REVOLVING CREDIT
AGREEMENT
This Revolving Credit Agreement,
dated as of February 12, 2007 (this “ Agreement
”), among the financial institutions listed on the signature
pages hereof (such financial institutions, together with their
respective successors and assigns, are referred to hereinafter each
individually as a “ Lender ” and collectively as
the “ Lenders ”), Bank of America, N.A. with an
office at 335 Madison Avenue, New York, New York, as
administrative agent for the Lenders (in its capacity as
administrative agent, together with any successor administrative
agent, the “ Administrative Agent ”), Banc of
America Securities LLC, as sole lead arranger (in such capacity,
the “ Arranger ”), Banc of America Securities
LLC, as sole bookrunning manager (in such capacity, the “
Book Manager ”), Wells Fargo Foothill, LLC and
Wachovia Bank, National Association, as co-documentation agents,
Foamex International Inc., a Delaware corporation (“
Holdings ”), Foamex L.P., a Delaware limited
partnership (“ Foamex ”), each wholly-owned
Domestic Subsidiary of Foamex that, with the prior written consent
of the Lenders, becomes a Borrower hereunder after the Closing Date
(together with Foamex, each a “ Borrower ” and
collectively, the “ Borrowers ”) and the
Guarantors (as defined herein).
W I T N E S
S E T H :
WHEREAS, Foamex, Holdings, the
Guarantors, certain lenders (the “ Prepetition Lenders
”), Bank of America, N.A., as administrative agent for such
lenders (the “ Prepetition Administrative Agent
”), and certain other Persons (as hereinafter defined) were
parties to a Credit Agreement, dated as of August 18, 2003, as
amended (as so amended, the “ Prepetition Credit
Agreement ”), pursuant to which the Prepetition Lenders
agreed, subject to the terms and conditions therein contained, to
make available to Foamex a revolving line of credit for revolving
loans and letters of credit in an aggregate amount not to exceed
$190,000,000 and term loans in an original aggregate principal
amount not to exceed $50,000,000;
WHEREAS, (i) each of Foamex,
Holdings, the Guarantors (other than Foamex Canada, as hereinafter
defined) and certain predecessor affiliates of Holdings
(collectively, the “ Debtors ”) filed in the
United States Bankruptcy Court for the District of Delaware (the
“ Bankruptcy Court ”) a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (as hereinafter
defined) and continued in the possession of its assets and in the
management of its business pursuant to Sections 1107 and 1108
of the Bankruptcy Code, and such reorganization cases were jointly
administered under Case Number 05-12685 (PJW) (the “
Chapter 11 Case ”) and (ii) Foamex Canada filed
an application for relief pursuant to Section 18.6 of the CCAA
(as hereinafter defined) (the “ Canadian Case
”);
WHEREAS, Foamex, as a debtor and
debtor-in-possession under Chapter 11 of the Bankruptcy Code,
Holdings, as a debtor and debtor-in-possession under Chapter 11 of
the Bankruptcy Code, the Guarantors, each of which (except for
Foamex Canada) is a debtor and debtor-in-possession under Chapter
11 of the Bankruptcy Code, certain lenders (the “ DIP
Lenders ”), Bank of America, N.A., as administrative
agent for such lenders (the “ DIP Administrative Agent
”), and certain other Persons are parties to a
Debtor-In-Possession Credit Agreement, dated as of September 22,
2005, as amended (as so amended, the “ DIP Credit
Agreement ”), pursuant to which the DIP Lenders agreed,
subject to the terms and conditions therein contained, to make
available to Foamex a debtor-in-possession revolving line of
credit
for revolving loans and letters of
credit (all such letters of credit, together with any letters of
credit issued under the Prepetition Credit Agreement which,
pursuant to the DIP Credit Agreement, are deemed to be letters of
credit issued under the DIP Credit Agreement, the “ DIP
Letters of Credit ”) in an aggregate amount not to exceed
$240,000,000;
WHEREAS, on November 27, 2006, the
Debtors filed their Second Amended Joint Plan of Reorganization, as
supplemented by an order of the Bankruptcy Court dated December 20,
2006 (the “ Plan of Reorganization ”), and
related Disclosure Statement with the Bankruptcy Court in the
Chapter 11 Case;
WHEREAS, on the Effective Date (as
hereinafter defined), Holdings and Foamex shall substantially
consummate the restructuring of their organizational and capital
structure, on the terms provided in the Plan of
Reorganization;
WHEREAS, pursuant to the Plan of
Reorganization, as a condition to the effectiveness of the Plan of
Reorganization, the Debtors are required to establish, as of the
Effective Date, senior secured credit facilities to fund payments
to be made under the Plan of Reorganization. Concurrently with the
execution of this Agreement, Foamex will enter into the senior
secured revolving credit facility under this Agreement in an
aggregate principal amount of up to $175,000,000 (the “
Revolving Facility ”), a senior secured first lien
term loan facility in an aggregate principal amount of up to
$425,000,000 (the “ First Lien Term Facility ”)
and a senior secured second lien term loan facility in an aggregate
principal amount of up to $175,000,000 (the “ Second Lien
Term Facility ” and, together with the First Lien Term
Facility, the “ Term Facilities ”; the Term
Facilities and the Revolving Facility, collectively, the “
Facilities ”) to repay certain existing obligations of
the Debtors on the Effective Date and for the provision of working
capital to the Borrowers after the Effective Date and for other
general corporate purposes, and Foamex has requested that the
Lenders make available to the Borrowers the Revolving Facility to
satisfy such condition;
WHEREAS, pursuant to the Plan of
Reorganization, as a condition to the effectiveness of the Plan of
Reorganization, Holdings is required to receive, as of the
Effective Date, gross proceeds (less put option premium plus call
option premium) of not less than $142,500,000 from the issuance of
its Qualified Capital Stock, the net proceeds of which are
contributed in cash to the common equity of Foamex (the “
Equity Contribution ”);
WHEREAS, the Lenders have agreed to
make available to the Borrowers the Revolving Facility upon the
terms and conditions set forth in this Agreement; and
WHEREAS, capitalized terms used in
this Agreement and not otherwise defined herein shall have the
meanings ascribed thereto in Annex A which is attached
hereto and incorporated herein; the rules of construction contained
therein shall govern the interpretation of this Agreement, and all
Annexes, Exhibits and Schedules attached hereto are incorporated
herein by reference.
NOW, THEREFORE, in consideration of
the mutual conditions and agreements set forth in this Agreement,
and for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto hereby agree as
follows.
ARTICLE 1
LOANS AND LETTERS OF
CREDIT
1.1
Revolving Facility . Subject to all of the terms and
conditions of this Agreement, the Lenders agree to make available
the Revolving Facility in an aggregate principal amount of up to
$175,000,000 to the Borrowers from time to time during the term of
this Agreement. The Revolving Facility shall be composed of a
revolving line of credit consisting of Revolving Loans and Letters
of Credit described herein.
(a)
Amounts . Subject to the satisfaction of the conditions
precedent set forth in Article 8 , each Lender severally,
but not jointly, agrees, upon a Borrower’s request from time
to time on any Business Day during the period from the Closing Date
to the Termination Date, to make revolving loans (the “
Revolving Loans ”) to such Borrower in amounts not to
exceed such Lender’s Pro Rata Share of Availability of such
Borrower, except for Non-Ratable Loans and Agent Advances. The
Lenders, however, in their unanimous discretion, may elect to make
Revolving Loans to a Borrower or issue or arrange to have issued
Letters of Credit for the account of a Borrower in excess of the
Availability of such Borrower on one or more occasions, but if they
do so, neither the Administrative Agent nor the Lenders shall be
deemed thereby to have changed the limits of the Availability of
such Borrower or to be obligated to exceed such limits on any other
occasion; provided , that nothing herein shall in any way
limit the Administrative Agent’s authority, in its sole
discretion, to make Agent Advances pursuant to the terms of
Section 1.2(i) . If the Administrative Agent has actual
knowledge that any Borrowing by a Borrower would exceed
Availability of such Borrower, the Lenders shall not, without the
prior written consent of all of the Lenders, make such Borrowing to
such Borrower until such excess has been eliminated, subject to the
Administrative Agent’s authority, in its sole discretion, to
make Agent Advances pursuant to the terms of Section 1.2(i)
. Notwithstanding anything herein to the contrary, not greater than
$60,000,000 of Revolving Loans shall be made on the Closing Date to
refinance Indebtedness existing on the Effective Date or to pay
fees and expenses incurred in connection with the
Transactions.
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(b)
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Procedure for
Borrowing .
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(i) Each
Borrowing by a Borrower shall be made upon such Borrower’s
irrevocable written notice (“ Notice of Borrowing
”) delivered to the Administrative Agent either (x) in the
form of a notice of borrowing in the form of Exhibit D
attached hereto and made a part hereof or (y) pursuant to the
Electronic Borrowing Notice Delivery System, which Notice of
Borrowing must be received by the Administrative Agent (1) in the
case of the delivery of a Notice of Borrowing pursuant to the
Electronic Borrowing Notice Delivery System, prior to the deadline
established from time to time by the Administrative Agent for
requesting such Borrowing pursuant to the Electronic Borrowing
Notice Delivery System and (2) in the case of the delivery of a
Notice of Borrowing in any other manner, prior to (i) 12:00 noon
(New York time) three Business Days prior to the requested Funding
Date, in the case of LIBOR Rate Revolving Loans and (ii) 11:00 a.m.
(New York time) on the requested Funding Date, in the case of Base
Rate Revolving Loans, specifying:
(A) the
amount of the Borrowing, which in the case of a LIBOR Rate
Revolving Loan must equal or exceed $5,000,000 (and increments of
$1,000,000 in excess of such amount);
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(B)
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the requested Funding Date, which
must be a Business Day;
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(C) whether
the Revolving Loans requested are to be Base Rate Revolving Loans
or LIBOR Rate Revolving Loans (and if not specified, it shall be
deemed a request for a Base Rate Revolving Loan); and
(D) the
duration of the Interest Period for LIBOR Rate Revolving Loans (and
if not specified, it shall be deemed a request for an Interest
Period of one month);
provided, however, that with respect
to any Borrowing to be made on the Closing Date, (i) in the
event that the Lenders on the Closing Date consist of exactly the
same financial institutions as the DIP Lenders on the Closing Date
and each Lender’s Pro Rata Share of the Revolving Facility is
the exact same as its Pro Rata Share (as defined in the DIP Credit
Agreement) of the credit facility provided under the DIP Credit
Agreement, then such Borrowing will consist of (x) LIBOR Rate
Revolving Loans in an aggregate principal amount equal to the
aggregate principal amount of DIP LIBOR Rate Revolving Loans
outstanding immediately prior to the Closing Date which are repaid
on the Closing Date with the proceeds of Revolving Loans made on
the Closing Date and the portion of the Interest Period (as defined
in the DIP Credit Agreement) for each such DIP LIBOR Rate Revolving
Loan remaining on the Closing Date shall apply to and continue as
the Interest Period for the corresponding LIBOR Rate Revolving Loan
made on the Closing Date (for clarity, it being understood that the
expiration date of the Interest Period for each LIBOR Rate
Revolving Loan made on the Closing Date shall be the date that
would have been the expiration date of the Interest Period (as
defined in the DIP Credit Agreement) for the corresponding DIP
LIBOR Rate Revolving Loan had such DIP LIBOR Rate Revolving Loan
remained outstanding) and (y) Base Rate Revolving Loans in an
aggregate amount equal to the excess, if any, of such Borrowing
less the LIBOR Rate Revolving Loans to be made on the Closing Date
and (ii) otherwise, such Borrowing will consist of Base Rate
Revolving Loans only.
(ii) After
giving effect to any Borrowing, there may not be more than ten (10)
different Interest Periods in effect.
(iii) In
lieu of delivering a Notice of Borrowing, a Borrower may give the
Administrative Agent telephonic notice of such request for advances
to the Designated Account on or before the deadline set forth under
Section 1.2(b)(i)(2) above. The Administrative Agent at all
times shall be entitled to rely on such telephonic notice in making
such Revolving Loans, regardless of whether any written
confirmation is received.
(iv) A
Borrower shall have no right to request a LIBOR Rate Revolving Loan
while a Default or Event of Default has occurred and is
continuing.
(c)
Reliance upon Authority . Prior to the Closing Date, each
Borrower shall deliver to the Administrative Agent a notice setting
forth the account of such Borrower (such account of a Borrower
referred to herein as a “ Designated Account ”)
to which the Administrative Agent is authorized to transfer the
proceeds of the Revolving Loans requested by such Borrower
hereunder. A Borrower may designate a replacement Designated
Account from time to time by written notice. All such Designated
Accounts must be reasonably satisfactory to the Administrative
Agent. The Administrative Agent is entitled to rely conclusively on
any person’s request for Revolving Loans on behalf of a
Borrower, so long as the proceeds thereof are to be transferred to
the Designated Account of such Borrower. The Administrative Agent
has no duty to verify the identity of any individual representing
himself or herself as a person authorized by a Borrower to make
such requests on its behalf.
(d)
No Liability . The Administrative Agent shall not incur any
liability to any Borrower as a result of acting upon any notice
referred to in Sections 1.2(b) and (c) which the
Administrative Agent believes in good faith to have been given by
an officer or other person duly authorized by such Borrower to
request Revolving Loans on its behalf. The crediting of Revolving
Loans to a Borrower’s Designated Account conclusively
establishes the obligation of such Borrower to repay such Revolving
Loans as provided herein.
(e)
Notice Irrevocable . Any Notice of Borrowing (or telephonic
notice in lieu thereof) made pursuant to Section 1.2(b)
shall be irrevocable. The applicable Borrower shall be bound to
borrow the funds requested therein in accordance
therewith.
(f)
Administrative Agent’s Election . Promptly after
receipt of a Notice of Borrowing (or telephonic notice in lieu
thereof), the Administrative Agent shall elect to have the terms of
Section 1.2(g) or the terms of Section 1.2(h) apply
to such requested Borrowing. If the Bank declines in its sole
discretion to make a Non-Ratable Loan pursuant to Section
1.2(h) , the terms of Section 1.2(g) shall apply to the
requested Borrowing.
(g)
Making of Revolving Loans . If the Administrative Agent
elects to have the terms of this Section 1.2(g) apply to a
requested Borrowing, then promptly after receipt of a Notice of
Borrowing or telephonic notice in lieu thereof, the Administrative
Agent shall notify the Lenders by telecopy, telephone or e-mail of
the requested Borrowing. Each Lender shall transfer its Pro Rata
Share of the requested Borrowing to the Administrative Agent in
immediately available funds, to the account from time to time
designated by the Administrative Agent, not later than 1:00 p.m.
(New York time) on the applicable Funding Date. After the
Administrative Agent’s receipt of all proceeds of such
Revolving Loans, the Administrative Agent shall make the proceeds
of such Revolving Loans available to the applicable Borrower on the
applicable Funding Date by transferring same day funds to the
account designated by such Borrower; provided ,
however , that, subject to Section 1.2(a) , the
amount of Revolving Loans so made on any date to a Borrower shall
not exceed the Availability of such Borrower on such
date.
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(h)
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Making of Non-Ratable
Loans .
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(i) If
the Administrative Agent elects, with the consent of the Bank, to
have the terms of this Section 1.2(h) apply to a requested
Borrowing, the Bank shall make a Revolving Loan in the amount of
that Borrowing available to the applicable
Borrower on the applicable Funding
Date by transferring same day funds to such Borrower’s
Designated Account. Each Revolving Loan made solely by the Bank
pursuant to this Section is herein referred to as a “
Non-Ratable Loan ”, and such Revolving Loans are
collectively referred to as the “ Non-Ratable Loans
.” Each Non-Ratable Loan shall be subject to all the terms
and conditions applicable to other Revolving Loans except that all
payments thereon shall be payable to the Bank solely for its own
account. The aggregate amount of Non-Ratable Loans outstanding at
any time shall not exceed $25,000,000. The Administrative Agent
shall not request the Bank to make any Non-Ratable Loan if
(1) the Administrative Agent has received written notice from
any Lender that one or more of the applicable conditions precedent
set forth in Article 8 will not be satisfied on the
requested Funding Date for the applicable Borrowing, or
(2) the Administrative Agent has actual knowledge that the
requested Borrowing would exceed the Availability of the applicable
Borrower on that Funding Date.
(ii) The
Non-Ratable Loans shall be secured by the Agent’s Liens in
and to the Collateral and shall constitute Base Rate Revolving
Loans and Obligations hereunder.
(i) Subject
to the limitations set forth below, the Administrative Agent is
authorized by the Borrowers and the Lenders, from time to time in
the Administrative Agent’s sole discretion, (A) after the
occurrence of a Default or an Event of Default, or (B) at any time
that any of the other applicable conditions precedent set forth in
Article 8 have not been satisfied, to make Base Rate
Revolving Loans to one or more of the Borrowers on behalf of the
Lenders in an aggregate amount outstanding at any time not to
exceed, with respect to any Borrower, 10% of the Borrowing Base of
such Borrower (or in the case of Foamex, of the aggregate Borrowing
Bases of Foamex and Foamex Canada) but not in the aggregate for all
the Borrowers in excess of the Maximum Revolver Amount, which the
Administrative Agent, in its reasonable business judgment, deems
necessary or desirable (1) to preserve or protect the Collateral,
or any portion thereof, (2) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other
Obligations, or (3) to pay any other amount chargeable to any
Borrower pursuant to the terms of this Agreement, including costs,
fees and expenses as described in Section 14.7 (any of such
advances are herein referred to as “ Agent Advances
”); provided , that the Required Lenders may at any
time revoke the Administrative Agent’s authorization to make
Agent Advances. Any such revocation must be in writing and shall
become effective prospectively upon the Administrative
Agent’s receipt thereof.
(ii) The
Agent Advances shall be secured by the Agent’s Liens in and
to the Collateral and shall constitute Base Rate Revolving Loans
and Obligations hereunder.
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1.3
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[Intentionally Omitted].
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(a)
Agreement to Issue or Cause to Issue . Subject to the terms
and conditions of this Agreement, the Administrative Agent agrees
(i) to cause the Letter of Credit Issuer to issue for the account
of a Borrower one or more commercial/documentary and standby
letters of credit (“ Letter of Credit ”) and/or
(ii) to provide credit support or other enhancement to a Letter of
Credit Issuer acceptable to the Administrative Agent which issues a
Letter of Credit for the account of a Borrower (any such credit
support or enhancement being herein referred to as a “
Credit Support ”) from time to time during the term of
this Agreement. Upon the Closing Date, all DIP Letters of Credit
outstanding at such time shall constitute Letters of Credit
hereunder with the same effect and status as if such Letters of
Credit were originally issued pursuant to this Agreement. All fees
payable with respect to such DIP Letters of Credit accruing through
the Closing Date shall be paid on the Closing Date. Until the
Closing Date, the Letter of Credit fees with respect to all DIP
Letters of Credit shall accrue and be payable at the rates set
forth in the DIP Credit Agreement and on and after the Closing Date
such fees shall accrue and be payable at the rates set forth
herein.
(b)
Amounts; Outside Expiration Date . The Administrative Agent
shall not have any obligation to issue or cause to be issued any
Letter of Credit or to provide Credit Support for any Letter of
Credit at any time if: (i) the maximum face amount of the requested
Letter of Credit is greater than the Unused Letter of Credit
Subfacility at such time; (ii) the maximum undrawn amount of the
requested Letter of Credit and all commissions, fees and charges
due from the requesting Borrower in connection with the opening
thereof would exceed the Availability of such Borrower at such
time; or (iii) such Letter of Credit has an expiration date less
than 30 days prior to the Stated Termination Date (other than any
such Letter of Credit issued at least twelve months prior to the
Stated Termination Date which has been extended or renewed in
accordance with the terms thereof for a period ending subsequent to
the date which is 30 days prior to the Stated Termination Date) or
more than 12 months from the date of issuance for standby letters
of credit and 180 days for documentary letters of credit. With
respect to any Letter of Credit which contains any
“evergreen” or automatic renewal provision, each Lender
shall be deemed to have consented to any such extension or renewal
unless any such Lender shall have provided to the Administrative
Agent written notice that it declines to consent to any such
extension or renewal at least thirty (30) days prior to the date on
which the Letter of Credit Issuer is entitled to decline to extend
or renew the Letter of Credit. If all of the requirements of this
Section 1.4 are met and no Default or Event of Default has
occurred and is continuing, no Lender shall decline to consent to
any such extension or renewal.
(c)
Other Conditions . In addition to conditions precedent
contained in Article 8 , the obligation of the
Administrative Agent to cause to be issued any Letter of Credit or
to provide Credit Support for any Letter of Credit is subject to
the following conditions precedent having been satisfied in a
manner reasonably satisfactory to the Administrative
Agent:
(i) The
applicable Borrower shall have delivered to the Letter of Credit
Issuer, at such times and in such manner as such Letter of Credit
Issuer may prescribe, an application in form and substance
satisfactory to such Letter of Credit Issuer and reasonably
satisfactory to the Administrative Agent for the issuance of the
Letter of Credit and such other documents as may be required
pursuant to the terms thereof, and
the form, terms and purpose of the
proposed Letter of Credit shall be reasonably satisfactory to the
Administrative Agent and the Letter of Credit Issuer;
and
(ii) As
of the date of issuance, no order of any court, arbitrator or
Governmental Authority shall purport by its terms to enjoin or
restrain money center banks generally from issuing letters of
credit of the type and in the amount of the proposed Letter of
Credit, and no law, rule or regulation applicable to money center
banks generally and no request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction
over money center banks generally shall prohibit, or request that
the proposed Letter of Credit Issuer refrain from, the issuance of
letters of credit generally or the issuance of such Letters of
Credit.
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(d)
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Issuance of Letters of
Credit .
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(i)
Request for Issuance . The Borrower for whose account the
Letter of Credit is to be issued must notify the Administrative
Agent of a requested Letter of Credit at least three (3) Business
Days prior to the proposed issuance date. Such notice shall be
irrevocable and must specify the original face amount of the Letter
of Credit requested, the Business Day of issuance of such requested
Letter of Credit, whether such Letter of Credit may be drawn in a
single or in partial draws, the Business Day on which the requested
Letter of Credit is to expire, the purpose for which such Letter of
Credit is to be issued, and the beneficiary of the requested Letter
of Credit. The applicable Borrower shall attach to such notice the
proposed form of the Letter of Credit.
(ii)
Responsibilities of the Administrative Agent; Issuance . As
of the Business Day immediately preceding the requested issuance
date of the Letter of Credit, the Administrative Agent shall
determine the amount of the applicable Unused Letter of Credit
Subfacility and Availability of the applicable Borrower as of such
date. If (A) the face amount of the requested Letter of Credit is
less than the Unused Letter of Credit Subfacility and (B) the
amount of such requested Letter of Credit and all commissions, fees
and charges due from the requesting Borrower in connection with the
opening thereof would not exceed Availability of such Borrower, the
Administrative Agent shall cause the Letter of Credit Issuer to
issue the requested Letter of Credit on the requested issuance date
so long as the other conditions hereof are met.
(iii)
No Extensions or Amendment . The Administrative Agent shall
not be obligated to cause the Letter of Credit Issuer to extend or
amend any Letter of Credit issued pursuant hereto unless the
requirements of this Section 1.4 are met as though a new
Letter of Credit were being requested and issued.
(e)
Payments Pursuant to Letters of Credit . Each Borrower
agrees to reimburse immediately the Letter of Credit Issuer for any
draw under any Letter of Credit issued for the account of such
Borrower and the Administrative Agent for the account of the
Lenders upon any payment pursuant to any Credit Support related to
such Letter of Credit, and to pay the Letter of Credit Issuer the
amount of all other charges and fees payable to the Letter of
Credit Issuer in connection with any Letter of Credit issued for
the account of such Borrower immediately when due, irrespective of
any claim, setoff, defense or other right which such
Borrower may have at any time
against the Letter of Credit Issuer or any other Person. Each
drawing under any Letter of Credit shall constitute a request by
the Borrower for whose account such Letter of Credit was issued to
the Administrative Agent for a Borrowing of a Base Rate Revolving
Loan in the amount of such drawing (and for purposes of such
Borrowing, Availability of such Borrower shall be determined after
giving effect to the concurrent application of the proceeds of such
Borrowing to the payment of the reimbursement obligation of such
Borrower for such drawing). The Funding Date with respect to such
borrowing shall be the date of such drawing.
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(f)
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Indemnification; Exoneration;
Power of Attorney .
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(i)
Indemnification . In addition to amounts payable as
elsewhere provided in this Section 1.4 , each Borrower
agrees to protect, indemnify, pay and save the Lenders and the
Administrative Agent harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys’ fees) which any Lender or
the Administrative Agent (other than a Lender in its capacity as
Letter of Credit Issuer) may incur or be subject to as a
consequence, direct or indirect, of the issuance of any Letter of
Credit for the account of such Borrower or the provision of any
Credit Support or enhancement in connection therewith. Each
Borrower’s obligations under this Section shall survive
payment of all other Obligations.
(ii)
Assumption of Risk by the Borrowers . As among the
Borrowers, the Lenders and the Administrative Agent, each Borrower
assumes all risks of the acts and omissions of, or misuse of any of
the Letters of Credit by, the respective beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the
foregoing, the Lenders and the Administrative Agent shall not be
responsible for: (A) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any Person
in connection with the application for and issuance of and
presentation of drafts with respect to any of the Letters of
Credit, even if it should prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) the
validity or sufficiency of any instrument transferring or assigning
or purporting to transfer or assign any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason;
(C) the failure of the beneficiary of any Letter of Credit to
comply duly with conditions required in order to draw upon such
Letter of Credit; (D) errors, omissions, interruptions, or delays
in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher;
(E) errors in interpretation of technical terms; (F) any loss or
delay in the transmission or otherwise of any document required in
order to make a drawing under any Letter of Credit or of the
proceeds thereof; (G) the misapplication by the beneficiary of any
Letter of Credit of the proceeds of any drawing under such Letter
of Credit; (H) any consequences arising from causes beyond the
control of the Lenders or the Administrative Agent, including any
act or omission, whether rightful or wrongful, of any present or
future de jure or de facto Governmental
Authority or (I) the Letter of Credit Issuer’s honor of a
draw for which the draw or any certificate fails to comply in any
respect with the terms of the Letter of Credit. None of the
foregoing shall affect, impair or prevent the vesting of any rights
or powers of the Administrative Agent or any Lender under this
Section 1.4(f) .
(iii)
Exoneration . Without limiting the foregoing, no action or
omission whatsoever by the Administrative Agent or any Lender
(excluding any Lender in its capacity as a Letter of Credit Issuer)
shall result in any liability of the Administrative Agent or any
Lender to any Borrower, or relieve any Borrower of any of its
obligations hereunder to any such Person, under or with respect to
any Letter of Credit or Credit Support issued or provided for the
account of any Borrower.
(iv)
Rights Against Letter of Credit Issuer . Nothing contained
in this Agreement is intended to limit any Borrower’s rights,
if any, with respect to the Letter of Credit Issuer which arise as
a result of the letter of credit application and related documents
executed by and between such Borrower and the Letter of Credit
Issuer.
(v)
Account Party . Each Borrower hereby authorizes and directs
any Letter of Credit Issuer to name such Borrower as the
“Account Party” on any Letter of Credit issued or to be
issued for the account of such Borrower and to deliver to the
Administrative Agent all instruments, documents and other writings
and property received by the Letter of Credit Issuer pursuant to
the Letter of Credit issued or to be issued for the account of such
Borrower, and to accept and rely upon the Administrative
Agent’s instructions and agreements with respect to all
matters arising in connection with such Letter of Credit or the
application therefor.
(g)
Supporting Letter of Credit . If, notwithstanding the
provisions of Section 1.4(b) and Section 10.1 , any
Letter of Credit or Credit Support is outstanding upon the
termination of this Agreement, then upon such termination each
Borrower shall deposit with the Administrative Agent, for the
ratable benefit of the Administrative Agent and the Lenders, with
respect to each Letter of Credit issued for the account of such
Borrower or related Credit Support then outstanding, a standby
letter of credit (a “ Supporting Letter of Credit
”) in form and substance satisfactory to the Administrative
Agent, issued by an issuer satisfactory to the Administrative Agent
in an amount equal to the greatest amount for which such Letter of
Credit or such Credit Support may be drawn plus any fees and
expenses associated with such Letter of Credit or such Credit
Support, under which Supporting Letter of Credit the Administrative
Agent is entitled to draw amounts necessary to reimburse the
Administrative Agent and the Lenders for payments to be made by the
Administrative Agent and the Lenders under such Letter of Credit or
Credit Support and any fees and expenses associated with such
Letter of Credit or Credit Support. Such Supporting Letter of
Credit shall be held by the Administrative Agent, for the ratable
benefit of the Administrative Agent and the Lenders, as security
for, and to provide for the payment of, the aggregate undrawn
amount of such Letters of Credit or such Credit Support remaining
outstanding.
1.5
Bank Products . Each Borrower may request and the
Administrative Agent (in the case of the Bank and its Affiliates)
or another Lender (in the case of such other Lender and its
Affiliates) may, in its sole and absolute discretion, arrange for
such Borrower to obtain from the Bank or the Bank’s
Affiliates (in the case of the Administrative Agent) or such other
Lender or its Affiliates (in the case of such other Lender) Bank
Products although the Borrowers are not required to do so. If Bank
Products are provided by an Affiliate of the Bank or another Lender
to a Borrower, such Borrower agrees to indemnify and hold the
Administrative Agent, the Bank and the other Lenders harmless from
any and all costs and obligations now or hereafter
incurred by the Administrative
Agent, the Bank or any other Lender which arise from any indemnity
given by the Administrative Agent or such other Lender, as the case
may be, to its Affiliates related to such Bank Products;
provided , however , (x) nothing contained herein is
intended to limit such Borrower’s rights with respect to the
Bank, another Lender or their respective Affiliates, if any, which
arise as a result of the execution of documents by and between such
Borrower and the Bank or another Lender, as applicable, which
relate to Bank Products and (y) Bank Products consisting of cash
management services, including controlled disbursement services,
and ACH Transactions may only be provided to a Borrower by the Bank
or an Affiliate of the Bank or another Lender (or any Affiliate of
such Lender) reasonably acceptable to the Administrative Agent (it
being agreed by the Administrative Agent that each of the Lenders
party to this Agreement (and their respective Affiliates) on the
Closing Date is reasonably acceptable to the Administrative Agent).
The agreement contained in this Section shall survive termination
of this Agreement with respect to Bank Products (and agreements to
provide Bank Products) entered into or otherwise provided on or
prior to the date of the termination of this Agreement. Each
Borrower acknowledges and agrees that the obtaining of Bank
Products from the Bank, another Lender or any of their respective
Affiliates (a) is in the sole and absolute discretion of the Bank,
such other Lender or the applicable Affiliate of the Bank or such
other Lender, as the case may be, and (b) is subject to all rules
and regulations of the Bank, such other Lender or the applicable
Affiliate of the Bank or such other Lender, as the case may
be.
ARTICLE 2
INTEREST AND FEES
(a)
Interest Rates . All outstanding Obligations (other than
Obligations in respect of Bank Products, which shall bear interest
in accordance with the terms of the respective documentation
governing Bank Products) shall bear interest on the unpaid
principal amount thereof (including, to the extent permitted by
law, on interest thereon not paid when due) from the date made or
incurred until paid in full in cash at a rate determined by
reference to the Base Rate or the LIBOR Rate plus the
Applicable Margins as set forth below, but not to exceed the
Maximum Rate. If at any time Loans are outstanding with respect to
which the applicable Borrower has not delivered to the
Administrative Agent a notice specifying the basis for determining
the interest rate applicable thereto in accordance herewith, those
Loans shall bear interest at a rate determined by reference to the
Base Rate until notice to the contrary has been given to the
Administrative Agent by such Borrower in accordance with this
Agreement and such notice has become effective. Except as otherwise
provided herein, the outstanding Obligations shall bear interest as
follows:
(i) For
all Base Rate Revolving Loans and other Obligations (other than (x)
LIBOR Rate Revolving Loans and (y) Obligations in respect of Bank
Products, which Obligations in respect of Bank Products shall bear
interest in accordance with the terms of the respective
documentation governing Bank Products), at a fluctuating per annum
rate equal to the Base Rate plus the Applicable Margin;
and
(ii) For
all LIBOR Rate Revolving Loans, at a per annum rate equal to the
LIBOR Rate plus the Applicable Margin.
Each change in the Base Rate shall
be reflected in the interest rate applicable to Base Rate Loans as
of the effective date of such change. All interest charges shall be
computed on the basis of a year of 360 days and actual days elapsed
(which results in more interest being paid than if computed on the
basis of a 365-day year).
(i) Each
Borrower shall pay to the Administrative Agent, for the ratable
benefit of the Lenders, interest accrued on all Base Rate Revolving
Loans made to such Borrower in arrears on the first day of each
month hereafter and on the Termination Date.
(ii) Each
Borrower shall pay to the Administrative Agent, for the ratable
benefit of the Lenders, interest on all LIBOR Rate Revolving Loans
made to such Borrower in arrears on each LIBOR Interest Payment
Date.
(c)
Default Rate . If any Event of Default occurs and is
continuing and the Majority Lenders in their discretion so elect,
then, while any such Event of Default is continuing, all of the
applicable Obligations shall bear interest at the Default Rate
applicable thereto.
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2.2
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Continuation and Conversion
Elections .
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(i) elect,
as of any Business Day, in the case of Base Rate Loans made to such
Borrower, to convert any such Base Rate Loans (or any part thereof
in an amount not less than $5,000,000, or that is in an integral
multiple of $1,000,000 in excess thereof) into LIBOR Rate Loans;
or
(ii) elect,
as of the last day of the applicable Interest Period, to continue
any LIBOR Rate Loans made to such Borrower having Interest Periods
expiring on such day (or any part thereof in an amount not less
than $5,000,000 or that is in an integral multiple of $1,000,000 in
excess thereof);
provided , that if at any time the aggregate amount of
LIBOR Rate Loans in respect of any Borrowing made to a Borrower is
reduced, by payment, prepayment, or conversion of part thereof to
be less than $5,000,000, such LIBOR Rate Loans shall automatically
convert into Base Rate Loans; provided further that
if the notice shall fail to specify the duration of the Interest
Period, such Interest Period shall be one month.
(b) A
Borrower shall deliver to the Administrative Agent a notice of
continuation/conversion (“ Notice of
Continuation/Conversion ”) either (x) in the form of
Exhibit E attached hereto and made a part hereof or (y)
pursuant to the Electronic Borrowing Notice Delivery System not
later than (1) in the case of the delivery of a Notice of
Continuation/Conversion pursuant to the Electronic Borrowing Notice
Delivery System, the
deadline established from time to
time by the Administrative Agent for requesting the relevant
continuation or conversion pursuant to the Electronic Borrowing
Notice Delivery System and (2) in the case of the delivery of a
Notice of Continuation/Conversion in any other manner,
12:00 noon (New York time) at least three (3) Business Days in
advance of the Continuation/Conversion Date, if the Loans of such
Borrower are to be converted into or continued as LIBOR Rate Loans,
and specifying:
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(i)
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the proposed Continuation/Conversion
Date;
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(ii) the
aggregate amount of Loans of such Borrower to be converted or
renewed;
(iii) the
type of Loans resulting from the proposed conversion or
continuation; and
(iv) the
duration of the requested Interest Period, provided ,
however , such Borrower may not select an Interest Period
that ends after the Stated Termination Date.
(c) If
upon the expiration of any Interest Period applicable to LIBOR Rate
Loans of a Borrower, such Borrower has failed to deliver a Notice
of Continuation/Conversion with respect to such LIBOR Rate Loans or
if any Default or Event of Default then exists, such Borrower shall
be deemed to have elected to convert such LIBOR Rate Loans into
Base Rate Loans effective as of the expiration date of such
Interest Period.
(d) The
Administrative Agent will promptly notify each Lender of its
receipt of a Notice of Continuation/Conversion. All conversions and
continuations shall be made ratably according to the respective
outstanding principal amounts of the Loans with respect to which
the notice was given held by each Lender.
(e) There
may not be more than ten (10) different LIBOR Rate Loans in effect
hereunder at any time.
2.3
Maximum Interest Rate . In no event shall any interest rate
provided for hereunder exceed the maximum rate legally chargeable
by any Lender under applicable law for such Lender with respect to
loans of the type provided for hereunder (the “ Maximum
Rate ”). If, in any month, any interest rate for any
Obligations, absent such limitation, would have exceeded the
Maximum Rate, then the interest rate for such Obligations for that
month shall be the Maximum Rate, and, if in future months, that
interest rate would otherwise be less than the Maximum Rate, then
that interest rate for such Obligations shall remain at a Maximum
Rate until such time as the amount of interest paid hereunder for
such Obligations equals the amount of interest which would have
been paid on such Obligations if the same had not been limited by
the Maximum Rate. In the event that, upon payment in full of the
Obligations, the total amount of interest paid or accrued under the
terms of this Agreement for any Obligations is less than the total
amount of interest which would, but for this Section 2.3 ,
have been paid or accrued for such Obligations if the interest rate
otherwise set forth in this Agreement for such Obligations had at
all times been in effect, then the applicable Borrower shall, to
the extent permitted by applicable law, pay the Administrative
Agent, for the account of the applicable Lenders, an amount equal
to
the excess of (a) the lesser of (i)
the amount of interest which would have been charged for such
Obligations if the Maximum Rate had, at all times, been in effect
or (ii) the amount of interest which would have accrued for such
Obligations had the interest rate otherwise set forth in this
Agreement, at all times, been in effect over (b) the amount of
interest actually paid or accrued under this Agreement for such
Obligations. If a court of competent jurisdiction determines that
the Administrative Agent and/or any Lender has received interest
and other charges hereunder in excess of the Maximum Rate, such
excess shall be deemed received on account of, and shall
automatically be applied to reduce, the applicable Obligations
other than interest, in the inverse order of maturity, and if there
are no applicable Obligations outstanding, the Administrative Agent
and/or such Lender shall refund to the applicable Borrower such
excess.
2.4
Certain Fees . The Borrowers agree, jointly and severally,
to pay to the Bank and the Administrative Agent for their own
respective accounts the fees payable to each set forth in the Fee
Letter, with such fees to be payable at such times as specified in
the Fee Letter.
2.5
Unused Line Fee . On the first day of each calendar quarter
and on the Termination Date, the Borrowers agree, jointly and
severally, to pay to the Administrative Agent, for the account of
the Lenders, in accordance with their respective Pro Rata Shares,
an unused line fee (the “ Unused Line Fee ”)
equal to one-quarter of one percent (0.25%) per annum times the
amount by which the average daily Maximum Revolver Amount exceeded
the sum of the average daily outstanding amount of Revolving Loans
and the average daily undrawn amount of outstanding Letters of
Credit, during the immediately preceding calendar quarter or
shorter period if calculated for the first calendar quarter
hereafter or on the Termination Date. The Unused Line Fee shall be
computed on the basis of a 360-day year for the actual number of
days elapsed. All principal payments received by the Administrative
Agent shall be deemed to be credited to the applicable
Borrower’s Loan Account immediately upon receipt for purposes
of calculating the Unused Line Fee pursuant to this Section
2.5 .
2.6
Letter of Credit Fee . Each Borrower agrees to pay to the
Administrative Agent, for the account of the Lenders, in accordance
with their respective Pro Rata Shares, for each Letter of Credit
(including, without limitation, each DIP Letter of Credit) issued
for the account of such Borrower, a fee (the “ Letter of
Credit Fee ”) at a per annum rate equal to the Applicable
Margin in effect from time to time with respect to LIBOR Rate
Revolving Loans minus one-quarter of one percent (0.25%) on the
undrawn amount of such Letter of Credit from time to time and to
the Administrative Agent, for the benefit of the Letter of Credit
Issuer, a fronting fee of one-eighth of one percent (0.125%) per
annum on the undrawn amount of each Letter of Credit issued for the
account of such Borrower, and to the Letter of Credit Issuer all
costs, fees and expenses incurred or charged by the Letter of
Credit Issuer in connection with the application for, processing
of, issuance or extension of, drawing under or amendment to, any
Letter of Credit issued for the account of such Borrower. The
Letter of Credit Fee and fronting fee shall be payable quarterly in
arrears on the first day of each calendar quarter following any
calendar quarter in which a Letter of Credit is outstanding and on
the Termination Date. The Letter of Credit Fee and fronting fee
shall be computed on the basis of a 360-day year for the actual
number of days elapsed.
ARTICLE 3
PAYMENTS AND
PREPAYMENTS
3.1
Revolving Loans . Each Borrower shall repay the outstanding
principal balance of the Revolving Loans made to it, plus all
accrued but unpaid interest thereon, on the Termination Date. Each
Borrower may prepay Revolving Loans made to it at any time in whole
or in part, without premium or penalty (except as provided in
Section 4.4 ), and reborrow subject to the terms of this
Agreement. In addition, and without limiting the generality of the
foregoing, (i) upon demand the Borrowers, jointly and severally,
shall pay to the Administrative Agent, for account of the Lenders,
the amount, without duplication, by which the Aggregate Revolver
Outstandings exceeds that amount which is (A) the lesser of (x) the
aggregate Borrowing Bases of all the Borrowers and Foamex Canada or
(y) the Maximum Revolver Amount less (B) all Reserves other than
Reserves deducted in the calculation of the aggregate Borrowing
Bases of all the Borrowers and Foamex Canada and (ii) each
Borrower shall pay to the Administrative Agent, for the account of
the Lenders, the amount, without duplication, by which the portion
of the Aggregate Revolver Outstandings relating to extensions of
credit made (or, in the case of Pending Revolving Loans, to be
made) to or for the account of such Borrower exceeds that amount
which is (A) the lesser of (x) the Borrowing Base of such Borrower
(or, in the case of Foamex, the aggregate Borrowing Bases of Foamex
and Foamex Canada) and (y) the Maximum Revolver Amount minus the
portion of the Aggregate Revolver Outstandings relating to
extensions of credit made (or, in the case of Pending Revolving
Loans, to be made) to or for the account of the other Borrowers
less (B) all Reserves with respect to such Borrower (or, in the
case of Foamex, all Reserves with respect to Foamex and Foamex
Canada) other than Reserves deducted in the calculation of the
Borrowing Base of such Borrower (or, in the case of Foamex, the
aggregate Borrowing Bases of Foamex and Foamex Canada).
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3.2
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Termination or Reduction of
Facility .
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(a) The
Borrowers may terminate this Agreement upon at least five (5)
Business Days’ written notice to the Administrative Agent and
the Lenders, upon (a) the payment in full of all outstanding
Revolving Loans, together with accrued interest thereon, and the
cancellation and return of all outstanding Letters of Credit or, to
the extent not so cancelled and returned, the deposit with the
Administrative Agent of Supporting Letters of Credit for such
outstanding Letters of Credit (or related Credit Support) in
accordance with and as required by Section 1.4(g) , (b) the
payment in full in cash of all reimbursable expenses and other
Obligations (other than Contingent Obligations at Termination), and
(c) with respect to any LIBOR Rate Loans prepaid, payment of the
amounts due under Section 4.4 , if any.
(b) The
Borrowers shall have the right, upon not less than three (3)
Business Days’ written notice to the Administrative Agent and
the Lenders, to from time to time permanently reduce the Maximum
Revolver Amount; provided , that (i) any such reduction in
the Maximum Revolver Amount shall result in a Dollar-for-Dollar
decrease in the aggregate amount of the Revolving Credit
Commitments then in effect and (ii) no such reduction of the
Maximum Revolver Amount shall be permitted if, after giving effect
thereto and to any prepayments of the Revolving Loans on the
effective date thereof, the Aggregate Revolver Outstandings would
exceed that amount which is equal to (A) the lesser of (x) the
aggregate Borrowing Bases of all Borrowers and Foamex Canada or (y)
the Maximum Revolver Amount as so reduced less (B) all
Reserves other than Reserves
deducted in the calculation of the aggregate Borrowing Bases of all
the Borrowers and Foamex Canada. Any such reduction of the Maximum
Revolver Amount shall be in an amount equal to $5,000,000 or a
multiple of $5,000,000 in excess thereof, and shall reduce the
aggregate Revolving Credit Commitments then in effect pro rata
among the Lenders. In no event shall the Borrowers be permitted to
reduce the Maximum Revolver Amount pursuant to this Section
3.2(b) to an amount less than $100,000,000.
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3.3
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[Intentionally Omitted].
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3.4
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[Intentionally Omitted].
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3.5
LIBOR Rate Loan Prepayments . In connection with any
prepayment, if any LIBOR Rate Revolving Loan is prepaid prior to
the expiration date of the Interest Period applicable thereto, the
Borrower which borrowed such Revolving Loan shall pay to the
Lenders the amounts described in Section 4.4 .
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3.6
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Payments by the
Borrowers .
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(a) All
payments to be made by the Borrowers shall be made without set-off,
recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments by the Borrowers shall be made to the
Administrative Agent for the account of the applicable Lenders, at
the account designated by the Administrative Agent and shall be
made in Dollars and in immediately available funds, no later than
12:00 noon (New York time) on the date specified herein. Any
payment received by the Administrative Agent after such time shall
be deemed (for purposes of calculating interest only) to have been
received on the following Business Day and any applicable interest
shall continue to accrue.
(b) Subject
to the provisions set forth in the definition of “Interest
Period”, whenever any payment is due on a day other than a
Business Day, such payment shall be due on the following Business
Day, and such extension of time shall in such case be included in
the computation of interest or fees, as the case may be.
3.7
Payments as Revolving Loans . At the election of the
Administrative Agent, all payments of principal, interest,
reimbursement obligations in connection with Letters of Credit and
Credit Support for Letters of Credit, fees, premiums, reimbursable
expenses and other sums payable hereunder may be paid from the
proceeds of Revolving Loans made hereunder. Each Borrower hereby
irrevocably authorizes the Administrative Agent to charge the Loan
Account of such Borrower for the purpose of paying all amounts from
time to time due by such Borrower hereunder and agrees that all
such amounts charged shall constitute Revolving Loans (including
Non-Ratable Loans and Agent Advances).
3.8
Apportionment, Application and Reversal of Payments .
Principal and interest payments shall be apportioned ratably among
the Lenders (according to the unpaid principal balance of the
Revolving Loans to which such payments relate held by each Lender)
and payments of the fees shall, as applicable, be apportioned
ratably among the Lenders, except for fees payable solely to the
Administrative Agent, the Bank and the Letter of Credit Issuer. All
payments shall be remitted to the Administrative Agent (except as
expressly provided herein otherwise) and all such payments not
relating to principal or interest of specific Revolving
Loans, or not constituting payment
of specific fees or expenses, and all proceeds of Accounts or,
subject to the provisions of the Intercreditor Agreement, other
Collateral received by the Administrative Agent, shall be applied,
ratably, subject to the provisions of this Agreement:
(i) So
long as no Event of Default is continuing: first , to pay
any fees, indemnities or expense reimbursements then due to the
Administrative Agent; second , to pay any amounts relating
to Bank Products of the type specified in clauses (ii) and (iii) of
the definition thereof then due to the Bank or any of its
Affiliates from any of the Borrowers; third , to pay any
fees or expense reimbursements then due to the Lenders from any of
the Borrowers; fourth , to pay interest due in respect of
all Revolving Loans, including Non-Ratable Loans and Agent
Advances; fifth , to pay or prepay principal of the
Non-Ratable Loans and Agent Advances; sixth , to pay or
prepay principal of the Revolving Loans (other than Non-Ratable
Loans and Agent Advances) and unpaid reimbursement obligations in
respect of Letters of Credit and Credit Support; seventh ,
to pay an amount to the Administrative Agent equal to all
outstanding Obligations in respect of Letters of Credit and Credit
Support to be held as cash collateral for such Obligations;
eighth , to pay any amounts relating to Bank Products (to
the extent not paid pursuant to clause second above) then
due to any Lender or any of its Affiliates from any of the
Borrowers; and ninth , to the payment of any other
Obligations.
(ii) Upon
the occurrence and during the continuance of an Event of Default:
first , to pay any fees, indemnities or expense
reimbursements then due to the Administrative Agent; second
, to pay any fees or expense reimbursements then due to the Lenders
from any of the Borrowers; third , to pay interest due in
respect of all Revolving Loans, including Non-Ratable Loans and
Agent Advances; fourth , to pay or prepay (or cash
collateralize, if applicable), in Revolving Loan Application Order,
the Revolving Loan Obligations; fifth , to pay any amounts
relating to Bank Products then due to any Lender or any of its
Affiliates from any of the Borrowers; and sixth , to the
payment of any other Obligations.
Notwithstanding anything to the
contrary contained in this Agreement, unless so directed by the
applicable Borrower, or unless an Event of Default has occurred and
is continuing, neither the Administrative Agent nor any Lender
shall apply any payments which it receives to any LIBOR Rate Loan,
except (a) on the expiration date of the Interest Period applicable
to any such LIBOR Rate Loan, or (b) in the event, and only to the
extent, that there are no outstanding Base Rate Loans owing by the
applicable Borrower and, in any event, the Borrowers shall pay
LIBOR breakage losses in accordance with Section 4.4 . The
Administrative Agent and the Lenders shall have the continuing and
exclusive right to apply and reverse and reapply, in each instance
in accordance with this Section 3.8 , any and all such
proceeds and payments to any portion of the Obligations.
3.9
Indemnity for Returned Payments . If after receipt of any
payment which is applied to the payment of all or any part of the
Obligations, the Administrative Agent, any Lender, the Bank or any
Affiliate of the Bank is for any reason compelled to surrender such
payment or proceeds to any Person because such payment or
application of proceeds is invalidated, declared fraudulent, set
aside, determined to be void or voidable as a preference,
impermissible setoff, or a diversion of trust funds, or for any
other reason, then the Obligations
or part thereof intended to be
satisfied shall be revived and continued and this Agreement shall
continue in full force as if such payment or proceeds had not been
received by the Administrative Agent, such Lender, the Bank or such
Affiliate of the Bank, as the case may be, and the applicable
Borrower or Borrowers shall be liable to pay to the Administrative
Agent, the Lenders, the Bank and any Affiliate of the Bank, and
hereby does indemnify the Administrative Agent, the Lenders, the
Bank and any Affiliate of the Bank and hold the Administrative
Agent, the Lenders, the Bank and any Affiliate of the Bank harmless
for the amount of such payment or proceeds surrendered. The
provisions of this Section 3.9 shall be and remain effective
notwithstanding any contrary action which may have been taken by
the Administrative Agent, any Lender, the Bank or any Affiliate of
the Bank in reliance upon such payment or application of proceeds,
and any such contrary action so taken shall be without prejudice to
the Administrative Agent’s, the Lenders’, the
Bank’s and its Affiliates’ rights under this Agreement
and shall be deemed to have been conditioned upon such payment or
application of proceeds having become final and irrevocable. The
provisions of this Section 3.9 shall survive the termination
of this Agreement.
3.10
Administrative Agent’s and Lenders’ Books and
Records; Monthly Statements . The Administrative Agent shall
record the principal amount of the Loans owing to each Lender, the
undrawn amount of all outstanding Letters of Credit and the
aggregate amount of unpaid reimbursement obligations outstanding
with respect to the Letters of Credit from time to time on its
books. In addition, each Lender may note the date and amount of
each payment or prepayment of principal of such Lender’s
Loans in its books and records. Failure by the Administrative Agent
or any Lender to make such notation shall not affect the
obligations of the Borrowers with respect to the Loans or the
Letters of Credit. Each Borrower agrees that the Administrative
Agent’s and each Lender’s books and records showing the
Obligations and the transactions pursuant to this Agreement and the
other Loan Documents shall be admissible in any action or
proceeding arising therefrom, and shall constitute rebuttably
presumptive proof thereof, irrespective of whether any Obligation
is also evidenced by a promissory note or other instrument. The
Administrative Agent will provide to the Borrowers a monthly
statement of Loans, payments and other transactions pursuant to
this Agreement. Such statement shall be deemed correct, accurate,
and binding on the Borrowers and an account stated (except for
reversals and reapplications of payments made as provided in
Section 3.8 and corrections of errors discovered by the
Administrative Agent), unless the Borrowers notify the
Administrative Agent in writing to the contrary within thirty (30)
days after such statement is delivered. In the event a timely
written notice of objections is given by a Borrower, only the items
to which exception is expressly made will be considered to be
disputed by such Borrower.
ARTICLE 4
TAXES, YIELD PROTECTION AND
ILLEGALITY
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4.1
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Taxes . Subject to Sections 12.10(d) and
(e) :
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(a) Except
as required by applicable Law, any and all payments by the
Borrowers or Guarantors, as applicable, or any of them to each
Lender or the Administrative Agent under this Agreement or any
other Loan Document shall be made free and clear of, and without
deduction or withholding for any Indemnified Taxes. In addition,
the Borrowers or Guarantors, as applicable, shall timely pay all
Other Taxes.
(b) The
Borrowers or Guarantors, as applicable, agree, jointly and
severally, to indemnify and hold harmless each Lender and the
Administrative Agent for the full amount of Indemnified Taxes and
Other Taxes (and any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section) imposed on or
paid by any Lender or the Administrative Agent and any penalties,
interest, additions to tax and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified
Taxes or Other Taxes were correctly or legally asserted. Payment
under this indemnification shall be made within 30 days after
the date such Lender or the Administrative Agent makes written
demand therefor.
(c) If
a Borrower or Guarantor, as applicable, shall be required by law to
deduct or withhold any Indemnified Taxes or Other Taxes from or in
respect of any sum payable hereunder or under any other Loan
Document to any Lender or the Administrative Agent,
then:
(i) the
sum payable shall be increased as necessary so that after making
all required deductions, remittances and withholdings (including
deductions, remittances and withholdings applicable to additional
sums payable under this Section) such Lender or the Administrative
Agent, as the case may be, receives an amount equal to the sum it
would have received had no such deductions, remittances or
withholdings been made;
(ii) such
Borrower or Guarantor, as applicable, shall make such deductions
and withholdings; and
(iii) such
Borrower or Guarantor, as applicable, shall pay the full amount
deducted or withheld to the relevant taxing authority or other
authority in accordance with applicable law.
(d) Within
30 days after the date of any payment by a Borrower or Guarantor,
as applicable, of Indemnified Taxes or Other Taxes, such Borrower
or Guarantor, as applicable, shall furnish the Administrative Agent
the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment reasonably satisfactory to
the Administrative Agent.
(e) If
a Borrower or Guarantor, as applicable, is required to pay
additional amounts to any Lender or the Administrative Agent
pursuant to subsection (c) of this Section, then such Lender
shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its lending office so
as to eliminate any such additional payment by such Borrower or
Guarantor, as applicable, which may thereafter accrue, if such
change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
(f) If
a Borrower or Guarantor, as applicable, shall notify, in writing, a
Lender or the Administrative Agent that it is entitled to claim a
refund from a Governmental Authority in respect of any Indemnified
Taxes or Other Taxes as to which it has been indemnified by such
Borrower or Guarantor, as applicable, or with respect to which such
Borrower or Guarantor, as applicable, has paid additional amounts
pursuant to this Section 4.1 , it shall, at the expense of
such Borrower or Guarantor, as the case may be, make a timely claim
to such Governmental Authority for such refund. If a Lender or the
Administrative Agent receives a refund (including
pursuant to a claim for refund made
pursuant to the preceding sentence) in respect of any Indemnified
Taxes or Other Taxes as to which it has been indemnified by a
Borrower or Guarantor or with respect to which a Borrower or
Guarantor has paid additional amounts pursuant to this Section
4.1 , it shall within 30 days from the date of such
receipt pay over the amount of such refund to such Borrower or
Guarantor, as the case may be, net of all reasonable out-of-pocket
expenses of such Lender or Administrative Agent (to the extent not
previously paid by such Borrower or Guarantor, as the case may be)
and Taxes imposed upon the receipt of such refund, and without
interest (other than interest paid by the relevant Governmental
Authority with respect to such refund net of Taxes imposed upon the
receipt of such interest). Such Lender or the Administrative Agent
(as the case may be) may, in its reasonable discretion, determine
the order of utilization of all charges, deductions, credits and
expenses which reduce Taxes imposed on its net income. Nothing in
this Section 4.1(f) shall be construed as requiring any
Lender or the Administrative Agent (as the case may be) to conduct
its business or to arrange or alter in any respect its Tax or
financial affairs so that it is entitled to receive such refund,
other than performing any ministerial acts necessary to be entitled
to receive such refund.
(g) In
respect of amounts paid or credited by any Loan Party that is
resident in Canada for purposes of the Income Tax Act (Canada) (the
“ ITA ”) to or for the benefit of a particular
Lender that is an “authorized foreign bank” for
purposes of the ITA, the obligations under this Section 4.1
to pay an additional amount shall apply where the particular Lender
is liable for Tax under Part XIII of the ITA in respect of such
payment, even if the Loan Party is not required under the ITA to
deduct or withhold an amount in respect of Indemnified Taxes on
such payment and this Section 4.1 shall apply, mutatis
mutandis , as if the Loan Party was required to withhold an
amount in respect of such taxes.
(h) Notwithstanding
anything contained herein to the contrary, the provisions of this
Section 4.1 shall survive the expiration or termination of
this Agreement and the other Loan Documents and the payment in full
of all other Obligations.
(a) If
any Lender determines that the introduction of any Requirement of
Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has
made it unlawful, or that any central bank or other Governmental
Authority has asserted that it is unlawful, for any Lender or its
applicable lending office to make LIBOR Rate Loans, then, on notice
thereof by that Lender to the Borrowers (or Foamex on behalf of the
Borrowers) through the Administrative Agent, any obligation of that
Lender to make LIBOR Rate Loans shall be suspended until that
Lender notifies the Administrative Agent and the Borrowers (or
Foamex on behalf of the Borrowers) that the circumstances giving
rise to such determination no longer exist.
(b) If
a Lender determines that it is unlawful to maintain any LIBOR Rate
Revolving Loan, each Borrower shall, upon its receipt (or
Foamex’s receipt on behalf of such Borrower) of notice of
such fact and demand from such Lender (with a copy to the
Administrative Agent), prepay in full such LIBOR Rate Revolving
Loans of that Lender owing by such Borrower then outstanding,
together with interest accrued thereon and amounts required under
Section 4.4 , either on the last day of the Interest Period
thereof, if that Lender may
lawfully continue to maintain such
LIBOR Rate Revolving Loans to such day, or immediately, if that
Lender may not lawfully continue to maintain such LIBOR Rate
Revolving Loans. If a Borrower is required to so prepay any LIBOR
Rate Revolving Loans pursuant to the previous sentence, then
concurrently with such prepayment, such Borrower shall borrow from
the affected Lender, in the amount of such repayment, a Base Rate
Revolving Loan.
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4.3
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Increased Costs and Reduction of
Return .
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(a) If
any Lender determines that due to either (i) the introduction
of or any change in the interpretation of any law or regulation or
(ii) the compliance by that Lender with any guideline or
request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any
increase in the cost (not including any Taxes or Other Taxes, as to
which Section 4.1 shall govern) to such Lender of agreeing
to make or making, funding or maintaining any LIBOR Rate Loans,
then the applicable Borrower(s) shall be liable for, and shall from
time to time, upon demand (with a copy of such demand to be sent to
the Administrative Agent), pay to the Administrative Agent for the
account of such Lender, additional amounts as are sufficient to
compensate such Lender for such increased costs.
(b) If
any Lender shall have determined that (i) the introduction of any
Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central
bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by
such Lender or any corporation or other entity controlling such
Lender with any Capital Adequacy Regulation in which a change (or
change in interpretation or administration) has occurred or which
was enacted subsequent to the date hereof, affects or would affect
the amount of capital required or expected to be maintained by such
Lender or any corporation or other entity controlling such Lender
and (taking into consideration such Lender’s or such
corporation’s or other entity’s policies with respect
to capital adequacy and such Lender’s desired return on
capital) determines that the amount of such capital is increased as
a consequence of its Commitments, Loans, credits or obligations
under this Agreement, then, upon demand of such Lender to the
Borrowers (or Foamex on behalf of the Borrowers) through the
Administrative Agent, the Borrowers shall, jointly and severally,
pay to such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender for such
increase.
(c) Each
Lender agrees that, upon the occurrence of any event giving rise to
the operation of this Section 4.3 with respect to such
Lender, it will, if requested by Foamex, use reasonable efforts
(subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event;
provided that such designation is made on terms that, in the
sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage,
and provided , further , that nothing in this clause
(c) shall affect or postpone any of the obligations of any Borrower
or the rights of any Lender pursuant to this Section 4.3
.
4.4
Funding Losses . Each Borrower shall reimburse each Lender
and hold each Lender harmless from any loss or expense which such
Lender may sustain or incur as a consequence of:
(a) the
failure of such Borrower to make on a timely basis any payment of
principal of any LIBOR Rate Loan made to such Borrower;
(b) the
failure of such Borrower to borrow, continue or convert a Loan
requested by or made to such Borrower after such Borrower has given
(or is deemed to have given) a Notice of Borrowing or a Notice of
Continuation/Conversion (or telephonic notice in lieu thereof);
or
(c) the
prepayment or other payment (including after acceleration thereof)
of any LIBOR Rate Loans made to such Borrower on a day that is not
the last day of the relevant Interest Period;
excluding any loss of anticipated
profit but including any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain its
LIBOR Rate Loans requested by or made to such Borrower or from fees
payable to terminate the deposits from which such funds were
obtained. Each Borrower shall also pay any customary administrative
fees charged by any Lender in connection with the
foregoing.
4.5
Inability to Determine Rates . If the Administrative Agent
determines that for any reason adequate and reasonable means do not
exist for determining the LIBOR Rate for any requested Interest
Period with respect to a proposed LIBOR Rate Loan, or the Majority
Lenders advise the Administrative Agent that the LIBOR Rate for any
requested Interest Period with respect to a proposed LIBOR Rate
Loan does not adequately and fairly reflect the cost to the
applicable Lenders of funding such Loan, the Administrative Agent
will promptly so notify the Borrowers and each Lender. Thereafter,
the obligation of the Lenders to make or maintain LIBOR Rate Loans
hereunder shall be suspended until the Administrative Agent revokes
such notice in writing. Upon receipt of such notice, a Borrower may
revoke any Notice of Borrowing or Notice of Continuation/Conversion
then submitted by it. If such Borrower does not revoke such Notice,
the Lenders shall make, convert or continue the Loans, as proposed
by such Borrower, in the amount specified in the applicable notice
submitted by such Borrower, but such Loans shall be made, converted
or continued as Base Rate Loans instead of LIBOR Rate
Loans.
4.6
Certificates of Administrative Agent and Lenders . Any
Lender (or the Administrative Agent, if applicable) claiming
reimbursement or compensation under this Article 4 shall
deliver to the applicable Borrower(s) (with a copy to the
Administrative Agent if delivered from a Lender) a certificate
setting forth in reasonable detail the basis and calculation of the
amount payable to such Lender (or the Administrative Agent, if
applicable), and such certificate shall be conclusive and binding
on the applicable Borrower(s) in the absence of manifest
error.
4.7
Survival . The agreements and obligations of the Borrowers
in this Article 4 shall survive the payment of all other
Obligations.
4.8
Limitation on Claims . Notwithstanding anything to the
contrary contained herein, no Loan Party shall be required to make
any payments to any Lender pursuant to any of Sections
4.1(b) , 4.1(c) , 4.3 or 4.4 relating to
any period of time which is greater than 180 days prior to the date
such Lender demands payment of such amount, except to the extent
that such
Lender could not reasonably have
been expected to discover such claim at the time of its incurrence,
in which case, the 180-day period shall be tolled until such Lender
discovers, or should reasonably have been expected to discover,
such claim.
ARTICLE 5
FINANCIAL INFORMATION;
NOTICES
So long as any of the Obligations
(other than Contingent Obligations at Termination and Obligations
in respect of Letters of Credit or Credit Support for which
Supporting Letters of Credit have been deposited with the
Administrative Agent in accordance with and as required by
Section 1.4(g) ) remain outstanding or this Agreement is in
effect:
5.1
Financial Statements . Foamex shall deliver to the
Administrative Agent for distribution to each Lender:
(a) as
soon as available, but in any event within 90 days (or, with
respect to the Fiscal Year ended December 31, 2006, 105 days) after
the end of each Fiscal Year (commencing with the Fiscal Year ended
December 31, 2006), a consolidated balance sheet of Foamex and its
Subsidiaries as at the end of such Fiscal Year, and the related
consolidated statements of operations, partners’ equity and
cash flows for such Fiscal Year, each setting forth in each case in
comparative form the figures for the previous Fiscal Year, all in
reasonable detail and prepared in accordance with GAAP, audited and
accompanied by a report and opinion of a nationally recognized
independent registered public accounting firm reasonably acceptable
to the Administrative Agent, which report and opinion shall be
prepared in accordance with generally accepted auditing standards
and shall not be subject to any “going concern” or like
qualification or exception or any qualification or exception as to
the scope of such audit;
(b) as
soon as available, but in any event within 45 days (or, with
respect to each of the first three fiscal quarters of Fiscal Year
2007, 60 days) after the end of each of the first three fiscal
quarters of each Fiscal Year (commencing with the fiscal quarter
ending April 1, 2007), (i) a consolidated balance sheet of
Foamex and its Subsidiaries as at the end of such fiscal quarter,
and (ii) the related consolidated statements of operations and
cash flows for such fiscal quarter and for the portion of the
Fiscal Year then ended, each setting forth in each case in
comparative form the figures for the corresponding fiscal quarter
of the previous Fiscal Year and the corresponding portion of the
previous Fiscal Year, all in reasonable detail, certified by a
Responsible Officer of Foamex as fairly presenting in all material
respects the financial condition, results of operations and cash
flows of Foamex and its consolidated Subsidiaries in accordance
with GAAP, subject to normal year-end audit adjustments and the
absence of footnotes;
(c) upon
request of the Administrative Agent or the Majority Lenders, as
soon as available, but in any event within 30 days after the
end of each fiscal month of Foamex (or, in the case of the last
fiscal month in a fiscal quarter of Foamex, within 45 days after
the end of such fiscal month), (i) a consolidated balance sheet of
Foamex and its Subsidiaries as at the end of such fiscal month, and
(ii) the related consolidated statements of operations and
cash flows for such fiscal month and for the portion of
the
Fiscal Year then ended, each setting
forth in each case in comparative form the figures for the
corresponding fiscal month of the previous Fiscal Year and the
corresponding portion of the previous Fiscal Year, all in
reasonable detail, certified by a Responsible Officer of Foamex as
fairly presenting in all material respects the financial condition,
results of operations and cash flows of Foamex and its consolidated
Subsidiaries in accordance with GAAP, subject to normal year-end
audit adjustments and the absence of footnotes; and
(d) as
soon as available, but in any event within 60 days after the end of
each Fiscal Year, forecasts prepared by management of Foamex, in
form satisfactory to the Administrative Agent, of consolidated
balance sheets and statements of operations and cash flows of
Foamex and its Subsidiaries on a monthly basis for the succeeding
Fiscal Year (including the Fiscal Year in which the Stated
Termination Date occurs).
As to any information contained in
materials furnished pursuant to Section 5.2(d) , Foamex
shall not be separately required to furnish such information under
clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of Foamex to furnish the information
and materials described in clauses (a) and (b) above at the times
specified therein.
5.2
Certificates; Other Information . Foamex shall deliver to
the Administrative Agent for distribution to each
Lender:
(a) concurrently
with the delivery of the audited financial statements referred to
in Section 5.1(a) , a certificate of its independent
certified public accountants certifying such financial statements
and stating that in making the examination necessary therefor no
knowledge was obtained of any Default under the financial covenants
set forth in Sections 7.25 and 7.26 or, if any such
Default shall exist, stating the nature and status of such
event;
(b) concurrently
with the delivery of the financial statements referred to in each
of Sections 5.1(a) and (b) (commencing with the
delivery of the financial statements for the fiscal quarter ending
April 1, 2007), (i) a duly completed Compliance Certificate signed
by a Responsible Officer of Foamex and (ii) a certificate of a
Responsible Officer of Foamex certifying that the aggregate
Availability of all Borrowers reported on the weekly Borrowing Base
Certificates for the Borrowers and Foamex Canada for each week
occurring during the period covered by such certificate did not
fall to an amount which would give rise to a Triggering Event, or
if the aggregate Availability of all Borrowers fell to any such
amount, the first date on which such event occurred;
(c) promptly
after any request by the Administrative Agent, copies of any
detailed audit reports and management letters submitted to the
board of directors (or the audit committee of the board of
directors) of Holdings or Foamex by independent accountants in
connection with the accounts or books of Holdings, Foamex or any of
their Subsidiaries, or any audit of any of them;
(d) promptly
after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent
generally to equityholders of
Holdings or Foamex, and copies of
all annual, regular, periodic and special reports and registration
statements which Holdings or Foamex files with the SEC under
Section 13 or 15(d) of the Exchange Act, and not otherwise
required to be delivered to the Administrative Agent pursuant
hereto;
(e) promptly
after the furnishing thereof, copies of any statement or report
furnished to any holder of material Indebtedness (or any agent or
trustee for such holder) of any Loan Party pursuant to the terms of
any indenture, loan or credit or similar agreement and not
otherwise required to be furnished to the Administrative Agent
pursuant to Section 5.1 or any other clause of this
Section 5.2 (including, without limitation and in any event,
any compliance certificate delivered under the First Lien Term
Credit Agreement or the Second Lien Term Credit
Agreement);
(f) promptly,
and in any event within five Business Days after receipt thereof by
any Loan Party, copies of each notice or other correspondence
received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any material investigation or
possible material investigation or other inquiry by such agency
regarding financial or other operational results of any Loan
Party;
(g) promptly,
and in any event within five Business Days after the end of each
Availability Test Period, a certificate of a Responsible Officer of
Foamex setting forth in reasonable detail the calculation of the
Average Availability for such Availability Test Period;
(h) upon
request by the Administrative Agent, and in no event less
frequently than once each month and not later than 15 days after
the end of each month, a (i) monthly trial balance showing Accounts
of each Borrower and Foamex Canada outstanding aged based on
original due date from statement date as follows: current, 6 to 30
days, 31 to 60 days, 61 to 90 days and 91 days or more,
accompanied by such supporting detail and documentation as shall be
requested by the Administrative Agent in its reasonable discretion
and (ii) a reconciliation of the Accounts of each Borrower and
Foamex Canada to the Borrowing Base Certificate of such
Borrower;
(i) on
the date any Borrowing Base Certificate is delivered pursuant to
Section 5.2(j) or at such more frequent intervals as the
Administrative Agent may reasonably request from time to time, a
collateral report with respect to each Borrower and Foamex Canada,
including all additions and reductions (cash and non-cash) with
respect to Accounts of such Borrower or Foamex Canada, as the case
may be, accompanied by such supporting detail and documentation as
shall be requested by the Administrative Agent in its reasonable
discretion;
(j) on
a weekly basis (not later than the fifth Business Day after the
last Business Day of the previous week with the information thereon
to be as of the last Business Day of such previous week), a
Borrowing Base Certificate for each Borrower and Foamex Canada.
Notwithstanding the foregoing, any Borrowing Base Certificate
delivered by a Borrower pursuant to this Section 5.2(j) may
be updated on a daily basis by such Borrower in a manner reasonably
satisfactory to the Administrative Agent with
reports of new sales of Inventory
resulting in Eligible Accounts; provided , that any such
updates delivered hereunder shall be subject to any adjustments
(including, without limitation, exclusion from the relevant
Borrowing Base of any new Accounts included in such update) that
the Administrative Agent deems necessary in the exercise of its
reasonable discretion;
(k) upon
request by the Administrative Agent, an aging of the accounts
payable of each Borrower and Foamex Canada;
(l) as
promptly as practicable with respect to the period commencing on
and at all times after the Closing Date relating to any Loan Party,
the Plan of Reorganization, the Chapter 11 Case or the
Canadian Case (but only to the extent not received through the
electronic filing system), copies of all filings with the
Bankruptcy Court or the Canadian Bankruptcy Court by any Person,
all notices of hearings, all reports with respect to Claims (as
defined in the Plan of Reorganization), all reports from the
disbursing agent, if any, under the Plan of Reorganization and
copies of all other materials relating to any matter over which the
Bankruptcy Court or the Canadian Bankruptcy Court has retained
jurisdiction; provided, that any such filing, notice, report or
other material need not be furnished to the Administrative Agent
unless material; and
(m) promptly,
such additional information regarding the business, financial or
corporate affairs of any Loan Party, or compliance with the terms
of the Loan Documents, as the Administrative Agent or any Lender
may from time to time reasonably request.
Documents required to be delivered
pursuant to Section 5.1(a) or (b) or Section
5.2(d) (to the extent any such documents are included in
materials otherwise filed with the SEC) may be delivered
electronically and, if so delivered, shall be deemed to have been
delivered on the date (i) on which Foamex posts such documents, or
provides a link thereto, on Foamex’s website on the Internet
at its website address provided to the Administrative Agent and the
Lenders; or (ii) on which such documents are posted on
Foamex’s behalf on an Internet or intranet website, if any,
to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by
the Administrative Agent); provided that (i) Foamex shall
deliver paper copies of such documents to the Administrative Agent
to fulfill the request of any Lender that requests Foamex to
deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or
such Lender and (ii) Foamex shall notify the Administrative Agent
(by facsimile or electronic mail) of the posting of any such
documents and provide, if requested, to the Administrative Agent by
electronic mail electronic versions ( i.e. , soft copies) of
such documents. Notwithstanding anything contained herein, in every
instance Foamex shall be required to promptly provide paper copies
in addition to electronic mail copies of originally executed
Compliance Certificates required by Section 5.2(b) to the
Administrative Agent. Except for such Compliance Certificates, the
Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance
by Foamex with any such request for delivery, and each Lender shall
be solely responsible for requesting delivery to it or maintaining
its copies of such documents.
The Loan Parties hereby acknowledge
that (a) the Administrative Agent and/or the Arranger will make
available to the Lenders materials and/or information provided by
or on behalf of one or more of Foamex and the other Loan Parties
hereunder (collectively, “ Borrower Materials ”)
by posting the Borrower Materials on IntraLinks or another similar
electronic system (the “ Platform ”) and (b)
certain of the Lenders may be “public-side” Lenders (
i.e. , Lenders that do not wish to receive material
non-public information with respect to any Loan Party or its
securities) (each, a “ Public Lender ”). Foamex
agrees to make all Borrower Materials that Foamex intends to be
made available to Public Lenders clearly and conspicuously
designated by Foamex as “PUBLIC.” By designating
Borrower Materials as “PUBLIC,” Foamex (on behalf of
each of the Loan Parties) authorizes such Borrower Materials to be
made available to a portion of the Platform designated
“Public Investor,” which is intended to contain only
information that is either publicly available or not material
information (though it may be sensitive and proprietary) with
respect to Foamex or its securities for purposes of United States
Federal and state securities laws.
THE PARTIES HERETO AGREE THAT THE
PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE.” THE AGENT-RELATED PERSONS DO NOT WARRANT THE
ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY
OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR
OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT
OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE
DEFECTS, IS MADE BY ANY AGENT-RELATED PERSON IN CONNECTION WITH THE
BORROWER MATERIALS OR THE PLATFORM. In no event shall the
Administrative Agent or any other Agent-Related Person have any
liability to any Loan Party or any Lender for losses, claims,
damages, liabilities or expenses of any kind (whether in tort,
contract or otherwise) arising out of Foamex’s or the
Administrative Agent’s transmission of Borrower Materials
through the Internet, except to the extent that such losses,
claims, damages, liabilities or expenses are determined by a court
of competent jurisdiction by a final and nonappealable judgment to
have resulted from the gross negligence or willful misconduct of
such Agent-Related Person; provided, however, that in no event
shall any Agent-Related Person have any liability to any Loan Party
or any Lender for indirect, special, incidental, consequential or
punitive damages (as opposed to direct or actual
damages).
5.3
Notices . Each of Holdings and Foamex shall, and shall cause
each other Loan Party to, promptly notify the Administrative Agent
for communication to each Lender:
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(a)
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of the occurrence of any Default or
a Triggering Event;
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(b) of
any matter that has resulted or would reasonably be expected to
result in a Material Adverse Effect, including to the extent the
following meets the foregoing standard, (i) breach or
non-performance of, or any default under, a Contractual Obligation
of Holdings or any of its Subsidiaries; (ii) any dispute,
litigation, investigation, proceeding or suspension between
Holdings or any of its Subsidiaries and any Governmental Authority;
or (iii) the commencement of, or any material
development
in, any litigation or proceeding
affecting Holdings or any of its Subsidiaries, including pursuant
to any applicable Environmental Laws;
(c) promptly
following Holdings or Foamex or such other Loan Party becoming
aware of the occurrence of any ERISA Event (or similar event with
respect to a Foreign Plan) that, alone or together with any other
ERISA Events (or similar events with respect to a Foreign Plan)
that have occurred, would reasonably be expected to result in
liability of Holdings, any of its Subsidiaries or any ERISA
Affiliate in an aggregate amount exceeding $5,000,000, a written
notice specifying the nature thereof, what action Holdings, such
Subsidiary or ERISA Affiliate has taken, is taking or proposes to
take with respect thereto, and, when known, any action taken or
threatened by the IRS, United States Department of Labor, PBGC,
Multiemployer Plan sponsor or other applicable Governmental
Authority with respect thereto;
(d) of
any material change in accounting policies or financial reporting
practices by any of the Loan Parties; and
(e) of
any failure of Foamex Canada to pay or remit when due any amount
for which it is liable in respect of any Pension Plan of Foamex
Canada or of any Lien arising with respect to any Pension Plan of
Foamex Canada (save for any Lien with respect to contribution
amounts not yet due or delinquent that arise under the PBA or other
applicable Canadian legislation).
Each notice pursuant to this
Section 5.3 shall be accompanied by a statement of a
Responsible Officer of Foamex setting forth details of the
occurrence referred to therein and stating what action the
applicable Loan Party or ERISA Affiliate, as the case may be, has
taken and proposes to take with respect thereto.
5.4
E-Mail Deliveries . Each of the parties hereto hereby agrees
that Foamex may, in lieu of delivering paper copies, transmit any
Financial Statements or any of the items specified in Section
5.2 to the Administrative Agent by electronic mail;
provided , that (i) each electronic mail transmission shall
be (A) formatted as the Administrative Agent may designate from
time to time and shall be digitally signed and (B) sent to the
Administrative Agent at one or more electronic mail addresses
designated by the Administrative Agent from time to time and (ii)
the Administrative Agent (A) shall be authorized to rely upon any
such electronic mail transmission for purposes of this Agreement to
the same extent as if the contents thereof had been otherwise
delivered to the Administrative Agent in accordance with the terms
of this Agreement and (B) may, upon notice in writing to Foamex,
terminate the right of Foamex to transmit such items via electronic
mail.
ARTICLE 6
GENERAL WARRANTIES AND
REPRESENTATIONS
Each Loan Party jointly and
severally warrants and represents to the Administrative Agent and
the Lenders that except as hereafter disclosed to and accepted by
the Administrative Agent and the Majority Lenders in
writing:
6.1
Existence, Qualification and Power; Compliance with Laws .
Each Loan Party and each Subsidiary thereof (a) is duly organized
or formed, validly existing and in good standing under the Laws of
the jurisdiction of its incorporation or organization, (b) has the
organizational power and authority and all requisite governmental
licenses, authorizations, consents and approvals to (i) own its
assets and carry on its business and (ii) execute, deliver and
perform its obligations under the Loan Documents to which it is a
party, (c) is duly qualified and is licensed and in good standing
under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires
such qualification or license, and (d) is in compliance with all
Laws, except in each case referred to in clause (b)(i), (c) or (d),
to the extent that failure to do so would not reasonably be
expected to have a Material Adverse Effect.
6.2
Authorization; No Contravention . The execution, delivery
and performance by each Loan Party of each Loan Document to which
such Person is party have been duly authorized by all necessary
corporate or other organizational action, and do not and will not
(a) contravene the terms of any of such Person’s Organization
Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under (i) any
Contractual Obligation to which such Person is a party or affecting
such Person or the properties of such Person or any of its
Subsidiaries (it being understood that, in the case of any Liens in
favor of the Administrative Agent granted by a Loan Party, there
may be a requirement under the First Lien Term Loan Documents and
the Second Lien Term Loan Documents that such Loan Party grant a
Lien in favor of the First Lien Term Collateral Agent and the
Second Lien Term Collateral Agent on the same collateral to the
extent permitted or required under the Intercreditor Agreement) or
(ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its
property is subject; or (c) violate any Law. Each Loan Party and
each Subsidiary thereof is in compliance with all Contractual
Obligations referred to in clause (b)(i), except to the extent that
failure to do so would not reasonably be expected to have a
Material Adverse Effect.
6.3
Governmental Authorization; Other Consents . No approval,
consent, exemption, authorization, or other action by, or notice
to, or filing with, any Governmental Authority or any other Person
is necessary or required in connection with (a) the execution,
delivery or performance by any Loan Party of this Agreement or any
other Loan Document, (b) the grant by any Loan Party of the Liens
granted by it pursuant to the Loan Documents, (c) the perfection or
maintenance of the Liens created under the Loan Documents
(including the priority thereof) or (d) the exercise by the
Administrative Agent or any Lender of its rights under the Loan
Documents or the remedies in respect of the Collateral, except for
(i) filings necessary to perfect the Liens on the Collateral
granted by the Loan Parties in favor of the Administrative Agent,
(ii) the approvals, consents, exemptions, authorizations, actions,
notices and filings which have been duly obtained, taken, given or
made and are in full force, (iii) those approvals, consents,
exemptions, authorizations, actions, notices or filings described
in the U.S. Security Agreement and the Canadian Security Agreement,
as applicable, and (iv) those approvals, consents, exemptions,
authorizations, actions, notices or filings, the failure of which
to obtain or make would not reasonably be expected to have a
Material Adverse Effect.
6.4
Binding Effect . This Agreement has been, and each other
Loan Document, when delivered hereunder, will have been, duly
executed and delivered by each Loan
Party that is party thereto. This
Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of
such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors’ rights generally, and by general equitable
principles (whether enforcement is sought by proceedings in equity
or at law).
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6.5
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Financial Statements; No Material
Adverse Effect .
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(a) The
Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the periods covered thereby,
except as otherwise expressly noted therein; (ii) fairly present in
all material respects the financial condition of Foamex and its
consolidated Subsidiaries as of the date thereof and their results
of operations for the periods covered thereby in accordance with
GAAP consistently applied throughout the periods covered thereby,
except as otherwise expressly noted therein; and (iii) show
all material indebtedness and other liabilities, direct or
contingent, of Foamex and its consolidated Subsidiaries as of the
date thereof.
(b) The
financial statements delivered from time to time pursuant to each
of Sections 5.1(a) , (b) and (c) (i) were
prepared in accordance with GAAP consistently applied throughout
the periods covered thereby, except as otherwise expressly noted
therein, and (ii) fairly present in all material respects the
financial condition of Foamex and its consolidated Subsidiaries as
of the date thereof and their results of operations for the periods
covered thereby, subject, in the case of clauses (i) and
(ii) with respect to interim financial statements, to the
absence of footnotes and to normal year-end audit
adjustments.
(c) Since
July 2, 2006, there has been no event or circumstance, either
individually or in the aggregate, that has had or would reasonably
be expected to have a Material Adverse Effect.
(d) The
consolidated pro forma balance sheet of Foamex and its Subsidiaries
as at December 3, 2006 described in Section 8.1(j) , a copy
of which has been furnished to the Administrative Agent, fairly
presents in all material respects the consolidated pro forma
financial condition of Foamex and its consolidated Subsidiaries as
at such date (except in each case for the effects of fair value
adjustments to the acquired tangible and intangible assets and
liabilities required by purchase accounting principles, if required
to be applied) giving effect to the Transactions.
(e) The
consolidated forecasted balance sheets and statements of income and
cash flows of Foamex and its Subsidiaries delivered to the
Administrative Agent from time to time pursuant to Section
5.1(d) were prepared in good faith on the basis of estimates,
information and assumptions believed by management of Holdings to
be reasonable at the time made, it being recognized by the
Administrative Agent and the Lenders that such financial
information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered
by such financial information may differ from the projected results
set forth therein by a material amount.
6.6
Litigation . There are no actions, suits, proceedings,
claims or disputes pending or, to the knowledge of any of Holdings
or any of its Subsidiaries, threatened or contemplated, at law, in
equity, in arbitration or before any Governmental Authority, by or
against Holdings or any of its Subsidiaries or against any of their
properties or revenues that (a) purport to affect or pertain to
this Agreement or any other Loan Document, or any of the
transactions contemplated hereby or (b) except as set forth on
Schedule 6.6 , either individually or in the aggregate,
would reasonably be expected to have a Material Adverse
Effect.
6.7
No Default . Neither Holdings nor any of its Subsidiaries is
in default under or with respect to any Contractual Obligation that
would, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. No Default has occurred
and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan
Document.
(a)
Generally . Holdings and each of its Subsidiaries has good
title to, or valid leasehold interests in, all its tangible
property material to its business (except for minor irregularities
or deficiencies in title to Real Property that in the aggregate do
not materially interfere with its ability to conduct its business
as currently conducted or to utilize such property for its intended
purpose), free and clear of all Liens except for Permitted Liens.
The tangible property of Holdings and its Subsidiaries, taken as a
whole, (i) is in good operating order, condition and repair
(ordinary wear and tear excepted) and (ii) constitutes all the
tangible property which is required for the business and operations
of Holdings and its Subsidiaries as presently conducted.
(b)
Real Property . Schedules 8(a) and 8(b) to the
Perfection Certificate dated the Closing Date contain a true and
complete list of each interest in Real Property (i) owned by
Holdings or any other Loan Party as of the date hereof and describe
the type of interest therein held by such Person and
(ii) leased, subleased or otherwise occupied or utilized by
Holdings or any other Loan Party, as lessee, sublessee, franchisee
or licensee, as of the date hereof and describe the type of
interest therein held by such Person and, in the case described in
clause (ii) of this Section 6.8(b) , whether any Lease
requires the consent of the landlord or tenant thereunder, or other
party thereto, to the Transactions.
(c)
No Extraordinary Receipts . As of the date hereof, none of
Holdings or any of its Subsidiaries has received any notice of, nor
has any knowledge of, the occurrence or pendency or contemplation
of any Extraordinary Receipts affecting all or any material portion
of its property. No Mortgage encumbers improved Real Property that
is located in an area that has been identified by the Secretary of
Housing and Urban Development as an area having special flood
hazards within the meaning of the National Flood Insurance Act of
1968 unless flood insurance has been obtained to the extent
required by Section 7.4(c) .
(d)
Collateral . The use by each of Holdings and each of the
other Loan Parties of the Collateral does not infringe on the
rights of any Person other than such infringement which would not,
individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.
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6.9
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Environmental Matters
.
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(a) Except
as set forth in Schedule 6.9 and except as, individually or
in the aggregate, would not reasonably be expected to result in a
Material Adverse Effect:
(i) Each
Loan Party and each Mexican Subsidiary and their respective
businesses, operations and Real Property are in compliance with,
and the Loan Parties and the Mexican Subsidiaries have no liability
under, Environmental Law;
(ii) The
Loan Parties and the Mexican Subsidiaries have obtained all
Environmental Permits required for the conduct of their respective
businesses and operations, and the ownership, operation and use of
their respective property, under Environmental Law, and all such
Environmental Permits are valid and in good standing;
(iii) There
has been no Release or threatened Release of Hazardous Material on,
at, under or from any Real Property or facility presently or
formerly owned, leased or operated by any Loan Party or any Mexican
Subsidiary or any of their respective predecessors in interest that
could reasonably be expected to result in liability of any Loan
Party or any Mexican Subsidiary under Environmental Law;
(iv) There
is no Environmental Claim pending or, to the knowledge of any of
Holdings and its Subsidiaries, threatened against any Loan Party or
any Mexican Subsidiary, or relating to any Real Property currently
or formerly owned, leased or operated by any Loan Party or any
Mexican Subsidiary or relating to the respective operations of any
Loan Party or any Mexican Subsidiary, and there are no actions,
activities, circumstances, conditions, events or incidents that
could reasonably be expected to form the basis of such an
Environmental Claim; and
(v) No
Person with an indemnity or contribution obligation to any Loan
Party or any Mexican Subsidiary relating to compliance with or
liability under Environmental Law is in default with respect to
such obligation.
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(b)
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Except as set forth in Schedule
6.9 :
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(i) None
of the Loan Parties or any of the Mexican Subsidiaries is obligated
to perform any action or otherwise incur any expense under
Environmental Law pursuant to any order, decree, judgment or
agreement by which it is bound or has assumed by contract or
agreement, and no such entity is conducting or financing any
Response pursuant to any Environmental Law with respect to any Real
Property or any other location, except as, individually or in the
aggregate, would not reasonably be expected to result in a Material
Adverse Effect;
(ii) As
of the date hereof, no Real Property or facility owned, operated or
leased by any Loan Party or any Mexican Subsidiary and, to the
knowledge of any of Holdings and its Subsidiaries, no Real Property
or facility formerly owned, operated or leased by any Loan Party or
any Mexican Subsidiary or any of their respective predecessors in
interest is (i) listed or formally proposed for listing on the
National Priorities List promulgated pursuant to CERCLA, or (ii)
listed on the Comprehensive
Environmental Response, Compensation
and Liability Information System promulgated pursuant to CERCLA or
(iii) included on any similar list maintained by any
Governmental Authority including any such list relating to
petroleum;
(iii) As
of the date hereof, no Lien has been recorded or, to the knowledge
of any of Holdings and its Subsidiaries, threatened under any
Environmental Law with respect to any owned real property or other
assets of any Loan Party or any Mexican Subsidiary;
(iv) The
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not
require any notification, registration, filing, reporting,
disclosure, investigation, remediation or cleanup pursuant to any
Governmental Real Property Disclosure Requirements or any other
Environmental Law, except for those matters that, individually or
in the aggregate, would not reasonably be expected to result in a
Material Adverse Effect; and
(v) Holdings
and its Subsidiaries have made available to the Lenders all
material records and files in the possession, custody or control
of, or otherwise reasonably available to, any of Holdings and its
Subsidiaries concerning compliance with or liability under
Environmental Law, including without limitation those concerning
the Release or threatened Release of Hazardous Material at Real
Property or facilities currently or formerly owned, operated,
leased or used by any Loan Party or any Mexican
Subsidiary.
(a) Each
of Holdings and its Subsidiaries has insurance in such amounts and
covering such risks and liabilities as are customary for companies
of a similar size engaged in similar businesses in similar
locations and as otherwise required by Section 7.4
.
(b) All
insurance maintained by Holdings and its Subsidiaries is in full
force and effect, all premiums have been duly paid and none of
Holdings or any of its Subsidiaries has received notice of
violation or cancellation thereof.
(a) The
Loan Parties and the Mexican Subsidiaries have timely filed all
material federal, state, provincial, foreign and other tax returns
and reports required to be filed, and have timely paid all material
federal, state, provincial, foreign and other taxes, assessments,
fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable
(whether or not shown on any Tax return), except those which are
being contested in good faith by appropriate proceedings diligently
conducted for which adequate reserves have been provided in
accordance with GAAP and for which no Lien has arisen as a result
of the failure to pay same (other than a Permitted Lien). There is
no proposed Tax assessment against any Loan Party or any Mexican
Subsidiary that, if made, would reasonably be expected to result in
a Material Adverse Effect. With the exception of the Tax Sharing
Agreement, gross-up provisions applicable to employee payments in
the ordinary course of business or contained in employment
agreements, the agreements to acquire any option, stock
or other equity interest in Holdings
and the Loan Documents, First Lien Term Loan Documents and Second
Lien Term Loan Documents, neither any Loan Party nor any Subsidiary
thereof is party to any tax sharing agreement that is currently in
effect. Each Loan Party and each Subsidiary has made adequate
provision in accordance with GAAP for all material taxes not yet
due and payable. Neither any Loan Party nor any Subsidiary has ever
been a party to any understanding or arrangement constituting a
“tax shelter” within the meaning of Section
6662(d)(2)(C)(iii) of the Code or within the meaning of Section
6111(c) or Section 6111(d) of the Code as in effect immediately
prior to the enactment of the American Jobs Creation of 2004, or
has ever “participated” in a “reportable
transaction” within the meaning of Treas. Reg. Section
1.6011-4, except as would not be reasonably expected to,
individually or in the aggregate, result in a Material Adverse
Effect. Except any liabilities for taxes of any consolidated,
combined or unitary tax group of which Holdings is the common
parent, neither any Loan Party nor any Subsidiary thereof has any
liabilities for the taxes of any Person under Treas. Reg. Section
1.1502-6 or any similar provision of state, local or foreign law,
as a transferee or successor, by contract or otherwise, except as
would not result in a Material Adverse Effect.
(b) Foamex,
since its organization through calendar year 2006, was treated as a
partnership within the meaning of Section 761(a) of the Code for
Federal income tax purposes and was not an entity subject to
Federal or state income tax (other than state income taxes
generally imposed on partnerships). Neither such Loan Party nor any
of its Subsidiaries has any knowledge of any inquiry or
investigation by any Person (including, without limitation, the
IRS) as to whether or not Foamex was, or any claim or assertion by
any Person (including, without limitation, the IRS) that Foamex was
not, a partnership for Federal or state income tax purposes or an
entity subject to Federal or state income taxes (other than state
income taxes generally imposed on partnerships). Subsequent to
calendar year 2006, Foamex has been treated as a disregarded entity
for Federal and state tax purposes.
(a) No
ERISA Event has occurred or is reasonably expected to occur that,
when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, would reasonably be
expected to result in a Material Adverse Effect. Each of the Loan
Parties and its Subsidiaries is in compliance in all material
respects with the presently applicable provisions of ERISA, the
Code and any other applicable Law with respect to each Employee
Benefit Plan. The present value of all accumulated benefit
obligations of all underfunded Pension Plans (based on the
assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent
audited financial statements of Foamex (the “ Financial
Statements Date ”), exceed by more than $45,000,000 the
fair market value of the assets of all such underfunded Pension
Plans. Using actuarial assumptions and computation methods
consistent with subpart 1 of subtitle E of Title IV of ERISA, the
aggregate liabilities of the Loan Parties and the ERISA Affiliates
to all Multiemployer Plans in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each
such Multiemployer Plan, would not reasonably be expected to result
in a Material Adverse Effect.
(b) Each
Foreign Plan has been maintained in compliance with its terms and
with the requirements of any and all applicable Laws and has been
maintained, where required, in good standing with applicable
regulatory authorities, in each case, except as would
not
reasonably be expected to result in
material liability to a Loan Party or any of its Subsidiaries.
Except as disclosed on Schedule 6.12(b) , neither Holdings
nor any of its Subsidiaries has incurred any material obligation in
connection with the termination or withdrawal from any Foreign
Plan. As of the most recent Financial Statements Date, the present
value of the aggregate unfunded liability in respect of all Foreign
Plans that are funded retirement plans did not exceed
$5,000,000.
6.13
Subsidiaries; Equity Interests . Except as disclosed to the
Administrative Agent by Foamex in writing from time to time after
the Closing Date, Holdings does not have any Subsidiaries other
than those specifically disclosed in Schedule 6.13(a) , and
all of the outstanding Equity Interests in such Subsidiaries have
been validly issued, are fully paid and nonassessable and are owned
by a Loan Party in the amounts specified on Schedule 6.13(a)
free and clear of all Liens, except the security interest created
by the U.S. Security Agreement, the First Lien Term Loan Documents
and the Second Lien Term Loan Documents and, after the Closing
Date, Liens arising by operation of law constituting Permitted
Liens. Except as disclosed to the Administrative Agent by Foamex in
writing from time to time after the Closing Date, neither Holdings
nor any of its Subsidiaries has any equity investments in any other
corporation or entity other than those specifically disclosed in
Schedule 6.13(b) or permitted under Section 7.15(d) .
All of the outstanding Equity Interests of Holdings have been
validly issued. All Equity Interests of Foamex are owned directly
or indirectly by Holdings and, as of the Closing Date, such Equity
Interests are owned by Holdings and FMXI as set forth on
Schedule 6.13(a) . Each Loan Party is the record and
beneficial owner of, and has good and defensible title to, the
Equity Interests pledged by it under the U.S. Security Agreement,
free of any and all Liens, rights or claims of other Persons,
except the security interest created by the U.S. Security
Agreement, the First Lien Term Loan Documents and the Second Lien
Term Loan Documents and, after the Closing Date, Liens arising by
operation of law constituting Permitted Liens and Liens permitted
under Section 7.14(l) (other than, if the relevant Permitted
Acquisition is the acquisition of Equity Interests of any Person,
Liens in such Equity Interests), and as of the date hereof, there
are no outstanding warrants, options or other rights to purchase,
or shareholder, voting trust or similar agreements outstanding with
respect to, or property that is convertible into, or that requires
the issuance or sale of, any such Equity Interests. All
Subsidiaries of Foamex existing on the Closing Date, other than the
Foreign Subsidiaries (other than any Canadian Subsidiary), are
Guarantors.
6.14
Margin Regulations; Investment Company Act; Public Utility
Holding Company Act .
(a) Neither
Holdings nor any of its Subsidiaries is engaged or will engage,
principally or as one of its important activities, in the business
of purchasing or carrying Margin Stock, or extending credit for the
purpose of purchasing or carrying Margin Stock. Following the
application of the proceeds of the Loans, the First Lien Term Loans
and the Second Lien Term Loans, not more than 25% of the value of
the assets (either of Holdings only or of Holdings and its
Subsidiaries on a consolidated basis) subject to the provisions of
Section 7.14 or Section 7.18 or subject to any
restriction contained in any agreement or instrument between
Holdings or any of its Subsidiaries and any Lender or any Affiliate
of any Lender relating to Indebtedness and within the scope of
Section 9.1(e) will be Margin Stock.
(b) No
Loan Party (i) is a “holding company” or an
“affiliate” of a “holding company” or a
“subsidiary company” of a “holding
company,” as each such term is defined and used in the Public
Utility Holding Company Act of 2005, enacted as part of the Energy
Policy Act of 2005, Pub. L. No. 109-58 as codified at §§
1261 et seq. , and the regulations adopted
thereunder, as amended, or (ii) is or is required to be
registered as an “investment company” under the
Investment Company Act of 1940.
6.15
Disclosure . Each Loan Party has disclosed to the
Administrative Agent and the Lenders all matters known to it that,
individually or in the aggregate, would reasonably be expected to
result in a Material Adverse Effect. No report, financial
statement, certificate or other information, including the
Confidential Information Memorandum and the Perfection Certificate,
furnished in writing by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this
Agreement or delivered hereunder or under any other Loan Document,
as of the date such report, financial statement, certificate or
other information was furnished (or, in the case of the
Confidential Information Memorandum, as of the date of this
Agreement or as of the Closing Date), contained any material
misstatement of fact or omitted to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading when taken
as a whole; provided that, with respect to projected
financial information, the Loan Parties represent only that such
information was prepared in good faith based upon assumptions
believed to be reasonable at the time.
6.16
Compliance with Laws . Holdings and each of its Subsidiaries
is in compliance with the requirements of all Laws and all orders,
writs, injunctions and decrees applicable to it or to any of its
properties, except in such instances in which (a) such applicable
Law or order, writ, injunction or decree is being contested in good
faith by appropriate proceedings diligently conducted or (b) the
failure to comply therewith, either individually or in the
aggregate, would not reasonably be expected to have a Material
Adverse Effect.
6.17
Solvency . Immediately after the consummation of the
Transactions to occur on the Closing Date (including the making of
the Loans and application of the proceeds thereof) and at all times
thereafter (a) the fair value of the properties of each of (x) the
Loan Parties (taken as a whole) and (y) Foamex, in each case as a
going concern, will exceed its or their, as the case may be, debts
and liabilities, subordinated, contingent or otherwise; (b) the
present fair saleable value of the property of each of (x) the Loan
Parties (taken as a whole) and (y) Foamex will be greater than the
amount that will be required to pay the probable liability of its
or their, as the case may be, debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) each of (x) the Loan
Parties (taken as a whole) and (y) Foamex will be able to pay its
or their, as the case may be, debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) each of (x) the Loan Parties (taken
as a whole) and (y) Foamex will not have unreasonably small capital
with which to conduct the business in which it is or they are, as
the case may be, engaged.
6.18
Intellectual Property Matters . Each Loan Party owns, or is
licensed to use, all patents, patent applications, trademarks,
trade names, service marks, copyrights, technology, trade secrets,
proprietary information, domain names, know-how and processes
necessary for the
conduct of its business as currently
conducted (the “ Intellectual Property ”),
except for those the failure to own or license which, individually
or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect. To the knowledge of each Loan Party, no
claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor to
the knowledge of each Loan Party does the use of such Intellectual
Property by each Loan Party infringe the rights of any Person,
except for such claims and infringements that, individually or in
the aggregate, would not reasonably be expected to result in a
Material Adverse Effect.
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6.19
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Security Interests
.
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(a)
Security Agreements . The U.S. Security Agreement, the
Canadian Security Agreement and the other Canadian Security
Documents are effective to create in favor of the Administrative
Agent for the benefit of the Secured Parties, legal and valid Liens
on, and security interests in, the Security Agreement Collateral
and (i) when financing statements and other filings in appropriate
form are filed in the offices specified on Schedule 7 to the
Perfection Certificate, (ii) upon the taking of possession or
control by the Administrative Agent or the Control Agent (if the
Intercreditor Agreement is in effect) of the Security Agreement
Collateral with respect to which a security interest may be
perfected only by possession or control (which possession or
control shall be given to the Administrative Agent or the Control
Agent (if the Intercreditor Agreement is in effect) to the extent
possession or control by the Administrative Agent or the Control
Agent is required by the U.S. Security Agreement, the Canadian
Security Agreement or the Intercreditor Agreement, as the case may
be), (iii) upon recording by the Administrative Agent of its Lien
on the certificates of title of motor vehicles and (iv) upon
compliance with the applicable perfection requirements of the laws
of jurisdictions other than the United States with respect to
Collateral as to which perfection of the Agent’s Lien thereon
is not subject to the laws of the United States, the Liens created
by each of the U.S. Security Agreement, the Canadian Security
Agreement and each other Canadian Security Document shall (to the
extent provided therein) constitute perfected First Priority Liens
on, and security interests in, all right, title and interest of the
grantors in the Security Agreement Collateral (other than such
Security Agreement Collateral in which a security interest cannot
be perfected under the UCC or applicable foreign Law, as
appropriate, as in effect at the relevant time in the relevant
jurisdiction), in each case subject to no Liens other than
Permitted Liens.
(b)
PTO Filing; Copyright Office Filing . When the U.S. Security
Agreement and the Canadian Security Agreement or a short form of
either is duly filed in, as appropriate, the United States Patent
and Trademark Office, the United States Copyright Office, or in a
similar office maintained by a foreign Governmental Authority, the
Liens created by such Loan Documents shall constitute fully
perfected First Priority Liens on, and security interests in, all
right, title and interest of the grantors thereunder in Patents and
Trademarks (each as defined in the U.S. Security Agreement)
registered or applied for with the United States Patent and
Trademark Office, or in a similar office maintained by a foreign
Governmental Authority, and Copyrights (as defined in the U.S.
Security Agreement) registered or applied for with the United
States Copyright Office, or in a similar office maintained by a
foreign Governmental Authority, as the case may be, in each case
subject to no Liens other than Permitted Liens.
(c)
Mortgages . Each Mortgage executed and delivered after the
Closing Date pursuant to Section 7.10(c) shall be effective
to create, in favor of the Administrative Agent, for its benefit
and the benefit of the other Secured Parties, legal and valid Liens
on, and security interests in, all of the Loan Parties’
right, title and interest in and to the Mortgaged Properties
thereunder and the proceeds thereof, subject only to Permitted
Liens, and when the Mortgages are duly filed in the offices
specified in the local counsel opinion delivered with respect
thereto in accordance with the provisions of Sections 7.10
and 7.11 , the Mortgages shall (to the extent provided
therein) constitute perfected First Priority Liens on, and security
interests in, all right, title and interest of the Loan Parties in
the Mortgaged Properties and the proceeds thereof, in each case
prior in right to any other Person, other than Liens permitted by
such Mortgage.
6.20
Use of Proceeds . The proceeds of the Loans are to be used
solely to refinance all amounts owing under the DIP Credit
Agreement and after payment in full of such amounts to make
payments under the Plan of Reorganization and for working capital
purposes and for general corporate purposes permitted hereunder.
None of the proceeds of the Loans will be used to purchase or carry
Margin Stock or to extend credit for the purchase or carrying of
Margin Stock.
6.21
FMXI . FMXI does not conduct any business other than the
business of acting as the managing general partner of Foamex and
owning its general partnership interest in Foamex.
6.22
Anti-Terrorism Law . No Loan Party and, to the knowledge of
each of the Loan Parties, none of its Affiliates is in violation of
any applicable law relating to terrorism or money laundering
(“ Anti-Terrorism Laws ”), including Executive
Order No. 13224 on Terrorist Financing, effective September 24,
2001 (the “ Executive Order ”), and the Uniting
and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001, Public Law
107-56.
No Loan Party and, to the knowledge
of each of the Loan Parties, no Affiliate or broker or other agent
of any Loan Party acting or benefiting in any capacity in
connection with any of the Loans is any of the
following:
(i) a
Person that is listed in the annex to, or is otherwise subject to
the provisions of, the Executive Order;
(ii) a
Person owned or controlled by, or acting for or on behalf of, any
person that is listed in the annex to, or is otherwise subject to
the provisions of, the Executive Order;
(iii) a
Person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism
Law;
(iv) a
Person that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order;
or
(v) a
Person that is named as a “specially designated national and
blocked person” on the most current list published by the
U.S. Treasury Department
Office of Foreign Assets Control
(“ OFAC ”) at its official website or any
replacement website or other replacement official publication of
such list.
No Loan Party and, to the knowledge
of each of the Loan Parties, no broker or other agent of any Loan
Party acting in any capacity in connection with any of the Loans
(i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of
any Person described in the immediately preceding paragraph, (ii)
deals in, or otherwise engages in any transaction relating to, any
property or interests in property blocked pursuant to the Executive
Order, or (iii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth
in any Anti-Terrorism Law.
6.23
Assumed Contracts . As of the Closing Date, the Contractual
Obligations “assumed” by each of the Loan Parties
pursuant to the Plan of Reorganization are each in full force and
effect and, taken as a whole, are sufficient for Foamex and its
Subsidiaries to conduct their respective businesses following the
Closing Date.
6.24
Trade Names . As of the Closing Date, all trade names or
styles under which any Loan Party sells or expects to sell
Inventory or create Accounts, or to which instruments in payment of
Accounts are expected to be made payable, are listed on Schedule
6.24 .
6.25
Bank Accounts . Schedule 6.25 contains as of the
Closing Date a complete and accurate list of all bank accounts
maintained by any Loan Party with any bank or other financial
institution.
6.26
Reorganization Matters . Attached hereto as Exhibit A
is a copy of each of the Plan of Reorganization and the
Confirmation Order confirming the Plan of Reorganization, and the
Plan of Reorganization and the Confirmation Order have not been
amended or modified without the prior written consent of the
Administrative Agent (such consent not to be unreasonably withheld)
and no conditions contained therein have been waived by any Loan
Party without the prior written consent of the Administrative Agent
(such consent not to be unreasonably withheld) and such order has
become a Final Order. Simultaneously with the making of the initial
Loans and the issuance of Letters of Credit on the Closing Date,
the Effective Date shall have occurred and the Plan of
Reorganization will be substantially consummated.
ARTICLE 7
AFFIRMATIVE AND NEGATIVE
COVENANTS
So long as any of the Obligations
(other than Contingent Obligations at Termination and Obligations
in respect of Letters of Credit or Credit Support for which
Supporting Letters of Credit have been deposited with the
Administrative Agent in accordance with and as required by
Section 1.4(g) ) remain outstanding or this Agreement is in
effect:
7.1
Payment of Obligations . Each Loan Party shall, and shall
cause each of its Subsidiaries to, pay and discharge as the same
shall become due and payable, all its obligations and liabilities,
including (a) all Taxes levied upon it or its properties or assets,
unless the same
are being contested in good faith by
appropriate proceedings diligently conducted, adequate reserves in
accordance with GAAP are being maintained therefor by such Loan
Party or such Subsidiary, as the case may be, and the nonpayment
thereof does not result in the imposition of a Lien (other than a
Permitted Lien); (b) all lawful claims which, if unpaid, would by
law become a Lien upon its property; and (c) all Indebtedness, as
and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness except, in each case, for any failure to pay or
discharge as would not reasonably be expected to have a Material
Adverse Effect so long as any such failure to pay or discharge does
not result in the imposition of a Lien (other than a Permitted
Lien) and Foamex has notified the Administrative Agent in writing
of such failure to pay or discharge.
7.2
Preservation of Existence, Etc. Each Loan Party shall, and
shall cause each of its Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and maintain in full force and
effect its legal existence, except as otherwise expressly permitted
under Section 7.17 or Section 7.18 or, in the case of
any Subsidiary (other than Foamex Canada or a Borrower), where the
failure to perform such obligations, individually or in the
aggregate, would not reasonably be expected to result in a Material
Adverse Effect. Foamex shall not change its partnership status to a
corporate status.
7.3
Maintenance of Properties . Each Loan Party shall, and shall
cause each Mexican Subsidiary to, do or cause to be done all things
reasonably necessary to obtain, preserve, renew, extend and keep in
full force and effect the rights, licenses, permits, privileges,
franchises, authorizations, patents, copyrights, trademarks and
trade names necessary to the conduct of its business and at all
times maintain, preserve and protect all tangible property
necessary to the conduct of such business and keep such property in
good repair, working order and condition (other than wear and tear
occurring in the ordinary course of business); provided that
nothing in this Section 7.3 shall prevent (i) sales of
property, consolidations or mergers by or involving any Loan Party
in accordance with Section 7.17 or Section 7.18 ;
(ii) the withdrawal by any Loan Party of its qualification as a
foreign corporation in any jurisdiction where such withdrawal,
individually or in the aggregate, would not reasonably be expected
to result in a Material Adverse Effect; or (iii) the abandonment by
any Loan Party of any rights, franchises, licenses, trademarks,
trade names, copyrights, patents or other Intellectual Property
that such Person reasonably determines are not useful to its
business or no longer commercially desirable.
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7.4
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Maintenance of
Insurance .
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(a)
Generally . Each Loan Party shall, and shall cause each
Mexican Subsidiary to, maintain insurance by financially sound and
reputable insurers to such extent and against such risks as is
customary with companies in the same or similar businesses
operating in the same or similar locations, including insurance
with respect to Mortgaged Properties and other properties material
to the business of such Loan Party or Mexican Subsidiary against
such casualties and contingencies and of such types and in such
amounts with such deductibles as is customary in the case of
similar businesses operating in the same or similar
locations.
(b)
Requirements of Insurance . All such insurance shall (i)
provide that no cancellation, material reduction in amount or
material change in coverage thereof shall be effective until at
least 30 days (or 10 days for nonpayment of premiums) after receipt
by the
Administrative Agent of written
notice thereof, (ii) name the Administrative Agent as additional
insured on behalf of the Secured Parties (in the case of liability
insurance) and loss payee (in the case of property insurance), as
applicable, and (iii) be reasonably satisfactory in all other
respects to the Administrative Agent.
(c)
Flood Insurance . Each Loan Party shall, with respect to
each Mortgaged Property, obtain flood insurance in such total
amount as the Administrative Agent may from time to time reasonably
require, except that such total amount shall not exceed the
principal amount of outstanding Indebtedness from time to time
secured by such Mortgaged Property, if at any time the area in
which any improvements are located on any Mortgaged Property is
designated a “flood hazard area” in any Flood Insurance
Rate Map published by the Federal Emergency Management Agency, and
otherwise comply with the National Flood Insurance Program as set
forth in the Flood Disaster Protection Act of 1973, as amended from
time to time.
(d)
Broker’s Report . Foamex shall deliver to the
Administrative Agent and the Lenders a summary report of a
reputable insurance broker with respect to such insurance and such
supplemental reports with respect thereto as the Administrative
Agent may from time to time reasonably request.
(e)
Mortgaged Properties . No Loan Party that is an owner of
Mortgaged Property shall take any action that is reasonably likely
to be the basis for termination, revocation or denial of any
insurance coverage required to be maintained under such Loan
Party’s respective Mortgage or that could be the basis for a
defense to any material claim under any Insurance Policy maintained
in respect of the Premises, and each Loan Party shall otherwise
comply in all material respects with all Insurance Requirements in
respect of the Premises; provided that each Loan Party may,
at its own expense and after written notice to the Administrative
Agent, (i) contest the applicability or enforceability of any such
Insurance Requirements by appropriate legal proceedings, the
prosecution of which does not constitute a basis for cancellation
or revocation of any insurance coverage required under this
Section 7.4 or (ii) cause the Insurance Policy containing
any such Insurance Requirement to be replaced by a new policy
complying with the provisions of this Section 7.4
.
7.5
Compliance with Laws . Each Loan Party shall, and shall
cause each of its Subsidiaries to, comply with the requirements of
all Laws and all orders, writs, injunctions and decrees applicable
to it or to its business or property, except in such instances in
which (a) such applicable Law or order, writ, injunction or decree
is being contested in good faith by appropriate proceedings
diligently conducted; or (b) the failure to comply therewith would
not reasonably be expected to have a Material Adverse
Effect.
7.6
Books and Records . Each Loan Party shall (a) maintain
proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made
of all financial transactions and matters involving the assets and
business of such Loan Party; and (b) maintain such books of record
and account in material conformity with all applicable requirements
of any Governmental Authority having regulatory jurisdiction over
such Loan Party. Each Loan Party shall maintain at all times books
and records pertaining to the Collateral in which it has an
interest in such detail, form and scope as the Administrative Agent
or the Majority Lenders shall reasonably require, including, but
not limited to, records of
(a) all payments received and all
credits and extensions granted with respect to Accounts and (b) all
other dealings affecting the Collateral in which it has an
interest; provided , that if a Loan Party is required by
GAAP or by the Administrative Agent or the Majority Lenders
pursuant to this sentence to make a change to its books and records
pertaining to its Collateral, such Loan Party shall have a
reasonable amount of time to implement such change.
7.7
Inspection Rights . Each Loan Party shall (i) permit
representatives and independent contractors of the Administrative
Agent (at the expense of the Loan Parties not to exceed two (2)
times per year unless an Event of Default has occurred and is
continuing) to visit and inspect any of its properties, to examine
its corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors (or Persons serving a
similar function), officers and independent public accountants and
in each case at such reasonable times during normal business hours
and, subject to the limitations above, as often as may be
reasonably desired, upon reasonable advance notice to Foamex (
provided , however , when an Event of Default exists,
the Administrative Agent may do any of the foregoing at the expense
of the Loan Parties at any time during normal business hours and
without advance notice) and (ii) conduct a conference call with the
Lenders, at the request of the Administrative Agent, once per year
at the Loan Parties’ expense during normal business hours
upon reasonable advance notice to Foamex. Any amounts payable by
the Loan Parties to the Administrative Agent or any Lender pursuant
to this Section 7.7 shall be the joint and several
obligations of each of the Loan Parties.
7.8
Use of Proceeds . The Borrowers shall use the proceeds of
the Loans solely to refinance all amounts owing under the DIP
Credit Agreement and after payment in full of such amounts to make
payments under the Plan of Reorganization and for working capital
purposes and for general corporate purposes permitted
hereunder.
7.9
Compliance with Environmental Laws . Each Loan Party shall,
and shall cause each Mexican Subsidiary to:
(a) Comply,
and cause all lessees and other Persons occupying Real Property of
any Loan Party to comply, in all material respects with all
Environmental Laws and Environmental Permits applicable to its
operations and Real Property; obtain and renew all material
Environmental Permits applicable to its operations and Real
Property; and conduct all Responses required by, and in accordance
in all material respects with, Environmental Laws; provided
that no Loan Party shall be required to undertake any Response to
the extent that its obligation to do so is being contested in good
faith and by proper proceedings diligently conducted and
appropriate reserves are being maintained with respect to such
circumstances in accordance with GAAP.
(b) If
a Default caused by reason of a breach of Section 6.9 or
Section 7.9(a) shall have occurred and be continuing for
more than 30 days, at the written request of the
Administrative Agent or the Majority Lenders through the
Administrative Agent, provide to the Administrative Agent and the
Lenders within 45 days after such request, at the expense of
the Loan Parties, an environmental assessment report regarding the
matters which are the subject of such Default, including, where
appropriate, soil and/or groundwater sampling, prepared by an
environmental consulting firm, and in a form and substance,
reasonably acceptable to the
Administrative Agent and indicating
the presence or absence of Hazardous Materials and the estimated
cost of any compliance or Response required by Environmental Laws
to address them.
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7.10
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Additional Collateral; Additional
Guarantors .
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(a) Except
as provided in Section 7.10(c) below, subject to the terms
of the Intercreditor Agreement and this Section 7.10 , with
respect to any property acquired after the Closing Date by any Loan
Party that is intended to be subject to the Lien created by any of
the Loan Documents but is not so subject, promptly (and in any
event within 30 days after the acquisition thereof), such Loan
Party shall (i) execute and deliver to the Administrative Agent
such amendments or supplements to the relevant Loan Documents or
such other documents as the Administrative Agent shall reasonably
deem necessary or advisable to grant to the Administrative Agent,
for its benefit and for the benefit of the other Secured Parties, a
First Priority Lien on such property subject to no Liens other than
Permitted Liens and (ii) take all actions necessary to cause such
Lien to be duly perfected to the extent required by such Loan
Documents in accordance with all applicable law, including the
filing of financing statements in such jurisdictions as may be
reasonably requested by the Administrative Agent. Subject to the
terms of the Intercreditor Agreement, the applicable Loan Party
shall take such actions and execute and/or deliver to the
Administrative Agent such documents as the Administrative Agent
shall reasonably require to confirm the validity, perfection and
priority of the Lien of the Loan Documents on such after-acquired
properties.
(b) Subject
to the terms of the Intercreditor Agreement, with respect to any
Person that is or becomes a Parent Company or a Subsidiary after
the Closing Date, the applicable Loan Party shall promptly
(i) deliver to the Administrative Agent the certificates, if
any, representing the Equity Interests of such Parent Company or
Subsidiary, together with undated stock powers or other appropriate
instruments of transfer executed and delivered in blank by a duly
authorized officer of the holder(s) of such Equity Interests;
provided that (x) only 65% of the outstanding voting Equity
Interests of any Foreign Subsidiary (100%, in the case of a
Canadian Subsidiary) and 100% of the outstanding non-voting Equity
Interests of any Foreign Subsidiary, in each instance, that is a
direct Subsidiary of a Loan Party shall be required to be delivered
pursuant to this clause (i) and (y) the Equity Interests of any
Subsidiary that is a Subsidiary of a Foreign Subsidiary (other than
a Canadian Subsidiary) shall not be required to be delivered
pursuant to this clause (i), and (ii) cause such new Parent Company
or such new Subsidiary, if such Subsidiary is not a Foreign
Subsidiary (other than a Canadian Subsidiary), (A) to execute
joinder agreements, in form and substance satisfactory to the
Administrative Agent, to this Agreement (to become a Loan Party and
a Guarantor hereunder) and the other relevant Loan Documents as
requested by the Administrative Agent (to grant Agent’s Liens
in the assets of such Parent Company or Subsidiary) and (B) to take
all actions necessary or advisable in the reasonable opinion of the
Administrative Agent to cause the Liens created by such Loan
Documents to be duly perfected to the extent required by such
agreement in accordance with all applicable law, including the
filing of financing statements in such jurisdictions as may be
reasonably requested by the Administrative Agent.
(c) Subject
to the terms of the Intercreditor Agreement, each Loan Party shall
promptly grant to the Administrative Agent, within 60 days of the
acquisition thereof, a security interest in and Mortgage on (i)
each Real Property owned in fee by such Loan Party that
is
acquired by such Loan Party after
the Closing Date and that, together with any improvements thereon,
has a fair market value of at least $1,000,000 and (ii) each leased
Real Property of such Loan Party, which lease (x) has annual rental
payments of at least $1,000,000 and (y) is not a lease of an
administrative or sales office or unimproved real property or other
property for which the Administrative Agent does not require a
Mortgage, as additional security for the Secured Obligations
(unless the subject property is mortgaged to a third party to the
extent permitted by Section 7.14 ); provided , that a
Loan Party shall not be in violation of clause (ii) above with
respect to a leased Real Property if the granting of a Mortgage
with respect to such leased Real Property in accordance with this
Section 7.10(c) requires the consent of the landlord under
the lease therefor and such landlord has failed to grant such
consent after such Loan Party shall have used commercially
reasonable efforts to obtain such consent. Subject to the terms of
the Intercreditor Agreement, such Mortgages shall be granted
pursuant to documentation reasonably satisfactory in form and
substance to the Administrative Agent and shall constitute valid
and enforceable perfected Liens subject only to Permitted Liens.
Subject to the terms of the Intercreditor Agreement, the Mortgages
or instruments related thereto shall be duly recorded or filed in
such manner and in such places as are required by law to establish,
perfect, preserve and protect the Liens in favor of the
Administrative Agent required to be granted pursuant to the
Mortgages and all taxes, fees and other charges payable in
connection therewith shall be paid in full. Subject to the terms of
the Intercreditor Agreement, such Loan Party shall otherwise take
such actions and execute and/or deliver to the Administrative Agent
such documents as the Administrative Agent shall reasonably require
to confirm the validity, perfection and priority of the Lien of any
existing Mortgage or new Mortgage against such after-acquired Real
Property (including a Title Policy, a Survey and local counsel
opinion (in form and substance reasonably satisfactory to the
Administrative Agent) in respect of such Mortgage).
7.11
Security Interests; Further Assurances . Each Loan Party
shall promptly, upon the reasonable request of the Administrative
Agent, at the Loan Parties’ expense, execute, acknowledge and
deliver, or cause the execution, acknowledgment and delivery of,
and thereafter register, file or record, or cause to be registered,
filed or recorded, in an appropriate governmental office, any
document or instrument supplemental to or confirmatory of the Loan
Documents or otherwise deemed by the Administrative Agent
reasonably necessary or advisable for the continued validity,
perfection and priority of the Liens on the Collateral covered
thereby subject to no other Liens except as permitted by the Loan
Documents. Each Loan Party shall, and shall cause each Mexican
Subsidiary to, deliver or cause to be delivered to the
Administrative Agent from time to time such other documentation in
form and substance reasonably satisfactory to the Administrative
Agent as the Administrative Agent shall reasonably deem necessary
to perfect or maintain the Liens on the Collateral pursuant to the
Loan Documents. If the Administrative Agent or the Majority Lenders
determine that they are required by applicable law to have
appraisals prepared in respect of the Real Property of any Loan
Party constituting Collateral, such Loan Party shall provide to the
Administrative Agent appraisals that satisfy the applicable
requirements of the Real Estate Appraisal Reform Amendments of
FIRREA and are otherwise in form and substance reasonably
satisfactory to the Administrative Agent.
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7.12
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Information Regarding
Collateral .
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(a) No
Loan Party shall effect any change (i) in such Loan Party’s
legal name, (ii) in the location of such Loan Party’s chief
executive office or legal domicile, (iii) in such Loan
Party’s identity or organizational structure, (iv) in such
Loan Party’s organizational identification number, if any, or
(v) in such Loan Party’s jurisdiction of organization
(in each case, including by merging or amalgamating with or into
any other entity, reorganizing, dissolving, liquidating,
reorganizing or organizing in any other jurisdiction), until (A) it
shall have given the Administrative Agent not less than
10 days’ prior written notice, or such lesser notice
period agreed to by the Administrative Agent, of its intention so
to do, clearly describing such change and providing such other
information in connection therewith as the Administrative Agent may
reasonably request and (B) it shall have taken all action
reasonably requested by the Administrative Agent to maintain (to
the extent provided in the applicable Loan Document) the perfection
and priority of the Lien of the Administrative Agent for the
benefit of the Secured Parties in the Collateral. Each Loan Party
agrees to promptly provide the Administrative Agent with certified
Organization Documents reflecting any of the changes described in
the preceding sentence. Each Loan Party also agrees to promptly
notify the Administrative Agent of any change in the location of
any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which
Collateral in excess of $1,000,000 in value is located (including
the establishment of any such new office or facility), other than
changes in location to a Mortgaged Property or a leased property
subject to a Landlord Access Agreement.
(b) Each
Loan Party shall deliver to the Administrative Agent, upon
reasonable request, such information reasonably deemed by the
Administrative Agent necessary to obtain or maintain (to the extent
provided in the applicable Loan Document) a valid, perfected First
Priority Lien on any Collateral acquired after the Closing
Date.
7.13
Affirmative Covenants with Respect to Leases . With respect
to each Lease for which any Loan Party holds the lessor’s or
sublessor’s interest, such Loan Party shall perform all the
obligations imposed upon the lessor or sublessor, as the case may
be, under such Lease and enforce all of the lessee’s or
sublessee’s, as the case may be, obligations thereunder,
except where the failure to so perform or enforce would not
reasonably be expected to result in a Material Adverse
Effect.
7.14
Liens . Each of the Loan Parties shall not, and shall not
permit any Mexican Subsidiary to, create, incur, assume or suffer
to exist any Lien upon any of its assets, whether now owned or
hereafter acquired, other than the following (“ Permitted
Liens ”):
(a) (i)
Liens pursuant to any Loan Document and (ii) Liens pursuant to
the First Lien Term Loan Documents or the Second Lien Term Loan
Documents; provided that Liens created pursuant to the First
Lien Term Loan Documents or the Second Lien Term Loan Documents on
any Collateral shall be subject to the Intercreditor
Agreement;
(b) Liens
existing on the date hereof and listed on Schedule 7.14 and
any modifications, replacements, renewals or extensions thereof;
provided that (i) such Lien is not spread to cover any
additional property other than (A) after-acquired property that is
affixed or incorporated into the property covered by such Lien and
(B) proceeds
thereof, (ii) no Loan Party is added
as a new direct or contingent obligor with respect thereto and
(iii) if such Lien secures Indebtedness, such Indebtedness is
permitted by Section 7.16(c) ;
(c) Liens
for (i) taxes, assessments or governmental charges not overdue for
a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books
of the applicable Person in accordance with GAAP, enforcement of
any such Lien has not been commenced and the failure to pay such
taxes, assessments and charges when due and payable could not
reasonably be expected to result in a Material Adverse Effect (it
being agreed that the Administrative Agent, in its sole discretion,
may implement a Reserve against the Availability and/or Borrowing
Base of the applicable Loan Party (or, in the case of a Loan Party
which is not a Borrower, against the Availability and/or Borrowing
Base of Foamex) in the amount of such Liens imposed against such
Loan Party), and (ii) taxes not paid when due and owing by any
Loan Party prior to the Filing Date which are permitted under the
Plan of Reorganization to be paid after the Effective Date,
provided that (A) such taxes are timely paid in accordance
with the Plan of Reorganization, (B) Foamex shall have notified the
Administrative Agent on or prior to the Closing Date (and will
thereafter promptly notify the Administrative Agent from time to
time upon the Administrative Agent’s request) of the
aggregate amount of such taxes, (C) adequate reserves with respect
thereto are maintained on the books of the applicable Person in
accordance with GAAP and enforcement of any such Lien has not been
commenced , (D) the Administrative Agent, in its sole discretion,
may implement a Reserve against the Availability and/or Borrowing
Base of the applicable Loan Party (or, in the case of a Loan Party
which is not a Borrower, against the Availability and/or Borrowing
Base of Foamex) in the amount of such Liens i
