setoff, defense or other
right which either Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of a
beneficiary named in a Letter of Credit (or any Person for whom
any such transferee may be acting), the Funding Agent, the Issuing
Bank, any Lender, or any other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any
underlying transactions between the account party and beneficiary
named in any Letter of Credit);
(C) any draft, certificate or any other document presented
under the Letter of Credit having been determined to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(D) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
(E) any failure by that Issuing Bank to make any reports
required pursuant to Section 2.03(h) or the inaccuracy of any such
report; or
(F) the occurrence of any Event of Default or Potential Event
of Default.
(f) Payment of Reimbursement Obligations. (i) Each Borrower party
to a Letter of Credit Reimbursement Agreement applicable to a Letter of
Credit unconditionally agrees to pay to each Issuing Bank, in Dollars,
the amount of all Reimbursement Obligations, interest and other amounts
payable to such Issuing Bank under or in connection with such Letter of
Credit Reimbursement Agreement and the Letter of Credit issued pursuant
thereto when such amounts are due and payable, irrespective of any
claim, setoff, defense or other right which either Borrower may have at
any time against any Issuing Bank or any other Person.
(ii) In the event any payment by either Borrower received
by an Issuing Bank with respect to a Letter of Credit and
distributed by the Funding Agent
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to the Lenders on account of their participations is thereafter
set aside, avoided or recovered from such Issuing Bank in
connection with any receivership, liquidation or bankruptcy
proceeding, each Lender which received such distribution shall,
upon demand by such Issuing Bank, contribute to such Issuing Bank
such Lender's Pro Rata Share of the amount set aside, avoided or
recovered together with interest at the rate required to be paid
by such Issuing Bank upon the amount required to be repaid by it.
(g) Issuing Bank Charges. With respect to each Letter of Credit,
the Borrower for whose account such Letter of Credit was issued shall
pay to each Issuing Bank, solely for its own account, (i) a fee of
one-quarter of one percent (0.25%) of the undrawn face amount of each
Letter of Credit payable 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 such
Borrower's account as may be agreed upon by such Borrower and such
Issuing Bank from time to time.
(h) Issuing Bank Reporting Requirements. Each Issuing Bank shall,
no later than the tenth (10th) Business Day following the last day of
each calendar month, provide to the Funding Agent and each Borrower
separate schedules for Commercial Letters of Credit and Standby Letters
of Credit issued as Letters of Credit, in form and substance reasonably
satisfactory to the Funding Agent, setting forth the aggregate Letter
of Credit Obligations outstanding to it at the end of each month and
any information requested by the Funding Agent or such Borrower
relating to the date of issue, account party, amount, expiration date
and reference number of each Letter of Credit issued by it.
(i) Indemnification; Exoneration. (i) In addition to all other
amounts payable to an Issuing Bank, each Borrower hereby agrees to
defend, indemnify, and save each Administrative Agent, each Issuing
Bank and each Lender harmless from and against any and all claims,
demands, liabilities, penalties, damages, losses (other than loss of
profits), costs, charges and expenses (including reasonable attorneys'
fees but excluding taxes) which such Administrative Agent, such Issuing
Bank or such Lender may incur or be subject to as a consequence, direct
or indirect, of (A) the issuance of any Letter of Credit to such
Borrower other than as a result of the gross negligence or willful
misconduct of the Issuing Bank, as determined by a court 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,
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whether rightful or wrongful, of any present or future de jure or de
facto government or Governmental Authority.
(ii) As between either Borrower on the one hand and the
Administrative Agents, the Lenders and the Issuing Banks on the
other hand, such Borrower assumes all risks of the acts and
omissions of, or misuse of Letters of Credit by, the respective
beneficiaries of the Letters of Credit. In furtherance and not in
limitation of the foregoing, subject to the provisions of the
Letter of Credit Reimbursement Agreements applicable to any Letter
of Credit, the Issuing Banks and the Lenders shall not be
responsible for: (A) the form, validity, legality, sufficiency,
accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of
the Letters of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (B) the validity, legality or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (C) failure of the
beneficiary of a Letter of Credit to comply duly with conditions
required in order to draw upon such Letter of Credit; (D) errors,
omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (E) errors in interpretation of
technical terms; (F) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the beneficiary of a Letter 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.
(k) Existing Letters of Credit. Effective as of the Effective
Date, the Existing Letters of Credit shall be deemed to have been
issued hereunder and shall thereafter for all purposes of this
Agreement and the other Loan Documents shall be deemed to be Letters of
Credit.
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2.4. Term Loan Facilities.
(a) The Term A Loans. (i) On each Business Day occurring on or
prior to the Term A Loan Commitment Termination Date, each Lender that
has a Term A Loan Commitment will severally and not jointly make loans
(relative to such Lender, its "Term A Loans") to Foamex equal to such
Lender's Pro Rata Share of the aggregate amount of the Borrowing of
Term A loans requested by Foamex to be made on such day. Each Borrowing
of Term A Loans made after the Effective Date shall (i) be in a minimum
principal amount of $2,500,000 or, if less, the remaining Term A Loan
Commitment Amount and (ii) be accompanied by a written statement from
Foamex describing in reasonable detail the terms of the Delayed
Purchase being financed by the proceeds of such Borrowing. Promptly
after receipt of a Term Notice of Borrowing under Section 2.04(c) (or
telephonic notice in lieu thereof), the Funding Agent shall notify each
Lender by telex or telecopy, or other similar form of transmission, of
the proposed Borrowing. Each Lender shall deposit an amount equal to
its Pro Rata Share of the amount requested by Foamex specified in such
Term Notice of Borrowing to be made as Term A 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 Foamex 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 Foamex'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 Term A 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 Term A Loans that such
Lender does not intend to fund its Term A Loan requested to be
made on such Funding Date, the Funding Agent may assume that such
Lender has funded its Term A 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 Foamex specified
in the applicable Notice of Borrowing on the Funding Date. If the
Term A Loan proceeds corresponding to that amount are advanced to
Foamex by the Funding Agent but are not in fact deposited with the
Funding Agent by such Lender
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on or prior to the applicable Funding Date, such Lender agrees to
pay, and in addition Foamex 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 Foamex until the date such
amount is paid or repaid to the Funding Agent, in the case of
Foamex 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 Term A Loan, and if both such Lender and Foamex shall pay
and repay such corresponding amount, the Funding Agent shall
promptly pay to Foamex such corresponding amount. This Section
2.04(a)(ii) does not relieve any Lender of its obligation to make
its Loan on any Funding Date; nor does this Section relieve Foamex
of its obligation to pay or repay any Lender funding its Term A
Loan pursuant to this Section interest on such Term A Loan from
such Funding Date until the date on which such Loan is repaid in
full.
(b) The Term B Loans and Term C Loans. In a single Borrowing
(which shall be on a Business Day) occurring on or prior to the
applicable Commitment Termination Date, each Lender that has a Term B
Loan Commitment or Term C Loan Commitment, as applicable,
(i) will make loans (relative to such Lender, its "Term B
Loans"), severally and not jointly, to Foamex equal to such
Lender's Pro Rata Share of the aggregate amount of the Borrowing
of Term B Loans requested by the Foamex to be made on such day;
and
(ii) will make loans (relative to such Lender, its "Term C
Loans"), severally and not jointly, to Foamex equal to such
Lender's Pro Rata Share of the aggregate amount of the Borrowing
of Term C Loans requested by the Foamex to be made on such day.
Each Lender shall deposit an amount equal to its Pro Rata Share of the
amount requested by Foamex to be made as Term B Loans and/or Term C
Loans, as the case may be, 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 the Effective Date. 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
Foamex at the Funding Agent's office in New York, New York on the
Effective Date and shall disburse such proceeds in accordance with
Foamex's disbursement instructions set forth in the applicable Term
Notice of Borrowing. The failure of any Lender to deposit the amount
described above with the Funding Agent on the Effective Date shall not
relieve any other Lender of its obligations hereunder
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to make its Term B Loan and/or Term C Loan, as the case may be, on the
Effective Date.
(c) Notice of Borrowing. When Foamex desires to borrow under this
Section 2.04, it shall deliver to the Funding Agent a Term 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; provided, however, no Borrowing of LIBO
Rate Loans shall be made on the Effective Date. Such Notice of
Borrowing shall specify (i) the type of Term Loan being requested, (ii)
the proposed Funding Date (which shall be a Business Day), (iii) the
amount of the proposed Borrowing, (iv) whether the proposed Borrowing
will be of Base Rate Loans or LIBO Rate Loans, (v) in the case of LIBO
Rate Loans, the requested LIBO Rate Interest Period, (vi) whether the
proceeds of the proposed Borrowing will be used for the payment of the
Refinancing or Delayed Purchases, and (vii) instructions for the
disbursement of the proceeds of the proposed Borrowing. Any Term Notice
of Borrowing given pursuant to this Section 2.04(c) shall be
irrevocable.
(d) Use of Proceeds of Term Loans. The proceeds of the Term Loans
shall be used solely (i) in the case of all Term Loans, to fund the
Refinancing and to pay Transaction Costs, and (ii) in the case of Term
A Loans made after the Effective Date, to fund the Delayed Purchases or
to refund Swing Loans or Revolving Loans used to fund Delayed
Purchases.
2.5. Authorized Officers and Administrative Agents. Each Borrower shall
deliver to each Administrative Agent from time to time an Officer's Certificate
setting forth the names of the officers, employees and agents authorized to
request Loans and Letters of Credit and to request a conversion/continuation of
any Loan and containing a specimen signature of each such officer, employee or
agent. The officers, employees and agents so authorized shall also be authorized
to act for such Borrower in respect of all other matters relating to the Loan
Documents. The Administrative Agents shall be entitled to rely conclusively on
such officer's or employee's authority to request such Loan, Letter of Credit or
such conversion/continuation until the Administrative Agents receive written
notice to the contrary. The Administrative Agents shall have no duty to verify
the authenticity of the signature appearing on any written Notice of Borrowing,
Term 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
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make such request or otherwise to act on behalf of such Borrower. None of the
Administrative Agents, the Lenders or the Issuing Banks shall incur any
liability to either Borrower or any other Person in acting upon any telephonic
notice referred to above which any Administrative Agent believes in good faith
to have been given by a duly authorized officer or other person authorized to
borrow behalf of such Borrower.
ARTICLE III.
PAYMENTS AND PREPAYMENTS
3.1. Prepayments and Repayments; Reductions in Term A Loan Commitments
and Revolving Loan Commitments.
(a) Voluntary Prepayments/Reductions. (i) Each Borrower may, at
any time and from time to time, prepay or repay any Loan, in whole or
in part; 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) Each Borrower, upon at least three (3) Business Days'
prior written notice to the Funding Agent (which the Funding Agent
shall promptly transmit to each Lender), shall have the right, at
any time and from time to time, to terminate in whole or
permanently reduce in part the Revolving Loan Commitments and/or
Term A Loan Commitments, provided that each Borrower shall have
made whatever payment may be required to reduce the Revolving
Credit Obligations to an amount less than or equal to the Maximum
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
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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)); provided, however, that any prepayment of
Term B Loans or Term C Loans (i) on or prior to June 12, 1998
shall be subject to a prepayment fee of 1.25% of the principal
amount of the Loans so prepaid and (ii) after June 12, 1998 and on
or prior to June 12, 1999 shall be subject to a prepayment fee of
1.0% of the principal amount of the Loans so prepaid, and in each
such case, such fees shall be due and payable on the date of such
repayment.
(b) Mandatory Payments. (i) Within one (1) Business Day after any
Credit Party's receipt of any Net Cash Proceeds of Sale, the Borrower
in receipt thereof, or in a position to direct the disposition of such
funds, shall make or cause to be made a mandatory prepayment of the
Obligations; provided, however, that, to the extent any such proceeds
(i) so long as any Senior Notes are outstanding constitute "Net
Proceeds" from an "Asset Sale" (as such terms are defined in the Senior
Note Indenture) or (ii) are proceeds of collateral for Existing Secured
Debt and are required by the terms of the relevant Existing Secured
Debt Indenture to be applied to the repayment of Existing Secured Debt,
then such Borrower shall be entitled to apply such proceeds to the
repayment of the relevant Existing Secured Debt. Notwithstanding the
foregoing, in the event such Borrower receives (i) Net Cash Proceeds of
Sale constituting a portion of "Net Proceeds" of an "Asset Sale" which,
at the time of the receipt thereof are not, pursuant to the relevant
Existing Secured Debt Indenture, required, at such time, to be applied
to the repayment of the relevant Existing Secured Debt but which may,
if certain contingencies are not met, be required to be so applied at a
later date or (ii) such proceeds that would not constitute "Net Cash
Proceeds of Sale" until the failure of a certain contingency described
in clause (b) of the definition thereof (in each case, such proceeds
being the "Pending Proceeds"), then during such interim period, all of
the Pending Proceeds shall be applied to the Revolving Credit
Obligations (or, to the extent no Revolving Credit Obligations (other
than contingent Revolving Credit Obligations) are outstanding, as a
deposit in the Cash Collateral Account), and, until it is determined
whether such Pending Proceeds shall be required to be applied to the
repayment of the relevant Existing Secured Debt in accordance with the
terms of the relevant Existing Secured Debt Indenture or against Term
Loans pursuant to this
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Section an availability reserve shall be established against the
Revolving Loan Commitments in the amount of the Pending Proceeds
applied to the Revolving Loans. In the event any portion of such
Pending Proceeds are required to be applied to the repayment of the
relevant Existing Secured Debt or against Term Loans pursuant to this
Section, then all Pending Proceeds deposited with the Collateral Agent
shall be released to such Borrower for the purpose of making such
repayment and the aforementioned availability reserve shall be abated
to the extent necessary to permit a Borrowing of Revolving Loans (but
in an amount not in excess of such reserve), the proceeds of which
shall be used to make the required repayment of the relevant Existing
Secured Debt or Term Loans, as the case may be. To the extent it is
determined that no repayment of the relevant Existing Secured Debt is
required to be made with the Pending Proceeds, then all such proceeds
on deposit with the Collateral Agent shall be applied to the
Obligations in accordance with the following sentence, the
aforementioned availability reserve shall be abated in its entirety and
that portion of the Pending Proceeds that was applied to the Revolving
Loans shall be deemed to have been applied to the Obligations in
accordance with the following sentence (it being understood that if any
portion of the Pending Proceeds originally applied to the Revolving
Loans are deemed to have been permanently applied to the Term Loans,
the Funding Agent shall make a corresponding increase in the
outstanding balance of the Revolving Loans). Any mandatory prepayment
of the obligations required to be made pursuant to this Section
3.01(b)(i) (other than the initial application of Pending Proceeds to
the Revolving Loans) shall be applied first, to 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, Foamex
shall make a scheduled repayment of the aggregate outstanding
principal amount, if any, of all Term A Loans in an amount equal
to the amount set forth below opposite the applicable Quarterly
Payment Date:
Amount of Required
Period Principal Payment
- ------ -----------------
September 30, 1997 $1,500,000
December 31, 1997 $1,500,000
March 31, 1998 $1,500,000
June 30, 1998 $1,500,000
September 30, 1998 $3,000,000
December 31, 1998 $3,000,000
March 31, 1999 $3,000,000
June 30, 1999 $3,000,000
September 30, 1999 $4,500,000
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December 31, 1999 $4,500,000
March 31, 2000 $4,500,000
June 30, 2000 $4,500,000
September 30, 2000 $6,000,000
December 31, 2000 $6,000,000
March 31, 2001 $6,000,000
June 30, 2001 $6,000,000
September 30, 2001 $6,750,000
December 31, 2001 $6,750,000
March 31, 2002 $6,750,000
June 30, 2002 $6,750,000
September 30, 2002 $8,250,000
December 31, 2002 $8,250,000
March 31, 2003 $8,250,000
June 30, 2003 $8,250,000;
provided, that any reduction in the Term A Loan Commitment made after the
Effective Date shall cause a reduction in the above amounts, such reduction to
be applied in inverse chronological order.
(iii) On each Quarterly Payment Date set forth below, Foamex
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
- ------ -----------------
September 30, 1997 $275,000
December 31, 1997 $275,000
March 31, 1998 $275,000
June 30, 1998 $275,000
September 30, 1998 $275,000
December 31, 1998 $275,000
March 31, 1999 $275,000
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 $11,000,000
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December 31, 2003 $11,000,000
March 31, 2004 $11,000,000
June 30, 2004 $11,000,000
September 30, 2004 $14,850,000
December 31, 2004 $14,850,000
March 31, 2005 $14,850,000
June 30, 2005 $14,850,000
(iv) On each Quarterly Payment Date set forth below, Foamex
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
- ------ -----------------
September 30, 1997 $250,000
December 31, 1997 $250,000
March 31, 1998 $250,000
June 30, 1998 $250,000
September 30, 1998 $250,000
December 31, 1998 $250,000
March 31, 1999 $250,000
June 30, 1999 $250,000
September 30, 1999 $250,000
December 31, 1999 $250,000
March 31, 2000 $250,000
June 30, 2000 $250,000
September 30, 2000 $250,000
December 31, 2000 $250,000
March 31, 2001 $250,000
June 30, 2001 $250,000
September 30, 2001 $250,000
December 31, 2001 $250,000
March 31, 2002 $250,000
June 30, 2002 $250,000
September 30, 2002 $250,000
December 31, 2002 $250,000
March 31, 2003 $250,000
June 30, 2003 $250,000
September 30, 2003 $250,000
December 31, 2003 $250,000
March 31, 2004 $250,000
June 30, 2004 $250,000
September 30, 2004 $8,250,000
December 31, 2004 $8,250,000
March 31, 2005 $8,250,000
June 30, 2005 $8,250,000
September 30, 2005 $15,000,000
December 31, 2005 $15,000,000
March 31, 2006 $15,000,000
June 30, 2006 $15,000,000
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(v) Within 100 days after the close of each Fiscal Year
(beginning with the close of the 1997 Fiscal Year), Foamex 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
(provided, that, with respect to any Excess Cash Flow payment in
respect of Fiscal Year 1997, EBDAIT, Consolidated Working Capital
and Capital Expenditures shall be calculated on the basis of only
the third and fourth fiscal quarters of Fiscal Year 1997 and all
other items of Excess Cash Flow shall be calculated for the period
commencing on the Effective Date and ending on the last day of
Fiscal Year 1997); provided, however, that if the Total Debt to
EBDAIT Ratio is less than 3.0:1, such mandatory prepayment shall
be in an amount equal to 50% of 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, Foamex 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" 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".
(vii) Immediately upon any acceleration of the Stated
Maturity Date of any Loans pursuant to Section 11.02, the
Borrowers shall repay all the Loans, unless, pursuant to 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
each 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 such 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 Revolving Loan Commitments. The
Revolving Loan Commitments shall be permanently reduced by the amount
of any payment made pursuant to Section 3.01(b) (other than with
Pending Proceeds) which is applied to the Revolving Credit Obligations;
provided, however, that no mandatory reduction of the Revolving Loan
Commitment required pursuant to
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Section 3.01(b) shall cause the Revolving Loan Commitments to be
reduced to an amount less than $50,000,000.
(d) Mandatory Reductions in Term A Loan Commitments. The Term A
Loan Commitments will be permanently reduced (i) by the principal
amount of Term A Loans made on the Effective Date, (ii) by the
principal amount of each Term A Loan made after the Effective Date and
on or prior to the Term A Loan Commitment Termination Date and (iii) to
$0 on (x) the Effective Date if less than $20,000,000 aggregate
principal and/or accreted amount of the Senior Notes, the Senior
Secured Notes, the Discount Debentures, the 1993 Subordinated
Debentures and the Subordinated Debentures remains outstanding after
giving effect to the Refinancing consummated on the Effective Date or
(y) the Term A Loan Commitment Termination Date (after giving effect to
any loans made on such date).
3.2. 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 either
Borrower shall be applied to such Borrower's Obligations as follows:
first to pay principal of and interest on any portion of any
outstanding Swing Loans, second to pay principal of and
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interest on any portion of the Revolving Loans which the Funding Agent
may have advanced on behalf of any Lender other than Scotiabank for
which the Funding Agent has not then been reimbursed by such Lender or
such Borrower, third, to pay principal of and interest on any
Protective Advance for which the Collateral Agent has not then been
paid by such Borrower or reimbursed by the Lenders, fourth, to pay
principal of and interest on all Revolving Loans which are Base Rate
Loans constituting Non Pro Rata Loans, fifth, to pay all other
obligations then due and payable other than Base Rate Loans
constituting Cure Loans, sixth, to pay principal of and interest on
Base Rate Loans constituting Cure Loans, and seventh, as such Borrower
so designates. Unless otherwise designated by the Borrowers, all
principal payments in respect of Loans shall be applied to the
outstanding Loans, first, to repay outstanding Base Rate Loans, and
then to repay outstanding 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 Borrowers 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; provided, however, that until payment in full of the
Term A Loans, the holder of a Term B Loan or Term C Loan may
decline, in a written notice delivered to the Funding Agent prior
to the date of such mandatory payment, to accept such payment, in
which case such amount so declined shall be applied against
outstanding Term A Loans pro rata 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 either 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 such Borrower for application to, the Obligations of
such Borrower in the following order:
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(A) first, to pay principal or interest on any portion
of the Swing Loans of such Borrower;
(B) second, to pay principal of and interest on any
portion of the Revolving Loans of such Borrower which the
Funding Agent may have advanced on behalf of any Lender other
than Scotiabank for which the Funding Agent has not then been
reimbursed by such Lender or such Borrower;
(C) third, to pay principal of and interest on any
Protective Advance for which the Collateral Agent has not
then been paid by such Borrower or reimbursed by the Lenders;
(D) fourth, to pay Obligations in respect of any expense
reimbursements or indemnities of such Borrower then due to
the Administrative Agents;
(E) fifth, to pay Obligations in respect of any expense
reimbursements or indemnities of such Borrower then due to
the Lenders and the Issuing Banks;
(F) sixth, to pay interest and fees due in respect of
Loans of such Borrower, to the extent not already paid
pursuant to clause (B) of this Section 3.02(b)(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 such Borrower and all other
Letter of Credit Obligations of such Borrower and Hedging
Obligations of such 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 such Borrower;
provided, however, if sufficient funds are not available to fund
all payments to be made in respect of any of the Obligations
described in any of the foregoing clauses (A) through (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
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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 Borrowers, any Holder which is not a Lender or
Issuing Bank, or any other Person; provided that the priority
listed in any of clauses (E) through (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.
(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 either Borrower pursuant to a Notice of Borrowing) made to
either Borrower hereunder, whether made following a request by
either Borrower pursuant to Section 2.01 or 2.02 or a deemed
request as provided in this Section 3.02(b)(iv), all amounts then
due and payable by such Borrower hereunder, including, without
limitation, amounts payable with respect to payments of principal,
interest, Reimbursement Obligations and fees and all
reimbursements for expenses pursuant to Section 13.02. Each
Borrower hereby irrevocably authorizes the Lenders to make
Revolving Loans, which Revolving Loans shall be Base Rate Loans,
in each case, upon notice from the Funding Agent as described in
the following sentence for the purpose of paying principal,
interest, Reimbursement Obligations and fees due from such
Borrower, reimbursing expenses pursuant to Section 13.02 and
paying any and all other amounts due and payable by such Borrower
hereunder or under the Notes, and agrees that all such Revolving
Loans so made shall be deemed to have been requested by it
pursuant to Section 2.01 or 2.02 as of the date of the
aforementioned notice. The Funding Agent shall request Revolving
Loans on behalf of each Borrower as described in the preceding
sentence by notifying the Lenders by telex, telecopy, telegram or
other similar form of transmission (which notice the Funding Agent
shall thereafter promptly transmit to such Borrower), of the
amount and Funding Date of the proposed Borrowing and that such
Borrowing is being requested on such Borrower's behalf pursuant to
this Section 3.02(b)(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
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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.
(vi) In the event that any Lender fails to fund its Pro Rata
Share of any Revolving Loan requested by either Borrower which
such Lender is obligated to fund under the terms of this Agreement
(the Pro Rata Share of each other Lender of such Revolving Loan
funded by each other Lender being hereinafter referred to as a
"Non Pro Rata Loan"), excluding any such Lender who has delivered
to the Funding Agent written notice that one or more of the
conditions precedent contained in Section 5.02 will not on the
date of such request be satisfied and until such conditions are
satisfied, until the earlier of such Lender's cure of such failure
and the termination of the Revolving Loan Commitments, the
proceeds of all amounts thereafter repaid to the Funding Agent by
either Borrower and otherwise required to be applied to such
Lender's share of all other Obligations pursuant to the terms of
this Agreement shall be advanced to either Borrower by the Funding
Agent on behalf of such Lender to cure, in full or in part, such
failure by such Lender, but shall nevertheless be deemed to have
been paid to such Lender in satisfaction of such other
Obligations. Notwithstanding anything in this Agreement to the
contrary:
(A) the foregoing provisions of this Section 3.02(b)(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);
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(B) a Lender shall be deemed to have cured its failure
to fund its Pro Rata Share of any Revolving Loan at such time
as an amount equal to such Lender's original Pro Rata Share
of the requested principal portion of such Revolving Loan is
fully funded to the applicable Borrower, whether made by such
Lender itself or by operation of the terms of this Section
3.02(b)(vi), and whether or not the Non Pro Rata Loan with
respect thereto has been repaid, converted or continued;
(C) amounts advanced to either Borrower to cure, in full
or in part, any such Lender's failure to fund its Pro Rata
Share of any Revolving Loan ("Cure Loans") shall bear
interest at the Base Rate in effect from time to time, and
for all other purposes of this Agreement shall be treated as
if they were Base Rate Loans; and
(D) regardless of whether or not an Event of Default has
occurred or is continuing, and notwithstanding the
instructions of either Borrower as to its desired
application, all repayments of principal which, in accordance
with the other terms of this Section 3.02, would be applied
to the outstanding Base Rate Loans shall be applied in
accordance with the terms of the second sentence of Section
3.02(b)(i).
(c) Payments on Non-Business Days. Whenever any payment to be made
by either Borrower hereunder or under the Notes is stated to be due on
a day which is not a Business Day, the payment shall instead be due on
the next succeeding Business Day, and any such extension of time shall
be included in the computation of the payment of interest and fees
hereunder.
3.3. Taxes.
(a) Payment of Taxes. Any and all payments by either Borrower
hereunder or under any Note or other document evidencing any
Obligations shall be made, in accordance with Section 3.02, free and
clear of and without reduction for any and all taxes, levies, imposts,
deductions, charges, withholdings, and all stamp or documentary taxes,
excise taxes, ad valorem taxes and other taxes imposed on the value of
the Property, charges or levies which arise from the execution,
delivery or registration, or from payment or performance under, or
otherwise with respect to, any of the Loan Documents or the 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
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Section 3.03(d)(ii)(C), (ii) the Governmental Authority of the
jurisdiction in which such Lender's Applicable Lending Office is
located or any political subdivision thereof or (iii) the Governmental
Authority in which such Person is organized, managed and controlled or
any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If either Borrower shall be
required by law to withhold or deduct any Taxes from or in respect of
any sum payable hereunder or under any such Note or document to any
Lender, any Issuing Bank or any Administrative Agent, (x) the sum
payable to such Lender or such Administrative Agent shall be increased
as may be necessary so that after making all required withholding or
deductions (including withholding or deductions applicable to
additional sums payable under this Section 3.03) such Lender, such
Issuing Bank or such Administrative Agent (as the case may be) receives
an amount equal to the sum it would have received had no such
withholding or deductions been made, (y) such Borrower shall make such
withholding or deductions, and (z) such Borrower shall pay the full
amount withheld or deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) Indemnification. Each Borrower will indemnify each Lender,
each Issuing Bank and each Administrative Agent against, and reimburse
each on demand for, the full amount of all Taxes (including, without
limitation, any Taxes imposed by any Governmental Authority on amounts
payable under this Section 3.03 and any additional income or franchise
taxes resulting therefrom) incurred or paid by such Lender, such
Issuing Bank or such Administrative Agent (as the case may be) or any
bank holding company parent of such Lender or Issuing Bank and any
liability (including penalties, interest, and out-of-pocket expenses
paid to third parties) arising therefrom or with respect thereto,
whether or not such Taxes were lawfully payable. A certificate as to
any additional amount payable to any Person under this Section 3.03
submitted by it to either Borrower shall, absent manifest error, be
final, conclusive and binding upon all parties hereto. Each Lender and
each Issuing Bank agrees, within a reasonable time after receiving a
written request from either Borrower, to provide such Borrower and each
Administrative Agent with such certificates as are reasonably required,
and take such other actions as are reasonably necessary to claim such
exemptions as such Lender or such Issuing Bank may be entitled to claim
in respect of all or a portion of any Taxes which are otherwise
required to be paid or deducted or withheld pursuant to this Section
3.03 in respect of any payments under this Agreement or under the
Notes.
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(c) Receipts. Within thirty (30) days after the date of any
payment of Taxes by either Borrower, such Borrower will furnish to the
Funding Agent, at its address referred to in Section 13.08, the
original or a certified copy of a receipt, if any, or other
documentation reasonably satisfactory to the Funding Agent, evidencing
payment thereof. Each Borrower shall furnish to the Funding Agent upon
the request of the Funding Agent from time to time an Officer's
Certificate stating that all Taxes of which it is aware are due have
been paid and that no additional Taxes of which it is aware are due.
(d) Foreign Bank Certifications. 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 Foamex
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 Borrowers and is not a controlled foreign
corporation related to the Borrowers (within the meaning of Section
864(d)(4) of the Internal Revenue Code.
(ii) Each Lender further agrees to deliver to the Borrowers
and the Funding Agent from time to time, a true and accurate
certificate executed in duplicate by a duly authorized officer of
such Lender before or promptly upon the occurrence of any event
requiring a change in the most recent certificate previously
delivered by it to either Borrower and the Funding Agent pursuant
to this Section 3.03(d) (including, but not limited to, a change
in such Lender's lending office). Each certificate required to be
delivered pursuant to this Section 3.03(d)(ii) shall certify as to
one of the following:
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(A) that such Lender can continue to receive payments
hereunder and under the Notes without deduction or
withholding of United States federal income tax;
(B) that such Lender cannot continue to receive payments
hereunder and under the Notes without deduction or
withholding of United States federal income tax as specified
therein but does not require additional payments pursuant to
Section 3.03(a) because it is entitled to recover the full
amount of any such deduction or withholding from a source
other than the Borrowers;
(C) that such Lender is no longer capable of receiving
payments hereunder and under the Notes without deduction or
withholding of United States federal income tax as specified
therein by reason of a change in law (including the Internal
Revenue Code or applicable tax treaty) after the later of the
Effective Date or the date on which such Lender became a
Lender and that it is not capable of recovering the full
amount of the same from a source other than the Borrowers; or
(D) that such Lender is no longer capable of receiving
payments hereunder without deduction or withholding of United
States federal income tax as specified therein other than by
reason of a change in law (including the Internal Revenue
Code or applicable tax treaty) after the later of the
Effective Date or the date on which such Lender became a
Lender.
Each Lender agrees to deliver to the Borrowers and the Funding
Agent further duly completed copies of the above-mentioned IRS
forms on or before the earlier of (x) the date that any such form
expires or becomes obsolete or otherwise is required to be
resubmitted as a condition to obtaining an exemption from
withholding from United States federal income tax and (y) fifteen
(15) days after the occurrence of any event requiring a change in
the most recent form previously delivered by such Lender to the
Borrowers and the Funding Agent, unless any change in treaty, law,
regulation, or official interpretation thereof which would render
such form inapplicable or which would prevent the Lender from duly
completing and delivering such form has occurred prior to the date
on which any such delivery would otherwise be required and the
Lender promptly advises the Borrowers that it is not capable of
receiving payments hereunder and under the Notes without any
deduction or withholding of United States federal income tax.
(iii) The Borrowers 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-
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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.
3.4. Increased Capital. If after the date hereof any Lender or Issuing
Bank determines that (i) the adoption or implementation of or any change in or
in the interpretation or administration of any law or regulation or any
guideline or request from any central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over any
Lender, Issuing Bank or banks or financial institutions generally (whether or
not having the force of law), or compliance with any of the above affects or
would affect the amount of capital required or expected to be maintained by such
Lender or Issuing Bank or any corporation controlling such Lender or Issuing
Bank and (ii) the amount of such capital is increased by or based upon (A) the
making or maintenance by any Lender of its Loans, any Lender's participation in
or obligation to participate in the Loans, Letters of Credit or other advances
made hereunder or the existence of any Lender's obligation to make Loans or (B)
the issuance or maintenance by any Issuing Bank of, or the existence of any
Issuing Bank's obligation to issue, Letters of Credit, then, in any such case,
upon written demand by such Lender or Issuing Bank (with a copy of such demand
to the Funding Agent), the Borrowers shall pay to the Funding Agent for the
account of such Lender or Issuing Bank, from time to time as specified by such
Lender or Issuing Bank, additional amounts sufficient to compensate such Lender
or Issuing Bank or such corporation therefor. Such demand shall be accompanied
by a statement as to the amount of such compensation and include a brief summary
of the basis for such demand. Such statement shall be conclusive and binding for
all purposes, absent manifest error. Such Lender or Issuing Bank shall notify
the Borrowers of any event referred to in clause (i) of this Section within 180
days of obtaining actual knowledge of such event.
3.5. Promise to Repay; Evidence of Indebtedness.
(a) Promise to Repay. Each Borrower hereby agrees to pay when due
the principal amount of each Revolving Loan which is made to it, and
further agrees to pay all unpaid interest accrued thereon, in
accordance with the terms of this Agreement and the promissory notes
evidencing the Revolving Loans owing to the Lenders, and each Borrower
shall execute and deliver to each Lender such promissory notes as are
necessary to evidence the Revolving Loans owing to the Lenders after
giving effect to any assignment thereof pursuant to Section 13.01, all
substantially in the form of Exhibit A-1 (all such promissory notes and
all amendments
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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) Foamex 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 Foamex
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) Each Borrower hereby agrees to pay when due the
principal amount of each Swing Loan which is made to it, and
further agrees to pay all unpaid interest accrued thereon, in
accordance with the terms of this Agreement and the promissory
note evidencing the Swing Loans owing to the Swing Bank, and each
Borrower shall execute and deliver to the Swing Bank such
promissory note as is necessary to evidence the Swing Loans owing
to the Swing Bank, substantially in the form of Exhibit 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 each Borrower to such Lender resulting from each
Loan owing to such Lender from time to time, including the amount of
principal and interest payable and paid to such Lender from time to
time hereunder and under the Notes.
(c) Control Account. The Register maintained by the Funding Agent
pursuant to Section 13.01(c) shall include a control account, and a
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 each Borrower to each
Lender hereunder or under the Notes, and (iv) the amount of any sum
received by the Funding Agent from each Borrower hereunder and each
Lender's share thereof.
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(d) Entries Binding. The Funding Agent will render and deliver a
statement of the Register monthly to each Borrower and each Lender. All
entries on any such statement shall, fifteen (15) days after the same
is sent, be presumed to be correct and shall constitute prima facie
evidence of the information contained in such statement. Each of the
Borrowers and the Lenders shall have the express right to rebut such
presumption by conclusively demonstrating the existence of an error on
the part of the Funding Agent.
3.6. 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. Each Borrower and Foamex Fibers shall enter into
Lockbox Agreements on terms satisfactory to the Administrative Agents within 90
days after the Effective Date.
(b) Funds on deposit in a Lockbox Account of either Borrower or
Foamex Fibers 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 such 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 either 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. Each Borrower and Foamex Fibers 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
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incurred by the Lockbox Bank in the operation of a Lockbox Account for
such Credit Party.
3.7. Replacement of Lender. If (i) either Borrower becomes obligated to
pay additional amounts to any Lender pursuant to 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 Borrowers
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 such
Borrower designated a Replacement Lender, and thereupon such Lender shall no
longer be a party hereto or have any obligations or rights hereunder (except
rights which, pursuant to the provisions of this Agreement, survive the
termination of this Agreement and the repayment of the Notes), and the
Replacement Lender shall succeed to such obligations and rights.
ARTICLE IV.
INTEREST AND FEES
4.1. 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)
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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 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 a Borrower to the Funding
Agent; provided, however, such 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 Revolving Loan Commitments, and (C) if not theretofore paid in
full, at maturity (whether by acceleration or otherwise) of such Base
Rate Loan.
(ii) Interest accrued on each 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) Each Borrower shall have the
option (A) to convert at any time all or any
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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, 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),
each Borrower shall deliver a Notice of Conversion/Continuation to
the Funding Agent no later than 11:00 a.m. (New York time) at
least three (3) Business Days in advance of the proposed
conversion/continuation date. A Notice of Conversion/Continuation
shall specify (A) the identity of the Borrower delivering such
notice, (B) the proposed conversion/continuation date (which shall
be a Business Day), (C) the principal amount of the Loan to be
converted/continued, (D) whether such Loan shall be converted
and/or continued, and (E) in the case of a conversion to, or
continuation of, a LIBO Rate Loan, the requested LIBO Rate
Interest Period. In lieu of delivering a Notice of
Conversion/Continuation, such Borrower may give the Funding Agent
telephonic notice of any proposed conversion/continuation by the
time required under this Section 4.01(c)(ii), and such notice
shall be confirmed in writing delivered to the Funding Agent
promptly (but in no event later than 5:00 p.m. (New York time) on
the same day). Promptly after receipt of a Notice of
Conversion/Continuation under this Section 4.01(c)(ii) (or
telephonic notice in lieu thereof), the Funding Agent shall notify
each Lender by telex or telecopy, or other similar form of
transmission, of the proposed conversion/continuation. Any Notice
of Conversion/Continuation for conversion to, or continuation of,
a Loan (or telephonic notice in lieu thereof) shall be
irrevocable, and such Borrower shall be bound to convert or
continue in accordance therewith.
(d) Default Interest. Notwithstanding the rates of interest
specified in Section 4.01(a) or elsewhere in this
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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 LIBO Rate Margin.
(e) Computation of Interest. Interest on all Obligations shall be
computed on the basis of the actual number of days elapsed in the
period during which interest accrues and a year of 360 days or, in the
case of Base Rate Loans, a year of 365 or 366 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,
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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 Borrowers shall immediately pay to
the Funding Agent for the account of such Lender or Issuing Bank, from
time to time as specified by such Lender or Issuing Bank, such amount
or amounts as may be necessary to compensate such Lender or Issuing
Bank or its 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 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.
4.2. 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 giving such notice 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:
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(i) Such 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;
(iv) Such 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) Such 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 twelve (12) 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 each
Borrower and to each Lender. The Funding Agent's determination shall be
presumed to be correct, absent manifest error, and shall be binding
upon the Borrowers.
(d) Interest Rate Unascertainable, Inadequate or Unfair. In the
event that at least one (1) Business Day before the LIBO Rate Interest
Rate Determination Date:
(i) the Funding Agent is advised by any Reference Bank that
deposits in Dollars (in the
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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 each
Borrower, whereupon (until the Funding Agent notifies such Borrower
that the circumstances giving rise to such suspension no longer exist)
the right of such Borrower to elect to have Loans bear interest based
upon the LIBO Rate 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 such Borrower to the contrary.
(e) Illegality. (i) If at any time any Lender determines (which
determination shall, absent manifest error, be final and conclusive and
binding upon all parties) that the making or continuation of any 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 such Borrower and
the Funding Agent, and the Funding Agent shall promptly transmit the
notice to each other Lender.
(ii) When notice is given by a Lender under Section
4.02(e)(i), (A) each Borrower's right to request from any Lender
and each Lender's obligation, if any, to make 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, each Borrower
shall immediately, or if permitted by applicable law, no later
than the date permitted thereby, upon at least one (1) Business
Day's prior
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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 each Borrower and the Funding
Agent, and the Funding Agent shall promptly transmit the notice to
each other Lender. Each 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 each Borrower pursuant to Section 4.01, each Borrower shall
compensate each Lender, upon demand, for all losses, expenses and
liabilities (including, without limitation, any loss or expense
incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain such Lender's
LIBO Rate Loans to such 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 such 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, 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 such
Borrower to repay LIBO Rate Loans when required by the terms of this
Agreement. The Lender making demand for such compensation shall deliver
to such Borrower concurrently with such demand a written statement in
reasonable detail as to such losses, expenses and liabilities, and this
statement shall be conclusive as to the amount of compensation due to
that Lender, absent manifest error.
(g) Booking of 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
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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.
4.3. Fees.
(a) Administrative Agents' Fees. The Borrowers shall pay to the
Administrative Agents, solely for the account of the Administrative
Agents, the fees set forth in the letter from Citicorp and Scotiabank
addressed to Foamex and GFI dated May 12, 1997, payable in accordance
with the terms of such letter.
(b) Letter of Credit Fee. In addition to any charges paid pursuant
to Section 2.03(g), each Borrower shall pay to the Funding Agent, for
the account of the Lenders 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 _ 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,
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
_ of 1%) plus two percent (2.0%) per annum.
(c) Unused Commitment Fee. The Borrowers 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 sum of (i) the Term A Loan Commitment then in effect and (ii) the
amount from time to time by which the Revolving Loan Commitments exceed
the sum of (A) the outstanding principal amount of the Revolving Loans,
plus (B) the outstanding Reimbursement Obligations, plus (C) 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 or Term A Commitment Termination Date,
as the case may be, 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
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event that any Lender fails to fund its Pro Rata Share of any Loan
requested by either Borrower which such Lender is obligated to fund
under the terms of this Agreement, (I) such Lender shall not be
entitled to any Unused Commitment Fees with respect to its Revolving
Loan Commitment until such failure has been cured in accordance with
Section 3.02(b)(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 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
5.1. Conditions Precedent to the Effectiveness of this Agreement. This
Agreement shall become effective on the date (the "Effective Date") when the
following conditions precedent have been satisfied (unless waived by the Lenders
or unless the deadline for delivery has been extended by the Administrative
Agents):
(a) Documents. The Administrative Agents shall have received on or
before the Effective Date all of the following in form and substance
satisfactory to the Lenders:
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(i) this Agreement and all other agreements, documents,
instruments, reports and appraisals described in the List of
Closing Documents, attached hereto and made a part hereof as
Exhibit D, each duly executed where appropriate and in form and
substance satisfactory to the Lenders; without limiting the
foregoing, the Borrowers hereby direct their counsel, Willkie Farr
& Gallagher and each of their local counsel, to prepare and
deliver to the Administrative Agents, the Lenders, the Issuing
Banks and Mayer, Brown & Platt, counsel to the Funding Agent, the
opinions referred to in such List of Closing Documents; and
(ii) such additional documentation as either Administrative
Agent or any of the Lenders may reasonably request.
(b) Perfection of Liens. The Collateral Agent shall have received
evidence that all Liens granted to the Collateral Agent with respect to
all Collateral are perfected and of first priority, except as otherwise
permitted under this Agreement or as set forth in the Intercreditor
Agreements.
(c) Consummation of Refinancing. The Refinancing shall have been
consummated in accordance with the terms of the Offer to Purchase
without any waiver or forbearance of the terms and conditions therefor
set forth in the Offer to Purchase without the prior written consent of
the Administrative Agents and Foamex shall have irrevocably accepted
for tender in accordance therewith the Required Minimum Tender Amounts.
The respective Trustees shall have entered into the Supplemental
Indentures and Intercreditor Agreements on terms satisfactory to the
Lenders and such documents shall be in full force and effect. Each of
the Existing Secured Debt Indentures, the 1993 Subordinated Debenture
Indenture and the Senior Subordinated Indenture shall have been amended
as set forth in the Supplemental Indentures.
(d) Issuance of New Foamex Subordinated Notes. The New Foamex
Subordinated Notes shall have been issued in accordance with the
Offering Memorandum (and the related purchase agreements) without any
waiver or forbearance of the terms and conditions therefor set forth in
the New Foamex Subordinated Note Offering Memorandum (or such related
purchase agreements) by any party thereto without the prior written
consent of the Administrative Agents. Foamex shall have received gross
cash proceeds of at least $150,000,000 in connection with such issuance
and sale.
(e) Payment of Obligations Under Existing Credit Agreement. The
Borrowers shall have paid in full all Obligations (as defined in the
Existing Credit Agreement)
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(other than Obligations in respect of indemnities not yet due) and
terminated all commitments to lend under the Existing Credit Agreement
in manner and pursuant to documentation in form and substance
satisfactory to the Administrative Agents.
(f) Consents. Each of the Borrowers, any of the Borrowers'
Subsidiaries and each General Partner, shall have received all consents
and authorizations required pursuant to any material Contractual
Obligation with any other Person and shall have obtained all consents
and authorizations of, and effected all notices to and filings with,
any Governmental Authority, in each case, as may be necessary to allow
each of the Borrowers, any of the Borrowers' Subsidiaries and each
General Partner, lawfully and without risk of rescission, (i) to
execute, deliver and perform, in all material respects, its obligations
under this Agreement, the other Loan Documents and 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 and (ii) to create and perfect or continue the
validity and perfection of the Liens on the Collateral to be owned by
it in the manner and for the purpose contemplated by the Loan
Documents.
(g) No Legal Impediments. No law, regulation, order, judgment or
decree of any Governmental Authority shall, and neither Administrative
Agent shall have received any notice that litigation is pending or
threatened which is likely to (i) enjoin, prohibit or restrain the
making of the Loans and/or the issuance of Letters of Credit and/or the
consummation of the transactions contemplated by the Transaction
Documents or (ii) impose or result in the imposition of a Material
Adverse Effect.
(h) No Change in Condition. No change in the condition (financial
or otherwise), business, performance, properties, assets, operations or
prospects of either Borrower or any of its Subsidiaries shall have
occurred since December 29, 1996 which change, in the judgment of the
Lenders, will have or is reasonably likely to have a Material Adverse
Effect.
(i) No Default. No Event of Default or Potential Event of Default
(as each such term is defined herein and under the Existing Credit
Agreement) shall have occurred and be continuing or would result from
the making of the Loans.
(j) Representations and Warranties. All of the representations and
warranties contained in Section 6.01 and in any of the other Loan
Documents shall be true and correct in all material respects on and as
of the Effective Date.
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(k) Financial Information, etc. The Administrative Agents shall
have received on or prior to the Effective Date:
(i) audited consolidated financial statements of Foamex and
its Subsidiaries for the three-year period ending December 29,
1996;
(ii) unaudited financial statements of Foamex and its
Subsidiaries for the thirteen week period ending March 30, 1997;
and
(iii) the estimated consolidated pro forma balance sheets of
the Borrowers and Borrowers' Subsidiaries as at June 29, 1997
(giving pro forma effect as of such date to the Refinancing and
the other transactions contemplated by the Refinancing Documents
and this Agreement and the then existing legal and capital
structure of the Borrowers and their respective Subsidiaries), and
detailed financial projections through Fiscal Year 2007 on an
annual basis, in each case in form and substance reasonably
satisfactory to the Administrative Agents and the Lenders.
(l) Compliance Certificate. The Administrative Agents shall
have received an initial Compliance Certificate on a pro forma basis as
if the Credit Extensions to be made on the Effective Date and the
Refinancing had occurred as of June 29, 1997 and as to such other items
therein as the Administrative Agents may reasonably request, dated the
Effective Date, duly executed (and with all schedules thereto duly
completed) and delivered by the chief executive, financial or
accounting officer of the Borrowers.
(m) Solvency, etc. The Administrative Agents shall have received
the solvency certificates, dated the date of the initial Credit
Extension, duly executed and delivered by the chief financial or
accounting Authorized officer of each of the Borrowers.
(n) Fees and Expenses Paid. There shall have been paid to the
Funding Agent, for the account of the Administrative Agents, as
applicable, all fees due and payable on or before the Effective Date
and all expenses due and payable on or before the Effective Date.
5.2. 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:
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(a) Representations and Warranties. As of such date, both before
and after giving effect to the Loans to be made or the Letter of Credit
to be issued on such date, all of the representations and warranties of
each Borrower and each General Partner contained in Section 6.01 and in
any other Loan Document (other than representations and warranties
which expressly speak as of a different date) shall be true and correct
in all material respects.
(b) No Defaults. No Event of Default shall have occurred and be
continuing or would result from the making of the requested Loan or
issuance of the requested Letter of Credit.
(c) No Legal Impediments. No law, regulation, order, judgment or
decree of any Governmental Authority shall, and neither Administrative
Agent shall have received from any Lender or Issuing Bank notice that,
in the judgment of such Lender or Issuing Bank, litigation is pending
or threatened which is likely to enjoin, prohibit or restrain, or
impose or result in the imposition of any material adverse condition
upon, (i) such Lender's making of the requested Loan or participation
in the requested Letter of Credit, (ii) the Swing Bank's making of the
requested Swing Loan or (iii) such Issuing Bank's issuance of the
requested Letter of Credit.
(d) No Material Adverse Effect. No change in the condition
(financial or otherwise), business, performance, properties, assets,
operations or prospects of either Borrower or any of their respective
Subsidiaries shall have occurred since December 29, 1996, which has had
or is reasonably likely to have a Material Adverse Effect.
Each submission by either Borrower to the Funding Agent of a Notice of Borrowing
or Term Notice of Borrowing, as the case may be, 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 either Borrower of the proceeds of each
Loan made, converted or continued hereunder, each submission by either Borrower
to an Issuing Bank of a request for issuance of a Letter of Credit and the
issuance of such Letter of Credit, shall constitute a representation and
warranty by such Borrower and, in the case of a submission by Foamex, each of
the General Partners, individually, and as a general partner of Foamex, as of
the Funding Date in respect of such Revolving Loan or Swing Loan, the date of
conversion or continuation and the date of issuance of such Letter of Credit,
that all the conditions contained in this Section 5.02 have been satisfied or
waived in accordance with Section 13.07.
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ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
6.1. Representations and Warranties of the Borrowers. In order to
induce the Lenders and the Issuing Banks to enter into this Agreement and to
make the Loans and the other financial accommodations to each of the Borrowers
and to issue the Letters of Credit described herein, each Borrower,
individually, and each of the General Partners, individually and as a general
partner or managing general partner of Foamex, as the case may be, hereby
represents and warrants to each Lender, each Issuing Bank and the Administrative
Agents as of the Effective Date and as of each date thereafter on which such
representations and warranties shall be made or deemed to be made that the
following statements are true, correct and complete:
(a) Organization; Partnership Powers; Corporate Powers. (i) Foamex
(A) is a limited partnership duly formed and organized, validly
existing and in good standing under the laws of the State of Delaware
and is a valid limited partnership under RULPA, (B) is duly qualified
to operate as a foreign limited partnership and is in good standing
under the laws of each jurisdiction in which failure to be so qualified
and in good 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 Foamex in connection with and
following the consummation of the transactions contemplated by this
Agreement.
(ii) FMXI, in its capacity as managing general partner, is
the Person who has executed this Agreement and the other Loan
Documents executed on the Effective Date to which Foamex is a
party on behalf of Foamex. After the Effective Date, FMXI will
execute any other Loan Documents to which Foamex is a party on
behalf of Foamex. Trace Foam and FMXI are the sole general
partners of Foamex and FMXI has full authority to execute alone,
and on behalf of Foamex, the Loan Documents. FMXI is the sole
managing general partner of Foamex.
(iii) Each of the General Partners (A) is a corporation duly
formed and organized, validly existing and in good standing under
the laws of the State of Delaware, (B) is duly qualified to do
business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which the failure to be so
qualified and in good standing will have or is reasonably likely
to have a Material Adverse Effect and (C) has all requisite
corporate power and authority to
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own, operate and encumber its Property and to conduct its business
as presently conducted and as proposed to be conducted in
connection with and following the consummation of the transactions
contemplated by this Agreement and the other Transaction
Documents.
(iv) Each of GFI and the other Subsidiaries of Foamex (A)
other than the Foreign Subsidiaries 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 to which it is party.
(v) The performance of the Partnership Agreement by each of
the General Partners and Foamex are within their respective
corporate powers or partnership powers, as the case may be, have
each been duly authorized by all necessary corporate power or
partnership power, as the case may be, and do not contravene any
Requirement of Law applicable to such Person.
(vi) Neither General Partner conducts any business other than
the business of acting as a general partner of Foamex and owning
Equity Interests in Foamex and in the case of Trace Foam,
guaranteeing certain obligations of TIHI to Recticel Foam
Corporation and Generale Bank.
(b) Authority. (i) Each of the General Partners and each
Subsidiary of Foamex party to a Transaction Document has the requisite
corporate power, and authority to execute, deliver and perform each of
the Transaction Documents to which it is a party.
(ii) Foamex has the requisite partnership power, and
authority to execute, deliver and perform each of the Transaction
Documents to which it is a party.
(iii) The execution, delivery and performance as the case may
be, of each of the Transaction Documents which have been executed
and to which either Borrower and/or any General Partner or any
Subsidiary of either
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Borrower is party and the consummation of the transactions
contemplated thereby, have been duly approved by the General
Partners (on behalf of Foamex), the board of directors of the
General Partners, GFI and each such Subsidiary and the
shareholders of GFI or 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
Foamex or other corporate or shareholder action or proceedings on
the part of any General Partner or GFI or either of the Borrower's
respective Subsidiaries are necessary to consummate such
transactions.
(iv) Each of the Transaction Documents to which either
Borrower or any General Partner or any Subsidiary of either
Borrower is a party has been duly executed, or delivered, on
behalf of such Borrower or 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 all parties thereto have
performed and complied with all the terms, provisions, agreements
and conditions set forth therein and required to be performed or
complied with by such parties on or before the Effective Date,
and, as of the Effective Date, no default (or event that with the
passing of time or giving of notice or both would constitute an
event of default) or breach of any covenant by any such party
exists thereunder.
(c) Subsidiaries; Ownership of Equity Interests. Schedule 6.01-C
(i) contains a diagram indicating the partnership and/or corporate
structure of Foamex and its Subsidiaries, and any other Person which
either Borrower or any of their respective Subsidiaries holds an Equity
Interest and each direct and indirect parent of each General Partner
and each Limited Partner as of the Effective Date; and (ii) accurately
sets forth as of the Effective Date (A) the correct legal name and the
jurisdiction of incorporation of the Persons listed on such Schedule,
and (B) the authorized, issued and outstanding shares of each class of
Equity Interests in Foamex and its Subsidiaries and the record and, to
the knowledge of each Borrower and each General Partner, beneficial
owner, of such Equity Interests. As of the Effective Date, none of the
partnership interests of Foamex (to Foamex's and each General Partner's
best knowledge in respect of such interests constituting limited
partnership interests) is subject to any vesting, redemption, or
repurchase agreement, and, to each of Borrowers' and each General
Partner's best knowledge as of the Effective Date, there are no
warrants or options outstanding with respect to such Equity Interests,
except in each case as contemplated in the Transaction Documents.
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The outstanding Equity Interests in each of Foamex's Subsidiaries are
duly authorized, validly issued, fully paid and nonassessable and do
not constitute Margin Stock.
(d) No Conflict. The execution, delivery and performance of each
of the Transaction Documents to which Foamex or any of its Subsidiaries
or any General Partner is a party do not and will not (i) conflict with
the Constituent Documents of either Borrower, any such Subsidiary, any
General Partner, or to the best knowledge of each Borrower and each
General Partner, any Person listed on Schedule 6.01-C, (ii) to each
Borrower's or each General Partner's best knowledge, constitute a
tortious interference with any Contractual Obligation of any Person
(other than a Lender) or (iii) except as set forth on Schedule 6.01-D,
conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under (A) any Transaction
Document, (B) any Requirement of Law (including, without limitation,
any requirement under RULPA in order for Foamex to remain a valid
limited partnership under RULPA) or (C) any Contractual Obligation of
either Borrower, any such Subsidiary, any General Partner or, to the
best knowledge of either Borrower or any General Partner, any Person
listed on Schedule 6.01-C, or require termination of any Contractual
Obligation, the consequences of which violation, breach, default or
termination, will have or is reasonably likely to have a Material
Adverse Effect or may subject either Administrative Agent, any of the
Lenders or any of the Issuing Banks to any liability, (iv) result in or
require the creation or imposition of any Lien whatsoever upon any of
the Property or assets of either Borrower or any such Subsidiary, other
than Liens contemplated by the Loan Documents, or (v) require any
approval of either Borrower's, any such Subsidiary's, or to each
Borrower's or each General Partner's best knowledge, any General
Partner's, direct or indirect, Equity Interest holders (which has not
been obtained).
(e) Governmental Consents. Except as set forth on Schedule 6.01-E,
the execution, delivery and performance of each of the Transaction
Documents to which Foamex or any of its Subsidiaries or any General
Partner is a party do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by
any Governmental Authority, except (i) filings, consents or notices
which have been made, obtained or given, or, in a timely manner, will
be made, obtained or given, and registrations with, filings, approvals
and consents required under the Securities Act, the Securities Exchange
Act and state securities and "Blue Sky" laws in connection with the
transactions contemplated by the Transaction Documents, and (ii)
filings necessary to create or perfect security interests in the
Collateral, and (iii) routine corporate and
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partnership filings to maintain good standing in each state in which
Foamex and its Subsidiaries conducts its business.
(f) Governmental Regulation. None of Foamex, any of its
Subsidiaries or any General Partner is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, or the Investment Company Act of 1940, or any
other federal or state statute or regulation which limits its ability
to incur indebtedness or its ability to consummate the transactions
contemplated in the Transaction Documents.
(g) Financial Position. All financial projections and related
materials and documents delivered to the Administrative Agents pursuant
to this Agreement are based upon facts and assumptions that each
General Partner and each Borrower believe to be reasonable in light of
the then current and foreseeable business conditions. All monthly,
quarterly and annual financial statements of each Borrower or of Foamex
and any of its Subsidiaries delivered to the Administrative Agents were
prepared in conformity with GAAP and fairly present the financial
position of each Borrower or the consolidated and consolidating
financial position of Foamex and such Subsidiaries, as the case may be,
as at the respective dates thereof and the results of operations and
changes in financial position for each of the periods covered thereby,
subject, in the case of unaudited interim financials, to changes
resulting from the audit and normal year-end adjustments and, with
respect to all financial statements delivered prior to the Effective
Date, such statements were in conformity with GAAP as interpreted by
the Borrowers at such time (it being understood that actual results may
differ from the projections). As of the date of delivery, none of
Foamex or any of its Subsidiaries has any Accommodation Obligation,
contingent liability or liability for any Taxes, long-term leases or
commitments, not reflected in any of its audited financial statements
delivered to the Administrative Agents pursuant to this Agreement or
otherwise disclosed to the Administrative Agents and the Lenders in
writing, which will have or is reasonably likely to have a Material
Adverse Effect.
(h) Pro Forma Financials. The estimated consolidated pro forma
balance sheets of the Borrowers and Borrowers' Subsidiaries as of June
29, 1997 (giving pro forma effect as of such date to the Refinancing
and the other transactions contemplated by the Transaction Documents
and this Agreement and on a historical basis giving effect to the
transactions contemplated by the Transaction Documents) delivered on
the Effective Date, copies of each of which have been, or will be,
furnished to the Lenders on such dates, present on a pro forma basis
the estimated financial condition of the Borrowers and such
Subsidiaries as of June 30, 1997 and reflect on a pro forma basis those
liabilities reflected in
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the notes thereto and resulting from consummation of the transactions
contemplated in the Transaction Documents and this Agreement, and the
payment or accrual of all Transaction Costs paid or estimated to be
payable on the Effective Date with respect to any of the foregoing. The
projections and assumptions expressed in the pro forma financials
furnished pursuant to this Section 6.01(h) are reasonable based on
facts and on assumptions that each General Partner and each Borrower
believes to be reasonable in light of the then current and foreseeable
business conditions (it being understood that actual results may differ
from the projections).
(i) Business Plan. The Business Plan of Foamex and its
Subsidiaries most recently delivered to the Administrative Agents after
the Effective Date pursuant to Section 7.01(f), represents each General
Partner's and Foamex's reasonable and good faith plan and estimate as
of the date of delivery to the Administrative Agents of Foamex's future
business and financial activities for the periods set forth therein.
Such Business Plan has been based on facts and on assumptions that each
General Partner and Foamex believe to be reasonable in light of the
then current and foreseeable business conditions.
(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 Foamex, any of
its Subsidiaries or any General Partner, threatened against either
Borrower or any such Subsidiaries or any Property of any of them (i)
challenging the validity or the enforceability of any of the
Transaction Documents or (ii) which will or is reasonably likely to
result in any Material Adverse Effect. Neither Foamex nor any of its
Subsidiaries is (A) in violation of any applicable Requirements of Law
which violation will have or is reasonably likely to have a Material
Adverse Effect, or (B) subject to or in default with respect to any
final judgment, writ, injunction, restraining order or order of any
nature, decree, rule or regulation of any court or Governmental
Authority which will have or is reasonably likely to have a Material
Adverse Effect.
(k) No Material Adverse Change. Since December 29, 1996, 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 Foamex and its Subsidiaries required to be
filed have been timely filed, and all taxes, assessments, fees and
other governmental charges thereupon and upon their respective
Property,
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assets, income and franchises which are shown in such returns or
reports to be due and payable have been paid prior to any penalty being
imposed unless the terms of Section 8.04 permit non-payment thereof.
None of the Borrowers has any knowledge of any proposed tax assessment
against either Borrower or any of Borrowers' Subsidiaries that will
have or is reasonably likely to have a Material Adverse Effect.
(m) Partnership Tax Status. Foamex since its organization has been
treated as a partnership within the meaning of Section 761(a) of the
Internal Revenue Code for Federal income tax purposes and has not been
and is not an entity subject to Federal or state income tax (other than
state income taxes generally imposed on partnerships). Neither General
Partner nor either Borrower has any knowledge of any inquiry or
investigation by any Person (including, without limitation, the IRS) as
to whether or not Foamex is, or any claim or assertion by any Person
(including, without limitation, the IRS) that Foamex is not, a
partnership for Federal or state income tax purposes or an entity
subject to Federal or state income taxes (other than state income taxes
generally imposed on partnerships).
(n) Performance. None of Foamex, any of its Subsidiaries or any
General Partner has received notice or has actual knowledge that it is
in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual
Obligation applicable to either Borrower or such Subsidiaries, except
where such default or defaults, if any, will not have or is not
reasonably likely to have a Material Adverse Effect.
(o) Disclosure. The representations and warranties of each of
Foamex, its Subsidiaries and each General Partner contained in the
Transaction Documents to which it is a party and all certificates and
other documents delivered to the Administrative Agents pursuant to the
terms thereof, and the factual disclosures applicable to Foamex, its
Subsidiaries and each General Partner set forth in the Offer to
Purchase and the New Foamex Subordinated Note Offering Memorandum, did
not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained
herein or therein, in light of the circumstances under which and the
time at which they were made, not misleading. None of the Borrower and
General Partners has intentionally withheld any fact from the
Administrative Agents, the Issuing Banks or the Lenders in regard to
any matter which will have or is reasonably likely to have a Material
Adverse Effect.
(p) Requirements of Law. Except as otherwise stated in Schedules
6.01-J and 6.01-Q, and with respect to environmental and related
violations of law concerning Foamex's Morristown, Tennessee, and Fort
Wayne, Indiana facilities, Foamex and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their
respective businesses, in each case where the failure to so comply
individually or in the aggregate will have or is reasonably likely to
have a Material Adverse Effect.
(q) Environmental Matters. Except as disclosed on Schedule 6.01-Q,
to the knowledge of each Borrower and each Borrower's employees,
consultants or agents:
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(A) the operations of Foamex and its Subsidiaries comply in
all material respects with all applicable Environmental, Health or
Safety Requirements of Law;
(B) Foamex and its Subsidiaries have obtained or have taken
appropriate steps, as required by Environmental Health or Safety
Requirements of Law, to obtain all environmental, health and
safety Permits necessary for their respective operations, and all
such Permits are in good standing and each of Foamex and its
Subsidiaries are currently in material compliance with all terms
and conditions of such Permits;
(C) none of Foamex and its Subsidiaries or any of their
respective present or past Property or operations 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 Foamex or its Subsidiaries is
subject to any judicial or administrative proceeding, order,
judgment, decree or settlement alleging or addressing a violation
of or a liability under any Environmental, Health or Safety
Requirement of Law;
(E) none of Foamex and its Subsidiaries:
(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
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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 Foamex's and its Subsidiaries' present or past
Property is listed or proposed for listing on the National
Priorities List ("NPL") pursuant to CERCLA or on the Comprehensive
Environmental Response Compensation Liability Information System
List ("CERCLIS") or any similar state list of sites requiring
Remedial Action and each Borrower is unaware of any conditions on
such Property which if known to a Governmental Authority, would
qualify such Property for inclusion on any such list;
(G) none of Foamex and its Subsidiaries has sent or directly
arranged for the transport of any waste to any site listed on the
NPL or proposed for listing on the NPL or to a site included on
the CERCLIS list, or any similar state list;
(H) there is not now, nor has there ever been on or in the
Property:
(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 Foamex and its Subsidiaries has received any
notice or Claim to the effect that any of such Persons is or may
be liable to any Person as a result of the Release or threatened
Release of a Contaminant into the environment;
(J) there have been no Releases of any Contaminants in
reportable or significant quantities to the environment from any
Property;
(K) none of Foamex and its Subsidiaries 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
Foamex or its Subsidiaries; and
(M) none of Foamex and its Subsidiaries has entered into any
agreements with any Person relating to any Remedial Action or
environmentally related Claim.
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(ii) Foamex and its Subsidiaries are conducting and will
continue to conduct their respective businesses and operations in
an environmentally responsible manner, and each Borrower and such
Subsidiaries, taken as a whole have not been, and have no reason
to believe that they shall be, subject to Liabilities and Costs
arising out of or relating to environmental, health or safety
matters that have or will result in cash expenditures by the
Borrowers and such Subsidiaries in excess of $10,000,000
(excluding matters described in item V.O. and V.P. of Schedule
6.01-O with respect to Foamex'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 Borrowers, Borrowers' Subsidiaries or any ERISA
Affiliate currently maintains or contributes to any Benefit Plan,
Multiemployer Plan or Foreign Pension Plan other than those listed on
Schedule 6.01-R hereto. 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 Borrowers 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. Each Borrower and Borrower's 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 Borrowers or any ERISA Affiliates nor, to the knowledge of
the Borrowers, 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 Borrowers or any ERISA Affiliate is subject to any liability under
Section 4063, 4064, 4069, 4204 or 4212(c) of ERISA. None of the
Borrowers or any ERISA Affiliate has incurred any liability to the PBGC
which remains outstanding other than the payment of premiums, and there
are no premium payments which have become due which are unpaid.
Schedule B to the most recent annual report filed with the IRS with
respect to each Benefit Plan and furnished to the Administrative Agents
is complete and accurate. Since the date of the latest Schedule B,
there has been no material adverse change in the funding status or
financial condition of the Benefit Plan
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relating to such Schedule B. None of the Borrowers or any ERISA
Affiliate has (i) failed to make a required contribution or payment to
a Multiemployer Plan or (ii) made a complete or partial withdrawal
under Section 4203 or 4205 of ERISA from a Multiemployer Plan. None of
the Borrowers or any such ERISA Affiliate has failed to make a required
installment or any other required payment under Section 412 of the
Internal Revenue Code on or before the due date for such installment or
other payment. None of the Borrowers or any such ERISA Affiliate is
required to provide security to a Benefit Plan under Section 401(a)(29)
of the Internal Revenue Code due to a Plan amendment that results in an
increase in current liability for the plan year. Except as disclosed on
Schedule 6.01-R, none of the Borrowers or Borrower's Subsidiaries has,
by reason of the transactions contemplated hereby, any obligation to
make any payment to any employee pursuant to any Plan or existing
contract or arrangement. Each Borrower has given 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 listing of all of the Multiemployer Plans currently
contributed to by each Borrower or any ERISA Affiliate with the
aggregate amount of the most recent annual contributions required to be
made by each Borrower and each ERISA Affiliate to each such
Multiemployer Plan, any information which has been provided to either
Borrower or any ERISA Affiliate regarding withdrawal liability under
any Multiemployer Plan and the collective bargaining agreement pursuant
to which such contribution is required to be made; each employee
welfare benefit plan within the meaning of Section 3(1) of ERISA which
provides benefits to employees of either Borrower or any of such ERISA
Affiliates after termination of employment other than as required by
Section 601 of ERISA, the most recent summary plan description for such
plan and the aggregate amount of the most recent annual payments made
to terminated employees under each such plan.
(s) Foreign Employee Benefit Matters. Each Foreign Employee
Benefit Plan is in compliance in all material respects with all laws,
regulations and rules applicable thereto and the respective
requirements of the governing documents for such Plan. Except as set
forth on Schedule 6.01-S, the aggregate of the liabilities to provide
all of the accrued benefits under any Foreign Pension Plan does not
exceed the current Fair Market Value of the assets held in the trust or
other funding vehicle, if any, for such Plan. With respect to any
Foreign Employee Benefit Plan maintained or contributed to by either
Borrower or any of Borrowers' Subsidiaries (other than a Foreign
Pension Plan), reasonable
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reserves have been established in accordance with prudent business
practice or where required by ordinary accounting practices in the
jurisdiction in which such Plan is maintained. The aggregate unfunded
liabilities, after giving effect to any reserves for such liabilities,
with respect to such Plans does not exceed the current Fair Market
Value of the assets held in the trust or other funding vehicle, if any,
for such Plan. To the best knowledge of each Borrower and such
Borrower's Subsidiaries, there are no actions, suits or claims (other
than routine claims for benefits) pending or threatened against such
Borrower or any of such Borrower's Subsidiaries or with respect to any
Foreign Employee Benefit Plan.
(t) Labor Matters. Schedule 6.01-T accurately sets forth all labor
contracts to which either Borrower or any of the Borrowers'
Subsidiaries is a party on the 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
either Borrower or any of such Subsidiaries is a party which have or is
reasonably likely to have a Material Adverse Effect.
(u) Securities Activities. None of Foamex or any of its
Subsidiaries is engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock.
(v) Solvency. After giving effect to the transactions contemplated
in the Transaction Documents and the Loans to be made on such date as
Loans requested hereunder are made, and the disbursement of the
proceeds of such Loans pursuant to the Borrowers' instructions, each
Borrower and each of the other Loan Parties is Solvent.
(w) Patents, Trademarks, Permits, Etc.; Government Approvals.
Foamex and its Subsidiaries own, are licensed or otherwise have the
lawful right to use, or have all permits and other governmental
approvals, patents, trademarks, trade names, copyrights, technology,
know-how and processes used in or necessary for the conduct of their
businesses as currently conducted which are material to their condition
(financial or otherwise), operations, performance and prospects, taken
as a whole. Except as set forth on Schedule 6.01-W, no claims are
pending or, to the best of each Borrower's knowledge following diligent
inquiry, threatened that Foamex or any of its Subsidiaries is
infringing or otherwise adversely affecting the rights of any Person
with respect to such permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and
processes, except for such claims and infringements as do not, in the
aggregate, give rise to any liability on the part of either Borrower or
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any of such Subsidiaries which has or is reasonably likely to have a
Material Adverse Effect.
(iii) The consummation of the transactions contemplated by
the Transaction Documents will not impair the ownership of or
rights under (or the license or other right to use, as the case
may be) any permits and governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how or
processes by Foamex and each of its Subsidiaries in any manner
which has or is reasonably likely to have a Material Adverse
Effect.
(x) Assets and Properties. Foamex and each of its Subsidiaries has
good and marketable (or indefeasible as to Texas real property) title
(except Liens securing the Obligations and Liens permitted under
Section 9.03 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 either
Borrower and/or each such Subsidiary are in adequate operating
condition and repair, ordinary wear and tear excepted, are free and
clear of any known defects except such defects as do not substantially
interfere with the continued use thereof in the conduct of normal
operations, and are able to serve the function for which they are
currently being used, except in each case where the failure of such
asset to meet such requirements would not have or is not reasonably
likely to have a Material Adverse Effect. Neither this Agreement nor
any other Transaction Document, nor any transaction contemplated under
any such agreement, will affect any right, title or interest of either
Borrower or such Subsidiary in and to any of such assets in a manner
that would have or is reasonably likely to have a Material Adverse
Effect.
(y) Insurance. Schedule 6.01-Y accurately sets forth as of the
Effective Date all insurance policies and programs currently in effect
with respect to the respective Property and assets and business of
Foamex and its Subsidiaries, 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
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expiration date thereof and (vi) the annual premium with respect
thereto. Such insurance policies and programs are in amounts sufficient
to cover the replacement value of the respective Property and assets of
each Borrower and such Subsidiaries subject to customary deductibles.
(z) Transaction with Affiliates. Schedule 6.01-Z lists each and
every existing agreement and arrangement as of the Effective Date that
(i) each Borrower has entered into with any General Partner, any
Limited Partner or any Affiliate of such Borrower, General Partner or
Limited Partner or (ii) any General Partner or Limited Partner or any
Affiliate of either Borrower, General Partner or Limited Partner is
subject to or has entered into with respect to any of the 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, Subordinated Debentures and
1993 Subordinated Debentures. The subordination provisions of the New
Foamex Subordinated Note Indenture, the Subordinated Debenture
Indenture and the 1993 Subordinated Debenture Indenture are enforceable
against the holders of the New Foamex Subordinated Note Indenture, the
Subordinated Debentures and the 1993 Subordinated Debentures,
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, the Subordinated Debenture
Indenture and the 1993 Subordinated Debenture 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, the Existing Secured Debt Indentures, the Subordinated
Debenture Indenture and the 1993 Subordinated Debenture Indenture) and
"Senior Indebtedness" or "Senior Debt" (as each term is defined in the
New Foamex Subordinated Note Indenture, the Subordinated Debenture
Indenture and the 1993 Subordinated Debenture Indenture).
ARTICLE VII.
REPORTING COVENANTS
Each Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until all of the
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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:
7.1. Financial Statements. Each Borrower shall maintain, and cause each
of its Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to permit preparation
of consolidated and consolidating financial statements in conformity with GAAP,
and each of the financial statements described below (except as otherwise
expressly provided) shall be prepared from such system and records. Each
Borrower shall deliver or cause to be delivered to the Administrative Agents and
the Lenders:
(a) Monthly Reports. As soon as practicable, and in any event
within forty-five (45) days after the end of each calendar month in
each Fiscal Year (or within sixty (60) days after the end of each
calendar month which corresponds to the end of a fiscal quarter), the
consolidated balance sheets and results of operations of each Borrower
and its Subsidiaries as at the end of such period, and the related
consolidated statements of income and cash flow of Foamex and its
Subsidiaries for such fiscal month and for the period from the
beginning of the then current Fiscal Year to the end of such fiscal
month, setting forth in each case in comparative form the corresponding
figures for the corresponding calendar month of the previous Fiscal
Year and the corresponding figures from the consolidated financial
forecast for the current Fiscal Year delivered pursuant to Section
7.01(f), certified by the chief financial officer of each Borrower as
fairly presenting the consolidated financial position of such Borrower
and such Subsidiaries as at the dates indicated and the results of
their operations and cash flow for the periods indicated in accordance
with GAAP, subject to normal year end adjustments (but excluding GAAP
footnotes).
(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 each Borrower with the Securities and Exchange Commission with
respect to such fiscal quarter.
(c) Annual Reports. As soon as practicable, and in any event
within ninety-five (95) days after the end of each Fiscal Year, (i) the
Form 10-K, if any, filed by each Borrower with the Securities and
Exchange Commission with respect to such Fiscal Year, (ii) the
consolidated and
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consolidating financial statements of Foamex and its Subsidiaries
(which shall be audited with respect to consolidated financial
statements by Coopers & Lybrand or any other independent certified
public accountants) as at the end of such Fiscal Year which shall be
prepared in conformity with GAAP applied on a basis consistent with
prior years (except for changes with which Coopers & Lybrand or any
such other independent certified public accountants, if applicable,
shall concur and which shall have been disclosed in the notes to the
financial statements), and which shall set forth in each case in
comparative form the corresponding figures for the previous Fiscal Year
and the corresponding figures from the consolidated and consolidating
financial forecast for the Fiscal Year being reported or delivered
pursuant to Section 7.01(f), and (iii) an opinion on such consolidated
financial statements by Coopers & Lybrand or such other independent
certified public accountants acceptable to the Administrative Agents,
which opinion shall be unqualified.
(d) Officer's Certificate. Together with each delivery of any
financial statement pursuant to paragraphs (a) (with respect to the
last monthly report for each Fiscal Year), (b) and (c) of this Section
7.01, (i) an Officers' Certificate of the Borrowers 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 Borrowers and Borrowers' Subsidiaries during the accounting
period covered by such financial statements, that such review has not
disclosed the existence during or at the end of such accounting period,
and that such officers do not have knowledge of the existence as at the
date of such Officers' Certificate, of any condition or event which
constitutes an Event of Default or Potential Event of Default, or, if
any such condition or event existed or exists, specifying the nature
and period of existence thereof and what action the Borrowers or any of
Borrowers' Subsidiaries have taken, are taking and proposes to take
with respect thereto; and (ii) a certificate substantially in the form
of Exhibit F attached hereto (the "Compliance Certificate"), signed by
each Borrower's chief financial officer, setting forth calculations
(with such specificity as the Administrative Agents may reasonably
request) for the period then ended which demonstrate compliance, when
applicable, with the provisions of Article X.
(e) Accountant's Statement and Privity Letter. Together with each
delivery of the financial statements
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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 each Borrower or to any
officer or employee thereof by such accountants in connection with such
financial statements and (y) a letter in substantially the form of
Exhibit G attached hereto and made a part hereof from each Borrower to
such accountants informing such accountants that the Lenders are
relying upon the financial statements audited by such accountants and
delivered to the Administrative Agents and the Lenders pursuant to
Section 7.01(c) and that a primary intent of each Borrower in having
such financial statements audited is to induce the Lenders to continue
to make Loans to each Borrower under this Agreement. Either
Administrative Agent and each Lender may, with the consent of each
Borrower (which consent shall not be unreasonably withheld),
communicate directly with such accountants.
(f) Business Plans; Financial Projections. No later than the last
day of each Fiscal Year beginning with Fiscal Year 1997, (i) an annual
business plan for the next Fiscal Year for each of the Borrowers and
Borrowers' Subsidiaries, substantially in the form of the business plan
heretofore delivered to the Administrative Agents and the Lenders; and
(ii) a consolidated and consolidating plan and financial forecast
consisting of balance sheets, income statements and cash flow
statements on a monthly basis for the next 12 months and on an annual
basis, based upon facts and assumptions that each General Partner and
each Borrower believe to be reasonable in light of the then current and
foreseeable business conditions, for the next three succeeding Fiscal
Years of Foamex and its Subsidiaries (it being understood that actual
results may differ from the projections).
(g) Consolidated Balance Sheet. On or before ninety (90) days
after the Effective Date, a consolidated and consolidating balance
sheet of Foamex and its Subsidiaries as of June 29, 1997 (after giving
effect to all transactions contemplated by the Transaction Documents
and the payment of
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all Transaction Costs), certified as fairly presenting the financial
position of Foamex and its Subsidiaries by the chief financial officer
of each Borrower, together with such Borrower's reconciliation, in form
and substance satisfactory to the Requisite Lenders, of all changes
from the estimated pro forma balance sheet of each Borrower referred to
in Section 6.01(h).
7.2. Events of Default. Promptly upon either Borrower obtaining
knowledge (i) of any condition or event which constitutes an Event of Default or
Potential Event of Default, (ii) that any Person has given any written notice to
either Borrower or any Subsidiary of such Borrower or taken any other action
with respect to a claimed default or event or condition of the type referred to
in Section 11.01(e), or (iii) of any condition or event which has or is
reasonably likely to have a Material Adverse Effect or adversely affect the
value of, or the Collateral Agent's interest in, the Collateral (taken as a
whole) in any material respect, such Borrower shall deliver to the
Administrative Agents and the Lenders an Officer's Certificate specifying (A)
the nature and period of existence of any such claimed default, Event of
Default, Potential Event of Default, condition or event, (B) the notice given or
action taken by such Person in connection therewith, and (C) what action such
Borrower has taken, is taking and proposes to take with respect thereto.
7.3. Lawsuits. (i) Promptly upon either Borrower obtaining knowledge of
the institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting Foamex or any of
its Subsidiaries or any Property of either Borrower or any of such Subsidiaries
not previously disclosed pursuant to Section 6.01(j), which action, suit,
proceeding, governmental investigation or arbitration exposes, or in the case of
multiple actions, suits, proceedings, governmental investigations or
arbitrations arising out of the same general allegations or circumstances which
expose, in such Borrower's reasonable judgment, such Borrower or any of such
Subsidiaries to liability in an amount aggregating $500,000 or more (exclusive
of claims covered by insurance policies of such Borrower or any of such
Subsidiaries unless the insurers of such claims have disclaimed coverage or
reserved the right to disclaim coverage on such claims), such Borrower shall
give written notice thereof to the Administrative Agents and the Lenders and
provide, if requested, such other information as may be reasonably available to
enable each Lender and either Administrative Agent and its counsel to evaluate
such matters; and (ii) in addition to the requirements set forth in clause (i)
of this Section 7.03, each Borrower upon request of either Administrative Agent
or of the Requisite Lenders shall promptly give written notice of the status of
any action, suit, proceeding, governmental investigation or arbitration covered
by a report delivered
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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.
7.4. Insurance. As soon as practicable and in any event by the last day
of each Fiscal Year, each Borrower shall deliver to the Administrative Agents
and the Lenders (i) a report in form and substance reasonably satisfactory to
the Administrative Agents and the Lenders outlining all material insurance
coverage maintained as of the date of such report by such Borrower and its
Subsidiaries and the duration of such coverage and (ii) if requested by the
Administrative Agents, evidence that all premiums with respect to such coverage
have been paid when due.
7.5. ERISA Notices. Each Borrower shall deliver or cause to be
delivered, within the time limits set forth below, to the Administrative Agents
and the Lenders, at such Borrower's expense, the following information and
notices as soon as reasonably possible, and in any event:
(i) within ten (10) Business Days after either Borrower or
any ERISA Affiliate knows or has reason to know that a Termination
Event has occurred, a written statement of the chief financial
officer of such Borrower describing such Termination Event and the
action, if any, which such Borrower or any ERISA Affiliate has
taken, is taking or proposes to take with respect thereto, and
when known, any action taken or threatened by the IRS, DOL or PBGC
with respect thereto;
(ii) within ten (10) Business Days after either Borrower or
any ERISA Affiliate knows or has reason to know that a prohibited
transaction (defined in Section 406 of ERISA and Section 4975 of
the Internal Revenue Code) has occurred with respect to any Plan,
a statement of the chief financial officer of such Borrower
describing such transaction and the action which such Borrower or
any ERISA Affiliate has taken, is taking or proposes to take with
respect thereto;
(iii) within ten (10) Business Days or such longer period as
may be reasonably agreed to by either Administrative Agent after
either Borrower or ERISA Affiliate receives written notice from
such Administrative Agent requesting same, copies of each annual
report (form 5500 series), including Schedule B thereto, filed
with respect to each Benefit Plan;
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(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 a 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 such Borrower or any ERISA Affiliate with respect to such
request;
(vi) within ten (10) Business Days after the request of
either Administrative Agent regarding the occurrence of any
material increase in the benefits of any existing Benefit Plan or
the establishment of any new Benefit Plan or the commencement of
contributions to any Benefit Plan to which such Borrower or any
ERISA Affiliate was not previously contributing, notification of
such increase, establishment or commencement;
(vii) within ten (10) Business Days after either Borrower or
any ERISA Affiliate receives notice of any unfavorable
determination letter from the IRS regarding the qualification of a
Plan under Section 401(a) of the Internal Revenue Code, copies of
each such letter;
(viii) within ten (10) Business Days after either Borrower or
any ERISA Affiliate fails to make a required installment or any
other required payment under Section 412 of the Internal Revenue
Code on or before the due date for such installment or payment, a
notification of such failure;
(ix) within ten (10) Business Days after either Borrower or
any ERISA Affiliate knows or has reason to know (A) a
Multiemployer Plan has been terminated, (B) the administrator or
plan sponsor of a Multiemployer Plan has provided such Borrower or
any ERISA Affiliate with notice of an intention to terminate a
Multiemployer Plan, or (C) the PBGC has instituted or will
institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan; and
(x) within ten (10) Business Days or such longer period as
may be reasonably agreed to by either Administrative Agent after
either Borrower or any of Borrowers' Subsidiaries or any ERISA
Affiliate receives written notice from such Administrative Agent
requesting the same, copies of any Foreign Employee Benefit Plan
and related documents, reports and correspondence specified in
such notice.
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For purposes of this Section 7.05, each Borrower and any Subsidiary and any
ERISA Affiliate shall be deemed to know all facts known by the administrator of
any Plan of which such Borrower, Subsidiary or ERISA Affiliate is the plan
sponsor. Section 7.05 shall only apply with respect to a Plan for which either
Borrower or any Subsidiary or any ERISA Affiliate is an "employer" as defined in
Section 3(5) of ERISA.
7.6. Environmental Notices. (a) Each Borrower shall notify the
Administrative Agents and the Lenders in writing, promptly upon such Borrower's
learning thereof, of any:
(i) notice or claim to the effect that such Borrower or any
of its Subsidiaries is or may be liable to any Person as a result
of the Release or threatened Release of any Contaminant into the
environment;
(ii) notice that such Borrower or any of its Subsidiaries is
subject to investigation by any Governmental Authority evaluating
whether any Remedial Action is needed to respond to the Release or
threatened Release of any Contaminant into the environment;
(iii) notice that any Property of such Borrower or any of its
Subsidiaries is subject to an Environmental Lien;
(iv) notice of violation to such Borrower or any of its
Subsidiaries of any Environmental, Health or Safety Requirement of
Law;
(v) condition which might reasonably constitute or result in
a material violation of any Environmental, Health or Safety
Requirement of Law;
(vi) commencement or threat of any judicial or administrative
proceeding alleging a material violation by such Borrower or any
of its Subsidiaries of any Environmental, Health or Safety
Requirement of Law;
(vii) new or proposed changes to any existing Environmental,
Health or Safety Requirement of Law that could result in a
Material Adverse Effect; or
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(viii) any proposed acquisition of stock, assets, real
estate, or leasing of property, or any other action by such
Borrower or any of its Subsidiaries that could subject such
Borrower or any of its Subsidiaries to environmental, health or
safety Liabilities and Costs.
(b) Within forty-five (45) days after the end of each
Fiscal Year, each Borrower shall submit to the Administrative Agents
and the Lenders a report summarizing the status of environmental,
health or safety compliance, hazard or liability issues identified in
notices required pursuant to Section 7.06(a), disclosed on Schedule
6.01-Q or identified in any notice or report required herein.
7.7. Labor Matters. Each Borrower shall notify the Administrative
Agents and the Lenders in writing, promptly upon each Borrower's learning
thereof, of (i) any material labor dispute to which such Borrower or any of its
Subsidiaries may become a party, including, without limitation, any strikes,
lockouts or other disputes relating to such Persons' plants and other facilities
and (ii) any material liability incurred with respect to the closing of any
plant or other facility of such Borrower or any of its Subsidiaries.
7.8. Permitted Subordinated Indebtedness; Senior Note Indenture; Senior
Secured Note Indenture. Upon its receipt of any of the following, each Borrower
shall deliver promptly thereafter a copy thereof to the Administrative Agents
and the Lenders: (a) any notice or other communication delivered by or on behalf
of such Borrower to any Person in connection with the Permitted Subordinated
Indebtedness or any Existing Secured Debt Indenture (other than, in the case of
the Senior Secured Note Indenture, notices delivered to the trustee thereunder
pursuant to Sections 314(c) and 314(d) of the Trust Indenture Act of 1939 (15
U.S.C. ss.ss. 77aaa-77bbbb)); and (b) any material notice or other material
communication received by such Borrower from any Person in connection with any
agreement or other document relating to Permitted Subordinated Indebtedness or
any Existing Secured Debt Indenture promptly after such notice or other
communication is received by such Borrower.
7.9. Other Reports. Each Borrower shall deliver or cause to be
delivered to the Administrative Agents and the Lenders copies of all financial
statements, reports and notices, if any, sent or made available generally by
such Borrower to its Securities holders or filed with the Securities and
Exchange Commission, all press releases made available generally by such
Borrower or any of its Subsidiaries to the public concerning material
developments in the business of such Borrower or any such Subsidiary and all
notifications received by such Borrower or its Subsidiaries pursuant to the
Securities Exchange Act and the rules promulgated thereunder.
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7.10. Change of Control. Promptly upon, and in any event within three
(3) Business Days of, the Managing General Partner or either Borrower obtaining
knowledge of the occurrence or potential occurrence of a Change of Control, the
Managing General Partner or either Borrower shall deliver to the Administrative
Agents an Officer's Certificate specifying, with respect to a Change of Control,
(i) the cause and nature of such Change of Control and (ii) the estimated date
on which the Change of Control will become effective.
7.11. Dissolution Notice. At least ninety (90) days prior to the
commencement of any action by any General Partner or any Limited Partner to
dissolve Foamex pursuant to the Partnership Agreement or otherwise, the Managing
General Partner or Foamex shall deliver an Officer's Certificate to the
Administrative Agents specifying (i) the cause of such dissolution and (ii) the
date on which such dissolution will occur.
7.12. 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, Foamex 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, each Borrower
shall prepare and deliver to the Administrative Agents and the Lenders such
other information with respect to such Borrower, any of its Subsidiaries, or the
Collateral, including, without limitation, schedules identifying and describing
the Collateral and any dispositions thereof and financial information, as from
time to time may be reasonably requested by either Administrative Agent or by
the Requisite Lenders.
ARTICLE VIII.
AFFIRMATIVE COVENANTS
Each Borrower and each General Partner covenant and agree that so long
as any Commitments are outstanding and thereafter until all of the Obligations
(other than indemnities not yet due) are paid in full (or, in the case of
contingent Obligations (other than indemnities not yet due), cash collateral has
been deposited in the Cash Collateral Account in the full amount of such
Obligations on terms satisfactory to the Lenders), unless the Requisite Lenders
shall otherwise give prior written consent thereto:
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8.1. Partnership/Corporate Existence, etc. The General Partners shall
cause Foamex to, and Foamex shall, at all times, maintain its partnership
existence, and each Borrower shall cause its Subsidiaries to, and the General
Partners and GFI shall, at all times, maintain its corporate existence and
preserve and keep, or cause to be preserved and kept, in full force and effect
its rights and franchises material to its businesses, except where the loss or
termination of such rights and franchises is not likely to have a Material
Adverse Effect.
8.2. Partnership Powers; Conduct of Business. The General Partners
shall, and shall cause Foamex to, and each Borrower shall, and shall cause each
of their respective Subsidiaries to, qualify and remain qualified to do business
in each jurisdiction in which the nature of its business requires it to be so
qualified except in such jurisdictions where the failure so to qualify would not
cause or be likely to cause a Material Adverse Effect.
8.3. Compliance with Laws, etc. The General Partners shall, and shall
cause Foamex to, and each Borrower shall, and shall cause each of their
respective Subsidiaries to, (a) comply with all Requirements of Law and all
restrictive covenants affecting such Person or the business, Property, assets or
operations of such Person, and (b) obtain as needed all Permits necessary for
its operations and maintain such Permits in good standing, except in the case
where noncompliance with either clause (a) or (b) above is not reasonably likely
to have a Material Adverse Effect.
8.4. Payment of Taxes and Claims; Tax Consolidation. Each Borrower
shall pay, and cause each of their respective Subsidiaries to pay, (a) all
taxes, assessments and other governmental charges imposed upon it or on any of
its Property or assets or in respect of any of its franchises, business, income
or Property before any penalty accrues thereon, and (b) all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
which have become due and payable and which by law have or may become a Lien
(other than a Lien permitted by Section 9.03) upon any of such Borrower's or
such Subsidiary's Property or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided, however, that no such taxes,
assessments and governmental charges referred to in clause (a) above or claims
referred to in clause (b) above need be paid if being contested in good faith by
appropriate proceedings diligently instituted and conducted and if such reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor. No Borrower will, nor will either Borrower
permit any of its Subsidiaries to, file or consent to the filing
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of any consolidated income tax return with any Person (except as required by law
and other than the other Borrowers or Borrowers' Subsidiaries).
8.5. Insurance. Each 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 either Borrower, any of Borrowers' Subsidiaries or any other
Person shall affect the right of the Collateral Agent to recover under such
policy or policies of insurance in case of loss or damage. In the event either
Borrower or any such Subsidiary, at any time or times hereafter shall fail to
obtain or maintain any of the policies or insurance required herein or to pay
any premium in whole or in part relating thereto, then the Collateral Agent,
without waiving or releasing any obligations or resulting Event of Default
hereunder, may at any time or times thereafter (but shall be under no obligation
to do so) obtain and maintain such policies of insurance and pay such premiums
and take any other action with respect thereto which the Collateral Agent deems
advisable. All sums so disbursed by the Collateral Agent shall constitute
Protective Advances hereunder and be part of the Obligations, payable as
provided in this Agreement.
8.6. Inspection of Property. Each Borrower shall permit, and cause its
Subsidiaries to permit, any authorized representative(s) designated by either
Administrative Agent or by any Lender to visit and inspect any of the Properties
of such Borrower or such Subsidiaries, to examine, audit, check and make copies
of their respective financial and accounting records, books, journals, orders,
receipts and any correspondence and other data relating to their respective
businesses or the transactions contemplated hereby and by the Transaction
Documents (including, without limitation, in connection with environmental
compliance, hazard or liability), and to discuss their affairs, finances and
accounts with their officers and independent certified public
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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 such Borrower's expense.
8.7. Books and Records; Discussions. Each Borrower shall keep and
maintain, and cause its Subsidiaries to keep and maintain, in all material
respects proper books of record and account in which entries in conformity with
GAAP shall be made of all dealings and transactions in relation to their
respective businesses and activities, including, without limitation,
transactions and other dealings with respect to the Collateral. Such books and
records shall include true and complete records of all Indebtedness of each
Borrower to the other Borrower as permitted under Section 9.01(vii) and each
Officer's Certificate delivered pursuant to Section 7.01(d) shall set forth in
reasonable detail the amount, date of incurrence, interest rate and amortization
schedule for such Indebtedness.
8.8. Insurance and Condemnation Proceeds. Each Borrower hereby directs
(and, if applicable, shall cause its Subsidiaries to direct) all insurers under
policies insuring any loss of Collateral and payors of any condemnation claim or
award relating to the Collateral to pay all proceeds relating to Collateral and
payable under such policies or with respect to such claim or award directly to
the Collateral Agent, for the benefit of the Administrative Agents, the Issuing
Banks and the Lenders, and in no case to either Borrower or one or more of the
Borrowers' 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).
8.9. ERISA Compliance. Each Borrower shall, and shall cause each of its
Subsidiaries and ERISA Affiliates to, establish, maintain and operate all Plans
to comply in all material respects with the provisions of ERISA, the Internal
Revenue Code, all other applicable laws, and the regulations and interpretations
thereunder and the respective requirements of the governing documents for such
Plans.
8.10. Foreign Employee Benefit Plan Compliance. Each Borrower shall,
and shall cause each of its Subsidiaries and ERISA Affiliates to, establish,
maintain and operate all Foreign Employee Benefit Plans to comply in all
material respects with all laws, regulations and rules applicable
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thereto and the respective requirements of the governing documents for such
Plans.
8.11. Maintenance of Property. Each Borrower shall, and shall cause
each of its Subsidiaries to, maintain in all material respects all of the owned
and leased Property of such Borrower or such Subsidiary used and necessary in
the business of such Borrower or such Subsidiary in adequate, working condition
and repair, ordinary wear and tear excepted, and not permit, commit or suffer
any waste or abandonment of any such Property and from time to time shall make
or cause to be made all material repairs, renewal and replacements thereof,
including, without limitation, any capital improvements which may be required;
provided, however, that such Property may be altered or renovated in the
ordinary course of business and disposed of in accordance with the provisions in
Section 9.02.
8.12. Condemnation. Immediately upon learning of the institution of any
proceeding for the condemnation or other taking of any of the owned or leased
real property of either Borrower or any of Borrowers' Subsidiaries, such
Borrower shall notify the Administrative Agents of the pendency of such
proceeding, and permit the Administrative Agents to participate in any such
proceeding, and from time to time will deliver to the Administrative Agents all
instruments reasonably requested by the Administrative Agents to permit such
participation.
8.13. Environmental Matters. Each Borrower shall (i) maintain an
environmental health and safety plan for all manufacturing facilities which, at
a minimum, addresses measures for response to catastrophic releases of
Contaminants into the environment or workplace, a copy of which plan shall be
delivered to the Administrative Agents; and (ii) maintain a health and safety
management system, which includes a corporate environmental health and safety
management structure, environmental health and safety personnel at each
facility, and a periodic facility audit program directed by the corporate
environmental health and safety management unit.
8.14. Future Mortgages. Each 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 the Effective Date.
The relevant Borrower or Subsidiary Guarantor shall, with respect to
any leasehold Mortgage, exercise good-faith bona fide
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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 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
Each 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:
9.1. Indebtedness. None of the Borrowers nor any of the Borrowers'
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) to the extent otherwise permitted to be made pursuant to
this Agreement, the Transaction Costs;
(iii) the Permitted Existing Indebtedness and any extensions,
renewals, refundings or replacements of Permitted Existing
Indebtedness (other than the Existing Secured Debt, the Senior
Subordinated Debentures and the 1993 Subordinated Debentures),
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 $25,000,000
at any time, Capital Leases and purchase money Indebtedness
incurred to finance the acquisition of fixed assets, and
Indebtedness incurred to refinance such Capital
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Leases and purchase money Indebtedness; provided, however, that
for purposes of this Section 9.1(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;
(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 any Borrower
or Subsidiary Guarantor to any other Borrower or Subsidiary
Guarantor to the extent permitted by Section 9.04(vi) or (y) owing
by any 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;
(viii) Indebtedness incurred by Foamex Fibers not in excess
of a principal amount of $2,000,000; and
(ix) 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.
9.2. Sales of Assets. None of the Borrowers nor any of the Borrowers'
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
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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 Foamex 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 (except as contemplated in clause (v) below) 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;
(iii) sales of assets by any Credit Party to any other Credit
Party, provided, that, the aggregate amount of all such sales
(valued at the Fair Market Value thereof), plus the amount of all
loans and/or advances outstanding under Section 9.01(vii) plus the
amount of all Investments outstanding under Section 9.04(vi)
(computed as set forth in Section 9.04) shall not exceed
$50,000,000;
(iv) the sublease of office space made by Foamex to Foamex
International and TIHI at 375 Park Avenue, New York, New York and
the lease or sublease by Foamex and its Subsidiaries of Real
Property to other Persons (but only to the extent such lease or
sublease is not prohibited by Section 9.08);
(v) sales or contributions of assets made by any Credit Party
to a Foreign Subsidiary to the extent permitted pursuant to
Section 9.04(iv) and 9.04(viii);
(vi) the sale of assets comprising Foamex's plants at
Mesquite, Texas or LaPorte, Indiana, and the sale, during the
twelve month period following the Effective Date, of assets
comprising all or any portion of the Borrowers' non-foam business
in the United States;
(vii) the license by Foamex 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;
(viii) leases or subleases of Property set forth on Schedule
9.02(viii) hereto; and
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(ix) leases or subleases of Property which in the aggregate
do not provide for rental payments in excess of $1,000,000 per
Fiscal Year;
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 (v) 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).
9.3. Liens. None of General Partners, the Borrowers nor any of
Borrowers' 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 Property is subject
at the time of either Borrower's or any of Borrowers' Subsidiary's
purchase thereof) securing Indebtedness of the Borrowers or their
Subsidiaries permitted under Section 9.01(iv);
(v) to the extent Indebtedness secured thereby is permitted
to be extended, renewed, refunded or refinanced pursuant to
Section 9.01(iii), a future Lien on any Property which is subject
to a Lien described in clauses (ii) and (iv) above, if such future
Lien attaches only to the same Property and secures only such
permitted extensions; and
(vi) Liens on the assets of Foamex Fibers securing
Indebtedness permitted to be incurred by Foamex Fibers pursuant to
Section 9.01(viii).
9.4. Investments. None of the Borrowers nor any of Borrowers'
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;
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(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 by Foamex in Persons in an amount not to exceed
$25,000,000 in the aggregate at any time outstanding; provided,
that (i) Investments in Persons which are not Subsidiary
Guarantors or Foreign Subsidiaries shall not exceed $15,000,000 in
the aggregate at any time outstanding and (ii) Investments in
Persons not engaged in a Permitted Business shall not exceed
$5,000,000 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 Foamex in Foamex International and the
Managing General Partner in an aggregate amount not to exceed (a)
$2,500,000 in any Fiscal Year and (b) $5,000,000 in the aggregate
for the period beginning on the Effective Date and ending on the
Commitment Termination Date;
(vi) Investments by any Credit Party in any other Credit
Party so long as the aggregate amount of Investments made by
Foamex in GFI and by either Borrower in the other Subsidiary
Guarantors pursuant to this Section plus the aggregate amount of
sales or other transfers of assets (valued at the Fair Market
Value thereof) to such Subsidiary Guarantors permitted under
Section 9.02(iii) and (without duplications) loans and/or advances
permitted under Section 9.01(vii) shall not exceed $50,000,000 in
the aggregate at any time outstanding;
(vii) Investments by Foamex and/or GFI in no more than 10,000
shares of common stock of Foamex International received by Foamex
in connection with the compromise of certain employee loans in the
aggregate principal amount not in excess of $1,000,000;
(viii) Investments by any Credit Party in Foreign
Subsidiaries so long as the aggregate amount of Investments made
pursuant to this Section 9.04(viii), together with the aggregate
amount of sales or other transfers of assets (valued at the Fair
Market Value thereof) to such Foreign Subsidiaries pursuant to
Section 9.02(v) and (without duplication) the amount of
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Accommodation Obligations permitted under Section 9.05(v) shall
not exceed $25,000,000 in the aggregate at any time outstanding;
(ix) Investments consisting of loans or advances by Foamex to
Foamex International under the Tax Advance Agreement in an amount
not to exceed $25,000,000 for the purpose (x) of paying the fees,
expenses and other costs associated with the sale of general and
limited partnership interests in JPS Automotive L.P. and (y) of
making payments in satisfaction of any outstanding obligation it
may have as a prior owner of JPS Automotive L.P.;
(x) Investments made on or after the Effective Date in an
amount not to exceed $5,000,000 in the aggregate at any time
outstanding in (x) the Trace Global Opportunities Fund and (y) the
New TIHI Loan; and
(xi) Investments in Hedging Obligations permitted under
Section 9.01(ix);
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 a 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 clauses (iv), (vi) and (viii) 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.
9.5. Accommodation Obligations. None of the Borrowers nor any of
Borrowers' 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;
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(iii) Accommodation Obligations of the Subsidiary Guarantors
in connection with their guaranty of the New Foamex Subordinated
Notes, but only to the extent set forth in the New Foamex
Subordinated Note Indenture;
(iv) Accommodation Obligations of either Borrower in respect
of Indebtedness permitted by Section 9.01 of any Subsidiary
Guarantor; and
(v) Accommodation Obligations of Credit Parties in respect of
Indebtedness of Foreign Subsidiaries, provided, that, the
aggregate outstanding amount of such Accommodation Obligations
plus the aggregate sales or other transfers of assets (valued at
the Fair Market Value thereof) to such Foreign Subsidiaries
permitted under Section 9.02(v) plus the amount of all Investments
outstanding under Section 9.04(viii) shall not exceed $25,000,000
(computed as set forth in Section 9.04);
provided that, except as contemplated in clause (v) above, in no event shall any
of the Borrowers, Trace Foam 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.
9.6. Restricted Junior Payments. None of the Borrowers nor any of
Borrowers' Subsidiaries (other than Foreign Subsidiaries) shall declare or make
any Restricted Junior Payment, except (without duplication):
(i) dividends or distributions to Foamex in respect of its
Equity Interests in any of its wholly-owned Subsidiaries or to any
of the Borrowers' wholly-owned Subsidiaries from any Subsidiary of
either Borrower;
(ii) (x) regularly scheduled interest payments in respect of
the New Foamex Subordinated Notes, the Subordinated Debentures and
the 1993 Subordinated Debentures if such interest payments are
permitted to be made pursuant to the terms of the New Foamex
Subordinated Notes and the New Foamex Subordinated Note Indenture,
the Subordinated Debentures and the Subordinated Debenture
Indenture or the 1993 Subordinated Debentures and the 1993
Subordinated Debenture Indenture, as the case may be, (y) the
Refinancing and (z) so long as no Event of Default or Potential
Event of Default has occurred and is
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continuing (or would result therefrom), Delayed Purchases;
(iii) distributions to the General Partners and the Limited
Partner in respect of Foamex's obligations (and not in excess of
such obligations) under the Tax Sharing Agreement to which it is a
party (A) in an amount up to $8,000,000 to be made on or prior to
the six-month anniversary of the Effective Date, (B) in an amount
necessary to permit Foamex International to service its debt
obligations referred to in Section 9.04(v) (but only if such
distributions are immediately repaid to Foamex); (C) in an amount
necessary to permit Foamex International to service its debt
obligations referred to in Section 9.04(ix) (but only if such
distributions are immediately repaid to Foamex) and (D) 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 Foamex to make such
payment shall not be discharged but shall be suspended and made
upon termination of this Agreement or subject to the terms of any
refinancing of the Obligations;
(iv) so long as no Event of Default or Potential Event of
Default has occurred and is continuing (or would result therefrom)
and all payments due and payable by Foamex under the Tax Sharing
Agreement permitted under clause (iii)(D) above have been made,
(x) distributions to the General Partners not in excess of
$3,000,000 in the aggregate in each Fiscal Year pursuant to the
Management Agreement and (y) Permitted Aircraft Payments;
provided, however, that no such payment or other distribution in
this clause (iv) may be made unless Foamex shall have delivered a
Compliance Certificate in respect of the Fiscal Quarter ended just
prior to the date of the proposed dividend or distribution
demonstrating compliance with Article X on a pro forma basis
(after giving effect to all distributions permitted under this
clause (iv));
(v) so long as no Event of Default or Potential Event of
Default has occurred and is continuing (or would result
therefrom), regularly scheduled interest payments in respect of
the GW Subordinated Note if such interest payments are permitted
to be made pursuant to the terms of the GW Subordinated Note and
the GW Subordination Agreement;
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(vi) so long as no Event of Default or Potential Event of
Default has occurred and is continuing (or would result
therefrom), dividends or distributions by Foamex to its partners
(A) in respect of each four fiscal quarter period in which the
Total Net Debt to EBDAIT Ratio is less than 4.25:1.00 but greater
than or equal to 3.50:1.00, an amount not to exceed the lesser of
(I) 50% of the excess of Consolidated Net Income of Foamex and its
Subsidiaries (excluding, however, those Subsidiaries which are not
Subsidiary Guarantors) for such four fiscal quarter period over
any Permitted Aircraft Payments in respect of such four fiscal
quarter period (to the extent not subtracted from such
Consolidated Net Income) and (II) $15,000,000 and (B) in respect
of each four fiscal quarter period in which the Total Net Debt to
EBDAIT Ratio is less than 3.50:1.00, an amount not to exceed to
the lesser of (I) 50% of the excess of Consolidated Net Income of
Foamex and its Subsidiaries (excluding, however, those
Subsidiaries which are not the Subsidiary Guarantors) for such
four fiscal quarter period over any Permitted Aircraft Payments
(to the extent not subtracted from such Consolidated Net Income)
and (II) $20,000,000; provided, however, that no such dividend or
other distribution may be made unless (A) Foamex shall have
delivered to the Administrative Agents a certificate in form and
substance acceptable to the Administrative Agents signed by the
chief financial officer of Foamex that Foamex had a pro forma
Fixed Charge Coverage Ratio for the four fiscal quarter period
ended just prior to the proposed dividend or distribution of at
least 1.15:1.00 (after giving effect to such proposed dividend or
distribution), (B) Foamex shall have delivered a Compliance
Certificate in respect of the four fiscal quarter period ended
just prior to the date of the proposed dividend or distribution
demonstrating compliance with Article X on a pro forma basis
(after giving effect to such proposed dividend or distribution),
(C) the aggregate amount of dividends or other distributions
pursuant to this clause (vi) made during the preceding 365-day
period just ended prior to the date of the payment of the proposed
dividend or distribution shall not exceed the aggregate amount of
payments of Term Loans made in respect of such preceding 365-day
period just ended pursuant to Sections 3.01(a), (b)(ii), (b)(iii),
(b)(iv) and (b)(v) and (D) Foamex has delivered the financial
statements and Compliance Certificate required by Sections
7.01(a), 7.01(c) and 7.01(d)(ii) in respect of such fiscal period;
and
(vii) payments made to Foamex International to purchase
materials pursuant to, and as defined in, the
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Foamex International Supply Agreement, provided that (a) Foamex
shall not make any payment to Foamex International to purchase any
materials prior to receipt by Foamex of title to such materials,
and (B) any amounts paid to Foamex International in excess of the
purchase price and reasonable expenses which either Borrower would
have paid had it purchased such materials directly from the
supplier of such materials shall be deemed to be a Restricted
Junior Payment made pursuant to Section 9.06(vi).
9.7. Conduct of Business. None of the Borrowers nor any of Borrowers'
Subsidiaries shall engage in any business other than a Permitted Business.
Neither General Partner shall engage in any business other than acting as a
general partner to Foamex and holding its general partnership interest in Foamex
and, in the case of Trace Foam, guaranteeing certain obligations of TIHI to
Recticel Foam Corporation and Generale Bank. Foamex shall cause FCC not to
engage in any business activity except the issuance of the New Foamex
Subordinated Notes, the Senior Notes, the Subordinated Debentures, the 1993
Subordinated Debentures and the Senior Secured Notes and the performance of
FCC's obligations thereunder, under the Senior Secured Note Collateral Documents
(as defined in the Existing Credit Agreement) to which it is a party, and under
the Senior Note Indenture, the Subordinated Debenture Indenture, the 1993
Subordinated Debenture Indenture, the Senior Secured Note Indenture, the New
Foamex Subordinated Note Indenture and the Loan Documents to which it is a
party.
9.8. Transactions with Shareholders and Affiliates. None of the
Borrowers nor any of Borrowers' Subsidiaries shall directly or indirectly enter
into any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service), with any holder or
holders of more than five percent (5%) of any class of Equity Interests in any
General Partner or its corporate parents and their Affiliates (other than Foamex
or a Subsidiary of Foamex). Nothing contained in this Section 9.08 shall
prohibit (i) any transaction expressly permitted by Section 9.02(vii), 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 Foamex), Section 9.04(v),
Section 9.04(vii), Section 9.04(ix), Section 9.04(x), Section 9.05 and Section
9.06; (ii) increases in compensation and benefits for officers and employees of
either Borrower or any of such Borrower's predecessors in interest or any of
their respective Subsidiaries which are customary in the industry or consistent
with the past business practice of such Borrower or such Subsidiary or
consistent with market conditions; (iii) payment of customary directors' fees
and indemnities; (iv) performance of any obligations arising under the
Transaction
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Documents; (v) transactions listed on Schedule 6.01-Z; (vi)sales and purchases
of Inventory between Foamex and its Subsidiaries on the one hand and TIHI and
its Subsidiaries on the other hand, on an arms length basis in the ordinary
course of business; or (vii) the sublease of office space by Foamex to Foamex
International and TIHI at 375 Park Avenue, New York, New York.
9.9. Restriction on Fundamental Changes. None of the General Partners,
the Borrowers nor any of Borrowers' 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 such General Partner's, such
Borrowers' or any such Subsidiary's business or Property, whether now or
hereafter acquired, except (i) transactions permitted under Section 9.02 or
transactions contemplated by 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 a Borrower
or another Subsidiary Guarantor so long as if such merger is with or into
Foamex, Foamex shall be the surviving Person. Foamex shall not change its
partnership status to a corporate status.
9.10. Sales and Leasebacks. None of the Borrowers nor any of Borrowers'
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.
9.11. Margin Regulations; Securities Laws. None of the Borrowers nor
any of Borrowers' 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. None of the Borrowers shall:
(i) engage, or permit any of its ERISA Affiliates to engage,
in any prohibited transaction described in Sections 406 of ERISA
or 4975 of the Internal Revenue Code for which a statutory or
class
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exemption is not available or a private exemption has not been
previously obtained from the DOL;
(ii) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Internal Revenue
Code), with respect to any Benefit Plan, whether or not waived;
(iii) terminate, or permit any ERISA Affiliate to terminate,
any Benefit Plan which would result in any liability of such
Borrower or any ERISA Affiliate under Title IV of ERISA;
(iv) fail to make any contribution or payment to any
Multiemployer Plan which such Borrower or any ERISA Affiliate may
be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto;
(v) fail, or permit any ERISA Affiliate to fail, to pay any
required installment or any other payment required under Section
412 of the Internal Revenue Code on or before the due date for
such installment or other payment;
(vi) amend, or permit any ERISA Affiliate to amend, a Benefit
Plan resulting in an increase in current liability for the plan
year such that such Borrower or any ERISA Affiliate is required to
provide security to such Plan under Section 401(a)(29) of the
Internal Revenue Code;
(vii) permit any unfunded liabilities with respect to any
Foreign Pension Plan if the existence of such liabilities or the
absence of full funding would be contrary to applicable law for
such Foreign Pension Plan or subject to a penalty under such law
with respect to such Foreign Pension Plan; or
(viii) fail, or permit any of its Subsidiaries or ERISA
Affiliates to fail, to pay any required contributions or payments
to a Foreign Pension Plan on or before the due date for such
required installment or payment.
9.13. Issuance of Equity Interests. None of the Borrowers nor any of
the Subsidiary Guarantors shall issue any Equity Interests except to the
existing holders of its Equity Interests.
9.14. Constituent Documents. None of the General Partners, the
Borrowers nor any of Borrowers' Subsidiaries (other than Foreign
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Subsidiaries) shall amend, modify or otherwise change any of the terms or
provisions in any of their respective Constituent Documents as in effect on the
Effective Date, except for such amendments or modifications deemed immaterial by
the Administrative Agents.
9.15. Amendments to Permitted Subordinated Indebtedness. None of the
Borrowers nor any of Borrowers' Subsidiaries (other than Foreign Subsidiaries)
shall amend, modify or otherwise change any of the terms or provisions of the
Permitted Subordinated Indebtedness or any indenture or other agreement relating
to Existing Secured Debt.
9.16. Cancellation of Debt; Prepayment. None of the Borrowers nor any
of the Borrowers' 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, the Senior Notes, the Subordinated Debentures, the 1993
Subordinated Debentures and the Senior Secured Notes), other than (i)
Indebtedness in respect of the Obligations, (ii) a repayment of the Existing
Secured Debt as required by the Intercreditor Agreements and the Existing
Secured Debt Indentures, (iii) the Refinancing (including so long as no
Potential Event of Default or Event of Default has occurred and is continuing
any Delayed Purchases), (iv) repayments of the Existing Secured Debt, the
Subordinated Debentures and the 1993 Subordinated Debentures to the extent
required to be made pursuant to the terms of the Existing Secured Debt
Indentures, the Subordinated Debenture Indenture and the 1993 Subordinated
Debenture Indenture, respectively, and (v) as permitted (and in accordance with
terms of) Section 9.06(ii).
9.17. Fiscal Year. None of the Borrowers nor any of Borrowers'
Subsidiaries (other than Foreign Subsidiaries) shall change its Fiscal Year for
accounting or tax purposes from a period consisting of the 12 month period
ending on Sunday nearest December 31 in each calendar year.
9.18. 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 such amendments,
supplements or modifications deemed immaterial by the Administrative Agents.
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9.19. Environmental Matters. None of the Borrowers nor any of
Borrowers' 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 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
Each 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:
10.1. Minimum Net Worth. The Net Worth of Foamex and its Subsidiaries
on a consolidated basis at all times during any period from the last day of the
fiscal quarter in each Fiscal Year of the Borrowers 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 1997 $(154.3)
Third fiscal quarter of 1997 (151.0)
Fourth fiscal quarter of 1997 (146.4)
First fiscal quarter of 1998 (142.0)
Second fiscal quarter of 1998 (136.4)
Third fiscal quarter of 1998 (128.9)
Fourth fiscal quarter of 1998 (121.4)
First fiscal quarter of 1999 (117.2)
Second fiscal quarter of 1999 (111.9)
Third fiscal quarter of 1999 (104.8)
Fourth fiscal quarter of 1999 (97.62)
First fiscal quarter of 2000 (92.8)
Second fiscal quarter of 2000 (86.7)
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Third fiscal quarter of 2000 (78.4)
Fourth fiscal quarter of 2000 (70.2)
First fiscal quarter of 2001 (64.8)
Second fiscal quarter of 2001 (57.9)
Third fiscal quarter of 2001 (48.6)
Fourth fiscal quarter of 2001 (39.4)
First fiscal quarter of 2002 (33.4)
Second fiscal quarter of 2002 (25.7)
Third fiscal quarter of 2002 (15.5)
Fourth fiscal quarter of 2002 (5.3)
First fiscal quarter of 2003 1.2
Second fiscal quarter of 2003 9.6
Third fiscal quarter of 2003 20.7
Fourth fiscal quarter of 2003 31.9
First fiscal quarter of 2004 38.9
Second fiscal quarter of 2004 47.8
Third fiscal quarter of 2004 59.7
Fourth fiscal quarter of 2004 71.6
First fiscal quarter of 2005 79.5
Second fiscal quarter of 2005 89.7
Third fiscal quarter of 2005 103.2
Fourth fiscal quarter of 2005 116.8
First fiscal quarter of 2006 123.8
Second fiscal quarter of 2006 and thereafter 131.8
10.2. Minimum Interest Coverage Ratio. Interest Coverage Ratio of
Foamex and its Subsidiaries on a consolidated basis, as determined as of the
last day of each fiscal quarter of the Borrowers set forth below for the 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
-------------- -------------
Second fiscal quarter of 1997 2.50:1.00
Third fiscal quarter of 1997 2.50:1.00
Fourth fiscal quarter of 1997 2.50:1.00
First fiscal quarter of 1998 2.50:1.00
Second fiscal quarter of 1998 2.50:1.00
Third fiscal quarter of 1998 2.50:1.00
Fourth fiscal quarter of 1998 2.50:1.00
First fiscal quarter of 1999 2.50:1.00
Second fiscal quarter of 1999 2.50:1.00
Third fiscal quarter of 1999 2.50:1.00
Fourth fiscal quarter of 1999 2.50:1.00
First fiscal quarter of 2000 2.75:1.00
Second fiscal quarter of 2000 2.75:1.00
Third fiscal quarter of 2000 2.75:1.00
Fourth fiscal quarter of 2000 2.75:1.00
First fiscal quarter of 2001 3.00:1.00
Second fiscal quarter of 2001 3.00:1.00
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Third fiscal quarter of 2001 3.00:1.00
Fourth fiscal quarter of 2001 3.00:1.00
First fiscal quarter of 2002 3.00:1.00
Second fiscal quarter of 2002 3.00:1.00
Third fiscal quarter of 2002 3.00:1.00
Fourth fiscal quarter of 2002 3.00:1.00
First fiscal quarter of 2003 3.00:1.00
Second fiscal quarter of 2003 3.00:1.00
Third fiscal quarter of 2003 3.00:1.00
Fourth fiscal quarter of 2003 3.00:1.00
First fiscal quarter of 2004 3.00:1.00
Second fiscal quarter of 2004 3.00:1.00
Third fiscal quarter of 2004 3.00:1.00
Fourth fiscal quarter of 2004 3.00:1.00
First fiscal quarter of 2005 3.00:1.00
Second fiscal quarter of 2005 3.00:1.00
Third fiscal quarter of 2005 3.00:1.00
Fourth fiscal quarter of 2005 3.00:1.00
First fiscal quarter of 2006 3.00:1.00
Second fiscal quarter of 2006 and thereafter 3.00:1.00
10.3. Minimum Fixed Charge Coverage Ratio. Fixed Charge Coverage Ratio
of Foamex and its Subsidiaries on a consolidated basis, as determined as of the
last day of each fiscal quarter of the Borrowers set forth below for the 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
-------------- -------------
Second fiscal quarter of 1997 1.10:1.00
Third fiscal quarter of 1997 1.10:1.00
Fourth fiscal quarter of 1997 1.10:1.00
First fiscal quarter of 1998 1.10:1.00
Second fiscal quarter of 1998 1.10:1.00
Third fiscal quarter of 1998 1.10:1.00
Fourth fiscal quarter of 1998 1.10:1.00
First fiscal quarter of 1999 1.10:1.00
Second fiscal quarter of 1999 1.10:1.00
Third fiscal quarter of 1999 1.10:1.00
Fourth fiscal quarter of 1999 1.10:1.00
First fiscal quarter of 2000 1.10:1.00
Second fiscal quarter of 2000 1.10:1.00
Third fiscal quarter of 2000 1.10:1.00
Fourth fiscal quarter of 2000 1.10:1.00
First fiscal quarter of 2001 1.10:1.00
Second fiscal quarter of 2001 1.10:1.00
Third fiscal quarter of 2001 1.10:1.00
Fourth fiscal quarter of 2001 1.10:1.00
First fiscal quarter of 2002 1.10:1.00
Second fiscal quarter of 2002 1.10:1.00
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Third fiscal quarter of 2002 1.10:1.00
Fourth fiscal quarter of 2002 1.10:1.00
First fiscal quarter of 2003 1.10:1.00
Second fiscal quarter of 2003 1.10:1.00
Third fiscal quarter of 2003 1.10:1.00
Fourth fiscal quarter of 2003 1.10:1.00
First fiscal quarter of 2004 1.00:1.00
Second fiscal quarter of 2004 1.00:1.00
Third fiscal quarter of 2004 1.00:1.00
Fourth fiscal quarter of 2004 1.00:1.00
First fiscal quarter of 2005 1.00:1.00
Second fiscal quarter of 2005 1.00:1.00
Third fiscal quarter of 2005 1.00:1.00
Fourth fiscal quarter of 2005 1.00:1.00
First fiscal quarter of 2006 1.00:1.00
Second fiscal quarter of 2006 and thereafter 1.00:1.00
10.4. Maximum Leverage Ratio. Total Net Debt to EBDAIT Ratio of Foamex
and its Subsidiaries on a consolidated bases, as determined as of the last day
of each fiscal quarter of the Borrowers set forth below for the four fiscal
quarter period ending on such date, shall not exceed the maximum ratio set forth
below:
Fiscal Quarter Minimum Ratio
-------------- -------------
Second fiscal quarter of 1997 5.00:1.00
Third fiscal quarter of 1997 5.00:1.00
Fourth fiscal quarter of 1997 5.00:1.00
First fiscal quarter of 1998 4.75:1.00
Second fiscal quarter of 1998 4.75:1.00
Third fiscal quarter of 1998 4.75:1.00
Fourth fiscal quarter of 1998 4.50:1.00
First fiscal quarter of 1999 4.50:1.00
Second fiscal quarter of 1999 4.50:1.00
Third fiscal quarter of 1999 4.50:1.00
Fourth fiscal quarter of 1999 4.00:1.00
First fiscal quarter of 2000 4.00:1.00
Second fiscal quarter of 2000 4.00:1.00
Third fiscal quarter of 2000 4.00:1.00
Fourth fiscal quarter of 2000 3.75:1.00
First fiscal quarter of 2001 3.75:1.00
Second fiscal quarter of 2001 3.75:1.00
Third fiscal quarter of 2001 3.75:1.00
Fourth fiscal quarter of 2001 3.50:1.00
First fiscal quarter of 2002 3.50:1.00
Second fiscal quarter of 2002 3.50:1.00
Third fiscal quarter of 2002 3.50:1.00
Fourth fiscal quarter of 2002 3.25:1.00
First fiscal quarter of 2003 3.25:1.00
Second fiscal quarter of 2003 3.25:1.00
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Third fiscal quarter of 2003 3.25:1.00
Fourth fiscal quarter of 2003 3.00:1.00
First fiscal quarter of 2004 3.00:1.00
Second fiscal quarter of 2004 3.00:1.00
Third fiscal quarter of 2004 3.00:1.00
Fourth fiscal quarter of 2004 3.00:1.00
First fiscal quarter of 2005 3.00:1.00
Second fiscal quarter of 2005 3.00:1.00
Third fiscal quarter of 2005 3.00:1.00
Fourth fiscal quarter of 2005 3.00:1.00
First fiscal quarter of 2006 3.00:1.00
Second fiscal quarter of 2006 and thereafter 3.00:1.00
ARTICLE XI.
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.1. Events of Default. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. Either Borrower shall fail
to pay when due any of the Obligations and if such non-payment relates
to interest on the Loans or fees, such non-payment continues for a
period of more than five (5) days.
(b) Breach of Certain Covenants. Either Borrower or any General
Partner shall fail duly and punctually to perform or observe any
agreement, covenant or obligation binding on such Person under Sections
3.05, 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 either Borrower or any General Partner
to either Administrative Agent, any Lender or any Issuing Bank herein
or by Foamex or any of its Subsidiaries or any General Partner in any
of the other Loan Documents or in any statement or certificate at any
time given by any such Person pursuant to any of the Loan Documents
shall be false or misleading in any material respect on the date as of
which made (or deemed made).
(d) Other Defaults. Either Borrower or any General Partner shall
default in the performance of or compliance with any term contained in
this Agreement (other than as covered by paragraph (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.
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(e) Default as to Other Indebtedness. Foamex or any of its
Subsidiaries shall fail to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise) with respect to Permitted Subordinated Indebtedness or any
other Indebtedness (other than an Obligation) in excess of $1,000,000;
or any breach, default or event of default shall occur, or any other
condition shall exist under any instrument, agreement or indenture
pertaining to any such Indebtedness, if the effect thereof is to cause
an acceleration, mandatory redemption or other required repurchase of
such Indebtedness, or during the continuance of such breach, default or
event of default, permit the holder(s) of such Indebtedness to
accelerate the maturity of any such Indebtedness or require a
redemption or other repurchase of such Indebtedness; or any such
Indebtedness shall be otherwise declared to be due and payable (by
acceleration or otherwise) or required to be prepaid, redeemed or
otherwise repurchased by Foamex or any of its Subsidiaries (other than
by a regularly scheduled required prepayment) prior to the stated
maturity thereof; in each case such accelerated, repurchased or other
Indebtedness to exceed, in the aggregate, $1,000,000.
(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) An
involuntary case shall be commenced against any Loan Party and the
petition shall not be dismissed, stayed, bonded or discharged within
forty-five (45) days after commencement of the case; or a court having
jurisdiction in the premises shall enter a decree or order for relief
in respect of any Loan Party in an involuntary case, under any
applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect; or any other similar relief shall be granted
under any applicable federal, state, local or foreign law; or the board
of directors (or other governing body) of any Loan Party (or any
committee thereof) adopts any resolution or otherwise authorizes any
action to approve any of the foregoing.
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar
powers over any Loan Party or over all or a substantial part of
the Property of any Loan Party shall be entered; or an interim
receiver, trustee or other custodian of any Loan Party or of all
or a substantial part of the Property of any Loan Party shall be
appointed or a warrant of attachment, execution or similar process
against any substantial part of the Property of any Loan 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
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of directors of any Loan Party (or any committee thereof) adopts
any resolution or otherwise authorizes any action to approve any
of the foregoing.
(g) Voluntary Bankruptcy; Appointment of Receiver, etc. Any Loan
Party shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or
to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession
by a receiver, trustee or other custodian for all or a substantial part
of its Property; or any Loan Party shall make any assignment for the
benefit of creditors or shall be unable or fail, or admit in writing
its inability, to pay its debts as such debts become due.
(h) Judgments and Attachments. Any money judgment (other than a
money judgment covered by insurance as to which the insurance company
has acknowledged coverage), writ or warrant of attachment, or similar
process against any Loan Party or any of their respective assets
involving in any case an amount in excess of $1,000,000 is entered and
shall remain undischarged, unvacated, unbonded or unstayed for a period
of sixty (60) days or in any event later than five (5) days prior to
the date of any proposed sale thereunder.
(i) Dissolution. (i) Either Administrative Agent shall have
received an Officer's Certificate described in Section 7.11, (ii) any
order, judgment or decree shall be entered against any Loan Party or
any of Borrowers' Subsidiaries decreeing its involuntary dissolution or
split up and such order shall remain undischarged and unstayed for a
period in excess of sixty (60) days, (iii) any General Partner or any
Limited Partner shall commence any action to dissolve Foamex pursuant
to the Partnership Agreement or otherwise, (iv) Foamex shall commence
any action to dissolve GFI (other than as permitted by Section 9.09),
or (v) either Borrower or any of Borrowers' Subsidiaries shall
otherwise dissolve or cease to exist except as specifically permitted
by this Agreement.
(j) Loan Documents; Failure of Security. At any time, for any
reason, (i) any Loan Document ceases to be in full force and effect or
any Loan Party or any of Borrowers' Subsidiaries party thereto seeks to
repudiate its obligations thereunder and the Liens intended to be
created thereby are, or any Loan Party or any such Subsidiary seeks to
render such Liens, invalid and unperfected, or (ii) Liens in favor of
the Administrative Agents, the 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
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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 either Borrower or any ERISA Affiliate to liability
in excess of $1,000,000.
(l) Waiver Application. The plan administrator of any Benefit Plan
for which either Borrower or an ERISA Affiliate is an "employer" as
defined in Section 3(5) of ERISA applies under Section 412(d) of the
Internal Revenue Code for a waiver of the minimum funding standards of
Section 412(a) of the Internal Revenue Code and the substantial
business hardship upon which the application for the waiver is based
could reasonably subject either Borrower or any ERISA Affiliate to
liability in excess of $1,000,000.
(m) Change of Control. Any Change of Control occurs.
(n) Material Adverse Change. An event shall exist or occur which
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.
(o) Tax Status. If Foamex 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 and Existing Secured Debt. 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 any indenture or other document relating to the
Existing Secured Debt shall have occurred and be continuing. Any of the
terms of the New Foamex Subordinated Notes or any Existing Secured Debt
Indenture or other document relating to the Existing Secured Debt 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 Foamex or of the General
Partners other than the Liens securing the Discount Debentures as in
effect on the Effective Date.
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(r) Intercreditor Agreements. Any of the parties to any of the
Intercreditor Agreements (other than the Administrative Agents and the
Lenders) shall fail to perform any material covenant or material
obligation binding on such party, or any of such Intercreditor
Agreements shall cease to be in full force and effect.
An Event of Default shall be deemed "continuing" until cured or waived
in writing in accordance with Section 13.07.
11.2. 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 each
Borrower and each General Partner; and upon the occurrence and during
the continuance of any other Event of Default, the Collateral Agent
shall at the request, or may with the consent, of the Requisite
Lenders, by written notice to each Borrower, (A) declare that the
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 each
Borrower.
(b) Deposit for Letters of Credit. In addition, after the
occurrence and during the continuance of an Event of Default, each
Borrower shall, promptly upon demand by the Collateral Agent, deliver
to the Collateral Agent, Cash Collateral in such form as requested by
the Collateral Agent for deposit 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
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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, each
Borrower shall pay all arrears of interest and all payments on account
of principal of the Loans and Reimbursement Obligations which shall
have become due otherwise than by acceleration (with interest on
principal and, to the extent permitted by law, on overdue interest, at
the rates specified in this Agreement) and all Events of Default and
Potential Events of Default (other than nonpayment of principal of and
accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 13.07,
then upon the written consent of the Requisite Lenders and written
notice to each 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 either Borrower and do not give either Borrower the right to
require the Lenders to rescind or annul any acceleration hereunder,
even if the conditions set forth herein are met.
(d) Enforcement. Each Borrower acknowledges that in the event
either Borrower or any of Borrowers' Subsidiaries fails to perform,
observe or discharge any of their respective obligations or liabilities
under this Agreement or any other Loan Document, any remedy of law may
prove to be inadequate relief to the Administrative Agents, the Issuing
Banks and the Lenders; therefore, each Borrower agrees that the
Administrative Agents, the Issuing Banks and the Lenders shall be
entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
11.3. The Cash Collateral Account. (a) If requested by either 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 such Borrower may select. After an Event of Default,
the Collateral Agent shall invest any funds held in the
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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 either 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
either 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. Each Borrower agrees that (i) any sale of Cash
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 applicable Borrower at its notice address on the
signature pages hereto at least ten (10) Business Days before the time
of the sale or disposition. Any other requirement of notice, demand or
advertisement for sale is waived to the extent permitted by law. The
Collateral Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned.
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(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
Borrowers 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 Borrowers and
shall constitute Obligations hereunder.
ARTICLE XII.
THE CREDIT AGENTS
12.1. Appointment. (a) Each Lender and each Issuing Bank hereby
designates and appoints Citicorp as the Collateral Agent, Intercreditor
Collateral Agent and as an Administrative Agent and Scotiabank as the Funding
Agent, Intercreditor 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 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
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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
Borrowers or any Subsidiary of the Borrowers shall have any rights to
rely on or enforce any of the provisions hereof (other than as
expressly set forth in Section 12.07). In performing its functions and
duties under this Agreement, each 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 either Borrower or any
Subsidiary of the Borrowers. Each Credit Agent may perform any of its
duties hereunder, or under the Loan Documents, by or through its agents
or employees.
12.2. 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 Foamex and
its Subsidiaries in connection with the making and the continuance of the Loans
hereunder and with the issuance of the Letters of Credit and shall make its own
appraisal of the creditworthiness of each Borrower and Borrowers' Subsidiaries
initially and on a continuing basis, and the 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 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.
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12.3. 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 either Borrower or any of
Borrowers' 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 either Borrower or any of
Borrowers' Subsidiaries, or the existence or possible existence of any
Potential Event of Default or Event of Default.
(b) Right to Request Instructions. 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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12.4. 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
Borrowers), independent public accountants and other experts selected by it.
12.5. Indemnification. To the extent that the Credit Agents are not
reimbursed and indemnified by the Borrowers, 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.
12.6. 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 either
Borrower or any of its Subsidiaries as if they were not acting as Credit Agents
pursuant hereto.
12.7. Successor Administrative Agent.
(a) Resignation. The Administrative Agents may resign from the
performance of all their functions and duties hereunder at any time by
giving at least thirty (30) Business Days' prior written notice to the
Borrowers and the
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Lenders. Such resignation shall take effect upon the acceptance by a
successor Administrative Agent of appointment pursuant to this Section
12.07.
(b) Remaining Administrative Agent. Upon any such notice of
resignation by an Administrative Agent, the remaining Administrative
Agent may in its discretion, appoint itself to the resigning
Administrative Agent's functions and duties. The remaining
Administrative Agent shall give the Lenders notice at least 15 days
prior to the effectiveness of such resignation.
(c) Appointment by Requisite Lenders. Upon any such notice of
resignation and if the remaining Administrative Agent has not notified
the Lenders that it has assumed the functions and duties of the
resigning Administrative Agent, the Requisite Lenders shall have the
right to appoint a successor Administrative Agent selected from among
the Lenders which appointment shall be subject to the prior written
approval of the Borrowers (which may not be unreasonably withheld, and
shall not be required upon the occurrence and during the continuance of
an Event of Default).
(d) Appointment by Retiring Administrative Agent. If a successor
Administrative Agent shall not have been appointed within the thirty
(30) Business Day period provided in paragraph (a) of this Section
12.07, the retiring Administrative Agent, with the consent of the
Borrowers (which may not be unreasonably withheld, and shall not be
required upon the occurrence and during the continuance of an Event of
Default), shall then appoint a successor Administrative Agent who shall
serve as Administrative Agent until such time, if any, as the Requisite
Lenders appoint a successor Administrative Agent as provided above.
(e) Rights of the Successor and Retiring Administrative Agents.
Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement. After
any retiring Administrative Agent's resignation hereunder as an
Administrative Agent, the provisions of this Article XII shall inure to
its benefit as to any actions taken or omitted to be taken by it while
it was an Administrative Agent under this Agreement.
12.8. Relations Among Lenders. Each Lender and each Issuing Bank agrees
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that it will not take any legal action, nor institute any actions or
proceedings, against either Borrower or any other obligor hereunder or with
respect to any Collateral, without the prior written consent of the Requisite
Lenders. Without limiting the generality of the foregoing, no Lender may
accelerate or otherwise enforce its portion of the Obligations, or unilaterally
terminate its Commitments except in accordance with Section 11.02(a).
12.9. Concerning the Collateral and the Loan Documents.
(a) Protective Advances. The Collateral Agent (i) 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 and (ii) after
the occurrence and during the continuance of an Event of Default or
Potential Event of Default, upon the written request and direction of
the Administrative Agents, shall make a disbursement or the
disbursements necessary, (as set forth in such written request) to
either (A) pay in whole or in part the principal amount of, accrued and
unpaid interest on and, if applicable, redemption premium, with respect
to Existing Secured Debt or (B) to defease such Existing Secured Debt,
in each case, in accordance with the term of the applicable Existing
Secured Debt Indenture (collectively, "Protective Advances"). The
Collateral Agent shall notify the Borrowers and each Lender in writing
of each such Protective Advance, which notice shall include a
description of the purpose of such Protective Advance. The Borrowers
agree to pay the Collateral Agent, upon demand, the principal amount of
all outstanding Protective Advances, together with interest thereon at
the rate from time to time applicable to Base Rate Loans from the date
of such Protective Advance until the outstanding principal balance
thereof is paid in full. If the Borrowers fail to make payment in
respect of any Protective Advance within one (1) Business Day after the
date the Borrowers receive written demand therefor from the Collateral
Agent, the Collateral Agent shall promptly notify each Lender having a
Revolving Loan 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
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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
Borrowers. Notwithstanding the foregoing, no Lender shall be required
to fund any Protective Advance in an amount exceeding such Lender's
then remaining Revolving Loan 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 Loan
Documents, and the exercise by the Collateral Agent or the Requisite
Lenders (or, where so required, such greater proportion) of the powers
set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all
of the Lenders and Issuing Banks. Without limiting the generality of
the foregoing, the Collateral Agent shall have the sole and exclusive
right and authority to (i) act as the disbursing and collecting agent
for the Lenders and the Issuing Banks with respect to all proceeds of
Collateral; (ii) execute and deliver each Loan Document relating to the
Collateral and accept delivery of each such agreement delivered by
Foamex or any of its Subsidiaries; (iii) act as collateral agent for
the Lenders and the Issuing Banks for purposes of the perfection of all
security interests and Liens created by such agreements and all other
purposes stated therein, provided, however, the Collateral Agent hereby
appoints, authorizes and directs the Lenders and the Issuing Banks to
act as collateral sub-agent for the Administrative Agents, the Lenders
and the Issuing Banks for purposes of the perfection of all security
interests and Liens with respect to the Borrowers' and their
Subsidiaries, respective deposit accounts maintained with, and cash and
Cash Equivalents held by, such Lender or such Issuing Bank; (iv)
manage, supervise and otherwise deal with the Collateral; (v) take such
action as is necessary or
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desirable to maintain the perfection and priority of the security
interests and liens created or purported to be created by the Loan
Documents; and (vi) except as may be otherwise specifically restricted
by the terms of this Agreement or any other Loan Document, exercise all
remedies given to the Administrative Agents, the Lenders or the Issuing
Banks with respect to the Collateral under the Loan Documents relating
thereto, applicable law or otherwise.
(c) Release of Collateral. (i) Each Lender hereby directs, in
accordance with the terms of this Agreement, the Collateral Agent to
release any Lien held by the Collateral Agent for the benefit of the
Administrative Agents, the Lenders and the Issuing Banks:
(A) against all of the Collateral, upon payment in full of
the Obligations and termination of this Agreement (or, to the
extent certain Obligations remain contingent (other than in
respect of indemnities), sufficient Cash Collateral has been
deposited 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
Foamex or any of its Subsidiaries, as certified to the Collateral
Agent by the applicable Borrower in an Officer's Certificate if
such sale or disposition is permitted by Section 9.02 or is
otherwise consented to by the Requisite Lenders.
(ii) Each Lender and each Issuing Bank hereby directs the
Collateral Agent to execute and deliver or file such termination
and partial release statements and do such other things as are
necessary to release Liens to be released pursuant to this Section
12.09(c) promptly upon the effectiveness of any such release.
(d) Additional Collateral Matters. Except for the safe custody of
any Collateral in its possession and the accounting for moneys actually
received by it pursuant to this Agreement, the Collateral Agent shall
have no obligation whatsoever to the Lenders or to any other Person to
assure that the Collateral exists or is owned by either Borrower or is
cared for, protected or insured or has been encumbered or that the
Liens granted to the Collateral Agent pursuant to the Loan Documents
have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Collateral Agent in
this Section
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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
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
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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
13.1. 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 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).
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(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 each Borrower and each of
Borrowers' Subsidiaries, the Administrative Agents and the Lenders may
treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be
available for inspection by each Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior 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 Borrowers 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 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) each Borrower, the
Administrative Agents and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and (iv) such participant's
rights to agree or to restrict such Lender's ability to agree to the
modification, waiver or release of any of the terms of the Loan
Documents or to the release of any Collateral covered by the Loan
Documents, to consent to any action or failure to act by any party to
any of the Loan Documents or any of
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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 either
Borrower to comply with the terms of Section 3.03, (F) any increase in
the amounts Lenders are required or expected to reserve in respect of
the Loans resulting from a failure of either Borrower to comply with
the terms of Section 3.04, or (G) any decrease 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 Foamex or its Subsidiaries furnished to such
Lender by the Administrative Agents or by or on behalf of the
Borrowers; provided that, prior to any such disclosure, such assignee
or participant, or proposed assignee or participant, shall agree to
preserve in accordance with Section 13.20 the confidentiality of any
confidential information described therein.
(g) Payment to Participants. Anything in this Agreement to the
contrary notwithstanding, in the case of any participation, all amounts
payable by either Borrower under the Loan Documents shall be calculated
and made in the manner and to the parties required hereby as if no such
participation had been sold.
(h) Lenders' Creation of Security Interests. Notwithstanding any
other provision set forth in this Agreement, any Lender may at any time
create a security interest in all or any portion of its rights under
this Agreement (including, without limitation, Obligations owing to it
and Notes 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
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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.
13.2. Expenses.
(a) Generally (the Administrative Agents). Each Borrower agrees
upon demand to pay, or reimburse each Administrative Agent for all of
such Administrative Agent's reasonable internal and external audit,
legal, appraisal, valuation, filing, document duplication and
reproduction and investigation expenses and for all other out-of-pocket
costs and expenses of every type and nature (including, without
limitation, the reasonable fees, expenses and disbursements of Sidley &
Austin and Mayer, Brown & Platt, local legal counsel, auditors,
accountants, appraisers, printers, insurance and environmental
advisers, and other consultants and agents) incurred by such
Administrative Agent in connection with (A) such Administrative Agent's
audit and investigation of Foamex and its Subsidiaries in connection
with the preparation, negotiation, and execution of the Loan Documents
and such Administrative Agent's periodic audits of each Borrower; (B)
the preparation, negotiation, execution and interpretation of this
Agreement (including, without limitation, the satisfaction or attempted
satisfaction of any of the conditions set forth in Article V), the Loan
Documents and the making of the Loans hereunder; (C) the creation,
perfection or protection of the Liens under the Loan Documents
(including, without limitation, any reasonable fees and expenses for
local counsel in various jurisdictions); (D) the ongoing administration
of this Agreement and the Loans, including consultation with attorneys
in connection therewith and with respect to such Administrative Agent's
rights and responsibilities under this Agreement and the other Loan
Documents; (E) the protection, collection or enforcement of any of the
Obligations or the enforcement of any of the Loan Documents; (F) the
commencement, defense or intervention in any court proceeding relating
to the Obligations, the Property, either Borrower, any of Borrowers'
Subsidiaries, this Agreement or any of the other Loan Documents; (G)
the response to, and preparation for, any subpoena or request for
document production with which such Administrative Agent is served or
deposition or other proceeding in which such Administrative Agent is
called to testify, in each case, relating in any way to the
Obligations, the Property, either Borrower, any of Borrowers'
Subsidiaries, this Agreement or any of the other Loan Documents; and
(H) any amendments, consents, waivers, assignments, restatements, or
supplements to any of the Loan Documents and the preparation,
negotiation, and execution of the same.
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(b) After Default. Each Borrower further agrees to pay or
reimburse the Administrative Agents, the Issuing Banks and the Lenders
upon demand for all out-of-pocket costs and expenses, including,
without limitation, reasonable attorneys' fees (including allocated
costs of internal counsel and costs of settlement) incurred by either
Administrative Agent, any Issuing Bank or any Lender after the
occurrence of an Event of Default (i) in enforcing any Loan Document or
Obligation or any security therefor or exercising or enforcing any
other right or remedy available by reason of such Event of Default;
(ii) in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a
"work-out" or in any insolvency or bankruptcy proceeding; (iii) in
commencing, defending or intervening in any litigation or in filing a
petition, complaint, answer, motion or other pleadings in any legal
proceeding relating to the Obligations, the Property, either Borrower
or any of Borrowers' Subsidiaries and related to or arising out of the
transactions contemplated hereby or by any of the other Transaction
Documents; and (iv) in taking any other action in or with respect to
any suit or proceeding (bankruptcy or otherwise) described in clauses
(i) through (iii) above.
13.3. Indemnity. Each 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, 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
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and Costs under federal, state or local environmental, health or safety laws,
regulations or common law principles arising from or in connection with the
past, present or future operations of either Borrower, either Borrowers'
Subsidiaries or any of their respective predecessors in interest, or the past,
present or future environmental condition of any respective Property of either
Borrower or such Subsidiaries or any of their respective predecessors in
interest (relating to the period during which either Borrower, such
Subsidiaries, any of their respective predecessors in interest, or the Lenders,
in such capacity, owned or operated such Property), the presence of
asbestos-containing materials at any respective Property of either Borrower or
such Subsidiaries or the Release or threatened Release of any Contaminant into
the environment from any respective Property of either Borrower or such
Subsidiaries or (c) the Subordinated Debentures, the Senior Secured Notes, the
Senior Notes, the 1993 Subordinated Notes, the Discount Debentures, the Foamex
International Warrants and Equity Interests in Foamex, the New Foamex
Subordinated Notes, the New Foamex Subordinated Note Offering Memorandum, the
Offer to Purchase, the use or intended use of the proceeds of issuance of the
Senior Notes, the Subordinated Debentures, the Senior Secured Notes, the
Discount Debentures, the New Foamex Subordinated Notes or any other transaction
contemplated in the Transaction Documents (collectively, the "Indemnified
Matters"); provided, however, the Borrowers 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, each Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees.
13.4. Change in Accounting Principles. If any change in the accounting
principles used in the preparation of the most recent financial statements
referred to in Section 7.01 are hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the Borrowers
with the agreement of their independent certified public accountants and such
changes result in a change in the method of calculation of any of the covenants,
standards or terms found in Article IX and Article X, the parties hereto agree
to enter into negotiations in order to amend such provisions so as to equitably
reflect such changes with the desired result that the criteria for evaluating
compliance with such covenants, standards and terms by the
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Borrowers shall be the same after such changes as if such changes had not been
made; provided, however, no change in GAAP that would affect the method of
calculation of any of the covenants, standards or terms shall be given effect in
such calculations until such provisions are amended, in a manner satisfactory to
the Requisite Lenders and the Borrowers, to so reflect such change in accounting
principles.
13.5. 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
Borrowers at any time or from time to time, without notice to any Person (any
such notice being hereby expressly waived) to set-off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured
(but not including trust accounts)) and any other Indebtedness at any time held
by or owing to such Lender, Issuing Bank, any of their Affiliates or any such
purchaser to or for the credit or the account of either Borrower against and on
account of the obligations of such Borrower to such Lender, Issuing Bank, any of
their Affiliates or any such purchaser, including, but not limited to, all Loans
and Letters of Credit and all claims of any nature or description arising out of
or in connection with this Agreement, irrespective of whether or not (i) such
Lender, Issuing Bank or such purchaser shall have made any demand hereunder or
(ii) the Collateral Agent, at the request or with the consent of the Requisite
Lenders, shall have declared the principal of and interest on the Loans and
other amounts due hereunder to be due and payable as permitted by Article XI and
even though such Obligations may be contingent or unmatured. Each Lender, each
Issuing Bank and each such purchaser agrees that it shall not, without the
express consent of the Requisite Lenders, and that it shall, to the extent it is
lawfully entitled to do so, upon the request of the Requisite Lenders, exercise
its set-off rights hereunder against any accounts of either Borrower or
Borrowers' Subsidiaries now or hereafter maintained with such Lender, Issuing
Bank or any Affiliate of either of them or such purchaser.
13.6. 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
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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 or otherwise, receive payment of a proportion of the aggregate
amount of the Obligations held by it, which is greater than the amount which
such Lender is entitled to receive hereunder, the Lender receiving such excess
payment shall purchase, without recourse or warranty, an undivided interest and
participation (which it shall be deemed to have done simultaneously upon the
receipt of such payment) in such Obligations owed to the others so that all such
recoveries with respect to such Obligations shall be applied ratably in
accordance with their Pro Rata Shares; provided, however, that if all or part of
such excess payment received by the purchasing party is thereafter recovered
from it, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such party to the extent necessary to
adjust for such recovery, but without interest except to the extent the
purchasing party is required to pay interest in connection with such recovery.
Each Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 13.06 may, to the fullest extent permitted by
law, exercise all its rights of payment (including, subject to Section 13.05,
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of either Borrower in the amount of such
participation.
13.7. Amendments and Waivers. Unless otherwise provided in this
Agreement, no amendment or modification of any provision of this Agreement shall
be effective without the written agreement of the Requisite Lenders and the
Borrowers, and no termination or waiver of any provision of this Agreement, or
consent to any departure by the Borrowers therefrom, shall be effective without
the written concurrence of the Requisite Lenders, which the Requisite Lenders
shall have the right to grant or withhold in their sole discretion.
Notwithstanding the foregoing, any amendment, modification, termination, waiver
or consent with respect to (i) any provision in Article X shall be effective by
a written agreement of the Requisite Lenders and the Borrowers and (ii) any of
the following provisions of this Agreement shall be effective only by a written
agreement, signed by each Lender affected thereby: (a) waiver of any of the
conditions specified in Sections 5.01 and 5.02 (except with respect to a
condition based upon another provision of this Agreement, the waiver of which
requires only the concurrence of the Requisite Lenders and express waiver of
such conditions set forth in this Agreement), (b) increase in the aggregate
amount of the Commitments of such Lender (it being understood that any increase
in the aggregate Commitments would require the consent of all the Lenders), (c)
reduction of the principal of, rate or amount of interest on the
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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 Term A Loan Commitment Termination Date or 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 either Borrower or any guarantor of the Obligations or of all or any
substantial portion of the Collateral (except as provided in Section 12.09(c)),
(f) change in the aggregate Pro Rata Share of the Lenders which shall be
required for the Lenders or any of them to take action hereunder (including,
without limitation, the definition of "Requisite Lenders") or (g) amendment of
Sections 3.03, 3.04, 13.02, 13.03 13.05 and 13.06 or this Section 13.07. The
Collateral Agent may, but shall have no obligation to, with the written
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on either Borrower in any case shall entitle either Borrower
to any other or further notice or demand in similar or other circumstances.
Notwithstanding anything to the contrary contained in this Section 13.07, no
amendment, modification, waiver or consent shall affect the rights or duties of
either Administrative Agent under this Agreement or the other Loan Documents,
unless made in writing and signed by such Administrative Agent in addition to
the Lenders required above to take such action.
13.8. 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.
13.9. 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,
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the Existing Credit Agreement (it being understood that the Borrowers 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
each Borrower in respect of taxes, indemnification and expense reimbursement
shall survive the execution and delivery of this Agreement and the other Loan
Documents, the making and repayment of the Loans, the issuance and discharge of
Letters of Credit hereunder and the termination of this Agreement and shall not
be limited in any way by the passage of time or occurrence of any event and
shall expressly cover time periods when either Administrative Agent, any of the
Issuing Banks or any of the Lenders may have come into possession or control of
any of the Borrowers' or their Subsidiaries' Property, except as limited by
applicable statutes of limitation.
13.10. Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of either Administrative Agent, any Lender or any
Issuing Bank in the exercise of any power, right or privilege under any of the
Loan Documents shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing under the Loan Documents are cumulative to and not exclusive
of any rights or remedies otherwise available.
13.11. 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 either Borrower or any other party or against or in payment of any or all of
the Obligations. To the extent that either Borrower makes a payment or payments
to the 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
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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, IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
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 each 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 each Borrower, or any interest therein, may not be assigned
without the written consent of all Lenders.
13.17. Certain Consents and Waivers of the Borrowers.
(a) Personal Jurisdiction. EACH OF THE ADMINISTRATIVE AGENTS, THE
LENDERS, THE ISSUING BANKS, EACH BORROWER AND EACH GENERAL PARTNER
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL
COURT SITTING IN NEW YORK, NEW YORK, AND ANY COURT HAVING JURISDICTION
OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY ACTION OR
PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR
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ANY LOAN DOCUMENT, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR
OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN
SUCH FEDERAL COURT. EACH BORROWER AND EACH GENERAL PARTNER IRREVOCABLY
DESIGNATES AND APPOINTS 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, EACH BORROWER AND EACH GENERAL PARTNER
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH BORROWER AND EACH
GENERAL PARTNER WAIVES IN ALL DISPUTES ANY OBJECTION THAT THEY MAY HAVE
TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
EACH BORROWER AGREES THAT THE COLLATERAL AGENT SHALL HAVE THE
RIGHT TO PROCEED AGAINST EACH BORROWER OR ITS PROPERTY IN A COURT IN
ANY LOCATION TO ENABLE THE ADMINISTRATIVE AGENTS, THE LENDERS AND THE
ISSUING BANKS TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR
THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED
IN FAVOR OF THE ADMINISTRATIVE AGENTS, ANY LENDER OR ANY ISSUING BANK.
EACH BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF
THE COURT IN WHICH THE ADMINISTRATIVE AGENTS, ANY LENDER OR ANY ISSUING
BANK MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
(b) Service of Process. EACH BORROWER AND EACH GENERAL PARTNER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE PROCESS AGENT OR EACH BORROWER'S OR EACH GENERAL PARTNER'S NOTICE
ADDRESS SPECIFIED BELOW, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS
AFTER SUCH MAILING. EACH OF THE BORROWERS AND EACH GENERAL PARTNER
IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL
AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENTS, THE LENDERS AND
ISSUING BANKS TO BRING PROCEEDINGS AGAINST EACH BORROWER OR EACH
GENERAL PARTNER IN THE COURTS OF ANY OTHER JURISDICTION.
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(c) Waiver of Jury Trial. EACH OF THE ADMINISTRATIVE AGENTS, EACH
BORROWER AND EACH GENERAL PARTNER IRREVOCABLY WAIVES TRIAL BY JURY IN
ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT.
13.18. Counterparts; Effectiveness; Inconsistencies. This Agreement and
any amendments, waivers, consents, or supplements hereto may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement and each of the other Loan Documents shall be
construed to the extent reasonable to be consistent one with the other, but to
the extent that the terms and conditions of this Agreement are actually
inconsistent with the terms and conditions of any other Loan Document, this
Agreement shall govern.
13.19. Limitation on Agreements. All agreements between each Borrower,
the 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 either Borrower under any of the Loan Documents be directly
or indirectly secured (within the meaning of Regulation U) by Margin Stock.
13.20. Confidentiality. Subject to Section 13.01(f), the Lenders and
the Issuing Banks shall hold all nonpublic information obtained pursuant to the
requirements of this Agreement and identified as such by the Borrowers in
accordance with such Lender's or such Issuing Bank's customary procedures for
handling confidential information of this nature and in 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 Borrowers 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 Borrowers; provided, however, each offeree shall be required to
agree that if it does not become a transferee or participant it shall return all
materials furnished to it by the Borrowers in connection with this Agreement.
Any and all confidentiality agreements entered into between any Lender or any
Issuing Bank and the Borrowers shall survive the execution of this Agreement.
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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.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first above written.
BORROWER: FOAMEX L.P.
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By FMXI, Inc.
its Managing General Partner
By /s/ George Karpinski
Title: Vice President
Notice Address:
Foamex L.P.
1000 Columbia Avenue
Linwood, Pennsylvania 19061
Attn.: Kenneth R. Fuette
Telecopier No. (610) 859-3085
with copies to:
Trace Foam, Inc.
c/o Trace International Holdings, Inc.
375 Park Avenue
New York, NY 10152
Attn.: Philip N. Smith, Jr., Esq.
Telecopier No. (212) 593-1363
FMXI, Inc.
c/o Foamex International Inc.
1000 Columbia Avenue
Linwood, Pennsylvania 19061
Attn.: Kenneth R. Fuette
Telecopier No. (610) 859-3085
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BORROWER: GENERAL FELT INDUSTRIES, INC.
- --------
By /s/ George Karpinski
Title: Vice President
Notice Address:
General Felt Industries, Inc.
1000 Columbia Avenue
Linwood, Pennsylvania 19061
Attn.: Kenneth R. Fuette
Telecopier No. (610) 859-3085
with copies to:
Trace Foam, Inc.
c/o Trace International Holdings, Inc.
375 Park Avenue
New York, NY 10152
Attn.: Philip N. Smith, Jr., Esq.
Telecopier No. (212) 593-1363
FMXI, Inc.
c/o Foamex International Inc.
1000 Columbia Avenue
Linwood, Pennsylvania 19061
Attn.: Kenneth R. Fuette
Telecopier No. (610) 859-3085
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TRACE FOAM COMPANY, INC.
By /s/ Philip N. Smith, Jr.
Title: Vice President
Notice Address:
Trace Foam
c/o Trace International Holdings, Inc.
375 Park Avenue
New York, NY 10152
Attn.: Robert N. Nelson
Telecopier No. (212) 593-1363
with a copy to:
Trace International Holdings, Inc.
375 Park Avenue
New York, NY 10152
Attn.: Philip N. Smith, Jr., Esq.
Telecopier No. (212) 593-1363
FMXI, INC.
By /s/ George Karpinski
Title: Vice President
Notice Address:
c/o Foamex International Inc.
1000 Columbia Avenue
Linwood, Pennsylvania 19061
Attn.: Kenneth R. Fuette
Telecopier No. (610) 859-3085
with a copy to:
Trace International Holdings, Inc.
375 Park Avenue
New York, NY 10152
Attn.: Philip N. Smith, Jr., Esq.,
and
Robert H. Nelson
Telecopier No. (212) 593-1363
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CITICORP USA, INC., as Administrative
Agent, Collateral Agent, individually
as a Lender, and as Intercreditor
Collateral Agent
By /s/
Title: Attorney-in-Fact
LIBO Rate Lending Office or
LIBO Rate Affiliate:
Citicorp USA, INC.
399 Park Avenue
New York, New York 10043
Attn.: Timothy L. Freeman
Telecopier No. (212) 793-1290
Notice Address:
Citicorp USA, INC.
399 Park Avenue
New York, New York 10043
Attn.: Timothy L. Freeman
Telecopier No. (212) 793-1290
Commitments
-----------
Term A Loan Commitment: $8,444,444.44
Term B Loan Commitment: $10,476,190.48
Term C Loan Commitment: $9,523,809.52
Revolving Loan Commitment: $10,555,555.56
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CITIBANK, N.A., as Issuing Bank
By /s/
Title: Attorney-in-Fact
Notice Address:
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Attn.: Timothy L. Freeman
Telecopier No. (212) 793-1290
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THE BANK OF NOVA SCOTIA, as
Administrative Agent, Funding Agent,
Issuing Bank, individually as a
Lender, and as Intercreditor Agent
By /s/
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
Commitments
-----------
Term A Loan Commitment: $8,444,444.44
Term B Loan Commitment: $26,190,476.19
Term C Loan Commitment: $23,809,523.81
Revolving Loan Commitment: $10,555,555.56
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TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS
1.1. Certain Defined Terms.............................................2
1.2. Computation of Time Periods.......................................47
1.3. Accounting Terms..................................................47
1.4. Other Definitional Provisions.....................................47
1.5. Other Terms.......................................................47
ARTICLE II.
AMOUNTS AND TERMS OF LOANS
2.1. Revolving Credit Facility.........................................47
2.2. The Swing Loan Facility...........................................50
2.3. Letters of Credit.................................................52
2.4. Term Loan Facilities..............................................60
2.5. Authorized Officers and Administrative Agents.....................62
ARTICLE III.
PAYMENTS AND PREPAYMENTS
3.1. Prepayments and Repayments; Reductions in Term A Loan Commitments
and Revolving Loan Commitments....................................63
3.2. Payments..........................................................69
3.3. Taxes.............................................................74
3.4. Increased Capital.................................................78
3.5. Promise to Repay; Evidence of Indebtedness........................78
3.6. Deposit Accounts..................................................80
3.7. Replacement of Lender.............................................81
ARTICLE IV.
INTEREST AND FEES
4.1. Interest on the Loans and other Obligations.......................81
4.2. Special Provisions Governing LIBO Rate Loans......................85
4.3. Fees..............................................................89
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ARTICLE V.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
5.1. Conditions Precedent to the Effectiveness of this Agreement.......90
5.2. Conditions Precedent to All Loans and Letters of Credit...........93
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
6.1. Representations and Warranties of the Borrowers...................95
ARTICLE VII.
REPORTING COVENANTS
7.1. Financial Statements..............................................108
7.2. Events of Default.................................................111
7.3. Lawsuits..........................................................112
7.4. Insurance.........................................................112
7.5. ERISA Notices.....................................................112
7.6. Environmental Notices.............................................114
7.7. Labor Matters.....................................................115
7.8. Permitted Subordinated Indebtedness; Senior Note Indenture;
Senior Secured Note Indenture.....................................115
7.9. Other Reports.....................................................116
7.10. Change of Control.................................................116
7.11. Dissolution Notice................................................116
7.12. Government Contracts..............................................116
7.13. Other Information.................................................116
ARTICLE VIII.
AFFIRMATIVE COVENANTS
8.1. Partnership/Corporate Existence, etc..............................117
8.2. Partnership Powers; Conduct of Business...........................117
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8.3. Compliance with Laws, etc.........................................117
8.4. Payment of Taxes and Claims; Tax Consolidation....................117
8.5. Insurance.........................................................118
8.6. Inspection of Property............................................118
8.7. Books and Records; Discussions....................................119
8.8. Insurance and Condemnation Proceeds...............................119
8.9. ERISA Compliance..................................................119
8.10. Foreign Employee Benefit Plan Compliance..........................119
8.11. Maintenance of Property...........................................120
8.12. Condemnation......................................................120
8.13. Environmental Matters.............................................120
8.14. Future Mortgages..................................................120
ARTICLE IX. NEGATIVE COVENANTS
9.1. Indebtedness......................................................121
9.2. Sales of Assets...................................................122
9.3. Liens.............................................................124
9.4. Investments.......................................................124
9.5. Accommodation Obligations.........................................126
9.6. Restricted Junior Payments........................................127
9.7. Conduct of Business...............................................129
9.8. Transactions with Shareholders and Affiliates.....................130
9.9. Restriction on Fundamental Changes................................130
9.10. Sales and Leasebacks..............................................131
9.11. Margin Regulations; Securities Laws...............................131
9.12. ERISA.............................................................131
9.13. Issuance of Equity Interests......................................132
9.14. Constituent Documents.............................................132
9.15. Amendments to Permitted Subordinated Indebtedness.................132
9.16. Cancellation of Debt; Prepayment..................................132
9.17. Fiscal Year.......................................................133
9.18. Transaction Documents.............................................133
9.19. Environmental Matters.............................................133
ARTICLE X.
FINANCIAL COVENANTS
10.1. Minimum Net Worth.................................................133
10.2. Minimum Interest Coverage Ratio...................................134
10.3. Minimum Fixed Charge Coverage Ratio...............................135
10.4. Maximum Leverage Ratio............................................136
ARTICLE XI.
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.1. Events of Default.................................................137
11.2. Rights and Remedies...............................................141
11.3. The Cash Collateral Account.......................................143
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ARTICLE XII. THE CREDIT AGENTS
12.1. Appointment.......................................................144
12.2. Nature of Duties..................................................145
12.3. Rights, Exculpation, etc..........................................146
12.4. Reliance..........................................................147
12.5. Indemnification...................................................147
12.6. Citicorp and Scotiabank Individually..............................147
12.7. Successor Administrative Agent....................................147
12.8. Relations Among Lenders...........................................148
12.9. Concerning the Collateral and the Loan Documents..................149
ARTICLE XIII
MISCELLANEOUS
13.1. Assignments and Participations...................................153
13.2. Expenses.........................................................155
13.3. Indemnity........................................................157
13.4. Change in Accounting Principles..................................158
13.5. Set-off..........................................................158
13.6. Ratable Sharing..................................................159
13.7. Amendments and Waivers...........................................160
13.8. Notices..........................................................161
13.9. Survival of Warranties and Agreements............................161
13.10. Failure or Indulgence Not Waiver; Remedies Cumulative............161
13.11. Marshaling; Payments Set Aside...................................162
13.12. Severability.....................................................162
13.13. Headings.........................................................162
13.14. Governing Law....................................................162
13.15. Limitation of Liability..........................................162
13.16. Successors and Assigns...........................................163
13.17. Certain Consents and Waivers of the Borrowers....................163
13.18. Counterparts; Effectiveness; Inconsistencies.....................164
13.19. Limitation on Agreements.........................................164
13.20. Confidentiality..................................................164
13.21. Entire Agreement.................................................165
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EXHIBITS
Exhibit A-1 -- Form of Revolving Note
Exhibit A-2 -- Form of Swing Loan Note
Exhibit A-3 -- Form of Term A Note
Exhibit A-4 -- Form of Term B Note
Exhibit A-5 -- Form of Term C Note
Exhibit B -- Form of Notice of Borrowing
Exhibit C -- Form of Notice of Conversion/Continuation
Exhibit D -- List of Closing Documents
Exhibit E -- Form of Officer's Certificate to Accompany Reports
Exhibit F -- Compliance Certificate
Exhibit G -- Form of Privity Letter from Borrowers to Accountants
Exhibit H -- Form of Assignment and Acceptance
Exhibit I -- Form of Foamex International Guaranty
Exhibit J-1 -- Form of Partnership Guaranty
Exhibit J-2 -- Form of Foamex Guaranty
Exhibit J-3 -- Form of GFI Guaranty
Exhibit J-4 -- Form of Subsidiary Guaranty
Exhibit K-1 -- Form of Partnership Pledge Agreement
Exhibit K-2 -- Form of Foamex Pledge Agreement
Exhibit K-3 -- Form of GFI Pledge Agreement
Exhibit K-4 -- Form of Subsidiary Pledge Agreement
Exhibit L-1 -- Foamex Security Agreement
Exhibit L-2 -- Form of GFI Security Agreement
Exhibit L-3 -- Form of Subsidiary Security Agreement
Exhibit M -- Form of Mortgage
Exhibit N -- Form of Closing Date Certificate
SCHEDULES
Schedule 1.01.2 -- Lockbox Banks
Schedule 1.01.3 -- Permitted Existing Accommodation Obligations
Schedule 1.01.4 -- Permitted Existing Indebtedness
Schedule 1.01.5 -- Permitted Existing Investments
Schedule 1.01.6 -- Permitted Existing Liens
Schedule 6.01-C -- Authorized, Issued and Outstanding Equity Interests;
Subsidiaries
Schedule 6.01-D -- Conflicts with Contractual Obligations and
Requirements of Law
Schedule 6.01-E -- Governmental Consents
Schedule 6.01-J -- Pending Actions
Schedule 6.01-L -- Taxes
Schedule 6.01-O -- Existing Environmental Matters
Schedule 6.01-R -- ERISA Matters
Schedule 6.01-S -- Foreign Employee Benefit Matters
Schedule 6.01-T -- Labor Contracts
Schedule 6.01-W -- Patent, Trademark & Permit Claims Pending
Schedule 6.01-Y -- Insurance Policies
Schedule 6.01-Z -- Related Party Contracts
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SECOND AMENDMENT TO FOURTH AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF FOAMEX L.P.
Dated as of June 12, 1997
by and among
FMXI, INC.
TRACE FOAM COMPANY, INC.
and
FOAMEX INTERNATIONAL INC.
<PAGE>
SECOND AMENDMENT TO FOURTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF FOAMEX L.P.
This Second Amendment (this "Amendment") is made as of June
12, 1997, by and among FMXI, Inc., a Delaware corporation ("FMXI"), Trace Foam
Company, Inc., a Delaware corporation ("Trace") and Foamex International Inc., a
Delaware corporation ("FII"), and amends the Fourth Amended and Restated
Agreement of Limited Partnership of Foamex L.P. (the "Partnership"), dated as of
December 14, 1993, as amended on June 28, 1994 (the "Fourth Partnership
Agreement"). Capitalized terms used but not otherwise defined herein shall have
the respective meanings assigned to such terms in the Fourth Partnership
Agreement.
WHEREAS, Foamex-JPS Automotive L.P. ("FJPS"), a 98% limited
partner in Foamex, has been merged with and into FII;
WHEREAS, the Partners wish to amend the Fourth Partnership
Agreement to admit FII as a limited partner of the Partnership in the place of
FJPS.
NOW THEREFORE, in consideration of the premises and the mutual
agreements contained herein and for other good, valuable and binding
consideration, the receipt and sufficiency of which are hereby acknowledged, and
subject to the terms hereof, the parties hereto, intending to be legally bound,
hereby amend the Fourth Partnership Agreement as follows:
Section 1. Admission of FII. Notwithstanding any of the terms
or provisions of the Fourth Partnership Agreement to the contrary, upon the
merger of FJPS with and into FII and the execution and delivery of this
Amendment, FII shall be and hereby is admitted to the Partnership as a limited
partner of the Partnership in the place of FJPS. FII, as a limited partner of
the Partnership, hereby agrees to be bound by the terms and conditions of the
Fourth Partnership Agreement and this Amendment.
Section 2. Continuation of Partnership. The parties hereto
agree that the consummation of the transactions contemplated in this Amendment,
the admission of FII as a limited partner of the Partnership will not dissolve
the Partnership and that the business of the Partnership shall be continued by
the Managing General Partner.
Section 3. Interim Closing. Each of the parties hereto who is
a Partner pursuant to the Fourth Partnership Agreement prior to this Amendment
agrees that it will be allocated income or loss for tax purposes pursuant to an
interim closing of the books as of the date hereof pursuant to the relevant
provisions of the Fourth Partnership Agreement.
<PAGE>
Section 4. Effect of Amendment. On and after the date hereof,
each reference in the Fourth Partnership Agreement to "this Agreement",
"hereof", "hereunder" or words of like import referring to the Fourth
Partnership Agreement shall mean and be a reference to the Fourth Partnership
Agreement as amended by this Amendment. The Fourth Partnership Agreement, as
amended by this Amendment, shall continue to be in full force and effect and is
hereby in all respects ratified and confirmed.
Section 5. Further Assurances. From time to time upon request
and without further consideration, each of the parties hereto shall, and shall
cause its subsidiaries and affiliates to, execute, deliver and acknowledge all
such further instruments and do such further acts as any other party hereto may
reasonably require to evidence or implement the transactions contemplated by
this Amendment. Notwithstanding anything to the contrary contained in the Fourth
Partnership Agreement, each of the parties hereto hereby consents to any and all
of the transactions contemplated by this Amendment.
Section 6. Waiver. Any failure of any of the parties to comply
with any obligation, covenant, agreement or condition herein may be waived by
any of the parties entitled to the benefit thereof only by a written instrument
signed by each such party granting such waiver, but such waiver or failure to
insist upon strict compliance with such obligation, representation, warranty,
covenant, agreement or condition shall not operate as a waiver of or estoppel
with respect to any subsequent or other failure.
Section 7. Governing Law. This Amendment shall be governed by,
and construed in accordance with, the laws of the State of Delaware regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
Section 8. Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
and delivered by means of facsimile transmission or otherwise, each of which
when so executed and delivered shall be deemed to be an original and all of
which when taken together shall constitute but one and the same Amendment.
Section 9. Severability. If any provision of this Amendment
shall be held to be illegal, invalid or unenforceable under any applicable law,
then such contravention or invalidity shall not invalidate the entire Amendment.
Such provision shall be deemed to be modified to the extent necessary to render
it legal, valid and enforceable, and if no such modification shall render it
legal, valid and enforceable, then this Amendment shall be construed as if not
containing the provision held to be invalid, and the rights and obligations of
the parties shall be construed and enforced accordingly.
<PAGE>
Section 10. Headings. The headings used herein are for
convenience of reference only, are not a part of this Amendment and are not to
affect the construction of, or to be taken into consideration in interpreting,
any provision of this Amendment or the Fourth Partnership Agreement.
[The remainder of this page is intentionally blank.]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their respective duly authorized officers thereunto
as of the date first written above.
TRACE FOAM COMPANY, INC.,
as General Partner
/s/ Philip N. Smith, Jr.
-----------------------------
By: Philip N. Smith, Jr.
Title: Vice President
FMXI, INC.,
as Managing General Partner
/s/ Philip N. Smith, Jr.
-----------------------------
By: Philip N. Smith, Jr.
Title: Vice President
FOAMEX INTERNATIONAL, INC.,
as Limited Partner and Successor to
Foamex-JPS Automotive L.P.
/s/ Philip N. Smith, Jr.
-----------------------------
By: Philip N. Smith, Jr.
Title: Vice President
<PAGE>
FIRST AMENDMENT TO
MANAGEMENT AGREEMENT
THIS FIRST AMENDMENT TO MANAGEMENT AGREEMENT (the "Amendment")
is made as of June 12, 1997, by and between Foamex L.P., a Delaware limited
partnership ("Foamex"), and Trace Foam Company, Inc., a Delaware corporation
formerly known as '21' Foam Company, Inc. ("Trace").
W I T N E S S E T H:
WHEREAS, Foamex and Trace entered into that certain '21' Foam
Management Agreement, dated as of October 13, 1992 (the "Agreement");
WHEREAS, the rights and obligations of Foamex and Trace were
reaffirmed in the Affirmation Agreement, dated as of December 14, 1993, by and
among Foamex, Trace and FMXI, Inc., the managing general partner of Foamex;
WHEREAS, Foamex has acquired and disposed of several
businesses and the management of Foamex has become increasingly complex since
the date the Agreement was originally entered into; and
WHEREAS, Foamex and Trace desire to amend the Agreement as set
forth herein to increase the fees payable to Trace.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants set forth herein and for other good, valid and binding
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
1. Amendment of Section 2(a). The Agreement is hereby amended
by deleting the words "annual management fee of $1,750,000" from the definition
of "Management Fee" set forth in Section 2(a) and inserting in their place the
following words: "annual management fee of $3,000,000".
2. Governing Law. This Amendment shall be governed by and
construed and enforced in accordance with the laws of the State of New York.
4. Limitation. Except as expressly set forth herein, this
Amendment shall not be deemed to waive, amend or modify any term or condition of
the Agreement, each of which shall remain in full force and effect and are
hereby ratified and confirmed.
<PAGE>
5. Counterparts. This Amendment may be executed in any number
of counterparts, each of which when executed and delivered will be deemed to be
an original, and all of which taken together will be deemed to be but one and
the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized
as of the date first above written.
FOAMEX L.P.
By: FMXI, INC.
its Managing General Partner
By: /s/ George Karpinski
Name: George Karpinski
Title: Vice President
TRACE FOAM COMPANY, INC.
By: /s/ Philip N. Smith, Jr.
Name: Philip N. Smith, Jr.
Title: Vice President
<PAGE>
FIRST AMENDMENT TO
AMENDED AND RESTATED TAX SHARING AGREEMENT OF FOAMEX L.P.
THIS FIRST AMENDMENT TO AMENDED AND RESTATED TAX SHARING
AGREEMENT OF FOAMEX L.P. (the "Amendment") is made as of June 12, 1997, by and
between Foamex L.P., a Delaware limited partnership ("Foamex"), Foamex
International Inc., a Delaware corporation ("FII"), FMXI, Inc., a Delaware
corporation ("FMXI"), and Trace Foam Company, Inc., a Delaware corporation
("Trace").
W I T N E S S E T H:
WHEREAS, Foamex, FII, FMXI, Trace and certain other parties
entered into that certain First Amended and Restated Tax Sharing Agreement,
dated as of December 14, 1993 (the "Original Agreement");
WHEREAS, Foamex, FMXI, Trace, FII and Foamex-JPS Automotive
L.P. ("FJPS") entered into that certain First Amendment (the "First Amendment")
to Fourth Amended and Restated Agreement of Limited Partnership of Foamex L.P.,
dated as of June 28, 1994, which amended the Original Agreement to reflect the
change in the partners of Foamex (the Original Agreement as amended by the First
Amendment is referred to as the "Agreement"); and
WHEREAS, Foamex-JPS Automotive L.P., a 98% limited partner in
Foamex is being merged with and into FII, and the parties wish to amend the
Agreement to reflect such merger.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants set forth herein and for other good and valid consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, agree as follows:
1. Amendment. The parties hereto agree that upon consummation
of the merger of FJPS into FII for all purposes of the Agreement FII shall be
deemed to be the successor to FJPS's 98% limited partnership interest in Foamex.
FII hereby agrees to become a party to the Agreement, as required by Section
7(u) of the Agreement and agrees to be bound by the terms and conditions of the
Agreement.
2. Governing Law. This Amendment shall be governed by and
construed and enforced in accordance with the laws of the State of New York.
<PAGE>
4. Limitation. Except as expressly set forth herein, this
Amendment shall not be deemed to waive, amend or modify any term or condition of
the Agreement, each of which shall remain in full force and effect and are
hereby ratified and confirmed.
5. Counterparts. This Amendment may be executed in any number
of counterparts, each of which when executed and delivered will be deemed to be
an original, and all of which taken together will be deemed to be but one and
the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized
as of the date first above written.
FOAMEX L.P.
By: FMXI, INC.
its Managing General Partner
By:/s/ George Karpinski
Name: George Karpinski
Title: Vice President
FOAMEX INTERNATIONAL INC.
By:/s/ George Karpinski
Name: George Karpinski
Title: Vice President
FMXI, INC.
By:/s/ George Karpinski
Name: George Karpinski
Title: Vice President
TRACE FOAM COMPANY, INC.
By:/s/ Philip N. Smith, Jr.
Name: Philip N. Smith, Jr.
Title: Vice President
<PAGE>
AMENDMENT No. 1 TO
TAX DISTRIBUTION ADVANCE AGREEMENT
This Amendment No. 1 To Tax Distribution Advance Agreement
(the "Amendment") dated as of June 12, 1997 is made by and between Foamex
International Inc., a Delaware corporation and the successor to Foamex-JPS
Automotive L.P. ("FII"), and Foamex L.P., a Delaware limited partnership
("Foamex"). This Amendment amends the Tax Distribution Advance Agreement entered
into between Foamex-JPS Automotive L.P. ("Partners") and Foamex L.P., dated
December 11, 1996 (the "Agreement").
WHEREAS, Partners and Foamex entered into the Agreement to
provide for certain advances of Tax Sharing Payments from Foamex to Partners;
and
WHEREAS, Partners has been merged with and into FII.
NOW, THEREFORE, in consideration of the premises, the mutual
agreements and covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions. Unless otherwise defined herein:
(a) the terms defined in the introductory paragraph and the Recitals
to this Amendment shall have the respective meanings specified therein; and
(b) capitalized terms used herein and not otherwise defined shall have
the meaning ascribed to them in the Agreement.
ARTICLE II.
AMENDMENT OF PROVISIONS
Section 2.1. Amendment of Definition of FJPS. The definition
of the term "FJPS" in the Agreement is hereby amended and restated in its
entirety as follows:
"FJPS" means Foamex-JPS Automotive L.P. and its successors,
including, Foamex International Inc.
Section 2.2. Amendment of Section 2.1(b). Section 2.1(b)
<PAGE>
of the Agreement is hereby amended and restated in its entirety as follows:
(b) "Availability" at any point in time shall mean $25
million, less all previous Advances.
Section 2.3. Amendment of Section 3.1(b). Section 3.1(b) of
the Agreement is hereby amended and restated in its entirety as follows:
"(b) Each Advance shall bear interest at a fixed rate per
annum equal to 13.25%."
Section 2.4. Amendment of Annex A. Annex A of the Agreement is
hereby replaced in its entirety by Annex A to this Amendment.
ARTICLE III.
MISCELLANEOUS
Section 3.1. Counterparts. This Amendment may be executed in
counterparts, each of which when so executed shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
Section 3.2. Severability. In the event that any provision in
this Amendment shall be held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 3.3. Headings. The article and section headings herein
are for convenience only and shall not effect the construction hereof.
Section 3.4. Effect of Amendment. Except as amended by this
Amendment, the terms and provisions of the Agreement shall remain in full force
and effect.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date first above written.
FOAMEX INTERNATIONAL INC.
By:/s/ Philip N. Smith, Jr.
Name: Philip N. Smith, Jr.
Title: Vice President and
Secretary
FOAMEX L.P.
By: FMXI, Inc.
Its: managing general partner
By:/s/ Philip N. Smith, Jr.
Name: Philip N. Smith, Jr.
Title: Vice President and
Secretary
<PAGE>
PROMISSORY NOTE
$25,000,000 New York, New York
June 12, 1997
THE UNDERSIGNED FOAMEX INTERNATIONAL INC., a Delaware
corporation ("Maker"), HEREBY PROMISES TO PAY to the order of FOAMEX L.P., a
Delaware limited partnership ("Payee"), on December 31, 1999, the principal
amount of TWENTY FIVE MILLION DOLLARS ($25,000,000), or, if less, the
outstanding Advances of Maker by Payee pursuant to the terms of that certain Tax
Distribution Advance Agreement dated as of December 11, 1996, as amended June
12, 1997 (the "Tax Distribution Advance Agreement") between Maker and Payee
together, in each case, with all accrued and outstanding interest in respect of
such principal amount. This promissory note amends and restates the promissory
note of Foamex-JPS Automotive L.P. payable to Foamex L.P. in an amount of up to
$17 million, dated December 11, 1996.
Maker promises to pay the interest on and principal of this
Note in accordance with the terms and conditions of the Tax Distribution Advance
Agreement.
Both principal and interest are payable in lawful money of the
United States of America in same day or immediately available funds to the
account of Payee at 1000 Columbia Avenue, Linwood, Pennsylvania 19061, or at
such other place or places as any subsequent holder of this Note may, from time
to time, designate in writing. Whenever any payment to be made hereunder shall
be stated to be due on a day that is not a Business Day, such payment shall be
due instead on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of such payment of interest
and not in the computation of the succeeding payment of interest.
Payee or any subsequent holder of this Note shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of Maker.
This Note is subject to the terms and conditions of the Tax
Distribution Advance Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
All the covenants, stipulations, promises and agreements made
by or contained in this Note or in the Tax Distribution Advance Agreement on
behalf of the undersigned shall bind its successors, whether so expressed or
not.
No failure on the part of Payee to exercise, and no delay in
exercising, any right under this Note shall operate as a waiver thereof, nor
shall any single or partial exercise of any
<PAGE>
such right preclude any other or further exercise thereof or the exercise of any
other right.
IN WITNESS WHEREOF, the undersigned has executed this Note as
of the date first set forth above.
FOAMEX INTERNATIONAL INC.
By: /s/ George Karpinski
Name: George Karpinski
Title: Vice President
<PAGE>
Foamex
Press Release Contact: Kenneth R. Fuette Trina Hardiman
Foamex International Inc. Matthew Doering
610 859-3081 Gavin Anderson & Co.
David E. Bright 212 373-0229
212 230-0488
FOR IMMEDIATE RELEASE
FOAMEX INTERNATIONAL COMPLETES REFINANCING
----------------------------
Tender Offers for Approximately $459.0 Million in Public Debt Completed
----------------------------
Company Closes $480.0 Million Bank Facility, With Commitments From 39 Lenders
----------------------------
$150.0 Million of Senior Subordinated Notes Placed in the Rule 144A Market
----------------------------
LINWOOD, PENNSYLVANIA, June 13, 1997 - Foamex International (NASDAQ: FMXI)
announced today the completion of several initiatives designed to improve its
financial and operating flexibility and to reduce interest expense.
The Company said that Foamex L.P., its 99%-owned subsidiary, completed
tender offers to repurchase outstanding public debt, totaling approximately
$459.0 million in aggregate principal.
All of the outstanding $116.7 million principal amount of the Foamex-JPS
Automotive L.P. Senior Secured Discount Debentures due 2004 were tendered and
accepted in the tender offer. Foamex L.P. also accepted tenders for the
following securities:
<PAGE>
$99.8 million of its $104.3 million of aggregate principal of its 9 1/2%
Senior Secured Notes due 2000;
$130.1 million of its $135.9 million of aggregate principal of its 11 1/4%
Senior Notes due 2002;
$105.5 million of its $125.8 million of aggregate principal of its 11 7/8%
Senior Subordinated Debentures
due 2004;
$6.95 million of its $7.0 million of aggregate principal of its 11 7/8%
Senior Subordinated Debentures, Series B due 2004.
Foamex L.P. also repaid all borrowings under the terms of an existing
credit facility which amount to $5.2 million.
In addition, Foamex L.P. signed a new $480.0 million bank facility with 39
lenders led by The Bank of Nova Scotia and Citicorp USA, Inc. as Co-Agents,
which had received commitments exceeding $1.0 billion for this facility. The
facility includes a $150.0 million revolver that expires in six years, which can
be used to fund working capital needs and future growth.
Foamex also successfully completed a private placement of $150.0 million
principal amount of Foamex L.P. Senior Subordinated Notes in the Rule 144A
market. The notes will pay interest semi-annually at a rate of 9 7/8% per annum
with a final maturity on June 15, 2007.
The proceeds from the private placement, along with borrowings of
approximately $350.0 million under the $480.0 million credit facility, were used
to fund the repurchase of the public debt,
<PAGE>
repay borrowings under the existing credit facility and pay related fees and
expenses.
Andrea Farace, Foamex's Chairman and Chief Executive Officer, said, "With
these steps, we have achieved a milestone in the program initiated 20 months ago
to strengthen Foamex's operations and financial flexibility."
He added that, assuming no material changes in interest rates, the Company
estimates the refinancing to result in approximately $4.0 million of reduced
interest expense in the second half of 1997. Based on current market conditions
Foamex's average interest rate on its debt in the immediate future is expected
to be approximately 8 3/4%.
As previously announced, Foamex said that it expects to take a one-time
charge, net of tax, of approximately $45.0 million in the second quarter of 1997
related to the early extinguishment of debt, the write-off of debt issuance
costs and additional one-time charges related to other aspects of the
refinancing.
The Company stated that future interest expense, and the ability to realize
the expected savings in interest expense, will vary based on several factors,
including fluctuation in interest rates in general. In addition, variable rate
debt now comprises a larger percentage of the Company's overall indebtedness
than in the past, and as a result, future fluctuations in interest rates will
have a greater impact on the Company's interest expense than in the past.
<PAGE>
This news release shall not constitute an offer to sell or the solicitation
of an offer to buy the securities offered by Foamex L.P. in the private
placement. The securities offered by Foamex L.P. in the private placement have
not been registered under the Securities Act of 1933, as amended, and may not be
offered or sold in the United States absent registration or an exemption from
the registration requirements of the Securities Act of 1933, as amended.
Foamex is the largest manufacturer and marketer of flexible polyurethane
and advanced polymer products in North America. Foamex's quality foams are
utilized primarily in four end-markets: carpet cushion and other carpet
products; cushioning foams for furniture, bedding, packaging and health care;
automotive trim and accessories; and industrial and consumer technical foams,
including those for filtration. For more information about Foamex, visit its web
site at http://www.foamex.com.
This news release contains forward-looking statements related to future
earnings. Actual results may differ. Cautionary statements regarding
forward-looking information may be found in the 1996 Annual Report and Forms
10-K on file with the Securities and Exchange Commission.
# # #
