Common use of Mandatory Prepayment of the Loans Clause in Contracts

Mandatory Prepayment of the Loans. (a) Subject to Section 3.4(d), concurrently upon receipt by any of the Loan Parties or any of the Mexican Subsidiaries of cash proceeds (or, in the case of cash proceeds received by any of the Loan Parties or Mexican Subsidiaries in the form of a check, such check shall be deposited into a bank account of the appropriate Loan Party or Mexican Subsidiary within one (1) Business Day of receipt of such check and the collected proceeds of such check shall be applied within one (1) Business Day after collection thereof) of any asset disposition (excluding proceeds of (i) asset dispositions permitted by Section 7.11(iii), except to the extent required under such Section, and (ii) asset dispositions, individually or as part of a series of related transactions, by any one or more of the Mexican Subsidiaries of less than all or substantially all of the assets of the Mexican Subsidiaries taken as a whole) or any sale or issuance of stock or other equity interests of any Loan Party or any Mexican Subsidiary (other than the sale or issuance by the Parent of common stock of the Parent in respect of the exercise of stock options granted under the Stock Option Plan, but only to the extent that after giving effect thereto the aggregate amount of cash received for the common stock sold or issued pursuant to the exercise of all such stock options on and after the date hereof shall not exceed $4,000,000 in the aggregate in any Fiscal Year and $10,000,000 in the aggregate during the term of this Agreement), the Borrowers shall repay or prepay the Loans and other Obligations in an amount equal to all such proceeds, net of (A) commissions and other reasonable and customary transaction costs, fees and expenses properly attributable to such transaction and payable by the applicable Loan Party or Mexican Subsidiary in connection therewith (in each case, paid to Persons not known by any Loan Party at the time of such asset disposition or sale or issuance of equity interests to be an Affiliate of a Loan Party), (B) any Taxes arising in connection with such transaction (after taking into account any available Tax credits or deductions arising from such transaction) and the accrual of any payments that would be required to be made pursuant to the Tax Sharing Agreement in connection with such transaction and (C) amounts payable to holders of Liens (to the extent such Liens constitute Permitted Liens hereunder and such Liens are senior to the Agent's Liens), if any, on the assets being disposed of to the extent the documentation governing such senior Liens required such payment to such holders upon such disposition ("Net Proceeds"). Any such repayment or prepayment shall be applied in accordance with Section 3.4(f); provided, that in any event (and notwithstanding anything contained in this Section 3.4), the Net Proceeds from any sale, issuance or other disposition of assets or equity interests of any Loan Party or any of the Mexican Subsidiaries consummated on or after the Closing Date shall be applied to the payment of the Loans and other Obligations (in the manner set forth in Section 3.4(f)) to the extent necessary to avoid any requirement under the Term Loan B Agreement to repay or prepay any Term Loan B Obligations (except as expressly permitted in clause third of the second sentence of Section 3.4(f)) or under the relevant indenture that Foamex or Foamex Capital offer to purchase or redeem any Permitted Subordinated Debt or Senior Secured Notes or any notes replacing or refinancing any of such Permitted Subordinated Debt or Senior Secured Notes, with there to be a permanent reduction of the Revolving Credit Commitments and the Maximum Revolver Amount (and additionally, to the extent necessary to avoid any requirement to repay or prepay any Term Loan B Obligations (except a payment of Term Loan B Obligations expressly permitted in clause third of the second sentence of Section 3.4(f)), the establishment of a permanent reserve reducing the Borrowing Base of a Borrower or Foamex Canada, as the case may be (any such reserve, a "Permanent Reserve"), in the manner set forth in Section 3.4(f)), in each instance, in the amount of any such application to the Revolving Loans to the extent required under the Term Loan B Agreement or the relevant indentures, as the case may be, in order to avoid any such repayment, prepayment or offer requirement (such permanent reduction and, if applicable, Permanent Reserve to be made or established concurrently with such application to the Revolving Loans and such reduction to result in each Revolving Lender's Revolving Credit Commitment to be permanently reduced by its Pro Rata Share of such reduction).

Mandatory Prepayment of the Loans. The Borrower shall make the following required prepayments of the Loans, each such payment to be made to the Administrative Agent for the benefit of the Lenders within the time period specified below: (i) The Borrower agrees, no later than 2 Business Days after the date of receipt of Net Cash Proceeds from any Disposition by the Parent Guarantor or any of its Subsidiaries otherwise permitted under this Agreement and the other Loan Documents (excluding Dispositions permitted under Sections 7.05(a)-(i)) to make a prepayment in an aggregate amount equal to 100% of the amount all Net Cash Proceeds from all Dispositions by the Loan Parties and any Subsidiaries in any Fiscal Year exceeding $500,000; provided that, so long as no Event of Default shall have occurred and be continuing, the Borrower shall not be required to make any prepayment pursuant to this Section 2.06(e)(i) to the extent that the proceeds received from such Dispositions are utilized to purchase other assets useful in the business of the Loan Parties or the Subsidiaries within 270 days of each such Disposition or if a Loan Party or a Subsidiary enters into a written agreement within such 270-day period pursuant to which such purchase shall be made; provided that if any Loan Party or any Subsidiary enters into a written agreement pursuant to which such purchase shall be made, the Administrative Agent shall be promptly provided a copy of such agreement. (ii) The Borrower agrees, no later than 2 Business Days after receipt of proceeds from the incurrence of any Indebtedness by the Parent Guarantor or any of its Subsidiaries otherwise permitted under this Agreement and the other Loan Documents (other than Indebtedness of Parent Guarantor or Indebtedness set forth in Sections 7.03(a)-(n)) to make a prepayment in an aggregate amount equal to 100% of the amount of the Net Cash Proceeds from such incurrence of Indebtedness received by any Loan Party or any Subsidiary. (iii) The Borrower agrees, no later than 2 Business Days after receipt of proceeds from any offering, issuance or sale of Equity Interests by CAC, Holdings, Parent (other than Trimaran Pollo Partners L.L.C. or any successor thereto), the Parent Guarantor or any of their Subsidiaries otherwise permitted under this Agreement and the other Loan Documents, to make a prepayment in an aggregate amount equal to (a) Subject 50% of the amount of Net Cash Proceeds from such offering, issuance or sale received by the Parent Guarantor if at the end of the immediately preceding four Fiscal Quarter period the Consolidated Leverage Ratio is greater than or equal to 5.0:1.0 and (b) 0% of the amount of Net Cash Proceeds from such offering, issuance or sale received by the Parent Guarantor if at the end of the preceding four Fiscal Quarter period the Consolidated Leverage Ratio is less than 5.0:1.0; provided that the Borrower shall not be required to make any prepayment under this Section 3.4(d2.06(e)(iii) with respect to (A) the sale or issuance of Equity Interests by CAC, Holdings, Parent or the Parent Guarantor or any of their Subsidiaries to (1) Trimaran or Controlled Investment Affiliates of Trimaran or (2) other existing shareholders of Parent on a pro rata basis with Trimaran or Controlled Investment Affiliates of Trimaran, (except that, in the case of this clause (2), concurrently upon so long as the percentage ownership of Trimaran is not reduced such sales or issuances to other existing shareholders need not be on a pro rata basis), in each case, so long as such Equity Interests constitute Qualified Capital Stock, and, in each case, other than in connection with a public offering of the Equity Interests of any Loan Party, (B) the sale of Equity Interests to any employee or director of such Loan Party pursuant to any stock option plan or compensatory arrangement approved by the board of directors of such Person in the ordinary course of business and consistent with past practices, (C) the portion of the Net Cash Proceeds from an IPO that are used to repay Senior Holdco Notes and (D) unless the Consolidated Leverage Ratio at the end of the immediately preceding four Fiscal Quarter period is greater than or equal to 4.5:1.0 after any repayment under this clause (D), the portion of the Net Cash Proceeds from an IPO that are used to repay Senior Notes. (iv) Upon the receipt by the Administrative Agent, the Lenders or the Parent Guarantor or any of its Subsidiaries of proceeds in excess of $500,000 in any Fiscal Year from insurance, condemnation award or other compensation in respect of any Casualty Event affecting any property of the Loan Parties or any Subsidiary, the Borrowers shall make a prepayment in an aggregate amount equal to 100% of the Mexican Subsidiaries of cash such proceeds (orless any taxes which are reasonably attributable thereto); provided that, so long as no Event of Default shall have occurred and be continuing, the Borrowers shall not be required to make any prepayment pursuant to this Section 2.06(e)(iv) to the extent that such proceeds are utilized to purchase assets that are useful in the case of cash proceeds received by any businesses or apply the amounts to restore the property of the Loan Parties or Mexican Subsidiaries in the form of a check, such check shall be deposited into a bank account of the appropriate Loan Party or Mexican Subsidiary within one (1) Business Day 270 days of receipt of such check and the collected proceeds of or if a Loan Party or a Subsidiary enters into a written agreement pursuant to which such check purchase shall be applied made within one (1) Business Day after collection thereof) of any asset disposition (excluding proceeds of (i) asset dispositions permitted by Section 7.11(iii), except such 270-day period pursuant to the extent required under which such Section, and (ii) asset dispositions, individually or as part of a series of related transactions, by any one or more of the Mexican Subsidiaries of less than all or substantially all of the assets of the Mexican Subsidiaries taken as a whole) or any sale or issuance of stock or other equity interests of purchase shall be made; provided that if any Loan Party or any Mexican Subsidiary (other than the sale or issuance by the Parent of common stock of the Parent in respect of the exercise of stock options granted under the Stock Option Plan, but only to the extent that after giving effect thereto the aggregate amount of cash received for the common stock sold or issued enters into a written agreement pursuant to which such purchase shall be made, the exercise Administrative Agent shall be promptly provided a copy of all such stock options on and agreement. (v) No later than 120 days after the date hereof shall not exceed $4,000,000 in the aggregate in any end of each Fiscal Year and $10,000,000 in commencing with the aggregate during the term of this Agreement)Fiscal Year ending December 31, 2006, the Borrowers Borrower shall repay or prepay the Loans and other Obligations make a prepayment in an aggregate amount equal to all (a) 75% of Excess Operating Cash Flow for such proceeds, net of (A) commissions and other reasonable and customary transaction costs, fees and expenses properly attributable to such transaction and payable by the applicable Loan Party or Mexican Subsidiary in connection therewith (in each case, paid to Persons not known by any Loan Party Fiscal Year if at the time end of such asset disposition Fiscal Year, the Consolidated Leverage Ratio is greater than or sale or issuance of equity interests equal to be an Affiliate of a Loan Party), (B) any Taxes arising in connection with such transaction (after taking into account any available Tax credits or deductions arising from such transaction) and the accrual of any payments that would be required to be made pursuant to the Tax Sharing Agreement in connection with such transaction 5.0:1.0 and (Cb) amounts payable to holders 50% of Liens (to Excess Operating Cash Flow for such Fiscal Year if at the extent end of such Liens constitute Permitted Liens hereunder and such Liens are senior to Fiscal Year, the Agent's Liens), if any, on the assets being disposed of to the extent the documentation governing such senior Liens required such payment to such holders upon such disposition ("Net Proceeds")Consolidated Leverage Ratio is less than 5.0:1:0. Any such repayment or prepayment Prepayments made under this Section 2.06(e) shall be applied (a) first, to repay the Outstanding Amount of the Term Loan with payment applied ratably against the remaining scheduled installments of the Term Loan and among the Term Loan Lenders in accordance with Section 3.4(f); provided, that each Term Loan Lender’s Pro Rata Term Share until payment in any event (and notwithstanding anything contained in this Section 3.4), the Net Proceeds from any sale, issuance or other disposition full of assets or equity interests of any Loan Party or any all Outstanding Amounts of the Mexican Subsidiaries consummated on or after Term Loan, (b) then, to repay the Closing Date shall be applied Outstanding Amount of Swing Line Loans until payment in full of all Outstanding Amounts of the Swing Line Loan and (c) then, (i) first, to repay any Unreimbursed Amount, (ii) second, to repay the Outstanding Amount of the Revolving Loans in an aggregate amount equal to the payment excess of the outstanding Amount of Revolving Loans and other Obligations (in over the manner set forth in Section 3.4(f)) to the extent necessary to avoid any requirement under the Term Loan B Agreement to repay or prepay any Term Loan B Obligations (except as expressly permitted in clause third of the second sentence of Section 3.4(f)) or under the relevant indenture that Foamex or Foamex Capital offer to purchase or redeem any Permitted Subordinated Debt or Senior Secured Notes or any notes replacing or refinancing any of such Permitted Subordinated Debt or Senior Secured Notes, with there to be a permanent reduction of the Aggregate Revolving Credit Commitments and the Maximum Revolver Amount (and additionallyiii) third, to Cash Collateralize the extent necessary to avoid any requirement to repay or prepay any Term Loan B Obligations (except a payment of Term Loan B Obligations expressly permitted in clause third of the second sentence of Section 3.4(f)), the establishment of a permanent reserve reducing the Borrowing Base of a Borrower or Foamex Canada, as the case may be (any such reserve, a "Permanent Reserve"), in the manner set forth in Section 3.4(f)), in each instance, in the amount of any such application to the Revolving Loans to the extent required under the Term Loan B Agreement or the relevant indentures, as the case may be, in order to avoid any such repayment, prepayment or offer requirement (such permanent reduction and, if applicable, Permanent Reserve to be made or established concurrently with such application to the Revolving Loans and such reduction to result in each Revolving Lender's Revolving Credit Commitment to be permanently reduced by its Pro Rata Share of such reduction)L/C Obligations.

Mandatory Prepayment of the Loans. (a) Subject to Section 3.4(d), concurrently Concurrently upon receipt by any of the Loan Parties or any of the Mexican Subsidiaries of cash proceeds (or, in the case of cash proceeds received by any of the Loan Parties or Mexican Subsidiaries in the form of a check, such check shall be deposited into a bank account of the appropriate Loan Party or Mexican Subsidiary within one (1) Business Day of receipt of such check and the collected proceeds of such check shall be applied within one (1) Business Day after collection thereof) of any asset disposition (excluding proceeds of (i) asset dispositions permitted by Section 7.11(iii), except to the extent required under such Section, and (ii) asset dispositions, individually or as part of a series of related transactions, by any one or more of the Mexican Subsidiaries of less than all or substantially all of the assets of the Mexican Subsidiaries taken as a wholewhole and (iii) asset dispositions permitted by Section 7.11(xiv)) or any sale or issuance of stock or other equity interests of any Loan Party or any Mexican Subsidiary (other than the sale or issuance by the Parent of common stock of the Parent in respect of the exercise of stock options granted under the Stock Option Plan, but only to the extent that after giving effect thereto the aggregate amount of cash received for the common stock sold or issued pursuant to the exercise of all such stock options on and after the date hereof shall not exceed $4,000,000 in the aggregate in any Fiscal Year and $10,000,000 in the aggregate during the term of this Agreement)Subsidiary, the Borrowers shall repay or prepay (or cash collateralize, if applicable) the Loans and other Obligations in an amount equal to all such proceeds, net of (A) commissions and other reasonable and customary transaction costs, fees and expenses properly attributable to such transaction and payable by the applicable Loan Party or Mexican Subsidiary in connection therewith (in each case, paid to Persons not known by any Loan Party at the time of such asset disposition or sale or issuance of equity interests to be an Affiliate of a Loan Party), (B) any Taxes arising in connection with such transaction (after taking into account any available Tax credits or deductions arising from such transaction) and the accrual of any payments that would be required to be made pursuant to the Tax Sharing Agreement in connection with such transaction and (C) amounts payable to holders of Liens (to the extent such Liens constitute Permitted Liens hereunder and such Liens are senior to the Agent's Liens), if any, on the assets being disposed of to the extent the documentation governing such senior Liens required such payment to such holders upon such disposition ("Net Proceeds"). Any such repayment or prepayment (or cash collateralization, if applicable) shall be applied in accordance with Section 3.4(f); provided, that in any event (and notwithstanding anything contained in this Section 3.4), the Net Proceeds from any sale, issuance or other disposition of assets or equity interests of any Loan Party or any of the Mexican Subsidiaries consummated on or after the Closing Date shall be applied to the payment (or cash collateralization, if applicable) of the Loans and other Obligations (in the manner set forth in Section 3.4(f)) to the extent necessary to avoid any requirement under the Term Loan B Agreement to repay or prepay any Term Loan B Obligations (except as expressly permitted in clause third of the second sentence of Section 3.4(f)) or under the relevant indenture that Foamex or Foamex Capital offer to purchase or redeem any Permitted Subordinated Debt or Senior Secured Notes or any notes replacing or refinancing any of such Permitted Subordinated Debt or Senior Secured NotesObligations, with there to be a permanent reduction of the Revolving Credit Commitments and the Maximum Revolver Amount (and additionally, to the extent necessary to avoid any requirement to repay or prepay any Term Loan B Obligations (except a payment of Term Loan B Obligations expressly permitted in clause third of the second sentence of Section 3.4(f))Obligations, the establishment of a permanent reserve reducing the Borrowing Base of a Borrower or Foamex Canada, as the case may be (any such reserve, a "Permanent Reserve"), in the manner set forth determined by the Administrative Agent in Section 3.4(f)its reasonable discretion), in each instance, in the amount of any such application to the Revolving Loans to the extent required under the Term Loan B Agreement or the relevant indentures, as the case may be, in order to avoid any such repayment, repayment or prepayment or offer requirement (such permanent reduction and, if applicable, Permanent Reserve to be made or established concurrently with such application to the Revolving Loans and such reduction to result in each Revolving Lender's Revolving Credit Commitment to be permanently reduced by its Pro Rata Share of such reduction). (b) Foamex shall cause Foamex Canada to promptly remit to Foamex (and Foamex Canada hereby agrees to promptly remit to Foamex) any and all Net Proceeds received by Foamex Canada with respect to any sale, issuance or other disposition by Foamex Canada of assets or equity interests of Foamex Canada in order that the Borrowers have the funds to timely make the mandatory prepayment (or cash collateralization, if applicable) of the Loans and other Obligations required by Section 3.4(a) with respect to such sale, issuance or other disposition. Any such remittance by Foamex Canada shall be by Distribution or loan; provided that Foamex Canada shall transfer such Net Proceeds first by Distribution (to the maximum extent legally permitted without negative tax consequences to Foamex or Foamex Canada) before transferring such Net Proceeds by loan. (c) No provision contained in this Section 3.4 shall constitute a consent to an asset disposition or a sale or issuance of stock or other equity interests that is otherwise not permitted by the terms of this Agreement. (d) [Intentionally Omitted]. (e) [Intentionally Omitted]. (f) Repayments or prepayments (or cash collateralization, if applicable) from proceeds of the disposition of Accounts and Inventory required by Section 3.4(a) (other than proceeds from the disposition of Accounts and Inventory of any of the Mexican Subsidiaries included in a disposition, individually or as a series of related transactions, of all or substantially all of the assets of the Mexican Subsidiaries taken as a whole, which proceeds shall be applied in accordance with the second sentence of this clause (f)) shall be applied as follows: the actual proceeds of sale or other disposition of Accounts and Inventory or an amount equal to the gross book value of Accounts and Inventory sold as part of a sale of a division or by means of the sale of the stock or other equity interests of a Subsidiary shall be applied, first, to accrued interest then due with respect to the Revolving Loans, second, to pay the principal of the Revolving Loans (subject to the proviso in the last sentence of Section 3.4(a), without reduction of the Maximum Revolver Amount or the establishment of a Permanent Reserve), third, to cash collateralize outstanding Letters of Credit, and fourth, to the payment of any other Obligations in the order set forth in Section 3.8. Repayments or prepayments (or cash collateralization, if applicable) from Net Proceeds of all asset dispositions (other than sales or other dispositions of Accounts and Inventory of a Loan Party) required by Section 3.4(a) and of all sales or issuances of stock or other equity interests required by Section 3.4(a), including Net Proceeds from the sale or other disposition of a division or a Subsidiary in excess of the gross book value of Accounts and Inventory sold or disposed of as part of the sale or other disposition of that division or Subsidiary, shall be applied as follows: first, to the extent such assets disposed of consist of (x) Real Estate of a Borrower or Foamex Canada, Net Proceeds from such disposition in an amount equal to 60% of the fair market value of such Real Estate, as such fair market value is set forth in the then most recent Real Estate Appraisal delivered to the Administrative Agent (or, with respect to any such Real Estate not included in such appraisal, based upon evidence reasonably satisfactory to the Administrative Agent of the fair market value of such Real Estate), shall be applied to pay or prepay (or cash collateralize, if applicable), in Revolving Loan Application Order, the Revolving Loan Obligations (subject to the proviso in the last sentence of Section 3.4(a) and to the immediately succeeding sentence) or (y) Equipment of a Borrower or Foamex Canada, Net Proceeds from such disposition in an amount equal to 85% of the orderly liquidation value of such Equipment, as such orderly liquidation value is set forth in the then most recent Equipment Appraisal delivered to the Administrative Agent (or, with respect to any such Equipment not included in such appraisal, based upon evidence reasonably satisfactory to the Administrative Agent of the orderly liquidation value of such Equipment), shall be applied to pay or prepay (or cash collateralize, if applicable), in Revolving Loan Application Order, the Revolving Loan Obligations (subject to the proviso in the last sentence of Section 3.4(a) and to the immediately succeeding sentence), second, to pay the principal of the Revolving Loans (subject to the proviso in the last sentence of Section 3.4(a) and to the immediately succeeding sentence), third, to cash collateralize outstanding Letters of Credit, and fourth, to the payment of any other Obligations in the order set forth in Section 3.8. Any repayment or prepayment of principal of Revolving Loans from Net Proceeds of any disposition of assets pursuant to the immediately preceding sentence shall result in (A) a permanent reduction of the Maximum Revolver Amount and the Revolving Credit Commitments and (B) the establishment of a Permanent Reserve against the Borrowing Base of Foamex or Foamex Canada (in the manner determined by the Administrative Agent in its reasonable discretion), in each case, in the amount of any such repayment or prepayment (such permanent reductions and establishment of Permanent Reserves to be made concurrently with any such repayment or prepayment of principal of Revolving Loans and such reduction to result in each Lender's Revolving Credit Commitment being permanently reduced by its Pro Rata Share of such reduction); provided, however, that any repayment or prepayment of principal of Revolving Loans pursuant to the immediately preceding sentence from (x) the first $15,000,000 (less any amounts required to be deducted therefrom pursuant to the final proviso contained in Section 7.15(l)) of aggregate Net Proceeds of dispositions of Specified Assets shall not result in a permanent reduction of either the Maximum Revolver Amount or the Revolving Credit Commitments or the establishment of a Permanent Reserve, (y) Net Proceeds of dispositions of assets, the value of which was included in the Borrowing Base of Foamex or Foamex Canada immediately prior to such disposition, shall not result in the establishment of a Permanent Reserve against the Borrowing Base of Foamex or Foamex Canada, as applicable (but shall result in a permanent reduction of the Maximum Revolver Amount and the Revolving Credit Commitments in the amount of such payment), and (z) subject to the application of clauses (x) and (y) of this proviso, Net Proceeds of dispositions of Real Estate and Equipment shall result in the reduction of the Maximum Revolver Amount and the Revolving Credit Commitments and the establishment of a Permanent Reserve only to the extent of the repayments or prepayments required pursuant to subclause "first" of the immediately preceding sentence (and not pursuant to subclause "second" of the immediately preceding sentence).

Mandatory Prepayment of the Loans. Without limiting Section 4.1, each of the Borrowers agrees to make a prepayment with respect to the outstanding Loans and other Obligations as follows: (a) Subject On any Business Day, if the Aggregate Revolver Outstandings exceed the Borrowing Base, the Borrowers shall immediately pay to Section 3.4(d)the Administrative Agent, concurrently upon receipt by any for the account of the Loan Parties or any Lenders, the amount (if any) of such excess for application to the principal amount of the Mexican Subsidiaries Revolving Loans and, if after such application there remains any portion of such excess, such remaining unapplied amount shall be delivered to and held by the Collateral Agent as cash proceeds collateral for the Obligations (or, in the case contingent or otherwise) with respect to outstanding Letters of Credit. (b) All cash proceeds received by any Borrower from the Disposition or sale of Inventory or collection of Accounts in the ordinary course of business shall be applied to repayment of the Loan Parties or Mexican Subsidiaries Obligations promptly (and in any event within one Business Day of receipt) as specified in Section 4.6(c). (c) The Borrowers shall pay to the form of a checkAdministrative Agent, such check shall be deposited into a bank for the account of the appropriate Loan Party or Mexican Subsidiary Lenders, promptly (and in any event within one (1) Business Day of receipt of such check and receipt) all net cash proceeds received by an Obligated Party in connection with any Disposition, excluding proceeds received pursuant to clause (b) preceding, for application to the collected Obligations as provided in Section 4.6(c). As used in this Section 4.3(c), “net cash proceeds” means the proceeds of such check shall be applied within one (1) Business Day after collection thereof) of any asset disposition (excluding proceeds of applicable Disposition, minus (i) asset dispositions permitted by Section 7.11(iii), except to the extent required under such Section, and (ii) asset dispositions, individually or as part of a series of related transactions, by any one or more of the Mexican Subsidiaries of less than all or substantially all of the assets of the Mexican Subsidiaries taken as a whole) or any sale or issuance of stock or other equity interests of any Loan Party or any Mexican Subsidiary (other than the sale or issuance by the Parent of common stock of the Parent in respect of the exercise of stock options granted under the Stock Option Plan, but only to the extent that after giving effect thereto the aggregate amount of cash received for the common stock sold or issued pursuant to the exercise of all such stock options on and after the date hereof shall not exceed $4,000,000 in the aggregate in any Fiscal Year and $10,000,000 in the aggregate during the term of this Agreement), the Borrowers shall repay or prepay the Loans and other Obligations in an amount equal to all such proceeds, net of (A) commissions and other reasonable and customary transaction costs, fees fees, and expenses properly attributable to such transaction and payable by the applicable Loan such Obligated Party or Mexican Subsidiary in connection therewith (in each case, paid to Persons not known by any Loan Party at the time of such asset disposition or sale or issuance of equity interests to be an Affiliate of a Loan Partynon-Affiliates), (Bii) any Taxes arising in connection with such transaction (after taking into account any available Tax credits or deductions arising from such transaction) and the accrual of any payments that would be required to be made pursuant to the Tax Sharing Agreement in connection with such transaction transfer taxes and (Ciii) amounts payable to holders of Liens (to the extent such Liens constitute Permitted Liens hereunder and such Liens are senior to the Agent's ’s Liens), if any, on the assets being disposed of property subject to such Disposition to the extent the documentation governing such senior Liens required such payment to such holders upon such disposition Disposition. ("Net Proceeds"). Any d) All cash payments or other cash proceeds received by any Obligated Party constituting proceeds of a Distribution, loan, or other advance (other than a Distribution, loan or advance by an Obligated Party to an Obligated Party) to such repayment Obligated Party, excluding proceeds of Revolving Loans, the Second Lien Debt or prepayment the Refinancing Second Lien Debt, such proceeds which are proceeds of a loan or advance from one Borrower to another Obligated Party, and other than such proceeds which are proceeds of a loan or advance permitted under clause (c) through clause (j) of Section 8.12, shall be applied paid to the Administrative Agent promptly upon such receipt, for application to the Obligations as specified in Section 4.6(c). (e) Upon any issuance of any Capital Stock of any Obligated Party, no later than two Business Days after such issuance, the Borrowers shall make a prepayment in an amount equal to the proceeds of such issuance, net of underwriting discounts, commissions, and other reasonable and customary transaction costs, fees, and expenses properly attributable to such transaction and payable by such Obligated Party in connection therewith (in each case paid to Persons who are not Affiliates of any Obligated Party) for application to the Obligations in accordance with Section 3.4(f4.6(c); provided. (f) In any event, that if any Obligated Party receives (i) net cash proceeds in connection with any event Disposition, (and notwithstanding anything contained in this Section 3.4), the Net Proceeds from any sale, issuance ii) cash payments or other disposition cash proceeds of assets a Distribution, loan, or equity interests other advance to such Obligated Party or (iii) proceeds of any Loan Party or any issuance of the Mexican Subsidiaries consummated Capital Stock, on or after the Closing Date Date, any such proceeds or payments shall be applied to the payment of the Revolving Loans and other Obligations (in the manner set forth in Section 3.4(f)) to the extent necessary to avoid any requirement under the Term Loan B Agreement any Second Lien Debt Documents or Refinancing Second Lien Debt Documents to repay prepay or redeem (or to make any offer to prepay or redeem) any Term Loan B Obligations (except as expressly permitted in clause third portion of the second sentence of Section 3.4(f)) or under the relevant indenture that Foamex or Foamex Capital offer to purchase or redeem any Permitted Subordinated Second Lien Debt or Senior Secured Notes or any notes replacing or refinancing any of such Permitted Subordinated Debt or Senior Secured NotesRefinancing Second Lien Debt, together with there to be a permanent reduction of the Revolving Credit Commitments and the Maximum Revolver Amount (and additionally, to the extent necessary to avoid any requirement to repay or prepay any Term Loan B Obligations (except a payment of Term Loan B Obligations expressly permitted in clause third of the second sentence of Section 3.4(f)), the establishment of a permanent reserve reducing the Borrowing Base of a Borrower or Foamex Canada, as the case may be (any such reserve, a "Permanent Reserve"), in the manner set forth in Section 3.4(f)), in each instance, in the amount of any such application to the Revolving Loans to the extent required under the Term Loan B Agreement or the relevant indentures, as the case may be, in order to avoid any such repayment, prepayment or offer requirement (such permanent reduction and, if applicable, Permanent Reserve to be made or established concurrently with such application to the Revolving Loans and such reduction to result in each Revolving Lender's Revolving Credit ’s Commitment to be being permanently reduced by its Pro Rata Share of such reduction). No provision contained in this Section 4.3 shall constitute a consent to an asset disposition, Distribution, loan, advance or equity issuance that is otherwise not permitted by the terms of this Agreement.

Mandatory Prepayment of the Loans. (a) Subject to Section 3.4(d), concurrently Immediately upon receipt by any of the Loan Parties Parent or any of the Mexican its Domestic Subsidiaries of cash proceeds (or, in the case of cash proceeds received by any of the Loan Parties or Mexican Subsidiaries in the form of a check, such check shall be deposited into a bank account of the appropriate Loan Party or Mexican Subsidiary within one (1) Business Day of receipt of such check and the collected proceeds of such check shall be applied within one (1) Business Day after collection thereof) of any asset disposition (excluding proceeds of (i) asset dispositions permitted by Section 7.11(iii)7.11, except to the extent required under such Section, and (ii) asset dispositions, individually or as part of a series of related transactions, by any one or more of the Mexican Subsidiaries of less than all or substantially all of the assets of the Mexican Subsidiaries taken as a wholeSection 7.11) or any sale or issuance of stock or other equity interests of any Loan Party or any Mexican Subsidiary (other than the sale or issuance by the Parent or of common stock any Subsidiary of the Parent in respect of the exercise of stock options granted under the Stock Option Plan, but only to the extent that after giving effect thereto the aggregate amount of cash received for the common stock sold or issued pursuant to the exercise of all such stock options on and after the date hereof shall not exceed $4,000,000 in the aggregate in any Fiscal Year and $10,000,000 in the aggregate during the term of this Agreement)Parent, the Borrowers shall repay or prepay the Loans and other Obligations in an amount equal to all such proceeds, net of (A) commissions and other reasonable and customary transaction costs, fees and expenses properly attributable to such transaction and payable by the Parent or the applicable Loan Party or Mexican Subsidiary in connection therewith (in each case, paid to Persons not known by any Loan Party at the time of such asset disposition or sale or issuance of equity interests to be an Affiliate of a Loan Partynon–Affiliates), (B) any Taxes arising in connection with such transaction (after taking into account any available Tax credits or deductions arising from such transaction) and the accrual of any payments that would be required to be made pursuant to the Tax Sharing Agreement in connection with such transaction and transfer taxes, (C) amounts payable to holders of senior Liens (to the extent such Liens constitute Permitted Liens hereunder and such Liens are senior to the Agent's Lienshereunder), if any, on the assets being disposed of to the extent the documentation governing such senior Liens required such payment to such holders upon such disposition and ("D) an appropriate reserve for income taxes in accordance with GAAP in connection therewith (“Net Proceeds"”). Any such repayment or prepayment shall be applied in accordance with Section 3.4(f)3.8; provided, that in if any event (and notwithstanding anything contained in this Section 3.4)sale requiring such a prepayment shall be made by a Borrower, the Net Proceeds from any sale, issuance or other disposition of assets or equity interests of any Loan Party or any of the Mexican Subsidiaries consummated on or after the Closing Date such sale shall be applied applied, as to the payment Obligations referred to in each of the Loans clauses first through and other Obligations (including seventh in the manner set forth in Section 3.4(f)) to the extent necessary to avoid any requirement under the Term Loan B Agreement to repay or prepay any Term Loan B Obligations (except as expressly permitted in clause third of the second sentence of Section 3.4(f)3.8, first (as to each such relevant clause) or under to the Obligations referred to in such clause owing by such Borrower until paid in full, then (as to each such relevant indenture that Foamex or Foamex Capital offer clause) to purchase or redeem the Obligations referred to in such clause owing by any Permitted Subordinated Debt or Senior Secured Notes or any notes replacing or refinancing any Subsidiary of such Permitted Subordinated Debt Borrower which is also a Borrower until paid in full and then (as to each such relevant clause) to the Obligations referred to in such clause owing by one or Senior Secured Notes, with there to be a permanent reduction more of the Revolving Credit Commitments other Borrowers and provided, further, that if any sale requiring such a prepayment shall be made by a Subsidiary of the Maximum Revolver Amount (Parent which is not a Borrower, the Net Proceeds of such sale shall be applied, as to Obligations referred to in each of clauses first through and additionally, to the extent necessary to avoid any requirement to repay or prepay any Term Loan B Obligations (except a payment of Term Loan B Obligations expressly permitted including seventh in clause third of the second sentence of Section 3.4(f))3.8, first (as to each such relevant clause) to the establishment Obligations referred to in such clause owing by those Borrowers which are direct or indirect parents of a permanent reserve reducing the Borrowing Base of a Borrower or Foamex Canada, such Subsidiary (as the case may be (any among such reserve, a "Permanent Reserve"), Borrowers in the manner set forth order of the most immediate direct or indirect relationship of such Borrower to such Subsidiary) until paid in Section 3.4(f)), in full and then (as to each instance, in the amount of any such application relevant clause) to the Revolving Loans Obligations referred to in such clause owing by one or more of the extent required under other Borrowers. (b) No provision contained in this Section 3.4 shall constitute a consent to an asset disposition that is otherwise not permitted by the Term Loan B Agreement or the relevant indentures, as the case may be, in order to avoid any such repayment, prepayment or offer requirement (such permanent reduction and, if applicable, Permanent Reserve to be made or established concurrently with such application to the Revolving Loans and such reduction to result in each Revolving Lender's Revolving Credit Commitment to be permanently reduced by its Pro Rata Share terms of such reduction)this Agreement.

Mandatory Prepayment of the Loans. Without limiting Section 4.1, each of the Borrowers agrees to make a prepayment with respect to the outstanding Loans and other Obligations as follows: (a) Subject On any Business Day, if the Aggregate Revolver Outstandings exceed the Borrowing Base, the Borrowers shall immediately pay to Section 3.4(d)the Administrative Agent, concurrently upon receipt by any for the account of the Loan Parties or any Revolving Lenders, the amount (if any) of such excess for application to the principal amount of the Mexican Subsidiaries Revolving Loans and, if after such application there remains any portion of such excess, such remaining unapplied amount shall be delivered to and held by the Collateral Agent as cash proceeds collateral for the Obligations (or, in the case contingent or otherwise) with respect to outstanding Letters of Credit. (b) All cash proceeds received by any Borrower from the Disposition or sale of Inventory or collection of Accounts in the ordinary course of business shall be applied to repayment of the Loan Parties or Mexican Subsidiaries applicable Obligations promptly (and in any event within one Business Day of receipt) as specified in Section 4.6(c). (c) The Borrowers shall pay to the form of a checkAdministrative Agent, such check shall be deposited into a bank for the account of the appropriate Loan Party or Mexican Subsidiary applicable Lenders, promptly (and in any event within one (1) Business Day of receipt of such check and receipt) all net cash proceeds received by an Obligated Party in connection with any Disposition, excluding proceeds received pursuant to clause (b) preceding, for application to the collected applicable Obligations as provided in Section 4.6(c). As used in this Section 4.3(c), “net cash proceeds” means the proceeds of such check shall be applied within one (1) Business Day after collection thereof) of any asset disposition (excluding proceeds of applicable Disposition, minus (i) asset dispositions permitted by Section 7.11(iii), except to the extent required under such Section, and (ii) asset dispositions, individually or as part of a series of related transactions, by any one or more of the Mexican Subsidiaries of less than all or substantially all of the assets of the Mexican Subsidiaries taken as a whole) or any sale or issuance of stock or other equity interests of any Loan Party or any Mexican Subsidiary (other than the sale or issuance by the Parent of common stock of the Parent in respect of the exercise of stock options granted under the Stock Option Plan, but only to the extent that after giving effect thereto the aggregate amount of cash received for the common stock sold or issued pursuant to the exercise of all such stock options on and after the date hereof shall not exceed $4,000,000 in the aggregate in any Fiscal Year and $10,000,000 in the aggregate during the term of this Agreement), the Borrowers shall repay or prepay the Loans and other Obligations in an amount equal to all such proceeds, net of (A) commissions and other reasonable and customary transaction costs, fees fees, and expenses properly attributable to such transaction and payable by the applicable Loan such Obligated Party or Mexican Subsidiary in connection therewith (in each case, paid to Persons not known by any Loan Party at the time of such asset disposition or sale or issuance of equity interests to be an Affiliate of a Loan Partynon-Affiliates), (Bii) any Taxes arising in connection with such transaction (after taking into account any available Tax credits or deductions arising from such transaction) and the accrual of any payments that would be required to be made pursuant to the Tax Sharing Agreement in connection with such transaction transfer taxes and (Ciii) amounts payable to holders of Liens (to the extent such Liens constitute Permitted Liens hereunder and such Liens are senior to the Agent's ’s Liens), if any, on the assets being disposed of property subject to such Disposition to the extent the documentation governing such senior Liens required such payment to such holders upon such disposition Disposition. ("Net Proceeds"). Any d) All cash payments or other cash proceeds received by any Obligated Party constituting proceeds of a Distribution, loan, or other advance (other than a Distribution, loan or advance by an Obligated Party to an Obligated Party) to such repayment Obligated Party, excluding proceeds of Revolving Loans, Term Loans, the Second Lien Debt or prepayment the Refinancing Second Lien Debt, such proceeds which are proceeds of a loan or advance from one Borrower to another Obligated Party, and other than such proceeds which are proceeds of a loan or advance permitted under clause (c) through clause (j) of Section 8.12, shall be applied paid to the Administrative Agent promptly upon such receipt, for application to the applicable Obligations as specified in Section 4.6(c). (e) Upon any issuance of any Capital Stock of any Obligated Party, no later than two Business Days after such issuance, the Borrowers shall make a prepayment in an amount equal to the proceeds of such issuance, net of underwriting discounts, commissions, and other reasonable and customary transaction costs, fees, and expenses properly attributable to such transaction and payable by such Obligated Party in connection therewith (in each case paid to Persons who are not Affiliates of any Obligated Party) for application to the applicable Obligations in accordance with Section 3.4(f4.6(c); provided. (f) In any event, that if any Obligated Party receives (i) net cash proceeds in connection with any event Disposition, (and notwithstanding anything contained in this Section 3.4), the Net Proceeds from any sale, issuance ii) cash payments or other disposition cash proceeds of assets a Distribution, loan, or equity interests other advance to such Obligated Party or (iii) proceeds of any Loan Party or any issuance of the Mexican Subsidiaries consummated Capital Stock, on or after the Closing Date Date, any such proceeds or payments shall be applied to the payment of the Revolving Loans (and after the payment in full of the Revolving Loans and other Obligations (in so long as no Event of Default is then continuing, to the manner set forth in Section 3.4(f)payment of the Term Loans) to the extent necessary to avoid any requirement under the Term Loan B Agreement any Second Lien Debt Documents or Refinancing Second Lien Debt Documents to repay prepay or redeem (or to make any offer to prepay or redeem) any Term Loan B Obligations (except as expressly permitted in clause third portion of the second sentence of Section 3.4(f)) or under the relevant indenture that Foamex or Foamex Capital offer to purchase or redeem any Permitted Subordinated Second Lien Debt or Senior Secured Notes or any notes replacing or refinancing any of such Permitted Subordinated Debt or Senior Secured NotesRefinancing Second Lien Debt, together with there to be a permanent reduction of the Revolving Credit Commitments and the Maximum Revolver Amount (and additionally, to the extent necessary to avoid any requirement to repay or prepay any Term Loan B Obligations (except a payment of Term Loan B Obligations expressly permitted in clause third of the second sentence of Section 3.4(f)), the establishment of a permanent reserve reducing the Borrowing Base of a Borrower or Foamex Canada, as the case may be (any such reserve, a "Permanent Reserve"), in the manner set forth in Section 3.4(f)), in each instance, in the amount of any such application to the Revolving Loans to the extent required under the Term Loan B Agreement or the relevant indentures, as the case may be, in order to avoid any such repayment, prepayment or offer requirement (such permanent reduction and, if applicable, Permanent Reserve to be made or established concurrently with such application to the Revolving Loans and such reduction to result in each Revolving Lender's ’s Revolving Credit Commitment to be being permanently reduced by its Pro Rata Share of such reduction). Any payment of the Term Loans made pursuant to this Section 4.3(f) and prior to the date that is thirty months after the Closing Date shall be accompanied by the Early Term Loan Prepayment Fee in accordance with Section 4.2. For the avoidance of doubt, no Early Term Loan Prepayment Fee shall be payable in connection with any prepayments or payments on the Term Loans made at any time after thirty months after the Closing Date. No provision contained in this Section 4.3 shall constitute a consent to an asset disposition, Distribution, loan, advance or equity issuance that is otherwise not permitted by the terms of this Agreement.

Mandatory Prepayment of the Loans. Without limiting Section 4.1, each of the Borrowers agrees to make a prepayment with respect to the outstanding Loans and other Obligations as follows: (a) Subject On any Business Day, if the Aggregate Revolver Outstandings exceed the Borrowing Base, the Borrowers shall immediately pay to Section 3.4(d)the Administrative Agent, concurrently upon receipt by any for the account of the Loan Parties or any Lenders, the amount (if any) of such excess for application to the principal amount of the Mexican Subsidiaries of cash proceeds Revolving Loans. (orb) During a Dominion Period, in the case of all cash proceeds received by any Borrower from the Disposition or sale of Inventory or collection of Accounts in the ordinary course of business shall be applied to repayment of the Loan Parties or Mexican Subsidiaries Obligations on the Business Day received as specified in Section 4.6(c). (c) The Borrowers shall pay to the form of a checkAdministrative Agent, such check shall be deposited into a bank for the account of the appropriate Loan Lenders, on the date of any Disposition of any property, excluding proceeds received from any Disposition pursuant to clause (b) of Section 8.9 that are to be reinvested in replacement assets by the applicable Obligated Party or Mexican Subsidiary within one (1) Business Day 120 days of receipt and proceeds received pursuant to clause (b) preceding, all net cash proceeds received by any Obligated Party in connection with such Disposition, for application to the Obligations as provided in Section 4.6(c); provided that any proceeds that are to be reinvested as provided herein shall be paid to the Administrative Agent, for the account of such check and the collected Lenders, on the date received for application to the Revolving Loans as provided in Section 4.6(c). AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT — Page 44 As used in this Section 4.3(c), “net cash proceeds” means the proceeds of such check shall be applied within one (1) Business Day after collection thereof) of any asset disposition (excluding proceeds of applicable Disposition, minus (i) asset dispositions permitted by Section 7.11(iii), except to the extent required under such Section, and (ii) asset dispositions, individually or as part of a series of related transactions, by any one or more of the Mexican Subsidiaries of less than all or substantially all of the assets of the Mexican Subsidiaries taken as a whole) or any sale or issuance of stock or other equity interests of any Loan Party or any Mexican Subsidiary (other than the sale or issuance by the Parent of common stock of the Parent in respect of the exercise of stock options granted under the Stock Option Plan, but only to the extent that after giving effect thereto the aggregate amount of cash received for the common stock sold or issued pursuant to the exercise of all such stock options on and after the date hereof shall not exceed $4,000,000 in the aggregate in any Fiscal Year and $10,000,000 in the aggregate during the term of this Agreement), the Borrowers shall repay or prepay the Loans and other Obligations in an amount equal to all such proceeds, net of (A) commissions and other reasonable and customary transaction costs, fees fees, and expenses properly attributable to such transaction and payable by the applicable Loan such Obligated Party or Mexican Subsidiary in connection therewith (in each case, paid to Persons not known by any Loan Party at the time of such asset disposition or sale or issuance of equity interests to be an Affiliate of a Loan Partynon-Affiliates), (Bii) any Taxes arising in connection with such transaction transfer taxes, (after taking into account any available Tax credits or deductions arising from such transaction) and the accrual of any payments that would be required to be made pursuant to the Tax Sharing Agreement in connection with such transaction and (Ciii) amounts payable to holders of Liens (to the extent such Liens constitute Permitted Liens hereunder and such Liens are senior to the Agent's Lienshereunder), if any, on the assets being disposed and (iv) an appropriate reserve for income taxes in accordance with GAAP in connection therewith. (d) During a Dominion Period, all cash payments or other cash proceeds received by any Obligated Party constituting proceeds of a Distribution, loan, or other advance (other than a Distribution, loan or advance by an Obligated Party to an Obligated Party) to such Obligated Party, excluding proceeds of Revolving Loans, such proceeds that are proceeds of a loan or advance from one Borrower to another Obligated Party, and other than such proceeds which are proceeds of a loan or advance permitted under clause (c) through clause (h) of Section 8.12, shall be paid to the extent Administrative Agent, promptly upon such receipt, for application to the documentation governing Obligations as specified in Section 4.6(c). (e) During a Dominion Period, upon any issuance of any Capital Stock of any Obligated Party, no later than two Business Days after such senior Liens required issuance, the Borrowers shall make a prepayment in an amount equal to the proceeds of such payment issuance, net of underwriting discounts, commissions, and other reasonable and customary transaction costs, fees, and expenses properly attributable to such holders upon transaction and payable by such disposition Obligated Party in connection therewith ("Net Proceeds"). Any such repayment or prepayment shall be applied in each case paid to Persons who are not Affiliates of any Obligated Party) for application to the Obligations in accordance with Section 3.4(f4.6(c); provided, that in any event (and notwithstanding anything . No provision contained in this Section 3.4), 4.3 shall constitute a consent to an asset disposition that is otherwise not permitted by the Net Proceeds from any sale, issuance or other disposition terms of assets or equity interests of any Loan Party or any of the Mexican Subsidiaries consummated on or after the Closing Date shall be applied to the payment of the Loans and other Obligations (in the manner set forth in Section 3.4(f)) to the extent necessary to avoid any requirement under the Term Loan B Agreement to repay or prepay any Term Loan B Obligations (except as expressly permitted in clause third of the second sentence of Section 3.4(f)) or under the relevant indenture that Foamex or Foamex Capital offer to purchase or redeem any Permitted Subordinated Debt or Senior Secured Notes or any notes replacing or refinancing any of such Permitted Subordinated Debt or Senior Secured Notes, with there to be a permanent reduction of the Revolving Credit Commitments and the Maximum Revolver Amount (and additionally, to the extent necessary to avoid any requirement to repay or prepay any Term Loan B Obligations (except a payment of Term Loan B Obligations expressly permitted in clause third of the second sentence of Section 3.4(f)), the establishment of a permanent reserve reducing the Borrowing Base of a Borrower or Foamex Canada, as the case may be (any such reserve, a "Permanent Reserve"), in the manner set forth in Section 3.4(f)), in each instance, in the amount of any such application to the Revolving Loans to the extent required under the Term Loan B Agreement or the relevant indentures, as the case may be, in order to avoid any such repayment, prepayment or offer requirement (such permanent reduction and, if applicable, Permanent Reserve to be made or established concurrently with such application to the Revolving Loans and such reduction to result in each Revolving Lender's Revolving Credit Commitment to be permanently reduced by its Pro Rata Share of such reduction)this Agreement.