Distributions; Capital Change; Restricted Investments. Such Loan Party shall not (i) directly or indirectly declare or make, or incur any liability to make, any Distribution, except Distributions to a Loan Party (other than FMXI or the Parent), (ii) make any change in its capital structure which could reasonably be expected to have a Material Adverse Effect or (iii) make any Restricted Investment; provided, however, that notwithstanding clauses (i) and (iii) above: (A) Foamex may (1) pay cash distributions and make loans and advances to the Parent and pay cash distributions to FMXI (which cash distributions shall in turn immediately be paid by FMXI to the Parent except to the extent used promptly by FMXI to pay operating expenses of FMXI), in each instance, for the purpose of paying, and so long as all proceeds thereof are promptly used by the Parent to pay (i) its operating expenses incurred in the ordinary course of business, (ii) other ordinary course corporate overhead costs and expenses of the Parent and FMXI or (iii) other costs and expenses of the Parent and FMXI that are approved by the Administrative Agent in writing; provided, that (x) the aggregate amount of all such distributions, loans and advances made by Foamex under this clause (1) shall not exceed $2,250,000 during the term of this Agreement and (y) no such distributions, loans or advances may be made by Foamex so long as a Default or Event of Default has occurred and is continuing or would result therefrom and (2) to the extent required under the Tax Sharing Agreement but subject to Section 7.38, pay cash distributions and make loans and advances to the Parent and pay cash distributions to FMXI (which cash distributions shall in turn immediately be paid by FMXI to the Parent, except to the extent used promptly by FMXI to pay the following taxes owing by FMXI), in each instance, for the purpose of paying, and so long as all proceeds thereof are promptly used by the Parent or FMXI to pay, franchise taxes and federal, state and local income taxes, in each instance, solely with respect to (i) the operations of Foamex and its Subsidiaries or (ii) franchise taxes of the Parent and FMXI (other than franchise taxes imposed in lieu of income taxes) and interest and penalties with respect thereto, if any, payable by the Parent or FMXI (provided that any refund (net of Taxes) shall be promptly returned by the Parent or FMXI to Foamex in the form of a repayment of any outstanding loan or advance made to the Parent or FMXI by Foamex or as a capital contribution to Foamex); provided, that if a payment otherwise required by the Tax Sharing Agreement not described in this clause (2) is reduced because the distribution would not be used to pay an actual tax liability, the obligation of Foamex to make such payment shall not be discharged but shall be suspended and made after termination of this Agreement, and payment in full of all Obligations (other than Contingent Obligations at Termination); provided, further, however, in no event shall Foamex make any such payments to the Parent or FMXI under this clause (2) with respect to any Fiscal Year in excess of the aggregate amount of franchise taxes and federal, state and local income taxes that are actually payable by the Parent or FMXI (as the case may be) with respect to such Fiscal Year (after taking into account all tax benefits, including, without limitation, net operating losses, that are used to reduce such tax liability); (B) [Intentionally Omitted]; (C) Foamex Canada may effect the return of capital in respect of, or repurchase, redemption or acquisition from Foamex of any of the stock of Foamex Canada owned by Foamex; provided, that any such return of capital, repurchase, redemption or acquisition shall only be consummated by Foamex Canada to the extent that Foamex or Foamex Canada would incur negative tax consequences if Foamex Canada were to dividend monies to Foamex instead of distributing monies to Foamex by means of such return of capital, repurchase, redemption or acquisition.
Appears in 1 contract
Distributions; Capital Change; Restricted Investments. Such Loan Party shall not (i) directly or indirectly declare or make, or incur any liability to make, any Distribution, except Distributions to a Loan Party (other than FMXI or the Parent), (ii) make any change in its capital structure which could reasonably be expected to have a Material Adverse Effect or (iii) make any Restricted Investment; provided, however, that notwithstanding clauses (i) and (iii) above:
(A) Foamex may (1) pay cash distributions and make loans and advances to the Parent and pay cash distributions to FMXI (which cash distributions shall in turn immediately be paid by FMXI to the Parent except to the extent used promptly by FMXI to pay operating expenses of FMXI), in each instance, for the purpose of paying, and so long as all proceeds thereof are promptly used by the Parent to pay (i) pay, its operating expenses incurred in the ordinary course of business, (ii) business and other ordinary course corporate overhead costs and expenses of the Parent and FMXI or (iii) other costs and expenses of the Parent and FMXI that are approved by the Administrative Agent in writingFMXI; provided, that (x) the aggregate amount of all such distributions, loans and advances made by Foamex under this clause (1) shall not exceed $2,250,000 during the term of this Agreement 1,500,000 in any Fiscal Year and (y) no such distributions, loans or advances may be made by Foamex so long as a Default or Event of Default has occurred and is continuing or would result therefrom and (2) to the extent required under the Tax Sharing Agreement but subject to Section 7.38Agreement, pay cash distributions and make loans and advances to the Parent and pay cash distributions to FMXI (which cash distributions shall in turn immediately be paid by FMXI to the Parent, except to the extent used promptly by FMXI to pay the following taxes owing by FMXI), in each instance, for the purpose of paying, and so long as all proceeds thereof are promptly used by the Parent or FMXI to pay, franchise taxes and federal, state and local income taxes, in each instance, solely with respect to (i) the operations of Foamex and its Subsidiaries or (ii) franchise taxes of the Parent and FMXI (other than franchise taxes imposed in lieu of income taxes) and interest and penalties with respect thereto, if any, payable by the Parent or FMXI (provided that any refund (net of Taxes) shall be promptly returned by the Parent or FMXI to Foamex in the form of a repayment of any outstanding loan or advance made to the Parent or FMXI by Foamex or as a capital contribution to Foamex); provided, that if a payment otherwise required by the Tax Sharing Agreement not described in this clause (2) is reduced because the distribution would not be used to pay an actual tax liability, the obligation of Foamex to make such payment shall not be discharged but shall be suspended and made after termination of this Agreement, and payment in full of all Obligations (other than Contingent Obligations at Termination); provided, further, however, in no event shall Foamex make any such payments to the Parent or FMXI under this clause (2) with respect to any Fiscal Year in excess of the aggregate amount of franchise taxes and federal, state and local income taxes that are actually payable by the Parent or FMXI (as the case may be) with respect to such Fiscal Year (after taking into account all tax benefits, including, without limitation, net operating losses, that are used to reduce such tax liability);
(B) [Intentionally Omitted];
Foamex may (C1) Foamex Canada may effect repurchase at a discount on the return open market Permitted Subordinated Debt (other than that under clause (a)(y) of capital in respect of, or repurchase, redemption or acquisition from Foamex such defined term) for an aggregate purchase price for all such repurchases not to exceed $10,000,000 during the term of any of the stock of Foamex Canada owned by Foamexthis Agreement; provided, that (a) (x) the average aggregate Availability for all Borrowers is greater than $40,000,000 for the fifteen consecutive day period ending on the date of such repurchase or, in the case of any such return repurchase occurring prior to fifteen days after the Closing Date, for the period commencing on the Closing Date and ending on the date of capital, such repurchase) and (y) immediately after giving effect to any such repurchase, redemption the aggregate Availability for all Borrowers is greater than $40,000,000, (b) the average aggregate Availability for all Borrowers is greater than $30,000,000 (after the date of such repurchase on a pro forma basis, based upon Foamex's best good faith estimate at the time of such repurchase, as evidenced by a certificate of a Responsible Officer of Foamex), for the fifteen consecutive day period commencing on the date of such repurchase, (c) no Default or acquisition Event of Default shall only have occurred and be consummated continuing on the date of any such repurchase or would be caused as a result thereof, (d) the purchase price for any repurchase shall not be greater than the then fair market value of the Permitted Subordinated Debt being repurchased, (e) any such Permitted Subordinated Debt being repurchased shall be retired and cancelled promptly following the consummation of such repurchase and (f) Foamex shall not repurchase any Permitted Subordinated Debt held by Foamex Canada any Affiliate of any Loan Party and (2) (x) repurchase on the open market at a discount Permitted Subordinated Debt (other than under clause (a)(y) of such defined term), in addition to repurchases of Permitted Subordinated Debt, permitted by clause (1) above, and (y) make Distributions to the extent Parent and FMXI (which Distributions to FMXI shall then immediately be paid by FMXI to the Parent) to be used by the Parent (concurrently with the making of any such Distributions) solely to repurchase on the open market shares of common stock of the Parent for an aggregate purchase price for clauses (x) and (y) above not to exceed $10,000,000 in any Fiscal Year; provided, that with respect to clauses (x) and (y) above, (i) no Default or Event of Default shall have occurred and be continuing on the date of any such repurchase or Distribution or would be caused as a result thereof, (ii) the Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters of Foamex ended on the then most recently ended fiscal quarter of Foamex on a pro forma basis after giving effect to such repurchase and, if applicable, Distribution (as if such repurchase and, if applicable, Distribution occurred on the last day of the then most recently ended fiscal quarter of Foamex) must be equal to or greater than 1.20:1.00 and Foamex Canada would incur negative tax consequences if Foamex Canada were shall have provided to dividend monies the Administrative Agent evidence reasonably satisfactory to Foamex instead the Administrative Agent of distributing monies to Foamex by means satisfaction of such return requirement, (iii) (w) the average aggregate Availability for all Borrowers is greater than $50,000,000 for the thirty consecutive day period ending on the date of capitalsuch repurchase and, repurchaseif applicable, redemption or acquisition.Distribution or, in the case of any such repurchase and, if applicable, Distribution occurring prior to thirty days after the Closing Date, for the period
Appears in 1 contract
Distributions; Capital Change; Restricted Investments. Such Loan Party shall not (i) directly or indirectly declare or make, or incur any liability to make, any Distribution, except Distributions to a Loan Party (other than FMXI or the Parent), (ii) make any change in its capital structure which could reasonably be expected to have a Material Adverse Effect or (iii) make any Restricted Investment; provided, however, that notwithstanding clauses (i) and (iii) above:
(A) Foamex may (1) pay cash distributions and make loans and advances to the Parent and pay cash distributions to FMXI (which cash distributions shall in turn immediately be paid by FMXI to the Parent Parent, except to the extent used promptly by FMXI to pay operating expenses of FMXI), in each instance, for the purpose of paying, and so long as all proceeds thereof are promptly used by the Parent to pay pay, (i) its operating expenses incurred in the ordinary course of business, (ii) other ordinary course corporate overhead costs and expenses of the Parent and FMXI or (iii) other costs and expenses of the Parent and FMXI that are approved by the Administrative Agent in writing; provided, that (x) the aggregate amount of all such distributions, loans and advances made by Foamex under this clause (1) shall not exceed $2,250,000 during the term of this Agreement and (y) no such distributions, loans or advances may be made by Foamex so long as a Default or Event of Default has occurred and is continuing or would result therefrom therefrom; and (2) to the extent required under the Tax Sharing Agreement but subject to Section 7.38, pay cash distributions and make loans and advances to the Parent and pay cash distributions to FMXI (which cash distributions shall in turn immediately be paid by FMXI to the Parent, except to the extent used promptly by FMXI to pay the following taxes owing by FMXI), in each instance, for the purpose of paying, and so long as all proceeds thereof are promptly used by the Parent or FMXI to pay, franchise taxes and federal, state and local income taxes, in each instance, solely with respect to (i) the operations of Foamex and its Subsidiaries or (ii) franchise taxes of the Parent and FMXI (other than franchise taxes imposed in lieu of income taxes) and interest and penalties with respect thereto, if any, payable by the Parent or FMXI (provided that any refund (net of Taxes) shall be promptly returned by the Parent or FMXI to Foamex in the form of a repayment of any outstanding loan or advance made to the Parent or FMXI by Foamex or as a capital contribution to Foamex); provided, that if a payment otherwise required by the Tax Sharing Agreement not described in this clause (2) is reduced because the distribution would not be used to pay an actual tax liability, the obligation of Foamex to make such payment shall not be discharged but shall be suspended and made after termination of this Agreement, the return and cancellation of all Letters of Credit outstanding at the time of termination (or the deposit with the Administrative Agent of Supporting Letters of Credit for the Letters of Credit not so returned and cancelled or related Credit Support in accordance with and as required by Section 1.4(g)) and payment in full of all Obligations (other than Contingent Obligations at Termination); provided, further, however, in no event shall Foamex make any such payments to the Parent or FMXI under this clause (2) with respect to any Fiscal Year in excess of the aggregate amount of franchise taxes and federal, state and local income taxes that are actually payable by the Parent or FMXI (as the case may be) with respect to such Fiscal Year (after taking into account all tax benefits, including, without limitation, net operating losses, that are used to reduce such tax liability);.
(B) [Intentionally Omitted.];
(C) Foamex Canada may effect the return of capital in respect of, or repurchase, redemption or acquisition from Foamex of of, any of the stock of Foamex Canada owned by Foamex; provided, that any such return of capital, repurchase, redemption or acquisition shall only be consummated by Foamex Canada to the extent that Foamex or Foamex Canada would incur negative tax consequences if Foamex Canada were to dividend monies to Foamex instead of distributing monies to Foamex by means of such return of capital, repurchase, redemption or acquisition.
Appears in 1 contract
Samples: Debt Agreement (Foamex L P)
Distributions; Capital Change; Restricted Investments. Such Loan Party shall not (i) directly or indirectly declare or make, or incur any liability to make, any Distribution, except Distributions to a Loan Party (other than FMXI or the Parent), (ii) make any change in its capital structure which could reasonably be expected to have a Material Adverse Effect or (iii) make any Restricted Investment; provided, however, that notwithstanding clauses (i) and (iii) above:
(A) Foamex may (1) pay cash distributions and make loans and advances to the Parent and pay cash distributions to FMXI (which cash distributions shall in turn immediately be paid by FMXI to the Parent Parent, except to the extent used promptly by FMXI to pay operating expenses of FMXI), in each instance, for the purpose of paying, and so long as all proceeds thereof are promptly used by the Parent to pay (i) pay, its operating expenses incurred in the ordinary course of business, (ii) business and other ordinary course corporate overhead costs and expenses of the Parent and FMXI or (iii) other costs and expenses of the Parent and FMXI that are approved by the Administrative Agent in writingFMXI; provided, that (x) the aggregate amount of all such distributions, loans and advances made by Foamex under this clause (1) shall not exceed $2,250,000 during the term of this Agreement 1,500,000 in any Fiscal Year and (y) no such distributions, loans or advances may be made by Foamex so long as a Default or Event of Default has occurred and is continuing or would result therefrom therefrom; and (2) to the extent required under the Tax Sharing Agreement but subject to Section 7.38Agreement, pay cash distributions and make loans and advances to the Parent and pay cash distributions to FMXI (which cash distributions shall in turn immediately be paid by FMXI to the Parent, except to the extent used promptly by FMXI to pay the following taxes owing by FMXI), in each instance, for the purpose of paying, and so long as all proceeds thereof are promptly used by the Parent or FMXI to pay, franchise taxes and federal, state and local income taxes, in each instance, solely with respect to (i) the operations of Foamex and its Subsidiaries or (ii) franchise taxes of the Parent and FMXI (other than franchise taxes imposed in lieu of income taxes) and interest and penalties with respect thereto, if any, payable by the Parent or FMXI (provided that any refund (net of Taxes) shall be promptly returned by the Parent or FMXI to Foamex in the form of a repayment of any outstanding loan or advance made to the Parent or FMXI by Foamex or as a capital contribution to Foamex); provided, that if a payment otherwise required by the Tax Sharing Agreement not described in this clause (2) is reduced because the distribution would not be used to pay an actual tax liability, the obligation of Foamex to make such payment shall not be discharged but shall be suspended and made after termination of this Agreement, the return and cancellation of all Letters of Credit outstanding at the time of termination (or the deposit with the Administrative Agent of Supporting Letters of Credit for the Letters of Credit not so returned and cancelled or related Credit Support in accordance with and as required by Section 1.4(g)) and payment in full of all Obligations (other than Contingent Obligations at Termination); provided, further, however, in no event shall Foamex make any such payments to the Parent or FMXI under this clause (2) with respect to any Fiscal Year in excess of the aggregate amount of franchise taxes and federal, state and local income taxes that are actually payable by the Parent or FMXI (as the case may be) with respect to such Fiscal Year (after taking into account all tax benefits, including, without limitation, net operating losses, that are used to reduce such tax liability);.
(B) [Intentionally Omitted];Foamex may (1) repurchase at a discount on the open market Permitted Subordinated Debt (other than that under clause (a)(y) of such defined term) for an aggregate purchase price for all such repurchases not to exceed $10,000,000 during the term of this Agreement; provided, that (a)(x) the average aggregate Availability for all Borrowers is greater than $40,000,000 for the fifteen consecutive day period ending on the date of such repurchase (or, in the case of any such repurchase occurring prior to fifteen days after the Closing Date, for the period commencing on the Closing Date and ending on the date of such repurchase), and (y) immediately after giving effect to any such repurchase, the aggregate Availability for all Borrowers is greater than $40,000,000, (b) the average aggregate Availability for all Borrowers is greater than $30,000,000 (after the date of such repurchase on a pro forma basis, based upon Foamex's best good faith estimate at the time of such repurchase, as evidenced by a certificate of a Responsible Officer of Foamex) for the fifteen consecutive day period commencing on the date of such repurchase, (c) no Default or Event of Default shall have occurred and be continuing on the date of any such repurchase or would be caused as a result thereof, (d) the purchase price for any repurchase shall not be greater than the then fair market value of the Permitted Subordinated Debt being repurchased, (e) any such Permitted Subordinated Debt being repurchased shall be retired and cancelled promptly following the consummation of such repurchase and (f) Foamex shall not repurchase any Permitted Subordinated Debt held by any Affiliate of any Loan Party and (2)(x) repurchase on the open market at a discount Permitted Subordinated Debt (other than that under clause (a)(y) of such defined term), in addition to repurchases of Permitted Subordinated Debt permitted by clause (1) above, and (y) make Distributions to the Parent and FMXI (which Distributions to FMXI shall then immediately be paid by FMXI to the Parent) to be used by the Parent (concurrently with the making of any such Distributions) solely to repurchase on the open market shares of common stock of the Parent for an aggregate purchase price for clauses (x) and (y) above not to exceed $10,000,000 in any Fiscal Year; provided, that with respect to clauses (x) and (y) above, (i) no Default or Event of Default shall have occurred and be continuing on the date of any such repurchase or Distribution or would be caused as a result thereof, (ii) the Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters of Foamex ended on the then most recently ended fiscal quarter of Foamex on a pro forma basis after giving effect to such repurchase and, if applicable, Distribution (as if such repurchase and, if applicable, Distribution occurred on the last day of the then most recently ended fiscal quarter of Foamex) must be equal to or greater than 1.20:1.00 and Foamex shall have provided to the Administrative Agent evidence reasonably satisfactory to the Administrative Agent of satisfaction of such requirement, (iii)(w) the average aggregate Availability for all Borrowers is greater than $50,000,000 for the thirty consecutive day period ending on the date of such repurchase and, if applicable, Distribution (or, in the case of any such repurchase and, if applicable, Distribution occurring prior to thirty days after the Closing Date, for the period commencing on the Closing Date and ending on the date of such repurchase and, if applicable, Distribution), (x) immediately after giving effect to any such repurchase and, if applicable, Distribution, the aggregate Availability for all Borrowers is greater than $50,000,000, (y) the average aggregate Availability for all Borrowers is greater than $50,000,000 (after giving effect to such repurchase and, if applicable, Distribution on a pro forma basis, based upon Foamex's best good faith estimate at the time of such repurchase and, if applicable, Distribution, as evidenced by a certificate of a Responsible Officer of Foamex) for the thirty consecutive day period commencing on the date of such repurchase and, if applicable, Distribution and (z) at all times for thirty consecutive days after giving effect to such repurchase and, if applicable, Distribution, the Loan Parties shall (based upon Foamex's best good faith estimate at the time of such repurchase and, if applicable, Distribution, as evidenced by a certificate of a Responsible Officer of Foamex) be in pro forma compliance with all of the financial covenants set forth in this Agreement, (iv) the purchase price for any repurchase shall not be greater than the then fair market value of the Permitted Subordinated Debt or common stock being repurchased, (v) any such Permitted Subordinated Debt being repurchased shall be retired and cancelled promptly following the consummation of such repurchase and (vi) Foamex or the Parent, as the case may be, shall not repurchase any Permitted Subordinated Debt or any shares of common stock of the Parent, in each instance, held by any Affiliate of any Loan Party.
(C) Foamex Canada may effect the return of capital in respect of, or repurchase, redemption or acquisition from Foamex of any of of, the stock of Foamex Canada owned by Foamex; provided, that any such return of capital, repurchase, redemption or acquisition shall only be consummated by Foamex Canada to the extent that Foamex or Foamex Canada would incur negative tax consequences if Foamex Canada were to dividend monies to Foamex instead of distributing monies to Foamex by means of such return of capital, repurchase, redemption or acquisition.
Appears in 1 contract
