UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 13)
FOAMEX INTERNATIONAL INC.
(Name of Issuer)
Common Stock, $0.01 Par Value
(Title of Class of Securities)
344123-10-4
(CUSIP Number)
Philip N. Smith, Jr., Esq.
Trace International Holdings, Inc.
375 Park Avenue
11th Floor
New York, New York 10152
(212) 230-0400
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 8, 1999
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. |_|
<PAGE>
SCHEDULE 13D
CUSIP No. 344123-10-4
1 Name of Reporting Person
I.R.S. Identification Nos. of Above Persons (entities only)
Trace International Holdings, Inc.
58-1080969
2 Check the Appropriate Box If a Member of a Group
a. |x|
b. |x|
3 SEC Use Only
4 Source of Funds (See Instructions)
BK, 00
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
6 Citizship or Place of Organization
Delaware
7 Sole Voting Power
Number of 4,474,753
Shares
Beneficially 8 Shared Voting Power
Owned By 7,050,247
Each
Reporting 9 Sole Dispositive Power
Person 4,474,753
With
10 Shared Dispositive Power
7,050,247
11 Aggregate Amount Beneficially Owned by Each Reporting Person
11,525,000
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
13 Percent of Class Represented By Amount in Row (11)
46.1%
14 Type of Reporting Person (See Instructions)
CO
2
<PAGE>
SCHEDULE 13D
CUSIP No. 344123-10-4
1 Name of Reporting Person
I.R.S. Identification Nos. of Above Persons (entities only)
Trace Foam Sub, Inc.
13-3808758
2 Check the Appropriate Box If a Member of a Group
a. |x|
b. |x|
3 SEC Use Only
4 Source of Funds (See Instructions)
00
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 7,000,247
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
7,000,247
11 Aggregate Amount Beneficially Owned by Each Reporting Person
7,000,247
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
13 Percent of Class Represented By Amount in Row (11)
28.0%
14 Type of Reporting Person (See Instructions)
CO
3
<PAGE>
SCHEDULE 13D
CUSIP No. 344123-10-4
1 Name of Reporting Person
I.R.S. Identification Nos. of Above Persons (entities only)
Marshall S. Cogan
2 Check the Appropriate Box If a Member of a Group*
a. |x|
b. |x|
3 SEC Use Only
4 Source of Funds (See Instructions)
PF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
6 Citizenship or Place of Organization
United States of America
7 Sole Voting Power
Number of 703,334
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 703,334
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
703,334
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) |x|
13 Percent of Class Represented By Amount in Row (11)
2.8%
14 Type of Reporting Person (See Instructions)
IN
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<PAGE>
This Amendment No. 13 to Schedule 13D is filed on behalf of
Trace International Holdings, Inc. ("Trace Holdings"), Trace Foam Sub, Inc.
("Trace Foam Sub"), and Marshall S. Cogan, and amends and supplements the
Schedule 13D, dated December 14, 1993 (as amended, the "Schedule 13D"), as
amended by Amendment No. 1 thereto filed on December 23, 1994, Amendment No. 2
thereto filed on March 6, 1995, Amendment No. 3 thereto filed on April 28, 1995,
Amendment No. 4 thereto filed on August 28, 1997, Amendment No. 5 thereto filed
on December 24, 1997, Amendment No. 6 thereto filed on March 16, 1998, Amendment
No. 7 thereto filed on June 26, 1998, Amendment No. 8 thereto filed on July 21,
1998, Amendment No. 9 thereto filed on October 19, 1998, Amendment No. 10
thereto filed on November 6, 1998, Amendment No. 11 filed on November 23, 1998
and Amendment No. 12 thereto filed on December 15, 1998 and is being filed
pursuant to Rule 13d-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). This Amendment No. 13 is
being filed to report the termination of the Merger Agreement.
The Schedule 13D is hereby amended and restated in its entirety as follows:
Item 1. Security and Issuer.
This statement relates to the Common Stock (the "Common
Stock") of Foamex International Inc., a Delaware corporation (the "Issuer"). The
address of the principal executive offices of the Issuer is 1000 Columbia
Avenue, Linwood, Pennsylvania, 19061.
Item 2. Identity and Background.
(a), (b) and (c) This statement is filed by Trace
International Holdings, Inc., a Delaware corporation ("Trace Holdings"), Trace
Foam Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Trace
Holdings ("Trace Foam Sub"), and Marshall S. Cogan (together with Trace Holdings
and Trace Foam Sub, the "Reporting Persons"). Trace Holdings' principal business
is that of a holding company. The principal business of Trace Foam Sub is to
hold shares of Common Stock. Marshall S. Cogan's principal occupation is the
Chairman, Chief Executive Officer and President of United Auto Group, Inc. and
the Chairman and Chief Executive Officer of Trace Holdings. The principal office
of each Reporting Person is 375 Park Avenue, New York, New York 10152.
Attached and incorporated herein by reference, are Schedules I
and II, which set forth the names, principal business and principal business
address of the directors and executive officers of Trace Holdings and Trace Foam
Sub, respectively.
(d) None of the Reporting Persons, nor to the best of their
knowledge, any entity or person with respect to whom information is provided in
response to this Item has, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) None of the Reporting Persons, nor to the best of their
knowledge, any entity or person with respect to whom information is provided in
response to this Item has, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) Each individual with respect to whom information is
provided in response to this Item is a citizen of the United States of America.
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<PAGE>
Item 3. Sources and Amounts of Funds or Other Consideration
In connection with the public offering of 10,712,000 shares of
the Issuer's common stock in 1993, on December 14, 1993, the partners in Foamex
L.P. exchanged their partnership interests for Common Stock. Trace Foam acquired
8,152,324 shares of Common Stock in exchange for a portion of the general
partner interest it held in Foamex L.P. Trace Holdings acquired 3,125,497 shares
of Common Stock in exchange for the limited partner interest it held in Foamex
L.P. and received 1,152,077 shares of Common Stock as a dividend from Trace
Foam. Mr. Cogan received options to purchase 750,000 shares of Common Stock,
pursuant to the Issuer's 1993 Stock Option Plan.
The Trace International Holdings, Inc. Retirement Plan for
Salaried Employees (the "Trace Holdings Plan") acquired 10,000, 30,000, 2,500
and 7,500 shares of Common Stock on December 21, 23, 27 and 30, 1993,
respectively, at prices ranging from $16.25 to $16.50 per share. See Item 4
hereof for a description of the investment in the Issuer by the Trace Holdings
Plan.
From June 1994 to July 1996, Mr. Cogan acquired 400,000 shares
of Common Stock for his own account with personal funds at prices ranging from
$7.5521 to $12.125 per share.
In 1995, Trace Foam transferred 7,000,247 shares of Common
Stock to Trace Foam Sub, a wholly-owned subsidiary, as a capital contribution to
facilitate certain borrowings from Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ"), as more fully described in Items 4 and 6 hereof.
Trace Holdings purchased 22,079 shares of Common Stock on
January 10, 1996 for $7.875 per share.
On August 15, 1997, Trace Holdings entered into a Margin Loan
Credit Agreement (the "Margin Loan Agreement") with The Bank of Nova Scotia (the
"Bank"), the form of which is filed as Exhibit F hereto and is incorporated
herein by reference. Pursuant to the terms of the Margin Loan Agreement, Trace
Holdings was able to obtain term loans in an aggregate principal amount of
$7,500,000 (the "Tranche A Loans") and term loans in an aggregate principal
amount of $8,750,000 (the "Tranche B Loans," and together with the Tranche A
Loans, the "Bank Loan"). Pursuant to the terms of the Margin Loan Agreement,
Trace Holdings was permitted to borrow up to $15 million for the purpose of
buying Common Stock and/or common stock of United Auto Group, Inc. (the "UAG
Stock"); provided, however, that until the waiver of certain negative pledges on
the UAG Stock held by Trace Holdings (the "UAG Pledge Event"), Trace Holdings
was not permitted to use more than $10 million of the proceeds of the Bank Loan
to purchase UAG Stock and no such purchase was permitted to be made after
October 31, 1997. From August 1997 through December 1997, Trace Holdings used
$2,107,721.18 of Bank Loan borrowings to purchase 175,100 shares of Common Stock
at prices ranging from $9.74 to $13.0797. On December 24, 1997, Trace Holdings
agreed not to make any future borrowings under the Bank Loan.
Pursuant to the terms of the pledge agreement, dated as of
August 15, 1997, by and between Trace Holdings and the Bank, as amended by
Amendment No. 1 to the Pledge Agreement, dated as of December 30, 1998, between
Trace Holdings and the Bank, which pledge agreement and amendment are filed as
Exhibit G hereto and incorporated herein by reference and Exhibit O hereto,
respectively, the Tranche A Loans are secured by a first lien on all shares of
UAG Stock acquired after the occurrence of the UAG Pledge Event and all shares
of Common Stock (the "Pledged Shares") purchased with the proceeds of the Bank
Loan and the Tranche B Loans are secured by a second lien on the Pledged Shares.
Pursuant to the terms of a Security Agreement, the form of which is filed as
Exhibit H hereto and incorporated herein by reference, the Tranche B Loans are
secured by a first lien on the payments due (the "Management Fee") under the 21
Foam Management Agreement, dated as of October 13, 1992, as amended, between
Foamex, L.P. and Trace Foam and the Tranche A Loans are secured by a second lien
on the Management Fee.
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<PAGE>
Item 4. Purpose of the Transaction.
(a) Trace Holdings and Trace Foam Sub.
Trace Holdings acquired 4,277,574 shares of Common Stock and
Trace Foam acquired 7,000,247 shares of Common Stock as part of the formation
and capitalization of the Issuer (see Item 3 above). Trace Foam contributed its
shares of Common Stock to Trace Foam Sub in the first quarter of 1995. On
December 24, 1997, Trace Foam distributed its stock in Trace Foam Sub to Trace
Holdings and thus, ceased to be the beneficial owner of any Common Stock as of
such date. In addition, Trace Holdings and Mr. Cogan have purchased Common Stock
on the open market. As a result of their ownership of an aggregate of
approximately 48.9% of the Issuer's outstanding Common Stock, the Reporting
Persons indirectly control the Issuer.
Trace Holdings and Trace Foam, among others, have exercised
their right, contained in a registration rights agreement with Foamex, executed
in connection with the capitalization of Foamex, to have their shares included
in a registration statement for Common Stock of Foamex. This registration
statement was declared effective by the Securities and Exchange Commission on
December 13, 1994. Trace Holdings and Trace Foam Sub have pledged all of their
shares of Common Stock to secure certain borrowings (See Item 6 hereof). Trace
Holdings and Trace Foam Sub entered into these pledges to provide them with more
flexibility in pursuing their investment strategy.
Pursuant to the terms of the Bank Loan and certain of its
other Indebtedness, Trace Holdings is prohibited from acquiring additional
shares of Common Stock.
Executive officers of Trace currently have one seat on the
Issuer's seven-person Board of Directors, and the Reporting Persons may in the
future seek to have their designees fill additional seats on the Issuer's Board
of Directors.
The shares of Common Stock beneficially owned by Trace
Holdings include 50,000 shares of Common Stock held in trust for the exclusive
benefit of participants under the Trace Holdings Plan (see Item 5 hereof and
4(c) below).
On June 25, 1998, Trace Holdings, Trace Merger Sub, Inc. a
Delaware corporation and a wholly-owned subsidiary of Trace Holdings ("Merger
Sub"), and the Issuer entered into an Agreement and Plan of Merger (the "First
Merger Agreement"). Pursuant to the terms of the First Merger Agreement, Merger
Sub would have been merged with and into the Issuer (the "First Merger") and
each share of Common Stock, other than Common Stock held by Trace Holdings and
its subsidiaries, treasury shares, and Common Stock with respect to which
appraisal rights would have been perfected, would have been converted into the
right to receive $18.75 per share in cash. On November 5, 1998, Trace Holdings
terminated the First Merger Agreement, pursuant to its terms, due to the failure
of the financing condition.
On November 5, 1998, Trace Holdings, Merger Sub and the Issuer
entered into a second Agreement and Plan of Merger (the "Second Merger
Agreement"). Pursuant to the terms of the Second Merger Agreement, Merger Sub
would have been merged with and into the Issuer (the "Second Merger") and each
share of Common Stock, other than Common Stock held by Trace Holdings and its
subsidiaries, treasury shares, and Common Stock with respect to which appraisal
rights would have been perfected, would have been converted into the right to
receive $12.00 per share in cash. Trace Holdings delivered a letter to the
Issuer, dated January 8, 1999 (the "Notice of Termination"), terminating the
Second Merger Agreement.
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<PAGE>
The Second Merger Agreement was terminated on the grounds that the financing
condition was incapable of being satisfied. A copy of the Notice of Termination
is filed as Exhibit N to this Schedule 13D.
Trace Holdings intends continuously to review its investment
in the Issuer. In reaching any decision with respect to such investment, Trace
Holdings will take into consideration various factors, such as the Issuer's
business and prospects, other developments concerning the Issuer or Trace
Holdings, other investment opportunities available to Trace Holdings and general
economic and market conditions. Depending upon the results of its review of such
factors, Trace Holdings may decide to acquire (on such terms and at such times
as it considers desirable) additional equity securities of the Issuer, either
alone or in connection with another person, subject to the waiver of the
conditions contained in the Bank Loan and certain of its other indebtedness.
Alternatively, Trace Holdings may decide to dispose of all or a portion of such
securities (whether now or hereafter held). Such disposition could take the form
of the sale of such equity securities on the open market or in privately
negotiated transactions, or in connection with an acquisition by a third party
of all or substantially all of the equity in the Issuer.
(b) Marshall S. Cogan and the Officers and Directors
Mr. Cogan and the officers and directors of the Reporting
Persons (the "Officers and Directors") own the Common Stock for investment
purposes.
Marshall S. Cogan and the Officers and Directors intend
continuously to review their investment in the Issuer. In reaching any decision
with respect to such investment, Mr. Cogan and the Officers and Directors will
take into consideration various factors, such as the Issuer's business and
prospects, other developments concerning the Issuer, other investment
opportunities available to the Reporting Persons and the Officers and Directors
and general economic and market conditions. Depending upon the results of their
review of such factors, the Mr. Cogan and the Officers and Directors may decide
to purchase (on such terms and at such times as they consider desirable)
additional equity securities of the Issuer, or dispose of all or a portion of
such securities (whether now or hereafter held).
With respect to Mr. Cogan, see the responses to 4(a) above.
(c) Trace Holdings Plan
The Trace Holdings Plan acquired all 50,000 shares during
December 1993 in open market purchases at prices ranging from $16.25 to $16.50.
The Trace Holdings Plan provides retirement benefits for the
employees of Trace Holdings and its subsidiaries. All benefits under the Trace
Holdings Plan, including any purchases of shares of Common Stock, are funded by
Trace Holdings and its subsidiaries. Trace Holdings has appointed an investment
manager to direct the investment and management of the Trace Holdings Plan's
funds but retains the power to dismiss the manager and to terminate the plan.
The Trace Holdings Plan, through the direction of the
investment manager of Trace Holdings, will continuously review the investment in
the Issuer. In reaching any decision with respect to such investment, the
investment manager will take into consideration various factors, such as the
Issuer's business and prospects, other developments concerning the Issuer, other
investment opportunities available to the Plan and general economic and market
conditions. Depending upon the results of their review of such factors, the
investment manager may decide to purchase (on such terms and at such times as
they consider
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<PAGE>
desirable) additional equity securities of the Issuer, or such persons may
decide to dispose of all or a portion of any such securities of the
Issuer (whether now or hereafter held).
(d) General
Although the foregoing describes activities and possibilities
presently contemplated or under consideration by the Reporting Persons, the
intentions of the Reporting Persons may change. Except as set forth above or in
any item hereof, the Reporting Persons do not have any present plans or
proposals that relate to or would result in any of the actions required to be
described in Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) and (b) The information in this Item 5(a) and (b) is
given as of the date hereof, and is based on 25,014,823 shares of outstanding
Common Stock. (1)
(i) Trace Foam Sub has direct beneficial ownership of
7,000,247 shares of Common Stock, constituting 28.1% of the outstanding Common
Stock. Except as set forth in the Prospectus Sale Borrower's Agreement and
Customer Agreement which are filed as Exhibit D and Exhibit E, respectively, to
this Schedule 13D and incorporated herein by reference, Trace Foam Sub has the
sole power to vote and dispose of the shares of Common Stock owned by it.
(ii) On December 24, 1997, Trace Foam distributed all of its
shares of Trace Foam Sub to Trace Holdings. Therefore, Trace Foam does not have
beneficial ownership of any shares of Common Stock.
(iii) Trace Holdings has direct beneficial ownership of
4,474,553 shares of Common Stock, constituting 17.9% of the outstanding Common
Stock. With respect to 4,277,574 of shares of Common Stock, except as set forth
in certain pledge agreements described in Item 6 hereof, and filed as Exhibits A
and B to this Schedule 13D (the "1993 Pledge Agreements"), Trace Holdings has
the sole power to vote and dispose of such shares of Common Stock. With respect
to the remaining shares of Common Stock directly beneficially owned by Trace
Holdings, except for certain restrictions following an event of default under
the Bank Loan and the pledge agreement described in Item 6 hereof and filed as
Exhibit F and Exhibit G, respectively, to this Schedule 13D and incorporated
herein by reference, Trace Holdings has the sole power to vote and dispose of
such shares of Common Stock.
By virtue of its ownership of all of the outstanding capital
stock of Trace Foam Sub, Trace Holdings is deemed to be the beneficial owner (as
such term is defined in Rule 13d-3) of all of the Common Stock owned by Trace
Foam Sub.
By virtue of Trace Holdings' ability to administer, and/or
terminate the Trace Holdings Plan, Trace Holdings may be deemed to own
beneficially (as such term is defined in Rule 13d-3) the 50,000 shares of Common
Stock held by the Trace Holdings Plan.
As a result of the foregoing, Trace Holdings may be deemed to
own beneficially (as such term is defined in Rule 13d-3) a total of 11,525,000
shares of Common Stock, which represents 46.1% of the outstanding Common Stock.
Such ownership figure does not include the shares which Trace Holdings will be
required to acquire should John Rallis choose to exercise his Put Option (see
Item 6 hereof).
- ----------
(1) Pursuant to the Issuer's quarterly report on Form 10-Q for the fiscal
quarter ended September 30, 1998.
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(iv) As of January 12, 1999, Mr. Cogan has acquired 400,000
shares of Common Stock and has vested options for 269,167 shares of Common Stock
with an exercise price of $6.875 and 34,167 shares of Common Stock with an
exercise price of $11.125. By virtue of Rule 13d-3, Mr. Cogan may be deemed to
be the beneficial owner of 703,334 shares of Common Stock as a result of the
400,000 shares that have been purchased as well as the shares issuable upon
exercise of options that have vested. Mr. Cogan's beneficial ownership comprises
2.8% of the outstanding Common Stock of the Issuer.
Mr. Cogan is the Chairman of the Board and President of Trace
Foam Sub and the Chairman of the Board and Chief Executive Officer of Trace
Holdings and owns or has voting control over capital stock of Trace Holdings
representing greater than a 50% voting interest. Mr. Cogan, by virtue of his
control positions at Trace Foam Sub and Trace Holdings, may be deemed to own
beneficially (as the term is defined in Rule 13d-3) the 11,525,000 shares of
Common Stock beneficially owned, directly and indirectly, by Trace Foam Sub and
Trace Holdings. Mr. Cogan expressly disclaims beneficial ownership of any of the
shares of Common Stock owned by Trace Foam Sub and Trace Holdings.
(v) Other Officers and Directors of Trace Holdings and Trace
Foam Sub beneficially own Common Stock in the amounts listed in the following
table. Shares beneficially owned include shares issuable upon exercise of vested
options, or options which will vest in the next sixty days, with an exercise
price of $6.875.
<TABLE>
<CAPTION>
Officer or Director Number of Shares Owned*
------------------- -----------------------
<S> <C>
Frederick Marcus 33,298
Robert H. Nelson 4,257
Saul S. Sherman 0
Philip N. Smith, Jr. 19,125
Karl H. Winters 4,836
Barry Zimmerman 22,569
</TABLE>
* Includes shares issuable upon exercise of options as
follows: Mr. Marcus, 23,298 shares; Mr. Nelson, 4,257 shares; Mr. Smith, 7,028
shares; Mr. Winters, 4,836 shares; and Mr. Zimmerman, 17,569 shares.
(c) Attached hereto as Schedule 5(c) is a schedule of
transactions in the Common Stock within the past 60 days by the persons named in
Item 5(a) above.
(d) Pursuant to the terms of the 1993 Pledge Agreements
described in Item 6 hereof, Generale Bank, acting through its branch in New
York, New York, and Recticel Foam Corporation are entitled to certain rights
with respect to voting, dividends and sale proceeds upon an event of default
under the 1993 Pledge Agreements. Pursuant to the terms of the Pledge Agreement
described in Item 6 hereof, the Bank is entitled to certain rights with respect
to voting, dividends and sale proceeds upon an event of default under the Pledge
Agreement.
Participants under the Trace Holdings Plan may have the right
to receive dividends from, or proceeds from the sale of, the Common Stock held
by the Trace Holdings Plan. In addition, the investment manager under the Trace
Holdings Plan or Trace Holdings, by virtue of its ability to administer the
plan,
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may have the power to direct the receipt of dividends from, or proceeds
from the sale of, the Common Stock held by the Trace Holdings Plan.
See Item 6 hereof for a discussion of the Asset Appreciation
Agreement.
(e) On December 24, 1997, Trace Foam Company, Inc. ceased to
be the beneficial owner of any shares of Common Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Pursuant to the terms of a pledge agreement, dated December
14, 1993, between Trace Holdings and Generale Bank, acting through its branch in
New York, New York ("GBNY"), Trace Holdings pledged 1,592,671 shares of Common
Stock, representing approximately 6.4% of the Common Stock outstanding, to GBNY
to secure certain obligations of Trace Holdings to GBNY. Pursuant to the terms
of a pledge agreement, dated December 14, 1993, between Trace Holdings and
Recticel Foam Corporation, Trace Holdings pledged 2,684,903 shares of Common
Stock, representing approximately 10.8% of the Common Stock outstanding, to
Recticel Foam Corporation to secure certain obligations of Trace Holdings to
Recticel Foam Corporation. The two pledge agreements are referred to herein
together as the "1993 Pledge Agreements."
The 1993 Pledge Agreements provide that so long as there is no
event of default with regard to the obligations of Trace Holdings to GBNY or
Recticel Foam Corporation, as the case may be, under the 1993 Pledge Agreements,
Trace Holdings is generally entitled to exercise all voting rights allocated to
the pledged shares of Common Stock, provided that such action will not have a
material adverse effect on the value of such shares of Common Stock.
The 1993 Pledge Agreements further provide that so long as
there is no such event of default, Trace Holdings is generally entitled to
receive all dividends paid in respect to the pledged shares of Common Stock,
subject to certain exceptions including (i) dividends paid in other than cash,
(ii) dividends paid in connection with a liquidation, dissolution or reduction
of capital, and (iii) cash paid in respect of principal of, or in redemption of
or in exchange for, the pledged shares. Any such payments become pledged under
the 1993 Pledge Agreements.
The preceding summary of the 1993 Pledge Agreements is
qualified in its entirety by reference to such agreements, copies of which are
filed as Exhibit A and Exhibit B hereto and incorporated herein by reference.
Pursuant to a Prospectus Sale Borrower's Agreement, dated
February 21, 1995 (effective March 1, 1995 with respect to 5,400,000 shares of
Common Stock), between Trace Foam Sub and DLJ (the "Borrower's Agreement"),
Trace Foam Sub pledged the 7,000,247 shares (the "Pledged Shares") of Common
Stock to DLJ to secure any margin credit extended to it by DLJ. The Borrower's
Agreement will remain in effect until (i) terminated by DLJ or (ii) terminated
by Trace Foam Sub with the consent of DLJ. During the term of the Agreement,
Trace Foam Sub may not sell, transfer, pledge or otherwise encumber the Pledged
Shares without the prior written consent of DLJ; provided, however, such
requirement will not apply to sales of the Pledged Shares through DLJ. In the
event that, at any time while a margin loan remains outstanding, should the
Registration Statement covering the Pledged Shares cease to be effective, DLJ
will have the right to immediately demand payment in full of all amounts
outstanding under the margin loan.
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The terms of the Borrowers Agreement are in addition to all
the terms and conditions of the Customer Agreement, dated February 21, 1995 (the
"Customer Agreement"), between Trace Foam Sub and DLJ. Copies of the Borrowers
Agreement and the Customer Agreement are filed as Exhibit D and Exhibit E hereto
and are incorporated herein by reference.
Pursuant to the terms of the pledge agreement, dated August
15, 1997, between Trace Holdings and the Bank, as amended (the "Pledge
Agreement"), Trace Holdings pledged to the Bank all shares of Common Stock and
UAG Stock, following the occurrence of the UAG Pledge Event, to be purchased
with the proceeds of the Bank Loan. The Pledge Agreement provides that so long
as there is no event of default with regard to the obligations of Trace Holdings
to the Bank, Trace Holdings is generally entitled to exercise all voting rights
allocated to the Pledged Shares, provided that no such exercise of voting rights
shall impair the value of the Pledged Shares or violate any provision of the
Margin Loan Agreement or accompanying loan documents. The Pledge Agreement
further provides that so long as there is no such event of default or potential
event of default relating to voluntary bankruptcy, involuntary bankruptcy or the
appointment of a receiver, Trace Holdings is generally entitled to receive all
dividends paid in respect of the Pledged Shares, subject to certain exceptions
including (i) dividends paid in other than cash and (ii) dividends paid in
connection with a liquidation. Any such payments become pledged under the Pledge
Agreement. The preceding summary of the Pledge Agreement is qualified in its
entirety by reference to such agreement, as amended, which agreement and
amendment are filed as Exhibit G hereto and incorporated herein by reference and
Exhibit O hereto, respectively.
Trace Holdings has entered into an Asset Appreciation
Agreement (the "Asset Agreement"), dated August 15, 1997, with the Bank in order
to provide the Bank with additional interest in connection with certain loans to
Trace Holdings. The Asset Agreement provides that on June 30, 2004, Trace
Holdings shall make an additional interest payment to the Bank in an amount
equal to 28% of the appreciation of certain assets, including any Common Stock
and UAG Stock held by Trace and its subsidiaries, over certain agreed upon base
prices. The base price for the shares of Common Stock and UAG Stock owned as of
the date of the Asset Agreement is $11.875 and $15.00, respectively, and the
base price for subsequently acquired shares of Common Stock and UAG Stock is the
acquisition cost. Upon a sale of Common Stock or UAG Stock prior to June 30,
2004, Trace Holdings is required make an additional interest payment equal to
the lesser of (i) 28% of the appreciation of the assets subject to the Asset
Agreement, or (ii) 28% of the appreciation of the Common Stock or UAG Stock
sold. Trace Holdings is also obligated to make payments in connection with
voluntary prepayments of the underlying loan from the Bank, based on the
appreciation of the Common Stock and UAG Stock, and upon the receipt of
extraordinary distributions of cash or assets, equal to 28% of such
distributions.
In connection with the Issuer's acquisition of Great Western,
Trace Holdings entered into a put option agreement (the "Put Option") with John
Rallis, a former President of the Issuer and the former owner of Great Western
Foam Products Corporation. Pursuant to the Put Option, Mr. Rallis has the right
and option to sell to Trace Holdings 308,813 shares of Common Stock for
approximately $7.5 million, or $24.29 per share, at any time during the period
commencing May 6, 1998, which expiration date was initially extended to November
6, 1998. On November 6, 1998, Mr. Rallis exercised the Put Option, which Trace
Holdings was unable to satisfy; subsequently, Mr. Rallis agreed to rescind the
exercise of the Put Option in exchange for the extension of the expiration date
of the Put Option to March 31, 1999. A copy of the letter agreement between
Trace Holdings and Mr. Rallis, dated November 6, 1998, extending the exercise
date of the Put Option is filed as Exhibit K hereto and incorporated herein by
reference.
12
<PAGE>
Item 7. Material to be Filed as Exhibits.
EXHIBIT A Pledge Agreement, dated as of December 14, 1993,
made by '21' International Holdings, Inc. to Generale
Bank, acting through its branch office located in New
York, New York (filed as Exhibit B to the initial
filing of the Schedule 13D and incorporated herein by
reference).
EXHIBIT B Pledge Agreement, dated as of December 14, 1993,
made by '21' International Holdings, Inc. to Recticel
Foam Corporation (filed as Exhibit C to the initial
filing of the Schedule 13D and incorporated herein by
reference).
EXHIBIT C Intentionally omitted.
EXHIBIT D Prospectus Sale Borrower's Agreement, dated as of
February 21, 1995, between '21' Foam Sub, Inc. and
Donaldson, Lufkin & Jenrette Securities Corporation
(filed as Exhibit F to Amendment No. 2 to the
Schedule 13D and incorporated herein by reference).
EXHIBIT E Customer Agreement, dated as of February 21, 1995,
executed by '21' Foam Sub, Inc. (filed as Exhibit G
to Amendment No. 2 to the Schedule 13D and
incorporated herein by reference).
EXHIBIT F Margin Loan Credit Agreement, dated as of August 15,
1997 by and between Trace International Holdings,
Inc. and the Bank (filed as Exhibit I to Amendment
No. 4 to the Schedule 13D and incorporated herein by
reference).
EXHIBIT G Pledge Agreement, dated as of August 15, 1997 by and
between Trace International Holdings, Inc. and the
Bank (filed as Exhibit J to Amendment No. 4 to the
Schedule 13D and incorporated herein by reference).
EXHIBIT H Security Agreement, dated as of August 15, 1997 by
and between Trace Foam Company, Inc. and the Bank
(filed as Exhibit K to Amendment No. 4 to the
Schedule 13D and incorporated herein by reference).
EXHIBIT I Amended and Restated Joint Filing Agreement and Power
of Attorney (filed as Exhibit M to Amendment No.
6 to the Schedule 13D and incorporated herein by
reference).
EXHIBIT J Amended and Restated Put Option Agreement by and
between John Rallis and '21' International Holdings,
Inc., dated as of December 14, 1993 (filed as Exhibit
S to Amendment No. 11 to the Schedule 13D and
incorporated herein by reference).
EXHIBIT K Letter Agreement between Trace International
Holdings, Inc. and John Rallis, dated November 6,
1998 (filed as Exhibit T to Amendment No. 12 to
the Schedule 13D and incorporated herein by
reference).
EXHIBIT L Letter Agreement between Trace International
Holdings, Inc. and John Rallis, dated September 30,
1998 (filed as Exhibit U to Amendment No. 12 to
the Schedule 13D and incorporated herein by
reference).
EXHIBIT M Letter Agreement between Trace International
Holdings, Inc. and John Rallis, dated July 21, 1998
(filed as Exhibit V to Amendment No. 12 to
the Schedule 13D and incorporated herein by
reference).
13
<PAGE>
EXHIBIT N Notice of Termination, dated January 8, 1999.
EXHIBIT O Amendment No. 5, dated as of December 30, 1998, to
Second Amended and Restated Credit Agreement, dated
as of December 24, 1997, and Amendment No. 1 to
Pledge Agreement, dated as of August 15, 1997,
between Trace International Holdings, Inc., and the
Bank.
EXHIBIT P Amendment No. 1, dated as of December 24, 1997, to
Margin Loan Credit Agreement, dated as of August 15,
1997 by and between Trace International Holdings,
Inc. and the Bank.
EXHIBIT Q Amendment No. 2, dated as of January 15, 1998, to
Margin Loan Credit Agreement, dated as of August 15,
1997 by and between Trace International Holdings,
Inc. and the Bank.
EXHIBIT R Amendment No. 3, dated as of February 17, 1998, to
Margin Loan Credit Agreement, dated as of August 15,
1997 by and between Trace International Holdings,
Inc. and the Bank.
EXHIBIT S Amendment No. 4, dated as of February 27, 1998, to
Margin Loan Credit Agreement, dated as of August 15,
1997 by and between Trace International Holdings,
Inc. and the Bank.
EXHIBIT T Amendment No. 5, dated as of June 30, 1998, to Margin
Loan Credit Agreement, dated as of August 15, 1997 by
and between Trace International Holdings, Inc. and
the Bank.
EXHIBIT U Amendment No. 6, dated as of December 30, 1998, to
Margin Loan Credit Agreement, dated as of August 15,
1997 by and between Trace International Holdings,
Inc. and the Bank.
14
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
TRACE INTERNATIONAL HOLDINGS, INC.
By: /s/ Marshall S. Cogan
-------------------------
Name: Marshall S. Cogan
Title: Chairman of the Board
and Chief Executive Officer
Date: January 13, 1999
15
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
TRACE FOAM SUB, INC.
By: /s/ Marshall S. Cogan
-------------------------
Name: Marshall S. Cogan
Title: Chairman of the Board and President
Date: January 13, 1999
16
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
/s/ Marshall S. Cogan
---------------------
Marshall S. Cogan
Date: January 13, 1999
17
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Title
- -------------- -----
<S> <C>
99.1 Exhibit N - Notice of Termination, dated January 8,
1999.
99.2 Exhibit O - Amendment No. 5, dated as of December 30,
1998, to Second Amended and Restated Credit
Agreement, dated as of December 24, 1997, and
Amendment No. 1 to Pledge Agreement, dated as of
August 15, 1997, between Trace International
Holdings, Inc., and the Bank.
99.3 Exhibit P - Amendment No. 1, dated as of December 24,
1997, to Margin Loan Credit Agreement, dated as of
August 15, 1997 by and between Trace International
Holdings, Inc. and the Bank.
99.4 Exhibit Q - Amendment No. 2, dated as of January 15,
1998, to Margin Loan Credit Agreement, dated as of
August 15, 1997 by and between Trace International
Holdings, Inc. and the Bank.
99.5 Exhibit R - Amendment No. 3, dated as of February 17,
1998, to Margin Loan Credit Agreement, dated as of
August 15, 1997 by and between Trace International
Holdings, Inc. and the Bank.
99.6 Exhibit S - Amendment No. 4, dated as of February 27,
1998, to Margin Loan Credit Agreement, dated as of
August 15, 1997 by and between Trace International
Holdings, Inc. and the Bank.
99.7 Exhibit T - Amendment No. 5, dated as of June 30,
1998, to Margin Loan Credit Agreement, dated as of
August 15, 1997 by and between Trace International
Holdings, Inc. and the Bank.
99.8 Exhibit Q - Amendment No. 6, dated as of December 30,
1998, to Margin Loan Credit Agreement, dated as of
August 15, 1997 by and between Trace International
Holdings, Inc. and the Bank.
</TABLE>
<PAGE>
SCHEDULE 5(c)
SCHEDULE OF TRANSACTIONS IN
COMMON STOCK IN THE PAST 60 DAYS
TRACE INTERNATIONAL HOLDINGS, INC.
None.
TRACE FOAM SUB, INC.
None.
OFFICERS AND DIRECTORS
None.
2
<PAGE>
SCHEDULE I
Executive Officers and Directors of Trace International Holdings, Inc.
Unless otherwise indicated, the business address of each individual listed below
is 375 Park Avenue, 11th Floor, New York, New York 10152. All of the following
persons are U.S. citizens.
<TABLE>
<CAPTION>
Directors Class of Director Principal Employment and Employer
- --------- ----------------- ---------------------------------
<S> <C> <C>
Saul S. Sherman Class A Unitcrane & Shovel Corp.
Unitcrane & Shovel Corp.
676 N. Michigan Avenue
Suite 2920
Chicago, IL 60611
Marshall S. Cogan Class B Trace International Holdings, Inc. and
United Auto Group, Inc.
Robert H. Nelson Class B Trace International Holdings, Inc. and
United Auto Group, Inc.
Frederick Marcus Class B Trace International Holdings, Inc.
</TABLE>
<TABLE>
<CAPTION>
Executive Officers Office Held at Trace International Holdings, Inc. Principal Employment and Employer
- ------------------ ------------------------------------------------- ---------------------------------
<S> <C> <C>
Marshall S. Cogan Chairman of the Board and Chief Executive Officer Trace International Holdings, Inc. and
United Auto Group, Inc.
Saul S. Sherman Vice Chairman of the Board Unitcrane & Shovel Corp.
Frederick Marcus Vice Chairman and Senior Managing Director Trace International Holdings, Inc.
Robert H. Nelson Senior Vice President, Chief Operating Officer and Trace International Holdings, Inc. and
Chief Financial Officer United Auto Group, Inc.
Barry Zimmerman Senior Vice President and Managing Director Foamex International Inc.
Philip N. Smith, Jr. Senior Vice President and General Counsel United Auto Group, Inc. and
Foamex International Inc.
Karl H. Winters Vice President-Finance and Controller Trace International Holdings, Inc. and
United Auto Group, Inc.
</TABLE>
3
<PAGE>
SCHEDULE II
Executive Officers and Directors of Trace Foam Sub, Inc.
Unless otherwise indicated, the business address of each individual listed below
is 375 Park Avenue, 11th Floor, New York, New York 10152. All of the following
persons are U.S. citizens.
<TABLE>
<CAPTION>
Directors Principal Employment and Employer
- --------- ---------------------------------
<S> <C>
Marshall S. Cogan Trace International Holdings, Inc. and
United Auto Group, Inc.
Robert H. Nelson Trace International Holdings, Inc. and
United Auto Group, Inc.
</TABLE>
<TABLE>
<CAPTION>
Executive Officers Office Held at Trace Foam Sub, Inc. Principal Employment and Employer
- ------------------ ----------------------------------- ---------------------------------
<S> <C> <C>
Marshall S. Cogan Chairman of the Board and President Trace International Holdings, Inc. and
United Auto Group, Inc.
Robert H. Nelson Vice President and Treasurer Trace International Holdings, Inc. and
United Auto Group, Inc.
Philip N. Smith, Jr. Vice President Foamex International Inc. and
United Auto Group, Inc.
</TABLE>
Trace International Holdings, Inc.
375 Park Avenue, 11th Floor
New York, New York 10152
January 8, 1999
Foamex International Inc.
1000 Columbia Avenue
Linwood, PA 19061
Attention: Chief Executive Officer
Board of Directors
of Foamex International Inc.
1000 Columbia Avenue
Linwood, PA 19061
Attention: Chairman
Re: Termination of Agreement and Plan of Merger
Dear Ladies and Gentlemen:
This notice is being provided to you pursuant to the terms of the Agreement
and Plan of Merger, dated as of November 5, 1998, by and among Trace
International Holdings, Inc. ("Trace"), Trace Merger Sub, Inc. ("Sub") and
Foamex International Inc. ("Foamex"), (the "Merger Agreement"). Capitalized
terms used herein but not otherwise defined shall have the meaning ascribed to
them in the Merger Agreement.
Trace has been informed by its financing sources that the Financing
contemplated by the Financing Letters is not available. In light of discussions
with investment and commercial banks, all of whom have indicated that they would
not be able to provide Financing for a transaction at $12.00 per share, Trace is
incapable of obtaining Financing on terms, conditions and in amounts that would
not be materially worse for Trace than as set forth in the Financing Letters on
or prior to January 29, 1999. Therefore, the condition set forth in Section
6.3(c) of the Merger Agreement is incapable of being satisfied.
In light of the fact that the condition set forth in Section 6.3(c) is
incapable of occurring, pursuant to the terms of Section 7.1(f) of the Merger
Agreement, Trace hereby terminates the Merger Agreement. The Merger Agreement
shall forthwith become void and there shall be no
<PAGE>
Board of Directors
of Foamex International Inc.
January 8, 1999
Page 2
liability or obligation on the part of Trace, Sub or Foamex or their respective
officers or directors, except as provided in Section 7.2 of the Merger
Agreement.
Sincerely yours,
/s/ Marshall S. Cogan
Marshall S. Cogan
cc: Judith R. Thoyer, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison
AMENDMENT NO. 5 TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AND AMENDMENT NO. 1 TO PLEDGE AGREEMENT
THIS AMENDMENT NO. 5 SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AND AMENDMENT NO. 1 TO PLEDGE AGREEMENT (this "Amendment"), dated as of December
30, 1998 is entered into between Trace International Holdings, Inc. (the
"Borrower" or the "Company") and The Bank of Nova Scotia (including its
successors and assigns, the "Lender").
W I T N E S S E T H:
WHEREAS, pursuant to the Second Amended and Restated Credit
Agreement dated as of December 24, 1997 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
entered into between the Borrower and the Lender, the Lender extended
Commitments to make Loans to the Borrower; and
WHEREAS, the Borrower has requested, and the Lender has agreed to,
an amendment to the Credit Agreement and to the Pledge Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Use of Defined Terms; Rules of Usage. Unless otherwise
defined or the context otherwise requires, terms for which meanings are provided
in the Credit Agreement shall, when capitalized, have such meanings when used in
this Amendment.
ARTICLE II
AMENDMENT TO CREDIT AGREEMENT
SECTION 2.1. Amendment to Article I of the Credit Agreement
(Definitions).
(i) Article I is hereby amended by adding the following definitions in
their appropriate alphabetical place:
"'Demand Note' shall mean that certain Demand Note dated as of
December 1, 1998, between Trace Foam Sub, Inc. and the Lender.";
<PAGE>
"'Restricted Junior Payment' means (a) any dividend or distribution,
direct or indirect, on account of any Equity Interests in the Borrower now or
hereafter outstanding, (b) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
Equity Interests in the Borrower 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 subordinated Indebtedness, and (d) any payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire Equity Interests in the Borrower
now or hereafter outstanding;
"'Trace Foam Sub Guaranty' shall mean that certain Guaranty by Trace
Foam Sub in favor of the Lender, dated December 30, 1998, which guarantees the
Indebtedness of the Borrower under the Other Loan Agreement.".
(ii) The definition of "Loan Documents" is hereby amended by adding the
following terms immediately after the words "the Contract Assignment Agreement"
therein:
", the Demand Note and the Trace Foam Sub Guaranty".
SECTION 2.2. Amendment to Article II of the Credit Agreement
(Amounts and Terms of the Loan).
Clause (f) of Section 2.1 is hereby amended and restated in its
entirety so that it reads as follows:
"(f) Repayment of the Loans. The Borrower shall repay in full the
outstanding principal amount of the Term A Loan, Term B Loan, Term C Loan
and Term D Loan on January 31, 1999."
SECTION 2.3. Amendment to Article IX to the Credit Agreement
(Negative Covenants).
(i) Section 9.1 is hereby amended by (a) deleting the word "and" at
the end of clause (viii), (b) deleting the "." and substituting "; and" at the
end of clause (ix) and (c) adding the following clause (x) after clause (ix):
"(x) Indebtedness of the Borrower and Trace Foam Sub, Inc.
under the Demand Note and the Trace Foam Sub Guaranty."
(ii) clause (vi) of Section 9.2 is hereby amended by adding the
phrase at the end thereof:
"and the Demand Note."
2
<PAGE>
(iii) Section 9.4 is hereby amended by adding the following sentence
at the end thereof:
"Notwithstanding the foregoing, the Borrower and Trace Foam Sub,
Inc. may enter into and perform all obligations under the Demand Note and the
Trace Foam Sub Guaranty."
(iv) Article IX is hereby amended by adding the following as Section
9.9:
"9.9. Restricted Junior Payments. The Borrower shall not
declare or make any Restricted Junior Payment."
ARTICLE III
AMENDMENT TO PLEDGE AGREEMENT
SECTION 3.1. Amendment to Article I of the Pledge Agreement
(Definitions).
(a) Article I is hereby amended by adding the following definitions
in their appropriate alphabetical place:
"CHF Guaranty" means the Guaranty of the Borrower dated as of
February 24, 1995 in favor of The Bank of Nova Scotia.
"CHF Note" means that promissory note of CHF Holdings, Inc.
dated November 25, 1996, as amended, payable to the order of the Borrower.
(b) (i) The definition of CHF Guarantee Collateral is hereby amended
and restated to read as follows:
"CHF Guarantee Collateral" means 969,696 shares of UAG Common
Stock and the Trace Foam Sub Shares."
(ii) The definition of "Dividends" is hereby amended by adding the
phrase "and other cash payments (whether of principal, interest or otherwise)"
after the phrase "and cash distributions" therein.
(iii) The definition of "Pledged Property" is hereby amended by
adding the parenthetical "(including, without limitation, the CHF Note)" after
the phrase "promissory notes" in the third line thereof.
SECTION 3.2. Amendment to Article III of the Pledge Agreement.
Section 3.1.3 of the Pledge Agreement is hereby amended by adding the following
sentence "The CHF Note is owned by the Pledgor free and clear of all Liens." at
the end thereof.
SECTION 3.3. Amendment to Article IV of the Pledge Agreement.
Section 4.2 of the Pledge Agreement is amended by
3
<PAGE>
amending and restating the parenthetical in the first sentence thereof to read
"(and all other items constituting Collateral)."
ARTICLE IV
EFFECTIVENESS
SECTION 4.1. Conditions to Effectiveness. This Amendment shall
become effective as of the date hereof (the "Effective Date"), subject to the
execution and delivery of (i) this Amendment by the Borrower and the Lender,
(ii) an amendment to the Other Loan Agreement of even date herewith in the form
attached hereto as Exhibit A, (iii) the Trace Foam Sub Guaranty substantially in
the form attached as Exhibit B and (iv) a letter agreement between the Borrower
and the Lender substantially in the form attached hereto as Exhibit C.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Amendment, the
Borrower hereby reaffirms, except as set forth in Annex A hereto, as of the date
hereof, the representations and warranties contained in Article VI of the Credit
Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1. Ratification of and References to the Credit Agreement.
This Amendment shall be deemed to be an amendment to the Credit Agreement and
the Pledge Agreement, respectively, and the Credit Agreement and the Pledge
Agreement, respectively, as amended hereby, are each hereby ratified, approved
and confirmed in each and every respect. All references to the Credit Agreement
and the Pledge Agreement, respectively, in any other document, instrument,
agreement or writing shall hereafter be deemed to refer to the Credit Agreement
and the Pledge Agreement, respectively as amended hereby.
SECTION 6.2. Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or interpretation
of this Amendment or any provisions hereof.
SECTION 6.3. Execution in Counterparts. This Amendment may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement.
SECTION 6.4. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL
4
<PAGE>
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD To NEW YORK CHOICE OF LAWS
PRINCIPLES.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized as of the day
and year first above written.
TRACE INTERNATIONAL HOLDINGS, INC.
By: /s/ Philip N. Smith, Jr.
----------------------------------
Name: Philip N. Smith, Jr.
Title: Senior Vice President
THE BANK OF NOVA SCOTIA
By: /s/ Brian Allen
----------------------------------
Name: Brian Allen
Title: Senior Relationship Manager
6
<PAGE>
Exhibit A
Schedule 6.1 - H
Schedule 6.1-H is supplemented by adding the following:
under a new caption "Trace Foam Sub, Inc."
Demand Note, dated as of December 1, 1998, in favor of Lender.
Exhibit A to Amendment No. 5
Page - 1
<PAGE>
Exhibit A
Schedule 6.1 - I
Schedule 6.1-I is supplemented to include the information
contained in the following two pages:
Exhibit A to Amendment No. 5
Page - 2
<PAGE>
Litigation and Legal Proceedings
Stockholder Litigation
Beginning on or about March 17, 1998, six actions (collectively the
"Stockholder Litigation") were filed in the Court of Chancery of the State of
Delaware, New Castle County, (the "Court") by stockholders of Foamex
International. The Stockholder Litigation, purportedly brought as class actions
on behalf of all stockholders of Foamex International, named Foamex
International, certain of its directors, certain of its officers and Trace as
defendants alleging that they had breached their fiduciary duties to the
plaintiffs and the other stockholders of Foamex International unaffiliated with
Trace in connection with the original proposal of Trace to acquire the publicly
traded outstanding common stock of Foamex International for $17.00 per share.
The complaints sought, among other things, class certification, a declaration
that the defendants have breached their fiduciary duties to the class,
preliminary and permanent injunctions barring implementation of the proposed
transaction, rescission of the transaction if consummated, unspecified
compensatory damages, and costs and attorneys' fees. A stipulation and order
consolidating these six actions under the caption In re Foamex International
Inc. Shareholders Litigation Consolidated Action, No. 16259NC was entered by the
Court on May 28, 1998.
The parties to the Stockholder Litigation entered into a Memorandum
of Understanding, dated June 25, 1998 (the "Memorandum of Understanding") to
settle the Stockholder Litigation, subject to, among other things, execution of
a definitive stipulation of settlement between the parties and approval by the
Court of filing notice to the stockholders of Foamex International of a hearing.
The Memorandum of Understanding provided that as a result of, among other
things, the Stockholder Litigation and negotiations among counsel for the
parties to the Memorandum of Understanding, a special meeting of stockholders
would be held to vote upon and approve the merger agreement which provided,
among other things, for the shares ("Public Shares") owned by stockholders by
Foamex International unaffiliated with Trace and its subsidiaries (the "Public
Stockholders") to be converted into the right to receive $18.75 in cash, without
interest. The Memorandum of Understanding also acknowledged that the terms of
the prior merger agreement, dated June 25, 1998, among Trace, a wholly owned
subsidiary of Trace ("Merger Sub") and Foamex International (the "Old Merger
Agreement") had been significantly improved over the terms originally proposed
by Trace on March 16, 1998, and Foamex International and the individual director
and officer defendants acknowledged that the filing and prosecution of the
Stockholder Litigation was a factor they took into account in giving fair
consideration to and entering into the Old Merger Agreement and
Exhibit A to Amendment No. 5
Page - 3
7
<PAGE>
Trace acknowledged that it took into account the desirability of satisfactorily
addressing the claims asserted in the Stockholder Litigation in agreeing to the
increased consideration to be paid to the stockholders of Foamex International
unaffiliated with Trace and its subsidiaries pursuant to the Old Merger
Agreement.
The Memorandum of Understanding also provided for certification of a
class, for settlement purposes only, consisting of the Public Stockholders, the
dismissal of the Stockholder Litigation with prejudice and the release by the
plaintiffs and all members of the class of all claims and causes of action that
were or could have been asserted against Trace, Foamex International and the
individual defendants in the Stockholder Litigation or that arise out of the
matters alleged by plaintiffs. Following the completion of the confirmatory
discovery which was provided for in the Memorandum of Understanding on September
9, 1998, the parties entered into a definitive Stipulation of Settlement and the
Court set a hearing to consider whether the settlement should be approved for
October 27, 1998 (the "Settlement Hearing"). In connection with the proposed
settlement, the plaintiffs intended to apply for an award of attorney's fees and
litigation expenses in an amount not to exceed $925,000, and the defendants
agreed not to oppose this application. Additionally, Foamex International agreed
to pay the cost, if any, of sending notice of the settlement to the Public
Stockholders. On September 24, 1998, a Notice of Pendency of Class Action,
Proposed Settlement of Class Action and Settlement Hearing was mailed to the
members of the settlement class. On October 20, 1998, the parties to the
Stockholder Litigation requested that the Court cancel the Settlement Hearing in
light of the announcement made by Trace on October 16, 1998, that it had been
unable to obtain the necessary financing for the contemplated acquisition by
Trace of Foamex International common stock at a price of $18.75 per share which
was the subject matter of the proposed settlement. This request was approved by
the Court on October 21, 1998, and Foamex International issued a press release
on October 21, 1998 announcing that the Court had canceled the settlement
hearing.
On November 10, 1998, counsel for certain of the defendants in the
Stockholder Litigation gave notice pursuant to the Stipulation of Settlement
that such defendants were withdrawing from the Stipulation of Settlement in
light of the notice given by Trace to Foamex and the special committee of the
Board of Directors on November 5, 1998 whereby Trace terminated the Old Merger
Agreement on the grounds that the financing condition in the Old Merger
Agreement was incapable of being satisfied.
On November 12, 1998, the plaintiffs in the Stockholder Litigation
filed an Amended Class Action Complaint (the "Amended Complaint"). The Amended
Complaint named Foamex International, Trace, Merger Sub, Mr. Marshall S. Cogan,
Mr. Andrea Farace, Dr. Stuart Hershon, Mr. John Tunney and Mr. Etienne Davignon
as
Exhibit A to Amendment No. 5
Page - 4
8
<PAGE>
defendants, alleging that they breached their fiduciary duties to plaintiffs and
the other Public Stockholders in connection with the Merger, that the proposal
to acquire the Public Shares for $12.00 per share lacked entire fairness, that
the individual defendants violated 8 Del. Code ss.251 in approving the Merger
Agreement, and that Trace and Merger Sub breached the Stipulation of Settlement.
On December 2, 1998, plaintiffs served a motion for a preliminary injunction,
seeking an Order to preliminarily enjoin the defendants from proceeding with,
consummating or otherwise effecting the merger contemplated by the Merger
Agreement.
The defendants have denied, and continue to deny, that they have
committed or have threatened to commit any violation of law or breaches of duty
to plaintiffs or the purported class or any breach of the Stipulation of
Settlement. The defendants intend to vigorously defend the Stockholder
Litigation. If the Stockholder Litigation is adversely determined, it could have
a material adverse effect on Foamex International and Trace.
In addition, on or about November 18, 1998, a putative class action
was filed in the United States District Court for the Eastern District of New
York on behalf of all persons who purchased common stock of Foamex International
between March 16, 1998 and October 19, 1998, naming Trace as defendant and
alleging that Trace breached a contract between the putative class members and
Trace. Neither Foamex International nor any of the individual directors of
Foamex International are named as defendants in this litigation.
Exhibit A to Amendment No. 5
Page - 5
<PAGE>
Exhibit A
Schedule 6.1 - W
The following information shall be deemed to qualify the
representation contained in Schedule 6.1(w) of the Credit Agreement, even though
no reference to a Schedule 6.1 - W is contained therein.
1. Entering into and performing its obligation under the Trace Foam
Sub Guaranty.
2. Entering into and performing its obligation under the Demand
Note.
Exhibit A to Amendment No. 5
Page - 6
<PAGE>
[EXHIBIT B]
TRACE FOAM SUB GUARANTY
This TRACE FOAM SUB GUARANTY (as amended, amended and restated,
supplemented or otherwise modified from time to time, this "Guaranty"), dated as
of December 30, 1998, is made by Trace Foam Sub, Inc., a Delaware corporation
(the "Guarantor" or "TSFI") in favor of The Bank of Nova Scotia (the "Lender")
for the benefit of the Lender.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to that certain Margin Loan Credit Agreement,
dated as of August 15, 1997 (as amended, amended and restated, supplemented or
modified from time to time, the "Credit Agreement") is entered into among, Trace
International Holdings, Inc. (the "Borrower" and "TIHI") and The Bank of Nova
Scotia (the "Lender). The Lender has extended Loans to the Borrower;
WHEREAS, the Borrower has requested and the Lender has agreed to
extend the Maturity Date of such Loans;
WHEREAS, as a condition precedent to extending the Maturity Date of
the Loans under the Credit Agreement, the Guarantor is required to execute and
deliver this Guaranty;
WHEREAS, the Guarantor has duly authorized the execution, delivery
and performance of this Guaranty; and
WHEREAS, it is in the best interests of the Guarantor to execute
this Guaranty inasmuch as the Guarantor has and will continue to derive
substantial direct and direct benefits from the Loans made to the Borrower by
the Lender pursuant to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, and in order to induce the Lender to extend the
final Maturity Date of the Loans to the Borrower pursuant to the Credit
Agreement, the Guarantor agrees, for the benefit of the Lender, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
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"Borrower" is defined in the first recital.
"Credit Agreement" is defined in the first recital.
"Guarantor" is defined in the preamble.
"Guaranty" is defined in the preamble.
"Obligations" means all Obligations (as defined in the Credit
Agreement) of the Borrower arising under or in connection with the Credit
Agreement or any other Loan Document.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Guaranty, including
its preamble and recitals, have the meanings provided in the Credit Agreement.
ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. The Guarantor hereby absolutely,
unconditionally and irrevocably
(a) guarantees the full and punctual payment when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand
or otherwise, of all Obligations of the Borrower under the Credit
Agreement, the Notes and the other Loan Documents to which it is a party
now or hereafter existing, whether for principal, interest, fees, expenses
or otherwise (including all such amounts which would become due but for
the operation of the automatic stay under Section 362(a) of the United
States Bankruptcy Code, II U.S.C. ss.362(a), and the operation of Sections
502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C.
ss.502(b) and ss.506(b)), and
(b) indemnifies and holds harmless the Lender and each holder of a
Note for any and all costs and expenses (including reasonable attorney's
fees and expenses) incurred by the Lender or such holder, as the case may
be, in enforcing any rights under this Guaranty;
This Guaranty constitutes a guaranty of payment when due and not of collection,
and the Guarantor specifically agrees that it shall not be necessary or required
that the Lender or any holder of any Note exercise any right, assert any claim
or demand or enforce any remedy whatsoever against the Borrower (or any other
Person) before or as a condition to the obligations of the Guarantor hereunder.
SECTION 2.2. Acceleration of Guaranty. The Guarantor agrees that, in
the event of the dissolution or insolvency of the
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Borrower or the Guarantor, or the, inability or failure of the Borrower or the
Guarantor to pay debts as they become due, or an assignment by the Borrower or
the Guarantor for the benefit of creditors, or the commencement of any case or
proceeding in respect of the Borrower or the Guarantor under any bankruptcy,
insolvency or similar laws, and if such event shall occur at a time when any of
the Obligations of the Borrower may not then be due and payable, the Guarantor
agrees that it will pay to the Lender forthwith the full amount which would be
payable hereunder by the Guarantor if all such Obligations were then due and
payable.
SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in all
respects be a continuing, absolute, unconditional and irrevocable guaranty of
payment, and shall remain in full force and effect until all Obligations of the
Borrower have been paid in full in cash and all obligations of the Guarantor
hereunder shall have been paid in full in cash. The Guarantor guarantees that
the Obligations of the Borrower will be paid strictly in accordance with the
terms of the Credit Agreement and each other Loan Document under which they
arise, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of the Lender or any
holder of any Note with respect thereto. The liability of the Guarantor under
this Guaranty shall be absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of the Credit
Agreement, any Note or any other Loan Document;
(b) the failure of the Lender or any holder of any Note
(i) to assert any claim or demand or to enforce any right or
remedy against the Borrower or any other Person (including any other
guarantor (including the Guarantor)) under the provisions of the
Credit Agreement, any Note, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any other
guarantor (including the Guarantor) of, or collateral securing, any
Obligations of the Borrower;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower or any other
Obligor, or any other extension, compromise or renewal of any Obligation
of the Borrower;
(d) any reduction, limitation, impairment or termination of any
Obligations of the Borrower for any reason, including any claim o waiver,
release, surrender,
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alteration or compromise, and shall not be subject to (and the Guarantor
hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Obligations of the Borrower or otherwise;
(e) any amendment to, rescission, waiver, or other modification of,
or any consent to departure from, any of the terms of the Credit
Agreement, any Note or any other Loan Document;
(f) any addition, exchange, release, surrender or non-perfection of
any collateral, or any amendment to or waiver or release or addition of,
or consent to departure from, any other guaranty, held by the Lender or
any holder of any Note securing any of the Obligations of the Borrower; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Borrower,
any surety or any guarantor.
SECTION 2.4. Reinstatement, etc. The Guarantor agrees that this
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment (in whole or in part) of any of the Obligations is
rescinded or must otherwise be restored by the Lender or any holder of any Note,
upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise,
all as though such payment had not been made.
SECTION 2.5. Waiver, etc. The Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations of the Borrower and this Guaranty and any requirement that the
Lender or any holder of any Note protect, secure, perfect or insure any security
interest or Lien, or any property subject thereto, or exhaust any right or take
any action against the Borrower or any other Person (including any other
guarantor) or entity or any collateral securing the Obligations of the Borrower.
SECTION 2.6. Postponement of Subrogation, etc. The Guarantor agrees
that it will not exercise any rights which it may acquire by way of rights of
subrogation under this Guaranty, by any payment made hereunder or otherwise,
until the prior payment in full in cash of all Obligations of the Borrower. Any
amount paid to the Guarantor on account of any such subrogation rights prior to
the payment in full in cash of all Obligations of the Borrower shall be held in
trust for the benefit of the Lender and each holder of a Note and shall
immediately be paid to the Lender for the benefit of the Lender and each holder
of a Note and credited and applied against the Obligations the Borrower, whether
matured or unmatured, in accordance with the terms of the Credit Agreement;
provided, however, that if
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(a) the Guarantor has made payment to the Lender and each holder of
a Note of all or any part of the Obligations of the Borrower, and
(b) all Obligations of the Borrower have been paid in full in cash,
the Lender and each holder of a Note agrees that, at the Guarantor's request,
the Lender, on its own behalf and that of the holders of the Notes, will execute
and deliver to the Guarantor appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by subrogation to
the Guarantor of an interest in the Obligations of the Borrower resulting from
such payment by the Guarantor. In furtherance of the foregoing, for so long as
any Obligations or Loans remain outstanding, the Guarantor shall refrain from
taking any action or commencing any proceeding against the Borrower (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in the respect of payments made under this
Guaranty to the Lender or any holder of a Note.
SECTION 2.7. Successors, Transferees and Assigns; Transfers of
Notes, etc. This Guaranty shall:
(a) be binding upon the Guarantor, and its successors, transferees
and assigns; and
(b) inure to the benefit of and be enforceable by the Lender.
Without limiting the generality of the foregoing clause (b), the Lender may
assign or otherwise transfer (in whole or in part) any Note or Loan held by it
to any other Person or entity, and such other Person or entity shall thereupon
become vested with all rights and benefits in respect thereof granted to the
Lender under any Loan Document (including this Guaranty) or otherwise, subject,
however, to any contrary provisions in such assignment or transfer, and to the
provisions of Article XI of the Credit Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. The Guarantor hereby
represents and warrants unto the Lender as set forth in this Article III
acknowledging that the Lender is relying thereon without independent inquiry.
SECTION 3.1.1. Corporate Existence; Compliance with Law. The
Guarantor (i) is a corporation duly organized, validly existing and in good
standing under the laws of the state of
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Delaware; (ii) has the requisite corporate power and authority and the legal
right to own, pledge, mortgage or otherwise encumber its properties and to
conduct its business as now and heretofore conducted; (iii) is in compliance
with its Constituent Documents; and (iv) is in compliance with all material
Requirements of Law.
SECTION 3.1.2. Corporate Power; Authorization. The execution and
delivery by the Guarantor of the Loan Documents to which it is a party and all
instruments and documents to be delivered by the Guarantor thereunder, and the
performance of its obligations thereunder: (i) are within the Guarantor's
corporate power; (ii) have been duly authorized by all necessary or proper
corporate action; (iii) are not in contravention of any provision of the
Guarantor's Constituent Documents; (iv) will not violate any law or regulation,
or any order or decree of any court or Governmental Authority; (v) will not
conflict with or result in the breach or termination of, constitute a default
under (with or without the giving of notice, the lapse of time or both) or a
tortious interference with or accelerate any performance required by, any
material indenture, mortgage, deed of trust, lease, agreement or other
instrument to which the Guarantor is a party or by which the Guarantor or any of
its property is bound; (vi) will not result in the creation or imposition of any
Lien upon any of the property of the Guarantor, other than Liens created
pursuant to the terms of the Loan Documents; and (vii) do not require the
consent or approval of any Governmental Authority, or any other Person which has
not been obtained.
SECTION 3.1.3. No Adverse Condition. No action has been taken by any
competent authority which restrains, prevents or imposes material adverse
conditions upon, or seeks to restrain, prevent or impose material adverse
conditions upon, the consummation of any of the transactions contemplated by the
Loan Documents.
SECTION 3.1.4. Enforceability. The obligations of the Guarantor
under this Guaranty are enforceable against the Guarantor in accordance with
their terms.
ARTICLE IV
COVENANTS, ETC.
SECTION 4.1. Covenants. The Guarantor covenants and agrees that the
Guarantor will perform the obligations set forth in this Article IV until all
Obligations of the Borrower have been paid in full in cash and all obligations
of the Guarantor hereunder shall have been paid in full in cash. The Guarantor
shall comply with the following covenants unless the Lender shall otherwise give
its prior written consent thereto.
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SECTION 4.1.1. Sale of Assets; Liens. The Guarantor shall not (A)
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 or (B) directly or indirectly create, incur,
assume or permit to exist any Lien on or with respect to any of its Property
other than those outstanding on the date hereof.
SECTION 4.1.2. Conduct of Business. The Guarantor shall not engage
in any business other than the ownership of shares of Foamex International.
SECTION 4.1.3. Transactions with Affiliates. The Guarantor shall not
directly or indirectly enter into any transactions (including, without
limitations, 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 the Guarantor or with any of the
Guarantor's Affiliates on terms that are less favorable to it than terms that
could be obtained in an arm's length transaction with an unrelated party at that
time.
SECTION 4.1.4. Indebtedness. Neither the Guarantor nor any of its
Subsidiaries shall directly or indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except Indebtedness in respect of this Guaranty, the Demand Note
dated as of December 4, 1998, or the Obligations and the DLJ Loan Commitment
Agreement, dated as of December 14, 1993, between the Guarantor and DLJ Funding,
Inc. and the Prospectus Sale Borrower's Agreement, dated as of February 21,
1995, executed by Trace Foam Sub, Inc. in favor of Donaldson, Lufkin & Jenrette
Securities Corporation.
SECTION 4.1.5. Restriction on Fundamental Changes. The Guarantor
shall not enter into any merger or consolidation, or liquidate, wind-up or
dissolve (or suffer any liquidation or dissolution), purchase or otherwise
acquire, in one transaction or series of transactions, all or substantially all
of the Equity Interests in, or other evidence of beneficial ownership of, or the
business, property or assets of, any Person.
SECTION 4.1.6. Investments. The Guarantor shall not directly or
indirectly make or own any Investment, except (i) Investments in cash and Cash
Equivalents and (ii) Investments held by the Guarantor set forth on Schedule I
hereto.
SECTION 4.1.7. Constituent Documents. Neither the Guarantor nor any
of its Subsidiaries shall amend, modify or otherwise change any of the terms or
provisions in any of its Constituent Documents as in effect on the date hereof
other than amendments or modifications deemed immaterial by the Lender.
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SECTION 4.1.8. Loan Documents. The Guarantor shall not amend,
supplement or otherwise modify any of the terms or provisions in any of the Loan
Documents to which it is a party other than amendments, supplements or
modifications deemed immaterial by the Lender.
ARTICLE V
SUBORDINATION
The Guarantor hereby agrees that any indebtedness of the Borrower
now or hereafter owing to the Guarantor (the "Guarantor Subordinated Debt") is
hereby subordinated to all of the Obligations as defined in the Credit
Agreement, whether heretofore, now or hereafter created. In addition, the
Guarantor Subordinated Debt is subordinated on the following terms: The
Guarantor Subordinated Debt shall not be paid in whole or in part except as
otherwise permitted under the terms of the Credit Agreement. The Guarantor will
not accept any payment of or on account of any Guarantor Subordinated Debt at
any time in contravention of the foregoing. The Guarantor agrees to file all
claims against the Borrower in any bankruptcy or other proceeding in which the
filing of claims is required by law in respect of any Guarantor Subordinated
Debt, and the Lender shall be entitled to all of the Guarantor's rights
thereunder. If for any reason the Guarantor fails to file such claim at least
thirty (30) days prior to the last date on which such claim should be filed, the
Lender, as the Guarantor's attorney-in-fact, is hereby authorized to do so in
the Guarantor's name or, in the Lender's discretion, to assign such claim to and
cause proof of claim to be filed in the name of the Lender or its nominee. In
all such cases, whether in administration, bankruptcy or otherwise, the person
or persons authorized to pay such claim shall pay to the Lender the full amount
payable on the claim in the proceeding, and, to the full extent necessary for
that purpose, the Guarantor hereby assigns to the Lender all the Guarantor's
rights to any payments or distributions to which the Guarantor otherwise would
be entitled. If the amount so paid is greater than the Guarantor's liability
hereunder, the Lender will pay the excess amount to the party entitled thereto.
In addition, the Guarantor hereby appoints the Lender as its attorney-in-fact to
exercise all of the Guarantor's voting rights with respect to the Guarantor
Subordinated Debt in connection with any bankruptcy proceeding or any plan for
the reorganization of the Borrower.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1. Loan Document. This Guaranty is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed,
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administered and applied in accordance with the terms and provisions thereof,
including Article XI thereof.
SECTION 6.2. Binding on Successors, Transferees and Assigns;
Assignment. In addition to, and not in limitation of, Section 2.7 hereof, this
Guaranty shall be binding upon the Guarantor and the Guarantor's successors,
transferees and assigns and shall inure to the benefit of and be enforceable by
the Lender and each holder of a Note and their respective successors,
transferees and assigns (to the full extent provided pursuant to Section 2.7
hereof); provided, however, that the Guarantor may not assign any of its
obligations hereunder without the prior written consent of the Lender.
SECTION 6.3. Amendments, etc. No amendment to or waiver of any
provision of this Guaranty, nor consent to any departure by the Guarantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Lender (on its own behalf) and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 6.4. Notices. All notices and other communications provided
for hereunder shall be in writing and may be personally served, telecopied,
telexed or sent by courier service or United States certified mail and shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of a telecopy or telex or four (4) Business Days after deposit in the
United States mail with postage prepaid and properly addressed. For the purposes
hereof, the address of the Guarantor shall be the address specified on the
signature page hereof, or at such other address as may be designated by the
Guarantor in a written notice to the Lender.
SECTION 6.5. No Waiver; Remedies. In addition to, and not in
limitation of, Section 2.3 hereof and Section 2.5 hereof, no failure on the part
of the Lender or any holder of a Note to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 6.6. Captions. Section captions used in this Guaranty are
for convenience of reference only, and shall not affect the construction of this
Guaranty.
SECTION 6.7. Setoff. In addition to, and not in limitation of, any
rights of the Lender or any holder of a Note under applicable law, the Lender
and each such holder shall, upon the occurrence of any Default described in
either Section 10.1(f) or Section 10.1(g) of the Credit Agreement or with the
consent of the Lender, any Event of Default, have the right to appropriate
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and apply to the payment of the obligations of the Guarantor owing to it
hereunder, whether or not then due, and the Guarantor hereby grants to the
Lender and each such holder a continuing security interest in, any and all
balances, credits, deposits, accounts or moneys of the Guarantor then or
thereafter maintained with the Lender, or such holder or any agent or bailee for
the Lender or such holder; provided, however, that any such appropriation and
application shall be subject to the provisions of Section 11.4 of the Credit
Agreement.
SECTION 6.8. Severability. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION 6.9. Certain Consents and Waivers of the Guarantor.
SECTION 6.9.1. Personal Jurisdiction. (i) THE GUARANTOR IRREVOCABLY
AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING IN NEW YORK,
NEW YORK, AND ANY COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN
SUCH COURTS, IN ANY ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED
TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED IN CONNECTION WITH THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT TO WHICH THE GUARANTOR IS A PARTY, WHETHER
ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT AND THE GUARANTOR IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT. THE GUARANTOR AGREES THAT A FINAL JUDGMENT ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE GUARANTOR WAIVES IN ALL
DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING
THE DISPUTE.
(ii) THE GUARANTOR AGREES THAT THE LENDER SHALL HAVE THE RIGHT TO
PROCEED AGAINST THE GUARANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION TO
ENABLE THE LENDER, TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR
OF THE LENDER. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT IN WHICH THE LENDER MAY COMMENCE A PROCEEDING DESCRIBED IN
THIS SECTION.
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SECTION 6.9.2. Service of Process. THE GUARANTOR 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 GUARANTOR'S NOTICE ADDRESS SPECIFIED
BELOW, SUCH SERVICE TO BECOME EFFECTIVE (5) FIVE DAYS AFTER SUCH MAILING. THE
GUARANTOR 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 GUARANTY OR ANY OTHER LOAN DOCUMENT TO WHICH IT
IS A PARTY 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 LENDER TO BRING PROCEEDINGS AGAINST THE GUARANTOR IN THE COURTS OF
ANY OTHER JURISDICTION.
SECTION 6.10. Governing Law, Entire Agreement, etc. THIS GUARANTY
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). THIS GUARANTY AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 6.11. Waiver of Jury Trial. THE GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE LENDER OR THE GUARANTOR. THE GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THE CREDIT
AGREEMENT.
SECTION 6.12. Counterparts. This Guaranty may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
TRACE FOAM SUB, INC.
By
-------------------------------------
Name:
Title:
Notice address:
375 Park Avenue, 11th Floor
New York, New York 10152
Attn: Karl H. Winters
Telecopier No.: 212-593-1363
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SCHEDULE I
to
Trace Foam Sub, Inc. Guaranty
1. The Prospectus Sale Borrower's Agreement, dated as of February 21, 1995,
executed by Trace Foam Sub, Inc. in favor of Donaldson, Lufkin & Jenrette
Securities Corporation (the "Loan").
Trace Foam Sub, Inc. has pledged 7,000,247 shares of Foamex
International Inc. common stock and, as of October 30, 1998, the
outstanding principal and accrued interest owed under the Loan was
$33,934,582.48.
<PAGE>
[EXHIBIT C]
December 30, 1998
VIA FACSIMILE
- -------------
Trace International Holdings, Inc.
375 Park Avenue, 11th Floor
New York, New York 10152
Attention: Phil Smith
Mr. Smith:
Reference is made to (i) the Second Amended and Restated Credit Agreement,
dated as of December 24, 1997 (the "Credit Agreement"), between Trace
International Holdings, Inc. (the "Borrower") and The Bank of Nova Scotia (the
"Lender"), (ii) the Margin Loan Credit Agreement (the "Margin Agreement"), dated
August 15, 1997, between the Borrower and the Lender and (iii) the Demand Note,
dated December 1, 1998 (the "Demand Note") between Trace Foam Sub, Inc. ("TFSI")
and the Lender. Unless otherwise defined, terms used herein have the meanings
provided in the Credit Agreement, the Margin Agreement or Demand Note, as the
case may be.
The Borrower and TFSI, respectively, have requested, and the Lender is
willing, to amend (i) the Credit Agreement and Margin Agreement to extend the
maturity of the Loans thereunder through January 31, 1999 and (ii) Section 2 of
the Demand Note to extend the Final Payment Date through January 31, 1999.
As consideration for such amendments, the Borrower hereby agrees to, on or
prior to January 6, 1999, (i) cause Marshall S. Cogan to execute and deliver
(subject to any contractual restrictions affecting the ability of Marshall S.
Cogan to execute and deliver) to the Lender: (a) the Cogan Pledge Agreement and
(b) the Cogan Guaranty (collectively, the "Necessary Documents"), both in form
and substance satisfactory to the Lender, (ii) deliver the CHF Note to the
Lender and (iii) deliver an opinion of Borrower's counsel, Willkie Farr &
Gallagher, in form, substance and scope satisfactory to the Lender and its
counsel.
This letter agreement constitutes a Loan Document under each of the Credit
Agreement and the Margin Agreement, and therefore, the failure to comply with
the terms of this letter agreement on or prior to January 6, 1999, shall
constitute an Event of Default under each of the Credit Agreement and the Margin
Agreement.
<PAGE>
Except as modified pursuant to this letter, all terms and provisions of
the Credit Agreement, the Margin Agreement and the Demand Note shall continue in
full force and effect.
This letter may be executed by the parties hereto in several counterparts,
each of which shall be deemed to be an original and all of which shall
constitute together but one and the same agreement.
Very truly yours,
THE BANK OF NOVA SCOTIA
By:
--------------------------------------
Name: Brian Allen
Title: Senior Relationship Manager
Agreed to this 30th day of December, 1998
TRACE INTERNATIONAL HOLDINGS, INC.
By:
--------------------------------------
Name:
Title:
Acknowledged, agreed and accepted:
TRACE FOAM SUB, INC.
By:
--------------------------------------
Name:
Title:
2
AMENDMENT NO. 1 to
MARGIN LOAN CREDIT AGREEMENT
THIS AMENDMENT NO. 1 (this "Amendment"), dated as of December 24, 1997 is
entered into between Trace International Holdings, Inc. (the "Borrower" or the
"Company") and The Bank of Nova Scotia (including its successors and assigns,
the "Lender").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Margin Loan Credit Agreement dated as of August
15, 1997 (as amended, amended and restated, supplemented or modified from time
to time, the "Credit Agreement"), entered into between the Borrower and the
Lender, the Lender extended Commitments to make Loans to the Borrower; and
WHEREAS, the Borrower has requested, and the Lender has agreed to, an
amendment to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Use of Defined Terms; Rules of Usage. Unless otherwise
defined or the context otherwise requires, terms for which meanings are provided
in the Credit Agreement shall, when capitalized, have such meanings when used in
this Amendment.
ARTICLE II
AMENDMENT
SECTION 2.1. Amendment to Article I to the Credit Agreement (Definitions).
(a) The following definitions contained in Article I of the Credit
Agreement are hereby amended and restated to read in their entirety as follows:
"New Investment" means (i) any Investment in UAG Stock or Foamex
Common Stock (other than pursuant to the Rallis Put) on or after the Closing
Date made with the proceeds of the Loans, pursuant to this Agreement and (ii)
any Investment made in CHF with the proceeds of the Term A Loan (as defined in
the Other Credit Agreement), pursuant to the Other Credit Agreement.
"Other Credit Agreement" means the Second Amended and Restated
Credit Agreement, dated as of December 24, 1997, between the Company and The
Bank of Nova Scotia, as lender, as amended, amended and restated, supplemented
or modified from time to time.
"Tranche A Commitment Amount" means $0.
"Tranche B Commitment Amount" means $0.
<PAGE>
SECTION 2.2. Amendment to Article IX to the Credit Agreement (Negative
Covenants).
(a) Section 9.1 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.1. Indebtedness. The Borrower shall not and shall not permit any
of its Subsidiaries (other than CHF Industries, Inc. and its operating
Subsidiaries and any Subsidiary which is not a Subsidiary of an Investment
Entity) directly or indirectly create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to any Funded Indebtedness,
except:
(i) the Obligations;
(ii) the Obligations (as such term is defined in the Other Credit
Agreement);
(iii) in the case of Trace Foam Sub, the DLJ Facility;
(iv) other Funded Indebtedness of the Borrower and such Subsidiaries
outstanding on the Closing Date; and
(v) Indebtedness to the United Auto Group, Inc. in a maximum principal
amount not to exceed $5,000,000."
(b) Section 9.2 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.2. Investments. The Borrower shall not make any Investment in any
Investment Entity or any Subsidiary thereof other than (i) any Investment
existing on the Closing Date (as defined in the Other Credit Agreement), (ii)
110,000 shares of Foamex International, Inc. common stock described in the
proviso to the definition of "Restricted Management Payment", (iii) as required
by Section 4(c) of the TIHI CHF Guaranty and (iv) the New Investments. The
Borrower shall not and shall not permit any Subsidiary to sell, transfer or
otherwise dispose of (i) any Equity Interest in Trace Foam Sub or any of its
assets or (ii) any Subject Asset to another Subsidiary of the Borrower unless,
in the case of this clause (ii), (x) such transferee Subsidiary is a direct,
wholly-owned Subsidiary of the Borrower and (y) the Borrower shall have given
prior written notice of such transaction to the Lender."
(c) Section 9.4 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.4. Transactions with Shareholders and Affiliates. The Borrower
shall not and shall not permit any Investment Entity which is a Subsidiary or
Trace Foam Sub to 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 Affiliate of the Borrower. Nothing contained
in this Section 9.4 shall prohibit (i) any transaction permitted by Section 9.3
or, subject to Section 9.3, compensation and benefits for officers and employees
of the Borrower or any of the Borrower's predecessors in interest or any of
their respective Subsidiaries which are customary in the industry or consistent
with the past business practice of the Borrower or such Subsidiary, provided
that no Event of Default or Potential Event of Default has occurred and is
continuing at the time of any increase therein; (ii) payment of customary
directors' fees and indemnities; (iii) performance of any obligations arising
under the Loan Documents; (iv) transactions listed on Schedule 6.1-Q, (v)
payment of
-2-
<PAGE>
dividends and distributions by Subsidiaries to the Borrower and (vi)
transactions between Trace Capital Partners LLC and Trace Capital Management LLC
on the one hand and Trace Global Opportunities Fund L.P. on the other hand,
other than any transaction which reduces the compensation or profits allocation
payable to Trace Capital Partners LLC or Trace Capital Management LLC."
(d) Section 9.5 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.5. Restriction on Fundamental Changes. The Borrower shall not,
and shall not permit Trace Foam Sub to, enter into any merger or consolidation,
or liquidate, windup 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 its business or property or
assets, whether now or hereafter acquired."
(e) Section 9.8 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.8. Environmental Matters. The Borrower shall not and shall not
permit Trace Foam Sub to:
(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 Hazardous Material into the
environment, or any Remedial Action in response thereto, or (b) any violation of
any Environmental, Health or 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 III
EFFECTIVENESS
This Amendment shall become effective, as of the date hereof, subject to
the execution and delivery of this Amendment by the Borrower and the Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Amendment, the Borrower
hereby reaffirms, as of the date hereof, the representations and warranties
contained in Article VI of the Credit Agreement; provided, however, that this
representation shall be deemed to be qualified by the Schedules to the Other
Credit Agreement.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Ratification of and References to the Credit Agreement. This
Amendment shall be deemed to be an amendment to the Credit Agreement, and the
Credit Agreement, as amended hereby, is
-3-
<PAGE>
hereby ratified, approved and confirmed in each and every respect. All
references to the Credit Agreement in any other document, instrument, agreement
or writing shall hereafter be deemed to refer to the Credit Agreement as amended
hereby.
SECTION 5.2. Headings. The various headings of this Amendment are inserted
for convenience only and shall not affect the meaning or interpretation of this
Amendment or any provisions hereof.
SECTION 5.3. Execution in Counterparts. This Amendment may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.
SECTION 5.4. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized as of the day
and year first above written.
TRACE INTERNATIONAL HOLDINGS, INC.
By /s/ Philip N. Smith, Jr.
----------------------------------
Name: Philip N. Smith, Jr.
Title: Senior Vice President
THE BANK OF NOVA SCOTIA,
By /s/ Brian Allen
-----------------------------------
Name: Brian Allen
Title: Senior Relationship Manager
AMENDMENT NO. 2 to
MARGIN LOAN CREDIT AGREEMENT
THIS AMENDMENT NO. 2 (this "Amendment"), dated as of January 15, 1998 is
entered into between Trace International Holdings, Inc. (the "Borrower" or the
"Company") and The Bank of Nova Scotia (including its successors and assigns,
the "Lender").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Margin Loan Credit Agreement dated as of August
15, 1997 (as amended, amended and restated, supplemented or modified from time
to time, the "Credit Agreement"), entered into between the Borrower and the
Lender, the Lender extended Commitments to make Loans to the Borrower; and
WHEREAS, the Borrower has requested, and the Lender has agreed to, an
amendment to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Use of Defined Terms; Rules of Usage. Unless otherwise
defined or the context otherwise requires, terms for which meanings are provided
in the Credit Agreement shall, when capitalized, have such meanings when used in
this Amendment.
ARTICLE II
AMENDMENT
SECTION 2.1. Amendment to Article I to the Credit Agreement (Definitions).
The following definition is hereby added to Article I of the Credit
Agreement in the appropriate alphabetical place:
"Permitted Vendor Guaranties" is defined in Section 9.1(vi).
SECTION 2.2. Amendment to Article IX to the Credit Agreement (Negative
Covenants).
(a) Section 9.1 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.1. Indebtedness. The Borrower shall not and shall not permit any
of its Subsidiaries (other than CHF Industries, Inc. and its operating
Subsidiaries and any Subsidiary which is not a Subsidiary of an Investment
Entity) directly or indirectly create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to any Funded Indebtedness,
except:
<PAGE>
(i) the Obligations;
(ii) the Obligations (as such term is defined in the Other Credit Agreement);
(iii) in the case of Trace Foam Sub, the DLJ Facility;
(iv) other Funded Indebtedness of the Borrower and such Subsidiaries outstanding
on the Closing Date (as such term is defined in the Other Credit Agreement);
(v) Indebtedness to the United Auto Group, Inc. in a maximum principal amount
not to exceed (x) $5,000,000 minus (y) the amount of Contingent Liabilities then
outstanding under clause (vi) below and"
(vi) Contingent Liabilities of the Borrower in respect of Indebtedness of the
Borrower or its Subsidiaries due to trade vendors to the Borrower or any of its
Subsidiaries which are not Affiliates of the Borrower, and which Indebtedness is
incurred directly to provide goods or services to the Borrower or any of its
Subsidiaries, in an aggregate amount not to exceed $5,000,000 at any time
outstanding ("Permitted Vendor Guarantees").
(b) Section 9.2 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.2. Investments. The Borrower shall not make any Investment in any
Investment Entity or any Subsidiary thereof other than (i) any Investment
existing on the Closing Date (as defined in the Other Credit Agreement), (ii)
110,000 shares of Foamex International, Inc. common stock described in the
proviso to the definition of "Restricted Management Payment", (iii) as required
by Section 4(c) of the TIHI CHF Guaranty, (iv) the New Investments and (v)
Permitted Vendor Guarantees. The Borrower shall not and shall not permit any
Subsidiary to sell, transfer or otherwise dispose of (i) any Equity Interest in
Trace Foam Sub or any of its assets or (ii) any Subject Asset to another
Subsidiary of the Borrower unless, in the case of this clause (ii), (x) such
transferee Subsidiary is a direct, wholly-owned Subsidiary of the Borrower and
(y) the Borrower shall have given prior written notice of such transaction to
the Lender."
ARTICLE III
EFFECTIVENESS
This Amendment shall become effective, as of the date hereof, subject to
the execution and delivery of this Amendment by the Borrower and the Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Amendment, the Borrower
hereby reaffirms, as of the date hereof, the representations and warranties
contained in Article VI of the Credit Agreement; provided, however, that this
representation shall be deemed to be qualified by the Schedules to the Other
Credit Agreement.
-2-
<PAGE>
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Ratification of and References to the Credit Agreement. This
Amendment shall be deemed to be an amendment to the Credit Agreement, and the
Credit Agreement, as amended hereby, is hereby ratified, approved and confirmed
in each and every respect. All references to the Credit Agreement in any other
document, instrument, agreement or writing shall hereafter be deemed to refer to
the Credit Agreement as amended hereby.
SECTION 5.2. Headings. The various headings of this Amendment are inserted
for convenience only and shall not affect the meaning or interpretation of this
Amendment or any provisions hereof.
SECTION 5.3. Execution in Counterparts. This Amendment may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.
SECTION 5.4. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
TRACE INTERNATIONAL HOLDINGS, INC.
By /s/ Tambra S. King
----------------------------------
Name: Tambra S. King
Title: Vice President
THE BANK OF NOVA SCOTIA,
By /s/ Brian Allen
----------------------------------
Name: Brian Allen
Title: Senior Relationship Manager
AMENDMENT NO. 3 to
MARGIN LOAN CREDIT AGREEMENT
THIS AMENDMENT NO. 3 (this "Amendment"), dated as of February 17, 1998 is
entered into between Trace International Holdings, Inc. (the "Borrower" or the
"Company") and The Bank of Nova Scotia (including its successors and assigns,
the "Lender").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Margin Loan Credit Agreement dated as of August
15, 1997 (as amended, amended and restated, supplemented or modified from time
to time, the "Credit Agreement"), entered into between the Borrower and the
Lender, the Lender extended Commitments to make Loans to the Borrower; and
WHEREAS, the Borrower has requested, and the Lender has agreed to, an
amendment to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Use of Defined Terms; Rules of Usage. Unless otherwise
defined or the context otherwise requires, terms for which meanings are provided
in the Credit Agreement shall, when capitalized, have such meanings when used in
this Amendment.
ARTICLE II
AMENDMENT
SECTION 2.1. Amendment to Article I to the Credit Agreement (Definitions).
The following definition is hereby added to Article I of the Credit
Agreement in the appropriate alphabetical place:
"CHF SAR Plan" means the CHF General Holdings Inc. Stock
Appreciation Rights Plan as in effect in February 17, 1998.
SECTION 2.2. Amendment to Article IX to the Credit Agreement (Negative
Covenants).
(a) Section 9.1 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.1. Indebtedness. The Borrower shall not and shall not permit any
of its Subsidiaries (other than CHF Industries, Inc. and its operating
Subsidiaries and any Subsidiary which is not a Subsidiary of an Investment
Entity) directly or indirectly to create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to any Funded Indebtedness,
except:
<PAGE>
(i) the Obligations;
(ii) the Obligations (as such term is defined in the Other Credit Agreement);
(iii) in the case of Trace Foam Sub, the DLJ Facility;
(iv) other Funded Indebtedness of the Borrower and such Subsidiaries outstanding
on the Closing Date (as such term is defined in the Other Credit Agreement);
(v) Indebtedness to the United Auto Group, Inc. in a maximum principal amount
not to exceed (x) $5,000,000 minus (y) the amount of Contingent Liabilities then
outstanding under clause (vi) below;
(vi) Contingent Liabilities of the Borrower in respect of Indebtedness of the
Borrower or its Subsidiaries due to trade vendors to the Borrower or any of its
Subsidiaries which are not Affiliates of the Borrower, and which Indebtedness is
incurred directly to provide goods or services to the Borrower or any of its
Subsidiaries, in an aggregate amount not to exceed $5,000,000 at any time
outstanding ("Permitted Vendor Guarantees"); and
(vii) Indebtedness in respect of the CHF SAR Plan so long as (i) no award
thereunder may be exercised on or prior to February 17, 2003 (other than as a
result of a Change in Control or Recapitalization Transaction, as such terms are
defined in the SAR Plan), or (ii) the Borrower shall cause CHF to assume the
Borrower'S liability thereunder on or prior to February 17, 2003.
ARTICLE III
EFFECTIVENESS
This Amendment shall become effective, as of the date hereof, subject to
the execution and delivery of this Amendment by the Borrower and the Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Amendment, the Borrower
hereby reaffirms, as of the date hereof, the representations and warranties
contained in Article VI of the Credit Agreement; provided, however, that this
representation shall be deemed to be qualified by the Schedules to the Other
Credit Agreement.
<PAGE>
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Ratification of and References to the Credit Agreement. This
Amendment shall be deemed to be an amendment to the Credit Agreement, and the
Credit Agreement, as amended hereby, is hereby ratified, approved and confirmed
in each and every respect. All references to the Credit Agreement in any other
document, instrument, agreement or writing shall hereafter be deemed to refer to
the Credit Agreement as amended hereby.
SECTION 5.2. Headings. The various headings of this Amendment are inserted
for convenience only and shall not affect the meaning or interpretation of this
Amendment or any provisions hereof.
SECTION 5.3. Execution in Counterparts. This Amendment may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.
SECTION 5.4. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
TRACE INTERNATIONAL HOLDINGS, INC.
By /s/ Philip N. Smith, Jr.
----------------------------------
Name: Philip N. Smith, Jr.
Title: Senior Vice President
THE BANK OF NOVA SCOTIA,
By /s/ Brian Allen
----------------------------------
Name: Brian Allen
Title: Senior Relationship Manager
AMENDMENT NO. 4 to
MARGIN LOAN CREDIT AGREEMENT
THIS AMENDMENT NO. 4 (this "Amendment"), dated as of February 27, 1998 is
entered into between Trace International Holdings, Inc. (the "Borrower" or the
"Company") and The Bank of Nova Scotia (including its successors and assigns,
the "Lender").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Margin Loan Credit Agreement dated as of August
15, 1997 (as amended, amended and restated, supplemented or modified from time
to time, the "Credit Agreement"), entered into between the Borrower and the
Lender, the Lender extended Commitments to make Loans to the Borrower; and
WHEREAS, the Borrower has requested, and the Lender has agreed to, an
amendment to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Use of Defined Terms; Rules of Usage. Unless otherwise
defined or the context otherwise requires, terms for which meanings are provided
in the Credit Agreement shall, when capitalized, have such meanings when used in
this Amendment.
ARTICLE II
AMENDMENT
SECTION 2.1. Amendment to Article I to the Credit Agreement (Definitions).
The following definition is hereby added to Article I of the Credit
Agreement in the appropriate alphabetical place:
"TFLLC Term Facility" means the Amended and Restated Term Credit
Agreement, dated as of February 27, 1998, among Trace Foam LLC, the lenders
party thereto, Citicorp USA, Inc. and The Bank of Nova Scotia, as administrative
agents, thereunder, as amended, supplemented or restated from time to time.
"TIHI/TFLLC Note" means the $20,000,000 promissory note, dated as of
February 27, 1998, due 2004 of the Borrower and payable to the order of Trace
Foam LLC.
SECTION 2.2. Amendment to Article IX to the Credit Agreement (Negative
Covenants).
(a) Section 9.1 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
<PAGE>
"9.1. Indebtedness. The Borrower shall not and shall not permit any
of its Subsidiaries (other than CHF Industries, Inc. and its operating
Subsidiaries and any Subsidiary which is not a Subsidiary of an Investment
Entity) directly or indirectly to create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to any Funded Indebtedness,
except:
(i) the Obligations;
(ii) the Obligations (as such term is defined in the Other Credit Agreement);
(iii) in the case of Trace Foam Sub, the DLJ Facility;
(iv) other Funded Indebtedness of the Borrower and such Subsidiaries outstanding
on the Closing Date (as such term is defined in the Other Credit Agreement);
(v) Indebtedness to the United Auto Group, Inc. in a maximum principal amount
not to exceed (x) $5,000,000 minus (y) the amount of Contingent Liabilities then
outstanding under clause (vi) below;
(vi) Contingent Liabilities of the Borrower in respect of Indebtedness of the
Borrower or its Subsidiaries due to trade vendors to the Borrower or any of its
Subsidiaries which are not Affiliates of the Borrower, and which Indebtedness is
incurred directly to provide goods or services to the Borrower or any of its
Subsidiaries, in an aggregate amount not to exceed $5,000,000 at any time
outstanding ("Permitted Vendor Guarantees");
(vii) Indebtedness in respect of the CHF SAR Plan so long as (i) no award
thereunder may be exercised on or prior to February 17, 2003 (other than as a
result of a Change in Control or Recapitalization Transaction, as such terms are
defined in the SAR Plan), or (ii) the Borrower shall cause CHF to assume the
Borrower'S liability thereunder on or prior to February 17, 2003;
(viii) Indebtedness of Trace SPV LLC and Trace Foam LLC in respect of the TFLLC
Term Facility; and
(ix) Indebtedness of the Borrower in respect of the TIHI/TFLLC Note."
(b) Section 9.4 of the Credit Agreement is hereby amended by (i) deleting
the "and" at the end of clause (v) thereof and substituting a ";", and (ii)
deleting the "." at the end thereof and adding the following: "; and (vii) the
Transactions, as such term is defined in the TFLLC Term Facility.
ARTICLE III
EFFECTIVENESS
This Amendment shall become effective, as of the date hereof, subject to
the execution and delivery of this Amendment by the Borrower and the Lender.
-2-
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Amendment, the Borrower
hereby reaffirms, as of the date hereof, the representations and warranties
contained in Article VI of the Credit Agreement; provided, however, that this
representation shall be deemed to be qualified by the Schedules to the Other
Credit Agreement.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Ratification of and References to the Credit Agreement. This
Amendment shall be deemed to be an amendment to the Credit Agreement, and the
Credit Agreement, as amended hereby, is hereby ratified, approved and confirmed
in each and every respect. All references to the Credit Agreement in any other
document, instrument, agreement or writing shall hereafter be deemed to refer to
the Credit Agreement as amended hereby.
SECTION 5.2. Headings. The various headings of this Amendment are inserted
for convenience only and shall not affect the meaning or interpretation of this
Amendment or any provisions hereof.
SECTION 5.3. Execution in Counterparts. This Amendment may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.
SECTION 5.4. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
TRACE INTERNATIONAL HOLDINGS, INC.
By /s/ Philip N. Smith, Jr.
----------------------------------
Name: Philip N. Smith, Jr.
Title: Senior Vice President
THE BANK OF NOVA SCOTIA,
By /s/ Brian Allen
----------------------------------
Name: Brian Allen
Title: Senior Relationship Manager
AMENDMENT NO. 5 to
MARGIN LOAN CREDIT AGREEMENT
THIS AMENDMENT NO. 5 (this "Amendment"), dated as of June 30, 1998 is
entered into between Trace International Holdings, Inc. (the "Borrower" or the
"Company") and The Bank of Nova Scotia (including its successors and assigns,
the "Lender").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Margin Loan Credit Agreement dated as of August
15, 1997 (as amended, amended and restated, supplemented or modified from time
to time, the "Credit Agreement"), entered into between the Borrower and the
Lender, the Lender extended Commitments to make Loans to the Borrower; and
WHEREAS, the Borrower has requested, and the Lender has agreed to, an
amendment to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Use of Defined Terms; Rules of Usage. Unless otherwise
defined or the context otherwise requires, terms for which meanings are provided
in the Credit Agreement shall, when capitalized, have such meanings when used in
this Amendment.
ARTICLE II
AMENDMENT
SECTION 2.1. Amendment to Article IX to the Credit Agreement (Negative
Covenants).
(a) Section 9.2 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
"9.2. Investments. The Borrower shall not make any Investment in any
Investment Entity or any Subsidiary thereof other than (i) any Investment
existing on the Closing Date (as defined in the Other Credit Agreement), (ii)
110,000 shares of Foamex International, Inc. common stock described in the
proviso to the definition of "Restricted Management Payment", (iii) as required
by Section 4(c) of the TIHI CHF Guaranty, (iv) the New Investments, (v)
Permitted Vendor Guarantees and (vi) Investments in CHF made with proceeds of
the Term D Loan. The Borrower shall not and shall not permit any Subsidiary to
sell, transfer or otherwise dispose of (i) any Equity Interest in Trace Foam Sub
or any of its assets or (ii) any Subject Asset to another Subsidiary of the
Borrower unless, in the case of this clause (ii), (x) such transferee Subsidiary
is a direct, wholly-owned Subsidiary of the Borrower and (y) the Borrower shall
have given prior written notice of such transaction to the Lender."
<PAGE>
ARTICLE III
EFFECTIVENESS
This Amendment shall become effective, as of the date hereof, subject to
the execution and delivery of this Amendment by the Borrower and the Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Amendment, the Borrower
hereby reaffirms, as of the date hereof, the representations and warranties
contained in Article VI of the Credit Agreement; provided, however, that this
representation shall be deemed to be qualified by the Schedules to the Other
Credit Agreement.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Ratification of and References to the Credit Agreement. This
Amendment shall be deemed to be an amendment to the Credit Agreement, and the
Credit Agreement, as amended hereby, is hereby ratified, approved and confirmed
in each and every respect. All references to the Credit Agreement in any other
document, instrument, agreement or writing shall hereafter be deemed to refer to
the Credit Agreement as amended hereby.
SECTION 5.2. Headings. The various headings of this Amendment are inserted
for convenience only and shall not affect the meaning or interpretation of this
Amendment or any provisions hereof.
SECTION 5.3. Execution in Counterparts. This Amendment may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.
SECTION 5.4. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
TRACE INTERNATIONAL HOLDINGS, INC.
By /s/ Philip N. Smith, Jr.
----------------------------------
Name: Philip N. Smith, Jr.
Title: Senior Vice President
THE BANK OF NOVA SCOTIA,
By /s/ Brian Allen
----------------------------------
Name: Brian Allen
Title: Senior Relationship Manager
AMENDMENT NO. 6 to
MARGIN LOAN CREDIT AGREEMENT
THIS AMENDMENT NO. 6 (this "Amendment"), dated as of December 30, 1998 is
entered into between Trace International Holdings, Inc. (the "Borrower" or the
"Company") and The Bank of Nova Scotia (including its successors and assigns,
the "Lender").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Margin Loan Credit Agreement dated as of August
15, 1997 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), entered into between the Borrower
and the Lender, the Lender extended Commitments to make Loans to the Borrower;
and
WHEREAS, the Borrower has requested, and the Lender has agreed to, an
amendment to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Use of Defined Terms; Rules of Usage. Unless otherwise
defined or the context otherwise requires, terms for which meanings are provided
in the Credit Agreement shall, when capitalized, have such meanings when used in
this Amendment.
ARTICLE II
AMENDMENT
SECTION 2.1. Amendment to Article I of the Credit Agreement (Definitions).
(i) Article I is hereby amended by adding the following definitions in
their appropriate alphabetical place:
"'Demand Note' shall mean that certain Demand Note dated as of
December 1, 1998, between Trace Foam Sub, Inc. and the Lender.";
"'Restricted Junior Payment' means (a) any dividend or distribution,
direct or indirect, on account of any Equity Interests in the Borrower now or
hereafter outstanding, (b) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
Equity
<PAGE>
Interests in the Borrower 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 subordinated Indebtedness and (d) any payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire Equity Interests in the Borrower
now or hereafter outstanding.";
"'Trace Foam Sub Guaranty' shall mean that certain Guaranty by Trace
Foam Sub in favor of the Lender, dated December 30, 1998, which guarantees the
Indebtedness of the Borrower under this Agreement."
(ii) The definition of "Loan Documents" is hereby amended by adding the
following terms immediately after the words "the Contract Assignment Agreement"
therein:
", the Demand Note and the Trace Foam Sub Guaranty".
SECTION 2.2. Amendment to Article II to the Credit Agreement Interest and
Fees). Clause (f) of Section 2.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"(f) Repayment of the Loan. The Borrower shall make a scheduled
repayment of the full outstanding principal amount of the Loan on January 31,
1999."
SECTION 2.3. Amendment to Article IX to the Credit Agreement (Negative
Covenants).
(i) Section 9.1 is hereby amended by (a) deleting the word "and" at the
end of clause (viii), (b) deleting the "." and substituting "; and" at the end
of clause (ix) and (c) adding the following clause (x) after clause (ix):
"(x) Indebtedness of the Borrower and Trace Foam Sub, Inc. under the
Demand Note and the Trace Foam Sub Guaranty."
(ii) Clause (vi) of Section 9.2 is hereby amended by adding the phrase at
the end thereof:
"and the Demand Note."
(iii) Section 9.4 is hereby amended by adding the following sentence at
the end thereof:
"Notwithstanding the foregoing, the Borrower and Trace Foam Sub,
Inc. may enter into and perform all obligations under the Demand Note and the
Trace Foam Sub Guaranty."
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(iv) Article IX is hereby amended by adding the following as Section 9.9:
"9.9. Restricted Junior Payments. The Borrower shall not declare or
make any Restricted Junior Payment."
ARTICLE III
EFFECTIVENESS
This Amendment shall become effective, as of the date hereof (the
"Effective Date"), subject to (i) the execution and delivery of this Amendment
by the Borrower and the Lender and (ii) satisfaction of the conditions to
effectiveness contained within Section 4.1 of Amendment No. 5, dated as of
December 30, 1998, to the other Credit Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Amendment, the
Borrower hereby reaffirms, except as set forth in Annex A hereto, as of the date
hereof, the representations and warranties contained in Article VI of the Credit
Agreement; provided, however, that this representation shall be deemed to be
qualified by the Schedules to the Other Credit Agreement.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Ratification of and References to the Credit Agreement. This
Amendment shall be deemed to be an amendment to the Credit Agreement, and the
Credit Agreement, as amended hereby, is hereby ratified, approved and confirmed
in each and every respect. All references to the Credit Agreement in any other
document, instrument, agreement or writing shall hereafter be deemed to refer to
the Credit Agreement as amended hereby.
SECTION 5.2. Headings. The various headings of this Amendment are inserted
for convenience only and shall not affect the meaning or interpretation of this
Amendment or any provisions hereof.
SECTION 5.3. Execution in Counterparts. This Amendment may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.
SECTION 5.4. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO NEW YORK CHOICE OF LAW PRINCIPLES.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
TRACE INTERNATIONAL HOLDINGS, INC.
By /s/ Philip N. Smith, Jr.
----------------------------------
Name: Philip N. Smith, Jr.
Title: Senior Vice President
THE BANK OF NOVA SCOTIA,
By /s/ Brian Allen
----------------------------------
Name: Brian Allen
Title: Senior Relationship Manager
