EXHIBIT 4.3.1
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FOAMEX L.P.
FOAMEX CAPITAL CORPORATION
and each of the Guarantors named herein
SERIES A AND SERIES B
10 3/4% SENIOR SECURED NOTES DUE 2009
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INDENTURE
Dated as of March 25, 2002
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U.S. Bank National Association
Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)................................................................... 7.10
(a)(2)................................................................. 7.10
(a)(3)................................................................. N.A.
(a)(4)................................................................. N.A.
(a)(5)................................................................. 7.10
(b).................................................................... 7.10
(c).................................................................... N.A.
311(a)...................................................................... 7.11
(b).................................................................... 7.11
(c).................................................................... N.A.
312(a)...................................................................... 2.05
(b).................................................................... 13.03
(c).................................................................... 13.03
313(a)...................................................................... 7.06
(b)(1)................................................................. N.A
(b)(2)................................................................. 7.06; 7.07
(c).................................................................... 7.06; 13.02
(d).................................................................... 7.06
314(a)...................................................................... 4.03; 13.02; 13.05
(b).................................................................... 10.02
(c)(1)................................................................. 13.04
(c)(2)................................................................. 13.04
(c)(3)................................................................. N.A.
(d).................................................................... 10.03, 10.04, 10.05
(e).................................................................... 13.05
(f).................................................................... N.A.
315(a)...................................................................... 7.01
(b).................................................................... 7.05,13.02
(c).................................................................... 7.01
(d).................................................................... 7.01
(e).................................................................... 6.11
316(a) (last sentence)...................................................... 2.09
(a)(1)(A).............................................................. 6.05
(a)(1)(B).............................................................. 6.04
(a)(2)................................................................. N.A.
(b).................................................................... 6.07
(c).................................................................... 2.12
317(a)(1)................................................................... 6.08
(a)(2)................................................................. 6.09
(b).................................................................... 2.04
318(a)...................................................................... 13.01
(b).................................................................... N.A.
(c).................................................................... 13.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions....................................................................................1
Section 1.02 Other Definitions.............................................................................26
Section 1.03 Incorporation by Reference of Trust Indenture Act.............................................27
Section 1.04 Rules of Construction.........................................................................27
Section 1.05 Designated Senior Debt........................................................................27
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating...............................................................................28
Section 2.02 Execution and Authentication..................................................................28
Section 2.03 Registrar and Paying Agent....................................................................29
Section 2.04 Paying Agent to Hold Money in Trust...........................................................29
Section 2.05 Holder Lists..................................................................................29
Section 2.06 Transfer and Exchange.........................................................................29
Section 2.07 Replacement Notes.............................................................................41
Section 2.08 Outstanding Notes.............................................................................41
Section 2.09 Treasury Notes................................................................................41
Section 2.10 Temporary Notes...............................................................................42
Section 2.11 Cancellation..................................................................................42
Section 2.12 Defaulted Interest............................................................................42
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee............................................................................42
Section 3.02 Selection of Notes to Be Redeemed or Purchased................................................43
Section 3.03 Notice of Redemption..........................................................................43
Section 3.04 Effect of Notice of Redemption................................................................44
Section 3.05 Deposit of Redemption or Purchase Price.......................................................44
Section 3.06 Notes Redeemed or Purchased in Part...........................................................44
Section 3.07 Optional Redemption...........................................................................44
Section 3.08 Mandatory Redemption..........................................................................45
Section 3.09 Offer to Purchase by Application of Excess Proceeds...........................................45
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes..............................................................................47
Section 4.02 Maintenance of Office or Agency...............................................................47
Section 4.03 Reports.......................................................................................48
Section 4.04 Compliance Certificate........................................................................48
Section 4.05 Taxes.........................................................................................49
Section 4.06 Stay, Extension and Usury Laws................................................................49
Section 4.07 Restricted Payments...........................................................................49
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries................................53
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock....................................54
Section 4.10 Asset Sales...................................................................................56
Section 4.11 Transactions with Affiliates..................................................................58
Section 4.12 Liens.........................................................................................60
Section 4.13 Business Activities...........................................................................60
Section 4.14 Corporate Existence...........................................................................60
Section 4.15 Offer to Repurchase Upon Change of Control....................................................60
Section 4.16 Limitation on Sale and Leaseback Transactions.................................................62
Section 4.17 Limitation on Issuances and Sales of Capital Stock in Restricted Subsidiaries.................62
Section 4.18 Payments for Consent..........................................................................63
Section 4.19 Additional Subsidiary Guarantees and Liens....................................................63
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets......................................................64
Section 5.02 Successor Entity Substituted..................................................................65
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.............................................................................66
Section 6.02 Acceleration..................................................................................67
Section 6.03 Other Remedies................................................................................68
Section 6.04 Waiver of Past Defaults.......................................................................68
Section 6.05 Control by Majority...........................................................................68
Section 6.06 Limitation on Suits...........................................................................69
Section 6.07 Rights of Holders of Notes to Receive Payment.................................................69
Section 6.08 Collection Suit by Trustee....................................................................69
Section 6.09 Trustee May File Proofs of Claim..............................................................69
Section 6.10 Priorities....................................................................................70
Section 6.11 Undertaking for Costs.........................................................................70
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.............................................................................71
Section 7.02 Rights of Trustee.............................................................................71
Section 7.03 Individual Rights of Trustee..................................................................72
Section 7.04 Trustee's Disclaimer..........................................................................72
Section 7.05 Notice of Defaults............................................................................72
Section 7.06 Reports by Trustee to Holders of the Notes....................................................73
Section 7.07 Compensation and Indemnity....................................................................73
Section 7.08 Replacement of Trustee........................................................................74
Section 7.09 Successor Trustee by Merger, etc..............................................................75
Section 7.10 Eligibility; Disqualification.................................................................75
Section 7.11 Preferential Collection of Claims Against Issuers.............................................75
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance......................................75
Section 8.02 Legal Defeasance and Discharge................................................................75
Section 8.03 Covenant Defeasance...........................................................................76
Section 8.04 Conditions to Legal or Covenant Defeasance....................................................76
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.77
Section 8.06 Repayment to Issuers..........................................................................78
Section 8.07 Reinstatement.................................................................................78
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes...........................................................79
Section 9.02 With Consent of Holders of Notes..............................................................80
Section 9.03 Compliance with Trust Indenture Act...........................................................81
Section 9.04 Revocation and Effect of Consents.............................................................81
Section 9.05 Notation on or Exchange of Notes..............................................................81
Section 9.06 Trustee to Sign Amendments, etc...............................................................82
ARTICLE 10.
COLLATERAL AND SECURITY
Section 10.01 Security Documents............................................................................82
Section 10.02 Recording and Opinions........................................................................82
Section 10.03 Release of Collateral.........................................................................83
Section 10.04 Certificates of the Issuers...................................................................84
Section 10.05 Certificates of the Trustee...................................................................85
Section 10.06 Authorization of Actions to Be Taken by the Trustee Under the Security Documents..............85
Section 10.07 Authorization of Receipt of Funds by the Trustee Under the Security Documents.................85
Section 10.08 Termination of Security Interest..............................................................85
Section 10.09 Collateral Agent..............................................................................85
ARTICLE 11.
SUBSIDIARY GUARANTEES
Section 11.01 Subsidiary Guarantees.........................................................................87
Section 11.02 Limitation on Guarantor Liability.............................................................87
Section 11.03 Execution and Delivery of Subsidiary Guarantee................................................88
Section 11.04 Guarantors May Consolidate, etc., on Certain Terms............................................88
Section 11.05 Releases of Subsidiary Guarantees.............................................................89
ARTICLE 12.
satisfaction and discharge
Section 12.01 Satisfaction and Discharge....................................................................90
Section 12.02 Application of Trust Money....................................................................91
ARTICLE 13.
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls..................................................................91
Section 13.02 Notices.......................................................................................91
Section 13.03 Communication by Holders of Notes with Other Holders of Notes.................................92
Section 13.04 Certificate and Opinion as to Conditions Precedent............................................92
Section 13.05 Statements Required in Certificate or Opinion.................................................93
Section 13.06 Rules by Trustee and Agents...................................................................93
Section 13.07 No Personal Liability of Partners, Directors, Officers, Incorporators, Employees,
Stockholders, Members and Agents..............................................................................93
Section 13.08 Governing Law.................................................................................93
Section 13.09 No Adverse Interpretation of Other Agreements.................................................94
Section 13.10 Successors....................................................................................94
Section 13.11 Severability..................................................................................94
Section 13.12 Counterpart Originals.........................................................................94
Section 13.13 Table of Contents, Headings, etc..............................................................94
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF SUBSIDIARY GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
INDENTURE dated as of March 25, 2002 among Foamex L.P., a Delaware limited
partnership ("Foamex"), Foamex Capital Corporation, a Delaware corporation
("Foamex Capital" and, together with Foamex, the "Issuers"), the Guarantors (as
defined) and U.S. Bank National Association, as trustee (the "Trustee").
The Issuers, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the 10 3/4% Series A Senior Secured Notes due 2009 (the "Series A
Notes") and the 10 3/4% Series B Senior Secured Notes due 2009 (the "Series B
Notes" and, together with the Series A Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Restricted Subsidiary of such
specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with or
into, or becoming a Restricted Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person to the extent of the fair market value of such asset
where the Indebtedness so secured is not the Indebtedness of such Person.
"Additional Notes" means additional notes (other than the Initial Notes)
issued from time to time under this Indenture in accordance with Sections 2.02
and 4.09 hereof, as part of the same series as the Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings. Notwithstanding the foregoing, The Bank of Nova
Scotia and its Affiliates shall not be deemed an Affiliate of the Issuers so
long as their beneficial ownership of the outstanding common stock (without
counting any shares of common stock issuable upon conversion of Foamex's Series
B Preferred Stock) in Foamex International is less than 40% for so long as
Foamex International and/or its Subsidiaries are the sole partners of Foamex. In
addition, no Person (other than Foamex or a Restricted Subsidiary of Foamex) in
which a Receivables Subsidiary makes an Investment in connection with a
Receivables Transaction shall be deemed to be an Affiliate of Foamex or any of
its Restricted Subsidiaries solely by reason of such Investment.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights, other than sales of goods, inventory, licensing of intellectual
property or sales of services, in each case, in the ordinary course of
business consistent with past practices; provided that the sale, lease,
conveyance or other disposition of all or substantially all of the assets
of Foamex and its Restricted Subsidiaries taken as a whole shall be
governed by the provisions of Section 4.15 hereof and/or the provisions
described in Section 5.01 hereof and not by the provisions of Section 4.10
hereof; and
(2) the issue or sale by Foamex or any of its respective Restrictive
Subsidiaries of Equity Interests of any of Foamex's Restricted
Subsidiaries.
Notwithstanding the preceding, none of the following items shall be deemed
to be an Asset Sale:
(1) any single transaction or a series of related transactions (x)
that have a fair market value less than or equal to $10.0 million or (y)
for Net Proceeds less than or equal to $10.0 million;
(2) any sale and leaseback transaction;
(3) the granting of a Permitted Lien;
(4) the transfer/sale or other disposition of cash and Cash
Equivalents;
(5) sales of goods, inventory, services, equipment, accounts
receivables and other/obsolete assets in the ordinary course of business;
(6) a Receivables Transaction;
(7) a transfer of assets by either of Foamex to a Restricted
Subsidiary or by a Restricted Subsidiary to Foamex or to another Restricted
Subsidiary;
(8) an issuance or transfer of Equity Interests by a Restricted
Subsidiary to Foamex or to another Restricted Subsidiary;
(9) Hedging Obligations;
(10) a Restricted Payment or Permitted Investment that is permitted by
Section 4.07 hereof;
(11) the sale, lease, conveyance, disposition or other transfer of the
Capital Stock of an Unrestricted Subsidiary;
(12) any sale, lease, conveyance or disposition by a Foreign
Subsidiary; and
(13) with respect to any asset constituting Indebtedness of an
Affiliate of Foamex existing as of the date of this Indenture, the
acceptance of the collateral securing such Indebtedness in satisfaction of
such Indebtedness.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning;
provided, however, that (a) a person shall not be deemed to have beneficial
ownership of securities subject to a stock purchase agreement, a merger
agreement, or similar agreement, until the consummation of the transactions
contemplated by such agreement, (b) for the purposes of determining beneficial
ownership of the Voting Stock of Foamex, The Bank of Nova Scotia and its
Affiliates shall not be deemed to have any beneficial ownership of any shares of
common stock of Foamex International issuance upon conversion of the Series B
Preferred Stock and (c) for so long as Foamex International and/or its
Subsidiaries are the sole partners of Foamex, for purposes of determining
beneficial ownership of Foamex, stockholders of Foamex International shall be
deemed to beneficially own a percentage of Voting Stock of Foamex equal to their
percentage beneficial ownership of Voting Stock of Foamex International.
"Board of Directors" means:
(1) with respect to a corporation, the Board of Directors of the
corporation or any authorized committee of the Board of Directors;
(2) with respect to a partnership, the Board of Directors of the
general partner of the partnership, any authorized committee of the Board
of Directors or the management committee or other governing body prescribed
by the governing documents of the partnership; and
(3) with respect to any other Person, the board or committee of such
Person serving a similar function or any authorized committee of such board
or committee.
For so long as Foamex is a subsidiary of Foamex International, if for any
reason a majority of the disinterested directors is required to approve a matter
or a resolution of the Board of Directors of Foamex is necessary, the
requirement may be satisfied by the approval of a majority of the disinterested
directors on Foamex International's Board of Directors or a resolution from such
Board of Directors.
"Broker-Dealer" has the meaning set forth in any Registration Rights
Agreement.
"Business Day" means any day except a Saturday, Sunday or other day in The
City of New York, or in the city of the Corporate Trust Office of the Trustee,
on which banks are authorized to close.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality of the United
States government (provided that the full faith and credit of the United
States is pledged in support of those securities) having maturities of not
more than one year from the date of acquisition;
(3) certificates of deposit and time deposits, including eurodollar
time deposits, with maturities of one year or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case, with any lender party to the
Credit Agreement, with any domestic commercial bank having capital and
surplus in excess of $100.0 million or with a commercial bank organized
under the law of any country that is a member of OECD having total assets
in excess of $100.0 million;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(5) direct obligations issued by any state of the United States of
America or any political subdivision of any state or any public
instrumentality thereof maturing within 90 days after the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Xxxxx'x (or, if at any time
neither S&P nor Xxxxx'x shall be rating such obligations, then from such
other nationally recognized rating service acceptable to the Trustee);
(6) commercial paper issued by the parent corporation of any
commercial bank organized in the United States having capital and surplus
in excess of $100.0 million, a commercial bank organized under the laws of
any other country that is a member of the OECD having total assets in
excess of $100.0 million and commercial paper issued by others having one
of the two highest ratings obtainable from either S&P or Xxxxx'x (or, if at
any time neither S&P nor Xxxxx'x shall be rating such obligations, then
from such other nationally recognized voting service acceptable to the
Trustee);
(7) deposits available for withdrawal on demand with commercial banks
organized in the United States having capital and surplus in excess of
$50.0 million or a commercial bank organized under the laws of any other
country that is a member of the OECD having total assets in excess of $50.0
million; and
(8) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1) through (7) of this
definition.
"Clearstream" means Clearstream Banking, S.A.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of Foamex and its Restricted Subsidiaries, taken as a
whole, to any "person" (as that term is used in Section 13(d)(3) of the
Exchange Act) other than a Principal or a Related Party of a Principal (as
defined below);
(2) the adoption of a plan relating to the liquidation or dissolution
of Foamex;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related
Parties and disregarding any holding companies or similar entities whose
principal asset is Voting Stock of Foamex, becomes the Beneficial Owner,
directly or indirectly, of more than 50% of the Voting Stock of Foamex,
measured by voting power rather than number of shares;
(4) the first day on which a majority of the members of the Board of
Directors of Foamex are not Continuing Members; provided that
notwithstanding the foregoing, so long as Foamex is a Subsidiary of Foamex
International, this provision shall be deemed to be complied with for so
long as the majority of the members of the Board of Directors of Foamex
International are Continuing Members; or
(5) for so long as the Senior Subordinated Notes are outstanding, a
change of control under the indentures governing the Senior Subordinated
Notes.
"Collateral" means all property and assets that from time to time secure
the Notes pursuant to the applicable Security Documents.
"Collateral Agent" means the Trustee in its capacity as the "Collateral
Agent" under and as defined in the Security Documents and any successor thereto
in such capacity.
"Common Collateral Agent" means a bank or trust company authorized to
exercise corporate trust powers that has been appointed by the Issuers, and has
agreed, to act as collateral agent for the equal and ratable benefit of both the
holders of Obligations secured by the Liens Securing Note Obligations and the
holders of all other Obligations secured by Liens Securing Other Second-Lien
Obligations, in its capacity as such collateral agent.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period, plus:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Restricted Subsidiaries in connection
with an Asset Sale or discontinued operations, to the extent such losses
were deducted in computing such Consolidated Net Income, plus
(2) provision for taxes based on income or profits or any Tax
Distributions of such Person and its Restricted Subsidiaries for such
period (including, to the extent applicable, payments made pursuant to any
tax sharing agreements), to the extent that such provision for taxes or Tax
Distribution was deducted in computing such Consolidated Net Income, plus
(3) Consolidated Interest Expense, plus
(4) depreciation, amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period) and other non-cash expenses (excluding any
such non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a prepaid
cash expense that was paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income, minus
(5) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue in the ordinary course of
business, in each case, on a consolidated basis and determined in
accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash expenses
of, a Restricted Subsidiary of Foamex that is not a Guarantor shall be added to
Consolidated Net Income to compute Consolidated Cash Flow of Foamex only to the
extent that a corresponding amount would be permitted at the date of
determination to be dividended to Foamex by such Subsidiary without prior
governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.
"Consolidated Cash Interest Expense" means, for any period, total interest
expense, whether paid or accrued (without duplication) (including the interest
component of capital leases), of Foamex and its Restricted Subsidiaries on a
consolidated basis, (a) including, without limitation, (i) all bank fees,
commissions, discounts and other fees and charges owed with respect to letters
of credit and (ii) net costs (and reduction for net benefits) under interest
rate Hedging Obligations, (b) but excluding, however, (i) amortization of
discount, (ii) interest paid in property other than cash or (iii) any other
interest expense not payable in cash, all as determined in conformity with GAAP.
"Consolidated Interest Expense" means, for any period, total interest
expense, whether paid or accrued (without duplication) (including the interest
component of capital leases), of Foamex and its Restricted Subsidiaries on a
consolidated basis, including, without limitation, all bank fees, commissions,
discounts and other fees and charges owed with respect to letters of credit and
net costs (and reduction for net benefits) under interest rate Hedging
Obligations, all as determined in conformity with GAAP.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income of any Person that is not a Restricted Subsidiary
or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions
paid in cash to the specified Person or a Restricted Subsidiary of the
Person;
(2) the Net Income of any Restricted Subsidiary that is not a
Guarantor shall be excluded to the extent that the declaration or payment
of dividends or similar distributions by that Restricted Subsidiary of that
Net Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary or its stockholders;
(3) the cumulative effect of a change in accounting principles shall
be excluded;
(4) the Net Income (but not loss) of any Unrestricted Subsidiary shall
be excluded, whether or not distributed to Foamex or one of its Restricted
Subsidiaries, except as provided in clause (1); and
(5) expenses and charges related to the Transactions which are paid,
taken or otherwise accounted for within 180 days of the date of this
Indenture shall be excluded.
"Consolidated Working Capital" means, as of any date of determination, the
difference of (a) the current assets (other than cash and Cash Equivalents) of
Foamex and its Restricted Subsidiaries on a consolidated basis minus (b) the
current liabilities (other than (i) current maturities of Indebtedness and (ii)
other Indebtedness to the extent included as a current liability of Foamex and
its Restricted Subsidiaries) of Foamex and its Restricted Subsidiaries on a
consolidated basis determined in accordance with GAAP.
"Continuing Members" means, as of any date of determination, any member of
the Board of Directors of Foamex or Foamex International, as applicable, who:
(1) was a member of such Board of Directors on the date of this
Indenture; or
(2) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Members who were members
of such Board at the time of such nomination or election.
"Contributions" means any loans, cash advances, capital contributions,
investments or other transfers of assets for less than fair value by Foamex or
any of its Restricted Subsidiaries to any Subsidiary or other Affiliate of
Foamex or any of its Restricted Subsidiaries, other than loans and cash advances
of officers and directors made in the ordinary course of business not to exceed
$5.0 million.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Issuers.
"Credit Agent" means Citicorp USA, Inc., in its capacity as administrative
and collateral agent for the lenders party to the Credit Agreement or any
successor thereto, or any Person otherwise designated the "Senior Agent"
pursuant to the Intercreditor Agreement.
"Credit Agreement" means that certain amended and restated Credit
Agreement, dated as of the date of this Indenture, by and among Foamex, FMXI,
Inc., the lenders party thereto and Citicorp USA, Inc., as administrative and
collateral agent, providing for up to $262.2 million of borrowings consisting of
a revolving credit facility and term loan facilities together with all related
agreements, instruments and documents executed or delivered pursuant thereto at
any time (including, without limitation, all mortgages, guarantees, security
agreements and all other collateral and security documents), in each case as
such agreements, instruments and documents may be amended (including any
amendment and restatement thereof), supplemented or otherwise modified from time
to time, including any agreements adding Subsidiaries as additional borrowers or
guarantors thereunder or extending the maturity of, refinancing, replacing or
otherwise restructuring (including increasing the aggregate principal amount
that may be borrowed thereunder; provided that such increase in borrowings is
within the definition of Permitted Debt or is otherwise permitted under Section
4.09 hereof) all or any portion of the Indebtedness and other Obligations under
such agreement or agreements or any successor or replacement agreement or
agreements, and whether by the same or any other agent, lender or group of
lenders.
"Credit Agreement Obligations" means (i) all Indebtedness outstanding under
one or more of (x) the Credit Agreement or (y) any other First-Lien Credit
Facilities that (1) constitutes Permitted Debt or is otherwise permitted under
Section 4.09 hereof and (2) is designated by Foamex as "Credit Agreement
Obligations" for purposes of this Indenture, (ii) all other Obligations not
constituting Indebtedness of Foamex, Foamex Capital or any Guarantor under the
Credit Agreement or any such other First-Lien Credit Facility, including,
without limitation, Obligations in respect of cash management services or
Hedging Obligations that are included as "Obligations" under and as defined in
the Credit Agreement or such other First-Lien Credit Facility and (iii) all
other Obligations of Foamex, Foamex Capital or any Guarantor in respect of cash
management services or Hedging Obligations that are designated by Foamex to be
"Credit Agreement Obligations" for purposes of this Indenture.
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities, providing for
revolving credit loans, term loans, receivables financing (including through the
sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit, or any
debt securities or other form of debt financing (including convertible or
exchangeable debt instruments), in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, substantially
in the form of Exhibit A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Discharge of Credit Agreement Obligations" means payment in full of the
principal of, interest and premium, if any, on all Indebtedness outstanding
under the First-Lien Credit Facilities or, with respect to Hedging Obligations
or letters of credit outstanding thereunder, delivery of cash collateral or
backstop letters of credit in respect thereof in compliance with such First-Lien
Credit Facility, in each case after or concurrently with termination of all
commitments to extend credit thereunder, and payment in full of any other Credit
Agreement Obligations that are due and payable at or prior to the time such
principal and interest are paid.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require Foamex
to repurchase such Capital Stock upon the occurrence of a change of control or
an asset sale shall not constitute Disqualified Stock if the terms of such
Capital Stock provide that Foamex may not repurchase or redeem any such Capital
Stock pursuant to such provisions unless such repurchase or redemption complies
with Section 4.07 hereof.
"Domestic Restricted Subsidiary" means any Restricted Subsidiary of Foamex
that was formed under the laws of the United States or any state of the United
States or the District of Columbia.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means a public offering or private placement of Equity
Interests (other than Disqualified Stock) of:
(1) any entity that directly or indirectly owns equity interests in
Foamex, to the extent the net proceeds are contributed to Foamex;
(2) any subsidiary of Foamex to the extent the net proceeds, are
distributed, paid, lent or otherwise transferred to Foamex that results in
the net proceeds to Foamex of at least $25.0 million; or
(3) Foamex.
A private placement of Equity Interests shall not be deemed an Equity
Offering unless net proceeds of at least $25.0 million are received.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear
system.
"Excess Cash Flow" means, for any fiscal year, the excess (if any),
(1) of the sum (for such fiscal year) of, without duplication:
(a) Consolidated Cash Flow, plus
(b) Proceeds of Issuance of Equity Interests, plus
(c) the net decrease in Consolidated Working Capital since the
last day of the immediately preceding fiscal year, over
(2) the sum (for such fiscal year) of, without duplication:
(a) Consolidated Cash Interest Expense actually paid by such
Persons, plus
(b) scheduled payments, to the extent actually made, of the
principal amount of Indebtedness of Foamex and its Restricted
Subsidiaries except the application of proceeds of Permitted
Refinancing Indebtedness or another refinancing of Indebtedness
permitted under this Indenture, plus
(c) all federal, state and foreign income taxes actually paid in
cash by Foamex and its Restricted Subsidiaries and payments under the
Tax Sharing Agreement, plus
(d) capital expenditures in accordance with GAAP actually made by
Foamex and its Restricted Subsidiaries in such fiscal year, plus
(e) the net increase in Consolidated Working Capital since the
last day of the immediately preceding fiscal year.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in any Exchange Offer pursuant to
Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in any Registration Rights
Agreement
"Exchange Offer Registration Statement" has the meaning set forth in any
Registration Rights Agreement
"Excluded Assets" means real property leasehold interests and assets
located outside the United States.
"Existing Indebtedness" means Indebtedness of Foamex and its Restricted
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the date of this Indenture, until such amounts are repaid.
"First-Lien Credit Facilities" means the Credit Agreement and any other
Credit Facility that is secured by a Permitted Lien described in clause (1) of
the definition thereof and is designated by Foamex as a "First-Lien Credit
Facility" upon incurrence of such Indebtedness for the purposes of this
Indenture.
"Fixed Charge Coverage Ratio" means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the specified Person or any of its Restricted Subsidiaries incurs, assumes,
guarantees, repays, repurchases or redeems any Indebtedness (other than
revolving credit borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred equity, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any of
its Restricted Subsidiaries, including through mergers or consolidations
and including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to
the Calculation Date shall be given pro forma effect as if they had
occurred on the first day of the four-quarter reference period and
Consolidated Cash Flow for such reference period shall be calculated giving
effect only to those acquisition-related cost savings that have been
realized or that Foamex's chief financial officer reasonably believes will
be realized;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be excluded;
and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed
of prior to the Calculation Date, shall be excluded, but only to the extent
that the obligations giving rise to such Fixed Charges shall not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date,
in each of cases (1), (2) and (3) as determined by a responsible financial or
accounting officer of Foamex.
Furthermore, in calculating the Fixed Charge Coverage Ratio, for purposes
of determining Fixed Charges, but not Consolidated Cash Flow, (a) interest on
outstanding Indebtedness determined on a fluctuating basis as of the Calculation
Date and which will continue to be so determined thereafter shall be deemed to
have accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Calculation Date, and (b) notwithstanding (a)
above, interest on Indebtedness to the extent such interest is covered by a
Hedging Obligation shall be deemed to accrue at the rate per annum resulting
after giving effect to the operation of such Hedging Obligation.
"Fixed Charges" means, with respect to any specified Person for any period,
the sum, without duplication, of:
(1) Consolidated Cash Interest Expense, plus
(2) the Consolidated Interest Expense of such Person and its
Restricted Subsidiaries that was capitalized during such period, to the
extent related to Indebtedness, plus
(3) any interest expense on Indebtedness of another Person (other than
that Person's Restricted Subsidiaries) that is guaranteed by such Person or
one of its Restricted Subsidiaries or secured by a Lien on assets of such
Person or one of its Restricted Subsidiaries, whether or not such Guarantee
or Lien is called upon, but only to the extent of the interest expense
attributable to the lesser of (a) the principal amount of such
Indebtedness, or (b) the fair market value of such asset, plus
(4) the product of (a) all cash dividend payments or other
distributions (and non-cash dividend payments in the case of a Person that
is a Restricted Subsidiary) on any series of preferred equity of such
Person (other than dividend payments or distributions to such Person or its
Restricted Subsidiaries or dividends on Equity Interests payable solely in
Equity Interests of the Issuers (other than Disqualified Stock)), times (b)
a fraction, the numerator of which is one and the denominator of which is
one minus the then current combined federal, state and local statutory tax
rate of such Person (or, in the case of a Person that is a partnership or a
limited liability company, the combined federal, state and local income tax
rate that was or would have been utilized to calculate the Tax Distribution
of such Person), expressed as a decimal, in each case, on a consolidated
basis and in accordance with GAAP, minus
(5) the costs, charges or expenses described in clause (5) of the
definition of Consolidated Net Income to the extent included in clauses (1)
through (4) above.
"Foamex International" means Foamex International Inc., a Delaware
corporation, and any and all successors thereto.
"Foamex Latin America" means Foamex Latin America, Inc. and its direct and
indirect Subsidiaries.
"Foreign Subsidiary" means any Subsidiary of Foamex either (a) which is
organized outside of the United States of America, (b) whose principal
activities are conducted outside of the United States of America or (c) whose
material assets are Equity Interests in Subsidiaries which are Foreign
Subsidiaries.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes, substantially in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(3), 2.06(b)(4),
2.06(d)(2) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(2),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means:
(1) all Domestic Restricted Subsidiaries that guarantee Credit
Agreement Obligations or that, so long as the Senior Subordinated Notes are
outstanding, guarantee the Senior Subordinated Notes; and
(2) any other subsidiary that executes a Subsidiary Guarantee in
accordance with the provisions of this Indenture,
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate or currency swap agreements, interest rate or
currency cap agreements and interest rate or currency collar agreements;
and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates and/or currency exchange rates.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means a Global Note substantially in the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, with respect to any specified Person without
duplication, any indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations; or
(5) representing the balance deferred and unpaid of the purchase price
of any property, except any such balance that constitutes an accrued
expense or trade payable,
if and to the extent any of the preceding items (other than letters of
credit) would appear as a liability upon a balance sheet of the specified Person
prepared in accordance with GAAP. In addition, the term "Indebtedness" includes
all Indebtedness of others secured by a Lien on any asset of the specified
Person (whether or not such Indebtedness is assumed by the specified Person) to
the extent of the fair market value of such asset where the Indebtedness so
secured is not the Indebtedness of such person and, to the extent not otherwise
included, the Guarantee by the specified Person of any Indebtedness of any other
Person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with any
interest on the Indebtedness that is more than 30 days past due, in the
case of any other Indebtedness.
Notwithstanding anything in this Indenture to the contrary, Hedging
Obligations and Obligations under the Tax Sharing Agreement shall not constitute
Indebtedness, except in the case of Hedging Obligations only to the extent they
appear on the balance sheet of Foamex. In addition, Indebtedness of Foamex and
its Restricted Subsidiaries shall not include (1) any Indebtedness of a
Receivables Subsidiary solely by reason of representations, warranties,
covenants and indemnities entered into by Foamex or any of its Restricted
Subsidiaries which are reasonably customary in a Receivables Transaction and (2)
any Indebtedness of Foamex and any of its Restricted Subsidiaries that has been
either satisfied and discharged or defeased through covenant defeasance or legal
defeasance.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Notes" means the first $300.0 million in aggregate principal
amount of Notes issued under this Indenture on the date hereof.
"Initial Purchasers" means, collectively, Credit Suisse First Boston
Corporation, Xxxxxxx Xxxxx Xxxxxx Inc., Scotia Capital (USA) Inc., Bear, Xxxxxxx
& Co. Inc. and Xxxxxxxxx & Company, Inc or the initial purchasers of Additional
Notes from the Issuers, as applicable.
"Insolvency or Liquidation Proceeding" means:
(1) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or
proceeding, relative to Foamex or to the creditors of Foamex as such, or to
the assets of Foamex;
(2) any liquidation, dissolution, reorganization or winding up of
Foamex, whether voluntary or involuntary and involving insolvency or
bankruptcy; or
(3) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of Foamex.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Intercreditor Agreement" means that certain intercreditor agreement, dated
as of the date of this Indenture, by and among Foamex, the Credit Agent, as
"Senior Agent" thereunder, and the Trustee, as Collateral Agent, as amended
(including any amendment and restatement thereof), supplemented or otherwise
modified from time to time and any substantially identical agreement hereafter
entered into pursuant to Section 10.09(c) hereof.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the form
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If Foamex or
any Restricted Subsidiary of Foamex sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary of Foamex such that,
after giving effect to any such sale or disposition, such Person is no longer a
Restricted Subsidiary of Foamex, Foamex shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of Foamex's Investments in such Subsidiary that were not sold or disposed
of in an amount determined as provided in the final paragraph of Section 4.07
hereof. A provision in an agreement relating to the purchase or sale of any of
Foamex's or its Restricted Subsidiaries' assets containing an "earn out" or
providing for an adjustment to the purchase or sale price based on a financial
statement relating to the assets purchased or sold shall not be deemed to be an
"Investment."
"Issuers" means Foamex and Foamex Capital, and any and all successors to
either of them as permitted by Article 5 hereof.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Issuers and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement or any lease
in the nature thereof.
"Liquidated Damages" means all liquidated damages then owing pursuant to
any Registration Rights Agreement.
"Moody's" means Xxxxx'x Investors Service, Inc or any successor thereto.
"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (or loss), together with any related provision for taxes
or Tax Distributions on such gain (or loss), realized in connection with:
(a) any Asset Sale (including without limitation, dispositions pursuant to
sale and leaseback transactions, whether or not an Asset Sale); or (b) the
disposition of any securities by such Person or any of its Subsidiaries or
the extinguishment of any Indebtedness of such Person or any of its
Subsidiaries;
(2) any extraordinary or nonrecurring gain (or loss), together with
any related provision for taxes or Tax Distributions on such extraordinary
or nonrecurring gain (or loss); and
(3) Tax Distributions, or the accrual thereof.
"Net Proceeds" means the aggregate cash proceeds received by Foamex or any
of its Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of:
(1) the direct costs relating to such Asset Sale, including, without
limitation, legal, accounting and investment banking fees, consent fees to
facilitate such Asset Sales and sales commissions, and any relocation
expenses incurred as a result of the Asset Sale;
(2) taxes or Tax Distributions paid or payable as a result of the
Asset Sale, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements;
(3) any reserve for adjustment in respect of the sale price of such
asset or assets or deduction in respect of any liabilities associated with
such asset or assets established in accordance with GAAP;
(4) amounts required to be applied to the repayment of Indebtedness,
other than Indebtedness under a Credit Facility, secured by a Lien on the
asset or assets that were the subject of such Asset Sale; and
(5) in the case of a sale by a Restricted Subsidiary that is not a
Wholly Owned Restricted Subsidiary, the minority interests' proportionate
share of such Net Proceeds.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither of Foamex nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness but
excluding, in the case of a Receivables Subsidiary, warranty claims,
indemnity rights and rights of set-off with respect to accounts receivable
that are sold to the Receivables Subsidiary), (b) is directly or indirectly
liable (as a guarantor or otherwise, except as set forth in (a)), or (c)
constitutes the lender (except as set forth in (a));
(2) with respect to any Unrestricted Subsidiary, no default with
respect to which (including any rights that the holders thereof may have to
take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness
(other than the Notes and the Senior Subordinated Notes) of Foamex or any
of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and
(3) as to which the lenders, except for lenders under instruments
governing Acquired Debt (a) have acknowledged that they do not have
recourse to the holder of the Equity Interest of the debtor or (b) have
been notified in writing that they will not have any recourse to the assets
of Foamex or stock or assets of any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" has the meaning assigned to it in the preamble to this Indenture.
The Initial Notes and the Additional Notes shall be treated as a single class
for all purposes under this Indenture, and unless the context otherwise
requires, all references to the Notes shall include the Initial Notes and any
Additional Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness (including any obligation to post
cash collateral in respect of letters of credit and any other obligations), or
any obligation for cash management services or Hedging Obligations.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person or any other officer designated
by the Board of Directors..
"Officers' Certificate" means a certificate signed on behalf of the Issuers
by two Officers of the Issuers, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Issuers, that meets the requirements of Section 13.05
hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 13.05 hereof.
The counsel may be an employee of or counsel to the Issuers, any Subsidiary of
the Issuers or the Trustee.
"Other Second-Lien Obligations" means any Indebtedness, other than the
Notes, that is secured by a Permitted Lien described in clause (1) of the
definition thereof granted to a Common Collateral Agent and is designated by
Foamex as "Other Second-Lien Obligations" upon incurrence of such Indebtedness
for the purposes of this Indenture.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted Business" means:
(1) the manufacture and/or distribution of polyurethane and advanced
polymer foam and activities related thereto; and
(2) other businesses engaged in by Foamex and its Restricted
Subsidiaries on the date of this Indenture and similar or reasonably
related lines of businesses to those engaged in by Foamex on the date of
this Indenture, including, but not limited to, the manufacture and
distribution of plastics and related products.
"Permitted Investments" means:
(1) any Investment in Foamex or in a Restricted Subsidiary of Foamex;
(2) any Investment in Cash Equivalents;
(3) any Investment by Foamex or any Restricted Subsidiary of Foamex in
a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of Foamex; or
(b) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or
is liquidated into, Foamex or a Restricted Subsidiary of Foamex;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 3.09 hereof;
(5) any acquisition of assets or equity solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of Foamex or
solely as a capital contribution in respect of any such Equity Interests to
Foamex;
(6) any Investments received in compromise of obligations of such
persons incurred in the ordinary course of trade creditors or customers
that were incurred in the ordinary course of business, including pursuant
to any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of any trade creditor or customer;
(7) other Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (7) that are at the time
outstanding not to exceed the sum of (a) $15.0 million, and (b) the
aggregate net cash proceeds (or non-cash proceeds when converted into cash
or Cash Equivalents) received by Foamex and its Restricted Subsidiaries
from the sale or disposition of investments or dividends or other
distributions from investments existing as of the date of this Indenture or
made pursuant to this clause (7);
(8) Hedging Obligations entered into in the ordinary course of
business in connection with the operation of the business of Foamex and its
Restricted Subsidiaries or as otherwise permitted by this Indenture;
(9) securities received in connection with any good faith settlement
or any insolvency or bankruptcy case or proceeding or any receivership,
reorganization, liquidation or other similar case or proceeding;
(10) prepaid expenses and loans or advances to employees and similar
items in the ordinary course of business;
(11) endorsements of negotiable instruments and other similar
negotiable documents;
(12) transactions with Affiliates as permitted under this Indenture;
(13) Investments outstanding as of the date of this Indenture;
(14) Investments in, including Contributions to, Foamex Latin America,
Foamex Asia or one or more Foreign Subsidiaries, provided that the maximum
amount of such Investments made subsequent to the date hereof pursuant to
this clause (14) outstanding at any one time does not exceed $50.0 million,
plus the cash dividends and distributions received by Foamex and its
Restricted Subsidiaries with respect to Investments pursuant to this clause
(14);
(15) Investments in one or more Persons engaged in a Permitted
Business; provided, however, that the maximum amount of such Investments
made subsequent to the date hereof pursuant to this clause (15) outstanding
at any one time does not exceed $5.0 million, plus the cash dividends and
distributions received by Foamex and its Restricted Subsidiaries with
respect to Investments made pursuant to this clause (15);
(16) Investments in a Receivables Subsidiary not otherwise restricted
by the terms of this Indenture; and
(17) Guarantees of Indebtedness permitted to be incurred under this
Indenture.
"Permitted Liens" means any of the following Liens which complies, to the
extent applicable, with the requirements described in Section 4.12 hereof:
(1) Liens upon any property of Foamex, Foamex Capital or any
Restricted Subsidiary securing any Indebtedness permitted to be incurred
under Section 4.09(a) hereof, or clauses (1) or (15) of Section 4.09(b)
hereof, and all other Obligations of Foamex, Foamex Capital or any
Restricted Subsidiary in respect of such Indebtedness not constituting
Indebtedness;
(2) Liens securing the Notes and the Subsidiary Guarantees;
(3) Liens in favor of Foamex or any Restricted Subsidiary;
(4) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with Foamex or any Restricted
Subsidiary of Foamex; provided that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with
Foamex or the Subsidiary;
(5) Liens on property existing at the time of acquisition of the
property by Foamex or any Restricted Subsidiary of Foamex, provided that
such Liens were in existence prior to the contemplation of such
acquisition;
(6) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (4) of Section 4.09(b) hereof covering only the assets
acquired with such Indebtedness;
(7) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
provided that any reserve or other appropriate provision as is required in
conformity with GAAP has been made therefor;
(8) Liens incurred in the ordinary course of business including,
without limitation, judgment and attachment liens of Foamex or any
Restricted Subsidiary of Foamex with respect to obligations that do not
exceed in the aggregate $25.0 million at any one time outstanding and that
are not incurred in connection with the borrowing of money or the obtaining
of advances of credit (other than trade credit in the ordinary course of
business, not evidenced by a note and not past due);
(9) Liens in favor of the Trustee;
(10) Liens on Receivables in connection with a Receivables
Transaction;
(11) Liens incurred in connection with Permitted Refinancing
Indebtedness, but only if such Liens extend to no more assets than the
Liens securing the Indebtedness being refinanced;
(12) Liens securing Hedging Obligations;
(13) statutory Liens of landlords and carriers', warehousemen's,
mechanics', suppliers', materialmen's, repairmen's, or other like Liens
(including contractual landlords liens) arising in the ordinary course of
business and with respect to amounts not yet delinquent or being contested
in good faith by appropriate proceedings, if a reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have
been made therefor;
(14) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security;
(15) Liens to secure Indebtedness of any Restricted Subsidiary that is
a Foreign Subsidiary, provided that such Indebtedness is used by such
Restricted Subsidiary to finance operations of such Foreign Subsidiary
outside the United States;
(16) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the business of Foamex or any of
its Restricted Subsidiaries as conducted at the relevant property;
(17) Liens on specific items of inventory or other goods and proceeds
thereof of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(18) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and the property
relating to such letters of credit and products and proceeds thereof;
(19) any interest or title of a lessor in the property subject to any
lease or arising from filing UCC financing statements regarding leases;
(20) judgment Liens that do not constitute an Event of Default;
(21) Liens existing on the date hereof and set forth on a schedule to
this Indenture;
(22) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory obligations, surety and appeal bonds,
government contracts, performance and return of money bonds and other
obligation of a like nature incurred in the ordinary course of business;
and
(23) Liens securing obligations in respect of cash management
services.
"Permitted Refinancing Indebtedness" means any Indebtedness of Foamex or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other,
in whole or in part, Indebtedness of Foamex or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness extended, refinanced,
renewed, replaced, defeased or refunded (plus all accrued interest or
dividends on the Indebtedness and the amount of all reasonable fees and
expenses and premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness is subordinated in right of payment to,
the Notes on terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded as determined in good
faith by the Board of Directors; and
(4) such Indebtedness is incurred either by Foamex or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government, agency or political subdivision, or other
entity.
"Principals" means Foamex International, Xxxxxxxx X. Xxxxx and/or any of
their Affiliates.
"Private Placement Legend" means the legend set forth in Section 2.06(g)(1)
to be placed on all Notes issued under this Indenture except where otherwise
permitted by the provisions of this Indenture.
"Proceeds of Issuance of Equity Interests" means net cash proceeds received
by Foamex or any of the Guarantors (including as a result of capital
contributions) at any time from and after the date hereof on account of the
issuance of any Equity Interest in Foamex International, Foamex or any
Subsidiary in each case net of all transaction costs and underwriters' discounts
with respect thereto.
"Public Debt" means obligations of Foamex or of a Guarantor evidenced by
bonds, debentures, notes and similar instruments issued in a manner and pursuant
to documentation customary in the intended market for obligations publicly
traded or traded in the high yield bond or other private placement or similar
market primarily among financial institutions (other than any such obligations
that are traded primarily among commercial banks).
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Receivables" means, with respect to any Person or entity, all of the following
property and interests in property of such Person or entity, whether now
existing or existing in the future or hereafter acquired or arising:
(1) accounts;
(2) accounts receivable incurred in the ordinary course of business,
including without limitation, all rights to payment created by or arising
from sales of goods, leases of goods or the rendition of services no matter
how evidenced, whether or not earned by performance;
(3) all rights to any goods or merchandise represented by any of the
foregoing after creation of the foregoing, including, without limitation,
returned or repossessed goods;
(4) all reserves and credit balances with respect to any such accounts
receivable or account debtors;
(5) all letters of credit, security, or guarantees for any of the
foregoing;
(6) all insurance policies or reports relating to any of the
foregoing;
(7) all collection or deposit accounts relating to any of the
foregoing;
(8) all other assets (including contract rights) that are customarily
transferred or in respect of which security interests are customarily
granted in connection with a Receivables Transaction;
(9) all contracts and contract rights relating to any of the
foregoing;
(10) all proceeds of the foregoing; and
(11) all books and records relating to any of the foregoing.
"Receivables Subsidiary" means an Unrestricted Subsidiary exclusively
engaged in Receivables Transactions and activities related thereto; provided,
however, all Indebtedness of such Unrestricted Subsidiary shall be Non-Recourse
Debt.
"Receivables Transaction" means:
(1) the sale or other disposition to a third party of Receivables or
an interest therein; or
(2) the sale or other disposition of Receivables or an interest
therein to a Receivables Subsidiary followed by a financing transaction in
connection with such sale or disposition of such Receivables (whether such
financing transaction is effected by such Receivables Subsidiary or by a
third party to whom such Receivables Subsidiary sells such Receivables or
interests therein); provided that in each of the foregoing, Foamex or its
Restricted Subsidiaries receive at least 80% of the aggregate principal
amount of any Receivables financed in such transaction.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the date hereof, among the Issuers, the Guarantors and the Initial
Purchasers, as such agreement may be amended, modified or supplemented from time
to time and, with respect to any Additional Notes, one or more registration
rights agreements among the Issuers, the Guarantors and the other parties
thereto, as such agreement(s) may be amended, modified or supplemented from time
to time, relating to rights given by the Issuers to the purchasers of Additional
Notes to register such Additional Notes or exchange such Additional Notes for
Exchange Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.
"Related Party" means:
(1) any controlling stockholder, 80% (or more) owned Subsidiary, or
spouse or immediate family member (in the case of an individual) of any
Principal; or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially
holding an 80% or more controlling interest of which consist of any one or
more Principals and/or such other Persons referred to in the immediately
preceding clause (1).
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day distribution compliance period as
defined in Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"S&P" means Standard & Poor's Ratings Group or any successor thereto.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Documents" means the security and pledge agreements and the
mortgages, deeds of trust and collateral assignments entered into by the Issuers
and each of the Guarantors that own any of the property or assets that secure
the Obligations of the Issuers and the Guarantors under the Notes, this
Indenture and the Subsidiary Guarantees, as such agreements may be amended,
modified or supplemented from time to time. The term "Security Documents" shall
include the Intercreditor Agreement.
"Senior Secured Leverage Ratio" means, with respect to any specified Person
on any date of determination (the "Calculation Date"), the ratio, of
(1) the sum of the aggregate outstanding amount of Indebtedness of
such Person and its Restricted Subsidiaries as of the Calculation Date
determined on a consolidated basis in accordance with GAAP that is secured
by Liens on the Collateral, to
(2) the Consolidated Cash Flow of such Person and its Restricted
Subsidiaries.
For purposes of calculating the Senior Secured Leverage Ratio:
(1) the adjustments described in clauses (1), (2) and (3) of the
definition of Fixed Charge Coverage Ratio shall be made except that in the
case of clause (1), cost savings may only be given effect to if they are
permitted under Article 11 of Regulation S-X; and
(2) transactions giving rise to the need to calculate the Senior
Secured Leverage Ratio shall be assumed to have occurred on the first day
of the four-quarter reference period.
"Senior Subordinated Notes" means the Issuers' 131/2% Senior Subordinated
Notes due 2005 and 97/8% Senior Subordinated Notes due 2007.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Stated Maturity" means, with respect to any installment of interest,
accreted value, or principal on any series of Indebtedness, the date on which
the payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest, accreted value, or
principal prior to the date originally scheduled for the payment or accretion
thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees of the corporation, association
or other business entity is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).
"Subsidiary Guarantee" means a guarantee of the Indenture on the terms set
forth in Article 11 hereof by a Subsidiary Guarantor.
"Tax Sharing Agreement" means the tax sharing agreement, among Foamex
International, Foamex and certain of their Subsidiaries as modified, amended,
restated or otherwise revised in accordance with this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx. 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Transactions" means, collectively, the contribution of Foamex Carpet
Cushion LLC to Foamex, the consummation of the amendment and restatement of the
Credit Agreement, dated as of the date hereof, and the offering of the Initial
Notes.
"Trustee" means the party named as such in the preamble to this Indenture
until a successor replaces it in accordance with the applicable provisions of
this Indenture and thereafter means the successor serving hereunder.
"Unrestricted Global Note" means a permanent global Note substantially in
the form of Exhibit A attached hereto that bears the Global Note Legend and that
has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means any direct or indirect Subsidiary of Foamex
(other than Foamex Capital or any successor to any of them) that is designated
by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) on the date of such designation is not party to any agreement,
contract, arrangement or understanding with Foamex or any Restricted
Subsidiary of Foamex unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to Foamex or such
Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of Foamex or such Restricted Subsidiary;
(3) is a Person with respect to which neither Foamex nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results;
(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of Foamex or any of its Restricted
Subsidiaries; and
(5) has at least one director on its Board of Directors that is not a
director, member of the Board of Directors or executive officer of Foamex
or any of its Restricted Subsidiaries and has at least one executive
officer that is not a director, member of the Board of Directors or
executive officer of Foamex or any of its Restricted Subsidiaries.
Any designation of a Subsidiary of Foamex as an Unrestricted Subsidiary
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the preceding
conditions and was permitted by Section 4.07 hereof. If, at any time, any
Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of Foamex
as of such date and, if such Indebtedness is not permitted to be incurred as of
such date under Section 4.09 hereof, Foamex shall be in default of Section 4.09.
The Board of Directors of Foamex may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that such designation shall
be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of
Foamex of any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (a) such Indebtedness is permitted under
Section 4.09 hereof, calculated on a pro forma basis as if such designation had
occurred at the beginning of the four-quarter reference period; and (b) no
Default or Event of Default would be in existence following such designation.
"U.S. Person" means a U.S. Person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect of the Indebtedness, by (b) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making of
such payment, by
(2) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
will at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
Section 1.02 Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"............................................................. 4.11
"Asset Sale Offer".................................................................. 3.09
"Authentication Order".............................................................. 2.02
"Change of Control Offer"........................................................... 4.15
"Change of Control Payment"......................................................... 4.15
"Change of Control Payment Date".................................................... 4.15
"Covenant Defeasance"............................................................... 8.03
"DTC"............................................................................... 2.03
"Event of Default".................................................................. 6.01
"Excess Proceeds"................................................................... 4.10
"incur"............................................................................. 4.09
"Indenture Documents"............................................................... 9.01
"Legal Defeasance".................................................................. 8.02
"Liens Securing Note Obligations"................................................... 10.09
"Liens Securing Other Second-Lien Obligations"...................................... 10.09
"Offer Amount"...................................................................... 3.09
"Offer Period"...................................................................... 3.09
"Paying Agent"...................................................................... 2.03
"Payment Default"................................................................... 6.01
"Permitted Consideration"........................................................... 4.10
"Permitted Debt".................................................................... 4.09
"Purchase Date"..................................................................... 3.09
"Registrar"......................................................................... 2.03
"Restricted Payments"............................................................... 4.07
"Tax Distributions"................................................................. 4.07
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Subsidiary Guarantees means the Issuers and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and transactions; and
(7) references to sections of or rules under the Securities Act will
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
Section 1.05 Designated Senior Debt.
For purposes of the indentures that govern the Senior Subordinated Notes,
the Notes shall constitute Designated Senior Debt (as such term is defined in
such indentures).
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication will
be substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each Note
will be dated the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes will constitute, and are
hereby expressly made, a part of this Indenture and the Issuers, the Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby. However, to the
extent any provision of any Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form will be substantially in the
form of Exhibit A attached hereto (including the Global Note Legend thereon and
the "Schedule of Exchanges of Interests in the Global Note" attached thereto).
Notes issued in definitive form will be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note will represent such of the outstanding Notes as will be specified
therein and each shall provide that it represents the aggregate principal amount
of outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby will be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream will be applicable to transfers
of beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Clearsteam.
Section 2.02 Execution and Authentication.
An Officer must sign the Notes for the Issuers by manual or facsimile
signature.
If the Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of the
Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.
On the date of this Indenture, the Trustee shall, upon a written order of
the Issuers signed by an Officer (an "Authentication Order"), authenticate the
Initial Notes for original issue up to $300,000,000 in aggregate principal
amount and, upon delivery of any Authentication Order at any time and from time
to time thereafter, the Trustee shall authenticate Additional Notes and Exchange
Notes for original issue in an aggregate principal amount specified in such
Authentication Order.
The Trustee may appoint an authenticating agent acceptable to the Issuers
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Issuers.
Section 2.03 Registrar and Paying Agent.
The Issuers will maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency where Notes may be presented for payment ("Paying Agent"). The Registrar
will keep a register of the Notes and of their transfer and exchange. The
Issuers may appoint one or more co-registrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes any additional paying agent. The Issuers may change any Paying
Agent or Registrar without notice to any Holder. The Issuers will notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Issuers fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Issuers or any of
their Subsidiaries may act as Paying Agent or Registrar.
The Issuers initially appoint The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Notes.
The Issuers initially appoint the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Issuers will require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium or Liquidated Damages, if any, or interest on the Notes, and will notify
the Trustee of any default by the Issuers in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Issuers at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Issuers or a Subsidiary) will have no further
liability for the money. If Foamex, Foamex Capital or a Subsidiary acts as
Paying Agent, it will segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Issuers, the Trustee will serve as
Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of all Holders
and shall otherwise comply with TIA ss. 312(a). If the Trustee is not the
Registrar, the Issuers will furnish to the Trustee at least seven Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders of Notes and the
Issuers shall otherwise comply with TIA ss. 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Issuers for Definitive Notes if:
(1) the Issuers deliver to the Trustee notice from the Depositary that
it is unwilling or unable to continue to act as Depositary or that it is no
longer a clearing agency registered under the Exchange Act and, in either
case, a successor Depositary is not appointed by the Issuers within 120
days after the date of such notice from the Depositary; or
(2) the Issuers in their sole discretion determine that the Global
Notes (in whole but not in part) should be exchanged for Definitive Notes
and deliver a written notice to such effect to the Trustee.
Upon the occurrence of either of the preceding events in (1) or (2) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will be subject to restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also will require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Regulation S Global Note may not be made to a
U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Beneficial interests in any Unrestricted Global Note
may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(1) above, the transferor
of such beneficial interest must deliver to the Registrar either:
(A) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause
to be credited a beneficial interest in another Global Note in an
amount equal to the beneficial interest to be transferred or
exchanged; and
(ii) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant
account to be credited with such increase; or
(B) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be
issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged; and
(ii) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above. Upon consummation of an
Exchange Offer by the Issuers in accordance with Section 2.06(f)
hereof, the requirements of this Section 2.06(b)(2) shall be
deemed to have been satisfied upon receipt by the Registrar of
the instructions contained in the Letter of Transmittal delivered
by the Holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for
transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes or otherwise applicable
under the Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Note(s) pursuant to Section 2.06(h)
hereof.
(3) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(2) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in an Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(2) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with any Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of the
Exchange Notes or (iii) a Person who is an affiliate (as defined in
Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with any Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with any
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof; or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Issuers
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D)
above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Issuers or any of their Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
(G) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Issuers shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(2) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with any Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of the
Exchange Notes or (iii) a Person who is an affiliate (as defined in
Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with any Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with any
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(3) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause
the aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Issuers will
execute and the Trustee will authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(3) will be registered in such
name or names and in such authorized denomination or denominations as the
holder of such beneficial interest requests through instructions to the
Registrar from or through the Depositary and the Participant or Indirect
Participant. The Trustee will deliver such Definitive Notes to the Persons
in whose names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(3) will
not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(1) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Restricted Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note,
then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such Restricted Definitive Note is being transferred to
the Issuers or any of their Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Note, in the
case of clause (B) above, the 144A Global Note, in the case of clause
(C) above, the Regulation S Global Note, and in all other cases, the
IAI Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with any Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a Broker-Dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with any Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with any
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(c)
thereof; or
(ii) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof
in the form of a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee will cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B), (2)(D) or
(3) above at a time when an Unrestricted Global Note has not yet been
issued, the Issuers will issue and, upon receipt of an Authentication Order
in accordance with Section 2.02 hereof, the Trustee will authenticate one
or more Unrestricted Global Notes in an aggregate principal amount equal to
the principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar will register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive
Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with any Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a broker-dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Issuers;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with any Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with any
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof; or
(ii) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Issuers to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A
Holder of Unrestricted Definitive Notes may transfer such Notes to a Person
who takes delivery thereof in the form of an Unrestricted Definitive Note.
Upon receipt of a request to register such a transfer, the Registrar shall
register the Unrestricted Definitive Notes pursuant to the instructions
from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of any Exchange Offer in accordance
with any Registration Rights Agreement, the Issuers will issue and, upon receipt
of an Authentication Order in accordance with Section 2.02 hereof, the Trustee
will authenticate:
(1) one or more Unrestricted Global Notes in an aggregate principal
amount equal to the principal amount of the beneficial interests in the
Restricted Global Notes tendered into the Exchange Offer by Persons that
certify in the applicable Letters of Transmittal that (A) they are not
Broker-Dealers, (B) they are not participating in a distribution of the
Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of
the Issuers; and
(2) Unrestricted Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted
for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee will cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Issuers will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends will appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A) THIS
NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE
UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (IV) TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, (V) TO THE ISSUERS OR ANY OF THEIR
SUBSIDIARIES OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(4), (c)(2), (c)(3), (d)(2),
(d)(3), (e)(2), (e)(3) or (f) of this Section 2.06 (and all Notes
issued in exchange therefor or substitution thereof) will not bear the
Private Placement Legend.
(2) Global Note Legend. Each Global Note will bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(A) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE ISSUERS OR THEIR
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the Issuers
will execute and the Trustee will authenticate Global Notes and Definitive
Notes upon receipt of an Authentication Order in accordance with Section
2.02 or at the Registrar's request.
(2) No service charge will be made to a Holder of a Global Note or to
a Holder of a Definitive Note for any registration of transfer or exchange,
but the Issuers may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable
upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15
and 9.05 hereof).
(3) The Registrar will not be required to register the transfer of or
exchange any Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any registration
of transfer or exchange of Global Notes or Definitive Notes will be the
valid obligations of the Issuers, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Global Notes or Definitive
Notes surrendered upon such registration of transfer or exchange.
(5) The Issuers will not be required:
(A) to issue, to register the transfer of or to exchange any
Notes during a period beginning at the opening of business 15 Business
Days before the day of any selection of Notes for redemption under
Section 3.02 hereof and ending at the close of business on the day of
selection;
(B) to register the transfer of or to exchange any Note selected
for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date.
(6) Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Issuers may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for
the purpose of receiving payment of principal of and interest on such Notes
and for all other purposes, and none of the Trustee, any Agent or the
Issuers shall be affected by notice to the contrary.
(7) The Trustee will authenticate Global Notes and Definitive Notes in
accordance with the provisions of Section 2.02 hereof.
(8) All certifications, certificates and Opinions of Counsel required
to be submitted to the Registrar pursuant to this Section 2.06 to effect a
registration of transfer or exchange may be submitted by facsimile.
Each Holder of a Note agrees to indemnify the Issuers and the Trustee
against any liability that may result from the transfer, exchange or assignment
of such Holder's Note in violation of any provision of this Indenture and/or
applicable United States federal or state securities laws.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Issuers and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Issuers will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Issuers, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Issuers to protect the Issuers, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Issuers may charge for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the Issuers and will
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section as
not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Issuers or an Affiliate of the Issuers holds
the Note; however, Notes held by the Issuers or a Subsidiary of the Issuers
shall not be deemed to be outstanding for purposes of Section 3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Issuers, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes will
be deemed to be no longer outstanding and will cease to accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Issuers, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuers, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned will be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Issuers
may prepare and the Trustee, upon receipt of an Authentication Order, will
authenticate temporary Notes. Temporary Notes will be substantially in the form
of certificated Notes but may have variations that the Issuers consider
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Issuers will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of this
Indenture.
Section 2.11 Cancellation.
The Issuers at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent will forward to the Trustee any Notes surrendered
to them for registration of transfer, exchange or payment. The Trustee and no
one else will cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and will destroy canceled Notes
(subject to the record retention requirement of the Exchange Act). Certification
of the destruction of all canceled Notes will be delivered to the Issuers. The
Issuers may not issue new Notes to replace Notes that they have paid or that
have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Issuers default in a payment of interest on the Notes, they will pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Issuers will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Issuers will fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Issuers (or, upon
the written request of the Issuers, the Trustee in the name and at the expense
of the Issuers) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Issuers elect to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, they must furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:
(1) the clause of this Indenture pursuant to which the redemption
shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee will select Notes for redemption or
purchase as follows:
(1) if the Notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities
exchange on which the Notes are listed; or
(2) if the Notes are not listed on any national securities exchange,
on a pro rata basis, by lot or by such method as the Trustee shall deem
fair and appropriate.
In the event of partial redemption or purchase by lot, the particular Notes
to be redeemed or purchased will be selected, unless otherwise provided herein,
not less than 30 nor more than 60 days prior to the redemption or purchase date
by the Trustee from the outstanding Notes not previously called for redemption
or purchase.
The Trustee will promptly notify the Issuers in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
Section 3.03 Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Issuers will mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder whose Notes
are to be redeemed at its registered address, except that redemption notices may
be mailed more than 60 days prior to a redemption date if the notice is issued
in connection with a defeasance of the Notes or a satisfaction and discharge of
this Indenture pursuant to Articles 8 or 12 of this Indenture.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion will be issued upon cancellation of the
original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(6) that, unless the Issuers default in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(7) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Issuers' request, the Trustee will give the notice of redemption in
the Issuers' name and at their expense; provided, however, that the Issuers have
delivered to the Trustee, at least five days prior to the date on which a notice
of redemption is to be sent, an Officers' Certificate requesting that the
Trustee give such notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
On or prior to the redemption or purchase date, the Issuers will deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
or purchase price of and accrued interest and Liquidated Damages, if any, on all
Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent
will promptly return to the Issuers any money deposited with the Trustee or the
Paying Agent by the Issuers in excess of the amounts necessary to pay the
redemption or purchase price of, and accrued interest and Liquidated Damages, if
any, on all Notes to be redeemed or purchased.
If the Issuers comply with the provisions of the preceding paragraph, on
and after the redemption or purchase date, interest will cease to accrue on the
Notes or the portions of Notes called for redemption or purchase. If a Note is
redeemed or purchased on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such interest record date. If any Note called for redemption or
purchase is not so paid upon surrender for redemption or purchase because of the
failure of the Issuers to comply with the preceding paragraph, interest shall be
paid on the unpaid principal, from the redemption or purchase date until such
principal is paid, and to the extent lawful on any interest not paid on such
unpaid principal, in each case at the rate provided in the Notes and in Section
4.01 hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the Issuers
will issue and, upon receipt of an Authentication Order, the Trustee will
authenticate for the Holder at the expense of the Issuers a new Note equal in
principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 Optional Redemption.
(a) At any time prior to April 1, 2005, the Issuers may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes issued
under this Indenture at a redemption price of 110.750% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings;
provided that:
(1) at least 65% of the aggregate principal amount of Notes issued
under this Indenture (i.e. including Initial Notes and Additional Notes)
remains outstanding immediately after the occurrence of such redemption
(excluding Notes held by Foamex and its Subsidiaries); and
(2) the redemption must occur within 45 days of the date of the
closing of such Equity Offering.
(b) Except pursuant to the preceding paragraph, the Notes are not
redeemable at the Issuers' option prior to April 1, 2006.
(c) On or after April 1, 2006 the Issuers may redeem all or a part of the
Notes upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, thereon, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on April 1 of the years indicated below:
Year Percentage
---- ----------
2006............................................ 105.375%
2007............................................ 102.688%
2008 and thereafter............................. 100.000%
(d) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
Except as set forth under Sections 4.10 and 4.15 of this Indenture, the
Issuers are not required to make mandatory redemption or sinking fund payments
with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Issuers are
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), they will follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets. The Asset Sale Offer will remain open for
a period of at least 20 Business Days following its commencement and not more
than 30 Business Days, except to the extent that a longer period is required by
applicable law (the "Offer Period"). No later than five Business Days after the
termination of the Offer Period (the "Purchase Date"), the Issuers will apply
all Excess Proceeds (the "Offer Amount") to the purchase of Notes and such other
pari passu Indebtedness (on a pro rata basis, if applicable) or, if less than
the Offer Amount has been tendered, all Notes and other Indebtedness tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased will be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest, and
Liquidated Damages, if any, will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Issuers will send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice will contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
notice, which will govern the terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
will remain open;
(2) the Offer Amount, the purchase price and the Purchase Date;
(3) that any Note not tendered or accepted for payment will continue
to accrue interest;
(4) that, unless the Issuers default in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer will cease to accrue
interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in integral multiples of
$1,000 only;
(6) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Issuers, a
Depositary, if appointed by the Issuers, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(7) that Holders will be entitled to withdraw their election if the
Issuers, the Depositary or the Paying Agent, as the case may be, receive,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing its election to have such Note
purchased;
(8) that, if the aggregate principal amount of Notes and other pari
passu Indebtedness surrendered by Holders exceeds the Offer Amount, the
Issuers will select the Notes and other pari passu Indebtedness to be
purchased on a pro rata basis based on the principal amount of Notes and
such other pari passu Indebtedness surrendered (with such adjustments as
may be deemed appropriate by the Issuers so that only Notes in
denominations of $1,000, or integral multiples thereof, will be purchased);
and
(9) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Issuers will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Issuers in accordance with the
terms of this Section 3.09. The Issuers, the Depositary or the Paying Agent, as
the case may be, will promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Issuers for purchase, and the Issuers will promptly issue a new Note, and the
Trustee, upon written request from the Issuers will authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Issuers to the Holder thereof. The Issuers
will publicly announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes.
The Issuers will pay or cause to be paid the principal of, premium, if any,
and interest and Liquidated Damages, if any, on the Notes on the dates and in
the manner provided in the Notes. Principal, premium, if any, and interest and
Liquidated Damages, if any will be considered paid on the date due if the Paying
Agent, if other than the Issuers or a Subsidiary thereof, holds as of 10:00 a.m.
Eastern Time on the due date money deposited by the Issuers in immediately
available funds and designated for and sufficient to pay all principal, premium,
if any, and interest then due. The Issuers will pay all Liquidated Damages, if
any, in the same manner on the dates and in the amounts set forth in any
Registration Rights Agreement.
The Issuers will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
The Issuers will maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee or an Affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Issuers in respect of the Notes and this Indenture may be served. The
Issuers will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Issuers
fail to maintain any such required office or agency or fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Issuers may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission will in any manner relieve the Issuers of
their obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York for such purposes. The Issuers will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Issuers hereby designate the Corporate Trust Office of the Trustee as
one such office or agency of the Issuers in accordance with Section 2.03 hereof.
Section 4.03 Reports.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Issuers will furnish to the Holders of
Notes, within the time periods specified in the SEC's rules and regulations:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
Foamex were required to file such forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and, with respect to the annual information only, a report thereon by
Foamex's certified independent accountants; and
(2) all current reports that would be required to be filed with the
SEC on Form 8-K if Foamex were required to file such reports.
In addition, following the consummation of the Exchange Offer contemplated
by any Registration Rights Agreement, whether or not required by the SEC, Foamex
will file a copy of all of the information and reports referred to in clauses
(1) and (2) above with the SEC for public availability within the time periods
specified in the SEC's rules and regulations (unless the SEC will not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request. The Issuers will at all times comply with
TIA ss. 314(a).
(b) For so long as any Notes remain outstanding, Foamex and the Guarantors
will furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
(c) If the parent company of Foamex guarantees the Notes and such parent
company is a reporting company under Section 13 or 15(d) of the Exchange Act,
Foamex need not comply with Sections 4.03(a) or 4.03(b) hereof if the parent
company makes such filings or provides such information and any required
financial information concerning Foamex under Regulation S-X is included in the
parent company's Exchange Act reports.
Section 4.04 Compliance Certificate.
(a) The Issuers and each Guarantor (to the extent that such Guarantor is so
required under the TIA) shall deliver to the Trustee, within 90 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Issuers and their Restricted Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officer with a
view to determining whether the Issuers have kept, observed, performed and
fulfilled their obligations under this Indenture and the Security Documents, and
further stating, as to such Officer signing such certificate, that to the best
of his or her knowledge the Issuers have kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and the Security Documents
and are not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture or the Security Documents (or, if a
Default or Event of Default has occurred, describing all such Defaults or Events
of Default of which he or she may have knowledge and what action the Issuers are
taking or propose to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest on the Notes is prohibited
or if such event has occurred, a description of the event and what action the
Issuers are taking or propose to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of Foamex's independent public accountants (who shall be a
firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Issuers have violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) So long as any of the Notes are outstanding, the Issuers will deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Issuers are taking or propose to take with respect
thereto.
Section 4.05 Taxes.
The Issuers will pay, and will cause each of their Restricted Subsidiaries
to pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment would not have a material adverse
effect on the business, financial condition or results of operations of the
Issuers and their Domestic Restricted Subsidiaries taken as a whole.
Section 4.06 Stay, Extension and Usury Laws.
The Issuers and each of the Guarantors covenants (to the extent that it may
lawfully do so) that they will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Issuers and
each of the Guarantors (to the extent that they may lawfully do so) hereby
expressly waive all benefit or advantage of any such law, and covenant (to the
extent that they may lawfully do so) that they will not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law has been enacted.
Section 4.07 Restricted Payments.
(a) Foamex shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of Foamex's or any of its Restricted Subsidiaries'
Equity Interests (including, without limitation, any payment in connection
with any merger or consolidation involving Foamex (other than cash in lieu
of fractional shares)) or to the direct or indirect holders of Foamex's or
any of its Restricted Subsidiaries' Equity Interests in their capacity as
such (other than dividends or distributions payable (a) in additional
Equity Interests (other than Disqualified Stock) of Foamex or (in the case
of a dividend, other payment or distribution on account of the Equity
Interest of a Restricted Subsidiary) of such Restricted Subsidiary, (b) to
Foamex or a Restricted Subsidiary of Foamex or (c) pro rata to all holders
of Capital Stock of a Subsidiary of Foamex);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving Foamex) any Equity Interests of Foamex or any
direct or indirect parent of Foamex, other than any such Equity Interests
owned by Foamex or a Restricted Subsidiary of Foamex;
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated in right of payment to the Notes or the Subsidiary Guarantees,
except a payment of interest or principal at the Stated Maturity thereof;
or
(4) make any Restricted Investment,
(all such payments and other actions set forth in these clauses (1) through
(4) above being collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or
would occur as a consequence of such Restricted Payment;
(2) Foamex would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made
at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in Section 4.09(a) hereof; and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by Foamex and its Restricted Subsidiaries
after the date of this Indenture (excluding Restricted Payments permitted
by clauses (1) (if on the date of such declaration, such Restricted Payment
would have been excluded), (2), (3), (5), (6), (9) and (12) of Section
4.07(b) hereof), is less than the sum, without duplication, of:
(A) 50% of the Consolidated Net Income of Foamex for the period
(taken as one accounting period) from the beginning of the first
fiscal quarter commencing after the date of this Indenture to the end
of Foamex's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a
deficit, less 100% of such deficit), plus
(B) 100% of the aggregate net cash proceeds and the fair value,
determined in good faith by the Board of Directors, of any non-cash
consideration, in each case, received by Foamex since the date of this
Indenture as a contribution to its common equity capital or from the
issue or sale of Equity Interests of Foamex (other than Disqualified
Stock) or from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt securities of
Foamex that have been converted into or exchanged for such Equity
Interests (other than Equity Interests (or Disqualified Stock or debt
securities) sold to a Restricted Subsidiary of Foamex, plus
(C) to the extent that any Restricted Investment that was made
after the date of this Indenture is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (i) the cash return of
capital with respect to such Restricted Investment (less the cost of
disposition, if any), and (ii) the initial amount of such Restricted
Investment, plus
(D) if any Unrestricted Subsidiary (i) is redesignated as a
Restricted Subsidiary, the fair market value of such redesignated
Subsidiary (as determined in good faith by the Board of Directors) as
of the date of its redesignation or (ii) pays any cash dividends or
cash distributions to Foamex or any of its Restricted Subsidiaries,
100% of any such cash dividends or cash distributions made after the
date of this Indenture.
(b) So long as no Default has occurred and is continuing or would be caused
thereby (other than in the case of clauses (2), (3), (5), (6), (8) (but only to
the extent that such payment of such funds directly to holders of such
Indebtedness on the date of deposit would have been a permitted Restricted
Payment under clauses (2) and (3) below) and (9)), the preceding provisions will
not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions of this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of Foamex
or any Restricted Subsidiary in exchange for, or out of the net cash
proceeds of the substantially concurrent sale or issuance (other than to a
Restricted Subsidiary of Foamex) of, Equity Interests of Foamex or any
Restricted Subsidiary (other than any Disqualified Stock); provided that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition shall
be excluded from clause (3)(B) of Section 4.07(a) hereof;
(3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness or Disqualified Stock of Foamex or any Guarantor,
in the exchange for, or with the net cash proceeds from an incurrence of,
Permitted Refinancing Indebtedness;
(4) the redemption, repurchase, retirement or other acquisition for
value of any Equity Interests of Foamex or any Restricted Subsidiary, or
any direct or indirect parent of Foamex or its Restricted Subsidiaries held
by any member of Foamex's (or any of its Restricted Subsidiaries'
management) pursuant to any management equity subscription agreement or
stock option agreement either (a) in effect as of the date of this
Indenture; provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests shall not exceed $2.5
million in any twelve-month period and no Default or Event of Default shall
have occurred and be continuing immediately after such transaction or (b)
upon the termination of such person's employment
(5) the advancement of payment or payment of distributions pursuant to
the Tax Sharing Agreement ("Tax Distributions");
(6) distributions, loans or advances to holders of the Equity
Interests of Foamex in an amount sufficient to enable Foamex International
to pay its reasonable, out-of-pocket operating and administrative expenses,
including, without limitation, directors' fees, legal and audit expenses,
SEC compliance expenses and corporate franchise and other taxes;
(7) dividends with respect to Disqualified Stock, the incurrence of
which was permitted pursuant to the Fixed Charge Coverage Ratio Test;
provided that at the time of paying such dividends, Foamex could incur
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio Test;
(8) the deposit of funds with the Trustee or a similar agent for the
benefit of the holders of any issue of Indebtedness of Foamex or its
Restricted Subsidiaries; provided, however, that (a) to the extent that the
payment of such funds directly to the holders of such Indebtedness on the
date of deposit would have constituted a Restricted Payment and (b) the
subsequent payment of such deposited funds and any earnings with respect
thereto to the holders of the corresponding Indebtedness shall not
constitute a Restricted Payment;
(9) distributions to Foamex International used to pay principal,
interest and other amounts on the promissory note, as in effect on the date
hereof, owed to Foamex; provided that such amounts are used to immediately
pay such amounts on the note;
(10) payments under the asset sale and change of control covenants of
the indentures governing the Senior Subordinated Notes and the agreements
governing any other subordinated Indebtedness permitted to be incurred
under the indentures governing the notes; provided that such payment is
made after compliance with Sections 4.10 and 4.15 hereof;
(11) the redemption, repurchase, retirement, defeasance or other
acquisition of the Senior Subordinated Notes in the aggregate amount not to
exceed the sum of (i) $60.0 million plus (ii) an amount equal to 50% of
Excess Cash Flow for each fiscal year beginning with the 2002 fiscal year
on a cumulative basis; provided, that any redemption, repurchase,
retirement, defeasance or other acquisition of Senior Subordinated Notes
under clause (i) in excess of $10.0 million must occur within 180 days of
the date hereof; provided, further, that in order to pay any amount under
clause (ii) only, the Senior Secured Leverage Ratio for the most recent
four-quarter reference period immediately preceding the date of such
redemption, repurchase, retirement, defeasance or other acquisition would
not have been greater than 3.5 to 1.0 after giving pro forma effect to such
redemption, repurchase, retirement, defeasance or other acquisition; and
(12) additional Restricted Payments in an aggregate amount not to
exceed $5.0 million.
For purposes of determining compliance with this Section 4.07, in the event
that a proposed Restricted Payment meets the criteria of more than one of the
categories of Restricted Payment described in clauses (1) through (12) above, or
is entitled to be incurred pursuant to the first paragraph of this Section 4.07,
the Issuers will be permitted to classify such item of Restricted Payment on the
date of its payment, or later reclassify all or a portion of such item of
Restricted Payment, in any manner that complies with this Section 4.07.
The Board of Directors may designate any Restricted Subsidiary, other than
Foamex Capital, to be an Unrestricted Subsidiary if that designation would not
cause a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments owned
by Foamex and its Restricted Subsidiaries in the Subsidiary properly designated
will be deemed to be an Investment made as of the time of the designation and
will reduce the amount available for Restricted Payments under this Section 4.07
or Permitted Investments, as determined by Foamex. That designation will only be
permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default.
The amount of all Restricted Payments (other than cash) will be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by Foamex or such Restricted Subsidiary, as
the case may be, pursuant to the Restricted Payment. The fair market value of
any assets or securities that are required to be valued by this Section 4.07
will be determined by the Board of Directors whose resolution with respect
thereto shall be delivered to the Trustee.
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.
(a) Foamex shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary that is not a Guarantor to:
(1) pay dividends or make any other distributions on its Capital Stock
to Foamex or any of its Restricted Subsidiaries, or with respect to any
other interest or participation in, or measured by, its profits, or pay any
Indebtedness owed to Foamex or any of its Restricted Subsidiaries;
(2) make loans or advances to Foamex or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to Foamex or any of its
Restricted Subsidiaries.
(b) However, the restrictions in Section 4.08(a) shall not apply to
encumbrances or restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit Facilities
as in effect on the date of this Indenture and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of those agreements; provided that the
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are no more materially restrictive,
taken as a whole, with respect to such dividend and other payment
restrictions than those contained in those agreements on the date of this
Indenture;
(2) this Indenture, the Notes, the Subsidiary Guarantees and the
Security Documents;
(3) agreements governing Indebtedness incurred in compliance with
Section 4.09 hereof if the encumbrance or restriction is no more
restrictive, taken as a whole, than those in the Credit Facilities or this
Indenture, the Notes, the Subsidiary Guarantees or the Security Documents
in effect on the date of this Indenture;
(4) applicable law;
(5) any instrument governing Indebtedness or Capital Stock of (i) a
Person acquired by Foamex or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such
Indebtedness or Capital Stock was incurred in connection with or in
contemplation of such acquisition) or (ii) any Person that is an
Unrestricted Subsidiary that becomes a Restricted Subsidiary, as in effect
on the date that such Person becomes a Restricted Subsidiary, which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person and its
Restricted Subsidiaries, or the property or assets of the Person and its
Restricted Subsidiaries, so acquired; provided that in the case of
Indebtedness, such Indebtedness was permitted by the terms of this
Indenture to be incurred;
(6) customary non-assignment provisions in leases, licenses and other
contracts entered into in the ordinary course of business and consistent
with past practices;
(7) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on that property of the nature
described in clause (3) of Section 4.08(a);
(8) Permitted Refinancing Indebtedness; provided that the restrictions
contained in the agreements governing such Permitted Refinancing
Indebtedness are no more materially restrictive, taken as a whole, than
those contained in the agreements governing the Indebtedness being
refinanced;
(9) any instrument or agreement governing Indebtedness permitted to be
incurred hereunder, which is secured by or permitted to be secured by a
Lien permitted to be incurred hereunder, which encumbrance or restriction
is not applicable to any property or assets other than the property or
assets subject to or permitted to be subject to such Lien;
(10) restrictions applicable to a Receivables Subsidiary arising from
a Receivables Transaction;
(11) any restriction imposed pursuant to an agreement entered into for
the sale or disposition of Equity Interests or other assets that apply
pending the closing of such sale or disposition;
(12) Liens securing Indebtedness otherwise permitted to be incurred
under the provisions of Section 4.12 hereof that limit the right of the
debtor to dispose of the assets subject to such Liens;
(13) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, assets sale agreements,
stock sale agreements and other similar agreements;
(14) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
and
(15) provisions in documents governing industrial revenue bonds.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) Foamex shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), Foamex and the Guarantors shall not issue any Disqualified Stock, and
Foamex shall not permit any of its Restricted Subsidiaries which are not
Guarantors to issue any shares of Disqualified Stock; provided, however, that
Foamex and its Restricted Subsidiaries may incur Indebtedness (including
Acquired Debt and Indebtedness under the Credit Agreement) or issue Disqualified
Stock or in the case of Restricted Subsidiaries which are not Guarantors issue
shares of preferred stock if the Fixed Charge Coverage Ratio for Foamex's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or Disqualified Stock or preferred stock is issued
would have been at least 2.25 to 1, determined on a pro forma basis (including a
pro forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or preferred stock had been issued, as the case
may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence of
any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by Foamex or any of its Restricted Subsidiaries of
Indebtedness under Credit Facilities in an aggregate principal amount at
any one time outstanding under this clause (1) (with letters of credit
being deemed to have a principal amount equal to the maximum potential
reimbursement liability of Foamex and its Restricted Subsidiaries with
respect thereto) not exceeding an amount equal to $285.0 million, less the
aggregate amount of all Net Proceeds of Asset Sales that have been applied
since the date of this Indenture to repay such Indebtedness under any such
Credit Facilities and resulting in a permanent reduction of the related
commitments pursuant to Section 4.10 hereof;
(2) the incurrence by Foamex and its Restricted Subsidiaries of the
Existing Indebtedness, including the incurrence of any current or future
Guarantees by any Restricted Subsidiary of Foamex of the Senior
Subordinated Notes;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness
represented by the Notes and the related Guarantees to be issued on the
date of this Indenture and the Exchange Notes and the related Guarantees to
be issued pursuant to any Registration Rights Agreement;
(4) the incurrence by Foamex or any of its Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage financings
or purchase money obligations, in each case incurred for the purpose of
financing all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used in the business of Foamex
or such Restricted Subsidiary, in an aggregate principal amount, including
all Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (4), not to
exceed $30.0 million at any time outstanding;
(5) the incurrence by Foamex or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to refund, refinance or replace Indebtedness (other than
intercompany Indebtedness) that was permitted by this Indenture to be
incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (9) or (15)
of this Section 4.09(b);
(6) the incurrence by Foamex or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among Foamex and any of its Restricted
Subsidiaries; provided, however, that:
(A) if Foamex or any Guarantor is the obligor on such
Indebtedness and the payee is not a Guarantor, such Indebtedness is
expressly subordinated to the prior payment in full in cash of all
Obligations with respect to the Notes, in the case of Foamex, or the
Subsidiary Guarantee, in the case of the Guarantor; and
(B) both (1) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person
other than Foamex or a Restricted Subsidiary and (2) any sale or other
transfer of any such Indebtedness to a Person that is not either
Foamex or a Restricted Subsidiary of Foamex shall be deemed, in each
case, to constitute an incurrence of such Indebtedness by Foamex or
such Restricted Subsidiary, as the case may be, that was not permitted
by this clause (6);
(7) the incurrence by Foamex or any of its Restricted Subsidiaries of
Hedging Obligations entered into either (a) for the purpose of fixing or
hedging of interest rate or currency exchange risk or (b) in the ordinary
course of business;
(8) the Guarantee or co-issuance by Foamex or any of its Restricted
Subsidiaries of Indebtedness of Foamex or a Restricted Subsidiary of Foamex
that was permitted to be incurred by another provision of this Section
4.09;
(9) Acquired Debt of a Restricted Subsidiary in existence at the time
of the acquisition of such Subsidiary, if such Acquired Debt was not
incurred in contemplation of such acquisition and such Acquired Debt is
Non-Recourse Debt (except with respect to such acquired Subsidiary and its
Restricted Subsidiaries);
(10) Indebtedness arising from agreements of Foamex or a Restricted
Subsidiary for indemnification, adjustment of purchase price, or similar
obligations, in each case incurred in connection with a disposition of any
business assets, or Restricted Subsidiaries, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
acquisition;
(11) Indebtedness of a Foreign Subsidiary and its Restricted
Subsidiaries (which is Non-Recourse Debt, except with respect to such
entities) not to exceed an aggregate amount of $100.0 million;
(12) Any financing related to Receivables Transactions permitted
pursuant to this Indenture;
(13) Indebtedness of Foamex or any of its Subsidiaries represented by
letters of credit in order to provide security for workers' compensation
claims, payment obligations in connection with self-insurance or similar
requirements in the ordinary course of business;
(14) Obligations in respect of performance bonds and completion
guarantees provided by Foamex of any Restricted Subsidiary of Foamex in the
ordinary course of business; and
(15) the incurrence by Foamex or any of its Restricted Subsidiaries of
additional Indebtedness including, without limitation, pursuant to any
Credit Facilities, in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness
incurred pursuant to this clause (15), not to exceed $55.0 million.
For purposes of determining compliance with this Section 4.09, in the event
that an item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (15) above or is
entitled to be incurred pursuant to Section 4.09(a), the Issuers shall, in their
sole discretion, classify (or later reclassify in whole or in part) such item of
Indebtedness in any manner that complies with this Section 4.09. The accrual of
interest or the accretion of accreted value shall not be deemed to be an
incurrence of Indebtedness for purposes of this Section 4.09.
Section 4.10 Asset Sales.
Foamex will not, and will not permit any of its Restricted Subsidiaries to,
consummate an Asset Sale unless:
(1) Foamex (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of the Asset Sale at least equal to the fair
market value of the assets or Equity Interests issued or sold or otherwise
disposed of;
(2) the fair market value is determined by Foamex's Board of Directors
and evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee; and
(3) at least 80% of the consideration received in the Asset Sale by
Foamex or such Restricted Subsidiary is in the form of (A) cash, (B) assets
useful in a Permitted Business not to exceed $30.0 million in the aggregate
over the life of the Notes, or (C) Equity Interests representing a
controlling interest in a Permitted Business not to exceed $30.0 million in
the aggregate over the life of the Notes (collectively, the "Permitted
Consideration"); provided that:
(A) the amount of any liabilities (as shown on Foamex's most
recent consolidated balance sheet) of Foamex or any Restricted
Subsidiary (other than contingent liabilities (except to the extent
reflected (or reserved for) on a balance sheet of Foamex or any
Restricted Subsidiary as of the date prior to the date of consummation
of such transaction) and liabilities that are by their terms
subordinated in right of payment to the Notes or any Subsidiary
Guarantee) that are assumed by the transferee of any such assets
pursuant to an agreement that releases Foamex or such Restricted
Subsidiary from further liability; and
(B) any securities, notes or other obligations received by Foamex
or any such Restricted Subsidiary from such transferee that, in each
case, are converted within 90 days by Foamex or such Restricted
Subsidiary into Permitted Consideration (to the extent so received),
shall be deemed to be Permitted Consideration for purposes of this
provision;
provided, further, that the 80% limitation referred to in Section
4.10(3) shall not apply to any Asset Sale in which the Permitted
Consideration portion of the consideration received therefore is equal to
or greater than what the net after-tax proceeds would have been had such
Asset Sale complied with the aforementioned 80% limitation.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Issuers or any Restricted Subsidiary may apply such Net Proceeds:
(1) to repay or cash collateralize any Credit Agreement Obligations,
to repay any Indebtedness of Foamex or any of its Restricted Subsidiaries
secured by assets not in the Collateral, or to repay any Indebtedness of
any Restricted Subsidiary that is not a Guarantor;
(2) to acquire all or substantially all of the assets of another
Permitted Business;
(3) to make a capital expenditure; or
(4) to acquire other long-term assets that are used or useful in a
Permitted Business.
Pending the final application of any Net Proceeds, Foamex or such
Restricted Subsidiary may temporarily reduce revolving credit borrowings or
otherwise invest the Net Proceeds in any manner that is not prohibited by this
Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraphs will constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $15.0 million, within five days
thereof, the Issuers will make an Asset Sale Offer to all Holders of Notes and
all holders of other Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem with the proceeds of sales of assets in accordance with
Section 3.09 hereof to purchase the maximum principal amount of Notes and such
other pari passu Indebtedness that may be purchased out of the Excess Proceeds.
The offer price in any Asset Sale Offer will be equal to 100% of principal
amount plus accrued and unpaid interest and Liquidated Damages, if any, to the
date of purchase, and will be payable in cash. If any Excess Proceeds remain
after consummation of an Asset Sale Offer, the Issuers may use such Excess
Proceeds for any purpose not otherwise prohibited by this Indenture. If the
aggregate principal amount of Notes and such other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and such other pari passu Indebtedness to be
purchased on a pro rata basis based on the principal amount of Notes and such
other pari passu Indebtedness tendered; provided, however, that the Issuers
shall not be obligated to purchase Notes in denominations other than integral
multiples of $1,000 principal amount at maturity Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero. Foamex may
commence an Asset Sale Offer at any time without having to wait for the
expiration of the 365 day period.
The Issuers will comply in all material respects with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent
that the provisions of any securities laws or regulations conflict with the
provisions of Sections 3.09 or 4.10 of this Indenture, the Issuers will comply
in all material respects with the applicable securities laws and regulations and
will not be deemed to have breached their obligations under those provisions of
this Indenture by virtue of such conflict.
Section 4.11 Transactions with Affiliates.
(a) Foamex shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that are no less favorable
to Foamex or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by Foamex or such Subsidiary with
an unrelated Person; and
(2) Foamex delivers to the Trustee:
(A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $1.0 million, a resolution of the Board of Directors set
forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (1) of this Section 4.11(a) and that
such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors; and
(B) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $10.0 million, an opinion as to the fairness to Foamex or
such Subsidiary of the financial terms of such Affiliate Transaction
from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
(b) The following items shall not be deemed to be Affiliate Transactions
and, therefore, shall not be subject to the provisions of Section 4.11(a):
(1) prepaid expenses and loans or advances to employees or similar
items in the ordinary course of business;
(2) (a) the advancement of payment or payment of distributions
pursuant to the Tax Sharing Agreement and (b) any amendment, restatement,
or other modification of the Tax Sharing Agreement approved by a majority
of disinterested directors on the Board of Directors; provided that such
amendment, restatement or other modification is not materially adverse,
taken as a whole, to Foamex; provided, further, that the Tax Sharing
Agreement may be amended to provide that payments of interest shall be
calculated at the rates and otherwise determined in the same manner as
would be calculated and determined by the relevant tax authority;
(3) the purchase of Equity Interests of Foamex Latin America from
executives or their assignees of Foamex Latin America, not to exceed 5% of
the outstanding Equity Interests of Foamex Latin America;
(4) purchases (and sales) of inventory and services in the ordinary
course of business at a price not greater (less) than the price paid by
(charged to) purchasers of a similar quantity of inventory and services
which are not Affiliates of Foamex;
(5) any employment agreements, compensation agreements or
indemnification agreements entered into by Foamex or any of its Restricted
Subsidiaries in the ordinary course of business and consistent with the
current market practice or the past practice of Foamex or its Restricted
Subsidiary;
(6) transactions between or among Foamex and/or its Restricted
Subsidiaries;
(7) Restricted Payments or Permitted Investments that are permitted by
Section 4.07 hereof;
(8) payment of reasonable directors/management fees to Persons who are
not otherwise Affiliates of Foamex;
(9) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of Foamex;
(10) transactions with a Person that is an Affiliate of Foamex solely
because Foamex or a Restricted Subsidiary owns an Equity Interest in, or
controls, such Person;
(11) Receivables Transactions;
(12) transactions with Recticel s.a. or any of its Affiliates; and
(13) transactions with The Bank of Nova Scotia or any of its
Affiliates, including, without limitation, transactions in the ordinary
course of business and loan and investment banking transactions and payment
of associated fees, that are approved by the Board of Directors.
Section 4.12 Liens.
Foamex will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien of any
kind on any asset now owned or hereafter acquired by Foamex or its Restricted
Subsidiaries, except Permitted Liens.
Notwithstanding anything in the preceding paragraph, Foamex will not, and
will not permit any of its Restricted Subsidiaries to, create or suffer to exist
any Lien upon any of the Collateral (including Collateral consisting of Capital
Stock or Indebtedness of any Subsidiary of Foamex) now owned or hereafter
acquired by it (1) securing any Public Debt unless the holders of such Public
Debt share in the distribution of proceeds from the foreclosure on Collateral
either (x) on an equal and ratable basis with the holders of the Credit
Agreement Obligations or (y) on an equal and ratable basis with the Holders of
the Notes (and any other obligations that share on an equal and ratable basis
with the Holders of the Notes) or (2) securing any Indebtedness or other
obligations (other than Public Debt) unless the holders thereof share in the
distribution of proceeds from the foreclosure on Collateral on an equal or any
greater basis with the Holders of the Notes or on any basis with the holders of
the Credit Agreement Obligations.
Section 4.13 Business Activities.
Foamex shall not, and shall not permit any Restricted Subsidiary to, engage
in any business other than Permitted Businesses, except to such extent as would
not be material to Foamex and its Restricted Subsidiaries taken as a whole.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, Foamex shall do or cause to be done all things
necessary to preserve and keep in full force and effect:
(1) its partnership existence, and the corporate, partnership or other
existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time
to time) of Foamex or any such Restricted Subsidiary; and
(2) the rights (charter and statutory), licenses and franchises of
Foamex and its Restricted Subsidiaries,
provided, however, that Foamex shall not be required to preserve any
such right, license or franchise, or the corporate, partnership or other
existence of any of its Restricted Subsidiaries, if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of Foamex and its Restricted Subsidiaries, taken as
a whole, and that the loss would not have a material adverse effect on the
Issuers and their Domestic Restricted Subsidiaries taken as a whole.
Section 4.15 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Issuers will make an
offer (a "Change of Control Offer") to each Holder to repurchase all or any part
(equal to $1,000 or an integral multiple of $1,000) of each Holder's Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, on the Notes
repurchased, if any, to the date of purchase (the "Change of Control Payment").
Within 30 days following any Change of Control, the Issuers will mail a notice
to each Holder describing the transaction or transactions that constitute the
Change of Control and stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes tendered will be accepted for payment;
(2) the purchase price and the purchase date, which shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Issuers default in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control
Payment Date;
(5) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer will be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased; and
(7) that Holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof.
The Issuers will comply in all material respects with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent those laws and regulations are applicable in connection
with the repurchase of the Notes as a result of a Change in Control. To the
extent that the provisions of any securities laws or regulations conflict with
the provisions of Sections 3.09 or 4.15 of this Indenture, the Issuers will
comply with the applicable securities laws and regulations and will not be
deemed to have breached their obligations under Section 3.09 or this Section
4.15 by virtue of such conflict.
(b) On the Change of Control Payment Date, the Issuers will, to the extent
lawful:
(1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions of Notes properly
tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions of Notes being purchased by the
Issuers.
The Paying Agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each new Note will be in a
principal amount of $1,000 or an integral multiple thereof. The Issuers will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Issuers will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.15 and Section 3.09 hereof and purchases all Notes validly tendered
and not withdrawn under the Change of Control Offer.
(d) Notwithstanding anything to the contrary in this Section 4.15, Foamex
and/or Foamex Capital may merge with an Affiliate incorporated for the sole
purpose of reincorporating Foamex and/or Foamex Capital in another jurisdiction
and/or for the sole purpose of forming a holding company, or for the sole
purpose of converting Foamex into a corporation and any such merger will not be
deemed a Change of Control, provided that the merger complies with Section 5.01
hereof.
Section 4.16 Limitation on Sale and Leaseback Transactions.
Foamex shall not, and shall not permit any of its Restricted Subsidiaries
to, enter into any sale and leaseback transaction; provided that Foamex or any
Restricted Subsidiary may enter into a sale and leaseback transaction if:
(1) Foamex or that Restricted Subsidiary, as applicable, could have
(a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction permitted under Section
4.09 hereof and (b) incurred a Lien to secure such Indebtedness pursuant to
Section 4.12 hereof;
(2) the gross cash proceeds of that sale and leaseback transaction are
at least equal to the fair market value (in the case of gross cash proceeds
in excess of $5.0 million as determined in good faith by the Board of
Directors and set forth in an Officers' Certificate delivered to the
Trustee), of the property that is the subject of that sale and leaseback
transaction; and
(3) the transfer of assets in that sale and leaseback transaction is
permitted by, and Foamex applies the proceeds of such transaction in
compliance with, Section 4.10 hereof.
Section 4.17 Limitation on Issuances and Sales of Capital Stock in Restricted
Subsidiaries.
Foamex will not, and will not permit any of its Restricted Subsidiaries to,
transfer, convey, sell, lease or otherwise dispose of any Capital Stock of any
Restricted Subsidiary of Foamex to any Person (other than Foamex or a Restricted
Subsidiary of Foamex), and will not permit any Restricted Subsidiaries to issue
any of its Equity Interests (other than, if necessary, shares of its Capital
Stock constituting directors' qualifying shares) to any Person other than to
Foamex or a Restricted Subsidiary of Foamex, unless
(1) after giving effect to such transfer, conveyance, sale, lease or
other disposition or issuance of the Capital Stock of such Restricted
Subsidiary, Foamex is the Beneficial Owner of either (x) at least 80%, or
(y) less than 50% of the Capital Stock of the relevant Restricted
Subsidiary; and
(2) the cash Net Proceeds from such transfer, conveyance, sale, lease
or other disposition or issuance are applied in the manner and to the
extent required by Section 4.10 hereof.
However, this Section 4.17 shall not apply to (A) Investments in the
entities described under clause (14) of Permitted Investments; (B) transfers,
conveyances, sales, leases or other dispositions or issuance (collectively,
dispositions") of any Capital Stock of any Restricted Subsidiary that have a
fair market value at the time of such disposition of less than $1.0 million; or
(C) a public offering of Equity Interests of Foamex Latin America which results
in net proceeds to Foamex Latin America of at least $15.0 million.
Section 4.18 Payments for Consent.
Foamex shall not, and shall not permit any of its Restricted Subsidiaries
to, directly or indirectly, pay or cause to be paid any consideration to or for
the benefit of any Holder of Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Indenture or the
Notes unless such consideration is paid to all Holders of the Notes that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
Section 4.19 Additional Subsidiary Guarantees and Liens.
If any Domestic Restricted Subsidiary shall, after the date hereof, become
a guarantor (1) of any Credit Agreement Obligations or (2) so long as the Senior
Subordinated Notes are outstanding, the Senior Subordinated Notes, then the
Issuers shall, at the time, cause such Domestic Restricted Subsidiary to (a)
execute a Guarantee of the Obligations of the Issuers under the Notes
substantially in the form set forth as Exhibit E hereto, and (b) if in
connection with a guaranty under clause (1) above, such Domestic Restricted
Subsidiary grants any Lien upon any of its property as security for any Credit
Agreement Obligations, execute a Security Document upon substantially the same
terms, but subject to the Intercreditor Agreement, that grants the Collateral
Agent a second-priority Lien upon such property for the benefit of the Holders
of the Notes, subject to Permitted Liens; provided that such Domestic Restricted
Subsidiary shall not be required to grant a second-priority Lien upon such
property for the benefit of the Holders of the Notes if (i) such property is an
Excluded Asset, the net book-value of which is less than $15,000,000, (ii) a
second-priority security interest in such property cannot be granted or
perfected under applicable law or (iii) such grant requires the consent of any
third party, which consent such Domestic Restricted Subsidiary is unable to
obtain using commercially reasonable efforts, and (3) deliver to the Trustee an
Opinion of Counsel, reasonably satisfactory to the Trustee, that such Guarantee
and any such Security Document is a valid, binding and enforceable obligation of
such Domestic Restricted Subsidiary and such second-priority Lien is enforceable
and duly perfected, subject to customary exceptions for bankruptcy, fraudulent
conveyance, equitable principles, remedies and waivers.
From and after the date of this Indenture, if Foamex, Foamex Capital or any
Guarantor creates any additional security interest upon any property to secure
any Credit Agreement Obligations or any other obligations that are secured
equally and ratably with the Notes by the second-priority security interests in
the Collateral (other than security interests granted solely to secure Hedging
Obligations or obligations in respect of cash management services), it shall
concurrently grant a second-priority security interest (subject to Permitted
Liens) upon such property as security for the Notes; provided that such Issuer
or Guarantor shall not be required to grant a second-priority Lien upon such
property as security for the Notes if (i) such property is an Excluded Asset,
the net book-value of which is less than $15,000,000, (ii) a second-priority
security interest in such property cannot be granted or perfected under
applicable law or (iii) such grant requires the consent of any third party,
which consent such Issuer or Guarantor is unable to obtain using commercially
reasonable efforts.
In addition, the Issuers shall, with respect to each parcel of real
property in the United States owned by the Issuers that secures the Credit
Agreement Obligations, use commercially reasonable efforts to deliver to the
Collateral Agent, for the benefit of or addressed to the Trustee or the
Collateral Agent, as applicable, the following:
(1) a fully executed, acknowledged, and recorded mortgage or deed of
trust, as applicable, which mortgage or deed of trust shall be in a form
substantially similar to that provided for the benefit of the Credit Agent
except that such mortgage or deed of trust shall be subject to the terms of
the Intercreditor Agreement;
(2) an opinion of local counsel in a form substantially similar to the
opinion provided for the benefit of the Credit Agent, or otherwise
reasonably acceptable to the Initial Purchasers and the Trustee;
(3) a fully-paid title insurance policy (including such endorsements
as the Credit Agent obtained in its title insurance policy) with no
exceptions other than (a) Permitted Liens and exceptions included under the
title insurance policy in favor of the Credit Agent, (b) the Credit Agent's
existing Lien on such property and (c) other changes reasonably acceptable
to the Initial Purchasers;
(4) the most recent survey of each property together with either (x)
an updated survey certification from the applicable surveyor stating that,
based on a visual inspection of the property and the knowledge of the
surveyor, there has been no change in the facts depicted in the survey or
(y) an affidavit from the Issuers stating that there has been no change,
other than, in each case, changes reasonably acceptable to the Initial
Purchasers, in the facts depicted in the survey; and
(5) such other related deliveries and deliverables as the Trustee and
the Initial Purchasers shall reasonably require.
The Issuers shall provide each of the foregoing described in clauses (1)
through (5) above at their own expense and shall pay all reasonable fees and
expenses of counsel incurred by the Trustee and the Initial Purchasers in
connection with each of the foregoing.
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
Foamex shall not, directly or indirectly, consolidate or merge with or into
another Person (whether or not Foamex is the surviving entity), or sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of Foamex and its Restricted Subsidiaries taken as a whole,
in one or more related transactions, to another Person; unless:
(1) either:
(A) Foamex is the surviving entity; or
(B) the Person formed by or surviving any such consolidation or
merger (if other than Foamex) or to which such sale, assignment,
transfer, conveyance or other disposition has been made is an entity
organized or existing under the laws of the United States, any state
of the United States or the District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger
(if other than Foamex) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes all
the obligations of Foamex under the Notes, this Indenture, any Registration
Rights Agreement and the Security Documents pursuant to agreements
reasonably satisfactory to the Trustee;
(3) immediately after such transaction, no Default or Event of Default
exists; and
(4) Foamex or the Person formed by or surviving any such consolidation
or merger (if other than Foamex), or to which such sale, assignment,
transfer, conveyance or other disposition has been made would, on the date
of such transaction after giving pro forma effect thereto and any related
financing transactions as if the same had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test
set forth in Section 4.09(a) hereof.
In addition, Foamex shall not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This Section 5.01 will not apply to a sale,
assignment, transfer, conveyance or other disposition of assets between or among
Foamex and any of its Wholly Owned Restricted Subsidiaries.
Without complying with clause (4) above, Foamex may merge with one or more
of its Wholly Owned Restricted Subsidiaries, and Foamex may merge with an
Affiliate for the sole purpose of incorporating Foamex in another jurisdiction
or for forming a holding company.
Notwithstanding the foregoing, Foamex is permitted to reorganize as a
corporation in accordance with the procedures established in this Indenture (and
Foamex Capital may thereafter liquidate); provided that Foamex shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee confirming that the Holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
reorganization and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such
reorganization had not occurred.
Section 5.02 Successor Entity Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of
Foamex in a transaction that is subject to, and that complies with the
provisions of, Section 5.01 hereof, the successor entity formed by such
consolidation or into or with which Foamex is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Issuers" or "Foamex" shall refer
instead to the successor entity and not to Foamex or Foamex Capital), and may
exercise every right and power of the Issuers under this Indenture with the same
effect as if such successor Person had been named as the Issuers herein. In the
event of any consolidation or merger, or any sale, assignment, transfer, lease
conveyance or other disposition of all or substantially all of the assets of the
Issuers in accordance with Section 5.01 hereof, the Issuers will be discharged
from all obligations and covenants under this Indenture and the Notes.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an "Event of Default":
(1) the Issuers default for 30 days in the payment when due of
interest on, or Liquidated Damages with respect to, the Notes;
(2) the Issuers default in the payment when due (at maturity, upon
redemption or otherwise) of the principal of, or premium, if any, on the
Notes;
(3) Foamex or any of its Restricted Subsidiaries fails to comply with
the provisions of Section 4.10 hereof, consummate an Asset Sale Offer under
Section 4.15 hereof or comply with the provisions of Section 5.01 hereof;
(4) Foamex or any of its Restricted Subsidiaries fails to observe or
perform any other covenant, representation, warranty or other agreement in
this Indenture, the Notes, the Subsidiary Guarantees or the Security
Documents for 60 days after notice to the Issuers by the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes then
outstanding voting as a single class;
(5) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by Foamex or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by Foamex or any of its
Restricted Subsidiaries), whether such Indebtedness or Guarantee now
exists, or is created after the date of this Indenture, if that default:
(A) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default
(a "Payment Default"); or
(B) results in the acceleration of such Indebtedness prior to its
Stated Maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the Stated Maturity of
which has been so accelerated, aggregates $20.0 million or more;
(6) failure by Foamex or any of its Restricted Subsidiaries to pay
final judgments aggregating in excess of $15.0 million, which judgments are
not paid, discharged, bonded (such that a judgment creditor could not
proceed against the assets of Foamex or any of its Restricted Subsidiaries)
or stayed for a period of 60 days after entry thereof;
(7) (a) except as permitted by this Indenture, any Subsidiary
Guarantee or any Security Document or any security interest granted thereby
is held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect and such default
continues for ten days after written notice to the Issuers by the Trustee
or the Holders of at least 25% in aggregate principal amount of the Notes
then outstanding voting as a single class or (b) Foamex, Foamex Capital or
any Guarantor, or any Person acting on behalf of Foamex, Foamex Capital or
any Guarantor, shall deny or disaffirm its obligations under any Subsidiary
Guarantee or Security Document;
(8) Foamex or any of its Significant Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a custodian of it or for all
or substantially all of its property,
(D) makes a general assignment for the benefit of its creditors,
or
(E) generally is not paying its debts as they become due; and
(9) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against Foamex or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary in an involuntary
case;
(B) appoints a custodian of Foamex or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary or for all or
substantially all of the property of Foamex or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary; or
(C) orders the liquidation of Foamex or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary,
and the order or decree remains unstayed and in effect for 60
consecutive days.
In addition, upon becoming aware of any Default or Event of Default, the
Issuers are required to deliver to the Trustee a statement specifying such
Default or Event of Default.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (8) or (9) of
Section 6.01 hereof, with respect to Foamex or any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, all outstanding Notes will become due
and payable immediately without further action or notice. If any other Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of all of the
Holders rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest, Liquidated Damages or premium that
has become due solely because of the acceleration) have been cured or waived.
If an Event of Default occurs on or after April 1, 2006 by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Issuers
with the intention of avoiding payment of the premium that the Issuers would
have had to pay if the Issuers then had elected to redeem the Notes pursuant to
Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent premium
shall also become and be immediately due and payable, to the extent permitted by
law, anything in this Indenture or in the Notes to the contrary notwithstanding.
If an Event of Default occurs prior to April 1, 2006 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding the prohibition on redemption of the Notes prior to
such date, then, upon acceleration of the Notes, an additional premium shall
also become and be immediately due and payable in an amount, for each of the
years beginning on April of the years set forth below, as set forth below
(expressed as a percentage of the principal amount of the Notes on the date of
payment that would otherwise be due but for the provisions of this sentence):
Year Percentage
---- ----------
2003................................................... 110.750%
2004................................................... 108.960%
2005................................................... 107.170%
2006................................................... 105.375%
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium and Liquidated
Damages, if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase); provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of other Holders of Notes or that may involve the Trustee in
personal liability.
Section 6.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(1) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee
a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder;
provided that a Holder shall not have the right to institute any such suit for
the enforcement of payment if and to the extent that the institution or
prosecution thereof or the entry of judgment therein would, under applicable
law, result in the surrender, impairment, waiver or loss of the Lien of this
Indenture upon any property subject to such Lien.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Issuers for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Issuers
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
premium and Liquidated Damages, if any and interest, respectively; and
Third: to the Issuers or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant
to Section 6.07 hereof, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee will
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee will examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(2) the Trustee will not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee will not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend or
risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder has offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee will not be liable for interest on any money received by it
except as the Trustee may agree in writing with the Issuers. Money held in trust
by the Trustee need not be segregated from other funds except to the extent
required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and agents and will not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee will not be liable for any action it takes or omits to take
in good faith that it believes to be authorized or within the rights or powers
conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Issuers will be sufficient if signed by an
Officer of the Issuers.
(f) The Trustee will be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities that might be incurred
by it in compliance with such request or direction.
(g) Except with respect to Section 4.01 hereof, the Trustee shall have no
duty to inquire as to the performance of the Issuers with respect to the
covenants contained in Article 4 hereof. In addition, the Trustee shall not be
deemed to have knowledge of an Event of Default except (i) any Default or Event
of Default occurring pursuant to Sections 4.01, 6.01(1) or 6.01(2) hereof or
(ii) any Default or Event of Default of which the Trustee shall have received
written notification or obtained actual knowledge. Section 7.03 Individual
Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with Foamex or any Affiliate of Foamex
with the same rights it would have if it were not Trustee. However, in the event
that the Trustee acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the SEC for permission to continue as trustee
or resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer.
The Trustee will not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Issuers' use of the proceeds from the Notes or any money
paid to the Issuers or upon the Issuers' direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium or
Liquidated Damages, if any, or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the Holders
of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with May 15, 2003, and for
so long as Notes remain outstanding, the Trustee will mail to the Holders of the
Notes a brief report dated as of such reporting date that complies with TIA ss.
313(a) (but if no event described in TIA ss. 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted). The
Trustee also will comply with TIA ss. 313(b)(2). The Trustee will also transmit
by mail all reports as required by TIA ss. 313(c).
(b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Issuers and filed by the Trustee with
the SEC and each stock exchange on which the Notes are listed in accordance with
TIA ss. 313(d). The Issuers will promptly notify the Trustee when the Notes are
listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Issuers will pay to the Trustee from time to time such reasonable
compensation as the Issuers and the Trustee shall from time to time agree in
writing for its acceptance of this Indenture and services hereunder. The
Trustee's compensation will not be limited by any law on compensation of a
trustee of an express trust. The Issuers will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses will
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
(b) The Issuers and the Guarantors will indemnify the Trustee and the
Collateral Agent against any and all losses, liabilities or expenses incurred by
it arising out of or in connection with the acceptance or administration of its
duties under this Indenture or any of the Security Documents, including the
costs and expenses of enforcing this Indenture against the Issuers and the
Guarantors (including this Section 7.07) and defending itself against any claim
(whether asserted by the Issuers, the Guarantors or any Holder or any other
Person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence or bad faith. The Trustee will
notify the Issuers promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Issuers will not relieve the Issuers or
any of the Guarantors of their obligations hereunder. The Issuers or such
Guarantor will defend the claim and the Trustee will cooperate in the defense.
The Trustee may have separate counsel and the Issuers will pay the reasonable
fees and expenses of such counsel. Neither the Issuers nor any Guarantor need
pay for any settlement made without its consent, which consent will not be
unreasonably withheld.
(c) The obligations of the Issuers and the Guarantors under this Section
7.07 will survive the satisfaction and discharge of this Indenture.
(d) To secure the Issuers' payment obligations in this Section 7.07, the
Trustee will have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(8) or (9) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIAss. 313(b)(2) to the
extent applicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Issuers. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuers in writing. The Issuers may remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a custodian or public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuers will promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
(d) If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee, provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Issuers' obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the requirements of
TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA ss. 310(b).
Section 7.11 Preferential Collection of Claims Against Issuers.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Issuers may, at the option of both of their Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Notes and Subsidiary Guarantees upon compliance with the conditions set forth
below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Issuers and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes (including the Subsidiary Guarantees), the Security Documents
and this Indenture on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that
the Issuers and the Guarantors will be deemed to have paid and discharged the
entire Indebtedness represented by the outstanding Notes (including the
Subsidiary Guarantees) and this Indenture, which Notes shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the
other Sections of this Indenture referred to in clauses (1) and (2) below, and
to have satisfied all their other obligations under such Notes, the Subsidiary
Guarantees and this Indenture (and the Trustee, on demand of and at the expense
of the Issuers, shall execute proper instruments acknowledging the same), except
for the following provisions which will survive until otherwise terminated or
discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, or interest or premium and Liquidated Damages, if
any, on such Notes when such payments are due from the trust referred to in
Section 8.04 hereof;
(2) the Issuers' obligations with respect to the Notes concerning issuing
temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen
Notes and the maintenance of an office or agency for payment and money for
security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Issuers' and the Guarantors' obligations in connection
therewith; and
(4) this Section 8.02.
Subject to compliance with this Article 8, the Issuers may exercise their
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Issuers and the Guarantors will, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, be released
from each of their obligations under the covenants contained in Sections 4.03,
4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, and 4.19
hereof and clause (4) of Section 5.01 hereof with respect to the outstanding
Notes on and after the date the conditions set forth in Section 8.04 hereof are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes will thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but will continue to be deemed "outstanding" for
all other purposes hereunder (it being understood that such Notes will not be
deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes and Subsidiary
Guarantees, the Issuers and the Guarantors may omit to comply with and will have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply will not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Subsidiary Guarantees will be unaffected thereby.
In addition, upon the Issuers' exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(7)
hereof will not constitute Events of Default and, upon satisfaction with Article
10 hereof, the Issuers will not be obligated to comply with the Security
Documents. Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance under
either Section 8.02 or 8.03 hereof:
(1) the Issuers must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Notes, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium
and Liquidated Damages, if any, and interest on the outstanding Notes on
the stated date for payment thereof or on the applicable redemption date,
as the case may be, and the Issuers must specify whether the Notes are
being defeased to maturity or to a particular redemption date;
(2) in the case of an election under Section 8.02 hereof, the Issuers
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that:
(A) the Issuers have received from, or there has been published
by, the Internal Revenue Service a ruling; or
(B) since the date of this Indenture, there has been a change in
the applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as
a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(3) in the case of an election under Section 8.03 hereof, the Issuers
must deliver to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Covenant Defeasance
had not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit);
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which Foamex or any
of its Restricted Subsidiaries is a party or by which Foamex or any of its
Restricted Subsidiaries is bound;
(6) the Issuers must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Issuers with the intent of
preferring the Holders of Notes over the other creditors of the Issuers
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Issuers or others; and
(7) the Issuers must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel (which opinion may be subject to customary
assumptions and exclusions), each stating that all conditions precedent
provided for or relating to the Legal Defeasance or the Covenant Defeasance
have been complied with.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Issuers acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Issuers will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Issuers from time to time upon the request of the
Issuers any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(1) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Issuers.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Issuers, in trust for the payment of the principal of, premium or Liquidated
Damages, if any, or interest on any Note and remaining unclaimed for two years
after such principal, premium or Liquidated Damages, if any, or interest has
become due and payable shall be paid to the Issuers on their request or (if then
held by the Issuers) will be discharged from such trust; and the Holder of such
Note will thereafter be permitted to look only to the Issuers for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Issuers as trustee thereof, will
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Issuers cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which will not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Issuers.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States dollars
or non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Issuers' and the Guarantors' obligations under this
Indenture and the Notes and the Subsidiary Guarantees will be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03 hereof, as the case may be;
provided, however, that, if the Issuers make any payment of principal of,
premium or Liquidated Damages, if any, or interest on any Note following the
reinstatement of their obligations, the Issuers will be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Issuers, the
Guarantors, the Trustee and the Collateral Agent may amend or supplement this
Indenture, the Subsidiary Guarantees, the Security Documents or the Notes
(collectively, the "Indenture Documents") without the consent of any Holder of a
Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes or to alter the provisions of Article 2 hereof
(including the related definitions) in a manner that does not materially
adversely affect any Holder;
(3) to provide for the assumption of the Issuers' or a Guarantor's
obligations to the Holders of the Notes by a successor to the Issuers
pursuant to Article 5 or Article 11 hereof;
(4) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any such Holder under the Indenture Documents;
(5) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(6) to provide for the issuance of Additional Notes in accordance with
the limitations set forth in this Indenture as of the date hereof;
(7) to allow any Subsidiary or any other Person to execute a
supplemental indenture and/or other Guarantee and any Security Documents
with respect to the Notes; or
(8) if necessary, in connection with any addition or release of
Collateral permitted under the terms of this Indenture or Security
Documents.
In addition, without the consent of any Holder of Notes, any amendment,
waiver or consent agreed to by the Credit Agent or the holders of Credit
Agreement Obligations under any provision of any of the security documents
granting the first-priority lien on any Collateral to secure the Credit
Agreement Obligations will automatically apply to the comparable provision of
the comparable Security Document entered into in connection with the Notes, as
provided in the Intercreditor Agreement. The Issuers shall also be entitled to
other releases of the Collateral or the Subsidiary Guarantees as described in
Sections 10.03 and 11.05 hereof. If the Issuers wish under other circumstances
to obtain an amendment or waiver or seek a consent under any Security Document
or Subsidiary Guarantee, the Issuers shall be entitled to do so if the Issuers
mail written notice of their request to the Trustee and the Holders of the Notes
and if the Issuers do not receive written objections from Holders of at least
25% in principal amount of the Notes within 20 Business Days after that mailing.
If the Issuers receive such objections, then they shall not be entitled to
effect that amendment or waiver, and such consent shall not be effective, unless
the Issuers obtain the consent of the Holders of a majority in outstanding
principal amount of the Notes (including, without limitation, Additional Notes,
if any) then outstanding voting as a single class (including, without
limitation, consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes).
Upon the request of Foamex accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture Document, and upon receipt by the Trustee or, in the case of the
Security Documents, the Collateral Agent, of the documents described in Section
7.02 hereof, the Trustee or the Collateral Agent, as applicable, will join with
the Issuers and the Guarantors in the execution of any amended or supplemental
Indenture Document authorized or permitted by the terms of this Indenture and to
make any further appropriate agreements and stipulations that may be therein
contained, but neither the Trustee nor the Collateral Agent will be obligated to
enter into such amended or supplemental Indenture Document that affects its own
rights, duties or immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided in Section 9.01 hereof and below in this Section 9.02,
the Issuers, the Guarantors and the Trustee or, in the case of the Security
Documents, the Collateral Agent, may amend or supplement this Indenture
(including, without limitation, Sections 3.09, 4.10 and 4.15 hereof), and the
other Indenture Documents with the consent of the Holders of at least a majority
in principal amount of the Notes (including, without limitation, Additional
Notes, if any) then outstanding voting as a single class (including, without
limitation, consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07
hereof, any existing Default or Event of Default (other than a Default or Event
of Default in the payment of the principal of, premium or Liquidated Damages, if
any, or interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of any
Indenture Document or the Notes may be waived with the consent of the Holders of
a majority in principal amount of the then outstanding Notes, including
Additional Notes, if any, voting as a single class (including consents obtained
in connection with a tender offer or exchange offer for, or purchase of, the
Notes). Section 2.08 hereof shall determine which Notes are considered to be
"outstanding" for the purposes of this Section 9.02.
Upon the request of Foamex accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
Indenture Document, and upon the filing with the Trustee of evidence reasonably
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee or, in the case of the Security Documents, the
Collateral Agent, of the documents described in Section 7.02 hereof, the Trustee
or the Collateral Agent, as applicable, will join with the Issuers in the
execution of such amended or supplemental Indenture Document unless such amended
or supplemental Indenture Document directly affects the Trustee's or the
Collateral Agent's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee or the Collateral Agent, as applicable, may
in its discretion, but will not be obligated to, enter into such amended or
supplemental Indenture Document.
It is not be necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Issuers will mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Issuers to mail such notice, or any defect therein, will not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture Document or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding voting as a single class may waive compliance in a particular
instance by the Issuers with any provision of any of the Indenture Documents.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption of
the Notes except as provided above with respect to Sections 3.09, 4.10 and
4.15 hereof;
(3) reduce the rate of or change the time for payment of interest,
including default interest, if any, on any Note;
(4) waive a Default or Event of Default in the payment of principal of
or premium or Liquidated Damages, if any, or interest on the Notes (except
a rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes and a
waiver of the payment default that resulted from such acceleration);
(5) make any Note payable in money other than that stated in the
Notes;
(6) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of, or interest or premium or Liquidated Damages, if
any, on the Notes;
(7) make any change in Section 6.04 or 6.07 hereof (other than a
payment required under Section 4.10 or 4.15 hereof) or in the foregoing
amendment and waiver provisions; or
(8) release any Guarantor from any of its obligations under any of the
Indenture Documents, except in accordance with the terms of this Indenture.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will be set
forth in a amended or supplemental Indenture that complies with the TIA as then
in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Issuers in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee or, in the case of the Security Documents, the Collateral
Agent, will sign any amended or supplemental Indenture Document authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee or the
Collateral Agent, as applicable. Foamex may not sign any amendment or
supplemental Indenture Document until the Board of Directors approves it. In
executing any amended or supplemental Indenture Document, the Trustee or the
Collateral Agent, as applicable, will be entitled to receive and (subject to
Section 7.01 hereof) will be fully protected in relying upon, in addition to the
documents required by Section 13.04 hereof, an Officers' Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
Indenture Document is authorized or permitted by this Indenture.
ARTICLE 10.
COLLATERAL AND SECURITY
Section 10.01 Security Documents.
The due and punctual payment of the principal of and interest and
Liquidated Damages, if any, on the Notes when and as the same shall be due and
payable, whether on an interest payment date, at maturity, by acceleration,
repurchase, redemption or otherwise, and interest on the overdue principal of
and interest and Liquidated Damages (to the extent permitted by law), if any, on
the Notes and performance of all other obligations of the Issuers to the Holders
of Notes or the Trustee under this Indenture and the Notes, according to the
terms hereunder or thereunder, are secured as provided in the Security Documents
which the Issuers and the Guarantors have entered into simultaneously with the
execution of this Indenture, subject to the terms of the Intercreditor
Agreement. Each Holder of Notes, by its acceptance thereof, consents and agrees
to the terms of the Security Documents (including, without limitation, the
provisions providing for foreclosure and release of Collateral) as the same may
be in effect or may be amended from time to time in accordance with its terms
and authorizes and directs the Collateral Agent to enter into the Security
Documents and to perform its obligations and exercise its rights thereunder in
accordance therewith. The Issuers shall deliver to the Trustee (if it is not
itself then the Collateral Agent) copies of all documents delivered to the
Collateral Agent pursuant to the Security Documents, and will do or cause to be
done all such acts and things as may be required by the next sentence of this
Section 10.01, to assure and confirm to the Trustee and the Collateral Agent the
security interest in the Collateral contemplated hereby, by the Security
Documents or any part thereof, as from time to time constituted, so as to render
the same available for the security and benefit of this Indenture and of the
Notes secured hereby, according to the intent and purposes herein expressed. The
Issuers shall take, and shall cause their Restricted Subsidiaries to take, any
and all actions reasonably required to cause the Security Documents to create
and maintain, as security for the Obligations of the Issuers hereunder, a valid
and enforceable perfected second-priority Lien in and on all the Collateral, in
favor of the Collateral Agent for the benefit of the Holders of Notes, second in
priority (subject to Permitted Liens) to any and all security interests at any
time granted in the Collateral to secure Credit Agreement Obligations.
Section 10.02 Recording and Opinions.
(a) The Issuers shall furnish to the Trustee promptly after the issuance of
the Exchange Notes an Opinion of Counsel either:
(1) stating that, in the opinion of such counsel, all action has been
taken with respect to the recording, registering and filing of this
Indenture, financing statements or other instruments necessary to make
effective and perfect the Lien intended to be created by the Security
Documents, and reciting with respect to the security interests in the
Collateral, the details of such action; or
(2) stating that, in the opinion of such counsel, no such action is
necessary to make such Lien effective.
(b) The Issuers will furnish to the Collateral Agent and the Trustee on May
15 in each year beginning with May 15, 2003, an Opinion of Counsel, dated as of
such date, either:
(1) (A) stating that, in the opinion of such counsel, action has been
taken with respect to the recording, registering, filing, re-recording,
re-registering and re-filing of all supplemental indentures, financing
statements, continuation statements or other instruments of further
assurance as is necessary to maintain and perfect the Lien of the Security
Documents and reciting with respect to the security interests in the
Collateral the details of such action or referring to prior Opinions of
Counsel in which such details are given, and (B) stating that, in the
opinion of such counsel, based on relevant laws as in effect on the date of
such Opinion of Counsel, all financing statements and continuation
statements have been executed and filed that are necessary as of such date
and during the succeeding 12 months fully to preserve, perfect and protect,
to the extent such protection and preservation are possible by filing, the
rights of the Holders of Notes and the Collateral Agent and the Trustee
hereunder and under the Security Documents with respect to the security
interests in the Collateral; or
(2) stating that, in the opinion of such counsel, no such action is
necessary to maintain and perfect such Lien and assignment.
(c) The Issuers will otherwise comply with the provisions of TIAss.314(b).
Section 10.03 Release of Collateral.
(a) Subject to subsections (b), (c) and (d) of this Section 10.03,
Collateral may be released from the Lien and security interest created by the
Security Documents at any time or from time to time in accordance with the
provisions of the Security Documents or as provided hereby. Whether prior to or
after the Discharge of Credit Agreement Obligations, upon the request of the
Issuers pursuant to an Officers' Certificate certifying that all conditions
precedent hereunder have been met and without the consent of any Holder of the
Notes, the Issuers and the Guarantors will be entitled to releases of assets
included in the Collateral from the Liens securing the Notes under any one or
more of the following circumstances:
(1) if all other Liens on that asset securing Credit Agreement
Obligations or any Other Second-Lien Obligations then secured by that asset
(including all commitments thereunder) are released; provided, that after
giving effect to the release, obligations secured by the first-priority
Liens on the remaining Collateral remain outstanding;
(2) to enable the Issuers or any Guarantor to consummate any sale,
lease, conveyance or other disposition of any assets or rights permitted or
not prohibited under Section 4.10 hereof;
(3) if the Issuers provide substitute collateral with at least an
equivalent fair value, as determined in good faith by the Board of
Directors of Foamex;
(4) in respect of assets subject to a permitted purchase money lien;
(5) if all of the stock of any of Foamex's Subsidiaries that is
pledged to the Collateral Agent is released or if any Subsidiary that is a
Guarantor is released from its Subsidiary Guarantee, that Subsidiary's
assets will also be released;
(6) in respect of assets included in the Collateral with a fair value,
as determined in good faith by the Board of Directors of Foamex, of up to
$1.0 million in any calendar year, subject to a cumulative carryover for
any amount not used in any prior calendar year; or
(7) pursuant to an amendment, waiver or supplement pursuant to Article
9 hereof.
Upon receipt of such Officers' Certificate the Collateral Agent shall
execute, deliver or acknowledge any necessary or proper instruments of
termination, satisfaction or release to evidence the release of any Collateral
permitted to be released pursuant to this Indenture or the Security Documents.
(b) Except as otherwise provided in the Intercreditor Agreement, no
Collateral may be released from the Lien and security interest created by the
Security Documents pursuant to the provisions of the Security Documents unless
the Officers' Certificate required by this Section 10.03 has been delivered to
the Collateral Agent.
(c) At any time when a Default or Event of Default has occurred and is
continuing and the maturity of the Notes has been accelerated (whether by
declaration or otherwise) and the Trustee has delivered a notice of acceleration
to the Collateral Agent, no release of Collateral pursuant to the provisions of
the Security Documents will be effective as against the Holders of Notes, except
as otherwise provided in the Intercreditor Agreement.
(d) The release of any Collateral from the terms of this Indenture and the
Security Documents shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to the terms of the Security Documents and this
Indenture. To the extent applicable, the Issuers will cause TIA ss. 313(b),
relating to reports, and TIA ss. 314(d), relating to the release of property or
securities from the Lien and security interest of the Security Documents and
relating to the substitution therefor of any property or securities to be
subjected to the Lien and security interest of the Security Documents, to be
complied with. Any certificate or opinion required by TIA ss. 314(d) may be made
by an Officer of the Issuers except in cases where TIA ss. 314(d) requires that
such certificate or opinion be made by an independent Person, which Person will
be an independent engineer, appraiser or other expert selected or approved by
the Trustee and the Collateral Agent in the exercise of reasonable care.
Section 10.04 Certificates of the Issuers.
To the extent applicable, the Issuers will furnish to the Trustee and the
Collateral Agent, prior to each proposed release of Collateral pursuant to the
Security Documents:
(1) all documents required by TIAss.314(d); and
(2) an Opinion of Counsel, which may be rendered by internal counsel
to the Issuers, to the effect that such accompanying documents constitute
all documents required by TIA ss.314(d).
The Trustee may, to the extent permitted by Sections 7.01 and 7.02 hereof,
accept as conclusive evidence of compliance with the foregoing provisions the
appropriate statements contained in such documents and such Opinion of Counsel.
Section 10.05 Certificates of the Trustee.
In the event that the Issuers wish to release Collateral in accordance with
the Security Documents at a time when the Trustee is not itself also the
Collateral Agent and have delivered the certificates and documents required by
the Security Documents and Sections 10.03 and 10.04 hereof, the Trustee will
determine whether it has received all documentation required by TIA ss. 314(d)
in connection with such release and, based on such determination and the Opinion
of Counsel delivered pursuant to Section 10.04(2), will deliver a certificate to
the Collateral Agent setting forth such determination.
Section 10.06 Authorization of Actions to Be Taken by the Trustee Under the
Security Documents.
Subject to the provisions of Section 7.01 and 7.02 hereof, the Trustee may,
in its sole discretion and without the consent of the Holders of Notes, direct,
on behalf of the Holders of Notes, the Collateral Agent to, take all actions it
deems necessary or appropriate in order to:
(1) enforce any of the terms of the Security Documents; and
(2) collect and receive any and all amounts payable in respect of the
Obligations of the Issuers hereunder.
Subject to Section 3 of the Intercreditor Agreement, the Trustee will have
power to institute and maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any acts that may be
unlawful or in violation of the Security Documents or this Indenture, and such
suits and proceedings as the Trustee may deem expedient to preserve or protect
its interests and the interests of the Holders of Notes in the Collateral
(including power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interest hereunder or be prejudicial to the interests of the
Holders of Notes or of the Trustee).
Section 10.07 Authorization of Receipt of Funds by the Trustee Under the
Security Documents.
The Trustee is authorized to receive any funds for the benefit of the
Holders of Notes distributed under the Security Documents, and to make further
distributions of such funds to the Holders of Notes according to the provisions
of this Indenture.
Section 10.08 Termination of Security Interest.
The Trustee will, at the request of the Issuers, deliver a certificate to
the Collateral Agent stating that such Obligations have been paid in full, and
instruct the Collateral Agent to release the Liens pursuant to this Indenture
and the Security Documents upon (1) payment in full of the principal of, accrued
and unpaid interest and Liquidated Damages, if any, on the Notes and all other
Obligations under this Indenture, the Subsidiary Guarantees and the Security
Documents that are due and payable at or prior to the time such principal,
accrued and unpaid interest and Liquidated Damages, if any, are paid, (2) a
satisfaction and discharge of this Indenture as described in Section 12.01
hereof or (3) a legal defeasance or covenant defeasance as described in Article
8. Upon receipt of such instruction, the Collateral Agent shall execute, deliver
or acknowledge any necessary or proper instruments of termination, satisfaction
or release to evidence the release of all such Liens.
Section 10.09 Collateral Agent.
(a) The Trustee shall act as Collateral Agent and shall be authorized to
appoint co-Collateral Agents as necessary in its sole discretion. Neither the
Collateral Agent nor any of its respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any other Person or
to take any other action whatsoever with regard to the Collateral or any part
thereof. The powers conferred on the Collateral Agent hereunder are solely to
protect the Collateral Agent's interest in the Collateral and shall not impose
any duty upon the Collateral Agent to exercise any such powers. The Collateral
Agent shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers, and neither the Collateral Agent nor any
of its officers, directors, employees or agents shall be responsible for any act
or failure to act hereunder, except for its own gross negligence or willful
misconduct.
(b) The Trustee, as Collateral Agent, is authorized and directed to (i)
enter into the Security Documents (including, without limitation, the
Intercreditor Agreement) (ii) bind the Holders on the terms as set forth therein
and (iii) perform and observe its obligations under the Security Documents
(including, without limitation, the Intercreditor Agreement).
(c) If the Issuers (i) incur Indebtedness constituting Credit Agreement
Obligations at any time when no Intercreditor Agreement is in effect or at any
time when Indebtedness constituting Credit Agreement Obligations entitled to the
benefit of an existing Intercreditor Agreement is concurrently retired, and (ii)
deliver to the Collateral Agent an Officers' Certificate so stating and
requesting the Collateral Agent to enter into an Intercreditor Agreement in
favor of a designated agent or representative for the holders of the
Indebtedness so incurred, the Collateral Agent shall (and is hereby authorized
and directed to) enter into such Intercreditor Agreement, bind the Holders on
the terms set forth therein, and perform and observe its obligations thereunder.
(d) If (i) the Issuers at any time incur any Indebtedness constituting
Other Second-Lien Obligations, (ii) the indenture or agreement governing such
Indebtedness provides that, notwithstanding the date, manner or order of grant,
attachment or perfection of any Liens granted to the Collateral Agent under the
Security Documents (the "Liens Securing Note Obligations") or granted to the
holders of Other Second-Lien Obligations or any agent or representative for the
holders of Other Second-Lien Obligations (the "Liens Securing Other Second-Lien
Obligations"), the Liens Securing Note Obligations and the Liens Securing Other
Second-Lien Obligations shall be of equal dignity, priority and rank, (iii) the
Issuers deliver to the Collateral Agent an Officer's Certificate so stating and
requesting that the Collateral Agent assign or transfer the Liens Securing Note
Obligations to a Common Collateral Agent identified therein and (iv) the Issuers
deliver to the Collateral Agent and the Common Collateral Agent an Opinion of
Counsel stating that, in the opinion of such counsel, the Common Collateral
Agent is empowered and obligated (on substantially the terms applicable to the
Collateral Agent pursuant to the Indenture Documents, including, without
limitation, the Intercreditor Agreement) to hold the Liens Securing Note
Obligations and all Liens Securing Other-Second Lien Obligations and all
proceeds of all such Liens for the equal and ratable benefit of the holders of
all Obligations secured thereby and further confirming as to all such Liens each
of the matters referred to in Section 10.02(b)(1), giving effect to the
assignment or transfer requested in such Officer's Certificate, then (A) the
Liens Securing Note Obligations shall be of equal dignity, priority and rank
with all such Liens Securing Other Second-Lien Obligations and (B) the
Collateral Agent shall assign or transfer the Liens Securing Note Obligations to
the Common Collateral Agent as requested in such Officer's Certificate.
ARTICLE 11.
SUBSIDIARY GUARANTEES
Section 11.01 Subsidiary Guarantees.
(a) Subject to this Article 11, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Issuers hereunder or thereunder, that:
(1) the principal of, premium and Liquidated Damages, if any, and
interest on the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of and interest on the Notes, if any, if lawful, and all
other obligations of the Issuers to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance
with the terms hereof and thereof; and
(2) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at Stated Maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Issuers, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Issuers, any right to require a
proceeding first against the Issuers, protest, notice and all demands whatsoever
and covenant that this Subsidiary Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise to
return to the Issuers, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Issuers or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, will be reinstated in full
force and effect.
(d) Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (2) in the event of any declaration of
acceleration of such obligations as provided in Article 6 hereof, such
obligations (whether or not due and payable) will forthwith become due and
payable by the Guarantors for the purpose of this Subsidiary Guarantee. The
Guarantors will have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Subsidiary Guarantee.
Section 11.02 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under this
Article 11, result in the obligations of such Guarantor under its Subsidiary
Guarantee not constituting a fraudulent transfer or conveyance.
Section 11.03 Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form attached as Exhibit E hereto shall be endorsed by an
Officer of such Guarantor on each Note authenticated and delivered by the
Trustee and that this Indenture will be executed on behalf of such Guarantor by
one of its Officers.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, will constitute due delivery of the Subsidiary Guarantee set forth in
this Indenture on behalf of the Guarantors.
In the event that an Issuer creates or acquires any Domestic Restricted
Subsidiary after the date of this Indenture, if required by Section 4.19 hereof,
the Issuers will cause such Domestic Restricted Subsidiary to comply with the
provisions of Section 4.19 hereof and this Article 11, to the extent applicable.
Section 11.04 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.05, no Guarantor may sell or
otherwise dispose of all or substantially all of its assets to, or consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person) another Person, unless:
(1) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(2) either:
(a) subject to Section 11.05 hereof, the Person acquiring the
property in any such sale or disposition or the Person formed by or
surviving any such consolidation or merger unconditionally assumes all
the obligations of that Guarantor, pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the
Trustee, under the Notes, this Indenture, the Subsidiary Guarantee and
any Registration Rights Agreement on the terms set forth herein or
therein;
(b) the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this
Indenture, including without limitation, Section 4.10 hereof; or
(c) Foamex would be permitted, immediately after giving pro forma
effect to such transaction, to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.09(a) hereof.
The requirements of clause (2)(c) of this Section 11.04 will not apply in
the case of a sale of all or substantially all of the assets to or consolidation
with or merger with or into (1) Foamex, Foamex Capital or another Guarantor, (2)
any other Person, if such transaction represents a disposition of the Guarantor
or all or a portion of its assets and such disposition or asset disposition is
permitted or not prohibited by Section 4.10 hereof, or (3) any other Person if
the acquisition of all the Equity Interests (or such lesser amount of Equity
Interests in a proposed transaction) in such Person would have complied, to the
extent applicable, with the provisions of the Sections 4.07 and 4.09 hereof.
In case of any such sale of substantially all of the assets or
consolidation, merger, sale or conveyance and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the
Trustee and reasonably satisfactory in form to the Trustee, of the Subsidiary
Guarantee endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person will succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor. Such successor
Person thereupon may cause to be signed any or all of the Subsidiary Guarantees
to be endorsed upon all of the Notes issuable hereunder which theretofore shall
not have been signed by the Issuers and delivered to the Trustee. All the
Subsidiary Guarantees so issued will in all respects have the same legal rank
and benefit under this Indenture as the Subsidiary Guarantees theretofore and
thereafter issued in accordance with the terms of this Indenture as though all
of such Subsidiary Guarantees had been issued at the date of the execution
hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses
(2)(a) and (2)(b) above, nothing contained in this Indenture or in any of the
Notes will prevent any consolidation or merger of a Guarantor with or into
Foamex, Foamex Capital or another Guarantor, or will prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to Foamex, Foamex Capital or another Guarantor.
Section 11.05 Releases of Subsidiary Guarantees.
A Subsidiary Guarantee of the Notes provided by a Guarantor shall be
released without any action required on the part of the Trustee or any Holder of
the Notes:
(1) if the Credit Agent releases the guarantee of Credit Agreement
Obligations made by such Guarantor, unless such Guarantor remains a
guarantor of the Issuers' Senior Subordinated Notes;
(2) if (a) all of the Capital Stock of, or other Equity Interests in,
or all or substantially all of the assets of such Guarantor is sold or
otherwise disposed of (including by way of merger or consolidation) to a
Person other than Foamex or any of Foamex's Domestic Restricted
Subsidiaries or (b) such Guarantor ceases to be a Restricted Subsidiary,
and the Issuers otherwise comply, to the extent applicable, with Section
4.10 hereof;
(3) if the Issuers designate such Guarantor as an Unrestricted
Subsidiary in accordance with Section 4.07 hereof; or
(4) upon the Issuers' request if the fair market value of the assets
of the applicable Guarantor (as determined in good faith by the Board of
Directors of Foamex), together with the fair market value of the assets of
other Guarantors whose Subsidiary Guarantee was released in the same
calendar year, do not exceed $1.0 million (subject to cumulative carryover
for amounts not used in any prior calendar year).
Upon delivery by the Issuers to the Trustee of an Officers' Certificate and
an Opinion of Counsel to the effect that such release was made by the Issuers in
accordance with the provisions of this Indenture, including without limitation
Section 4.10 hereof, the Trustee will execute any documents reasonably required
in order to evidence the release of any Guarantor from its obligations under its
Subsidiary Guarantee.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 11.
ARTICLE 12.
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further effect as
to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated (except lost, stolen
or destroyed Notes that have been replaced or paid and Notes for whose
payment money has theretofore been deposited in trust and thereafter
repaid to the Issuers) have been delivered to the Trustee for
cancellation; or
(b) all Notes that have not been delivered to the Trustee for
cancellation (i) have become due and payable by reason of the making
of a notice of redemption or otherwise, (ii) will become due and
payable within one year or (iii) are to be called for redemption
within 18 months under arrangements reasonably satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the
name, and at the reasonable expense of Foamex, and the Issuers or any
Guarantor have irrevocably deposited or caused to be deposited with
the Trustee as trust funds in trust solely for the benefit of the
Holders, cash in U.S. dollars, non-callable Government Securities, or
a combination thereof, in such amounts as will be sufficient without
consideration of any reinvestment of interest, to pay and discharge
the entire Indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium and Liquidated Damages, if any,
and accrued interest to the date of maturity or redemption;
(2) no Default or Event of Default has occurred and is continuing on
the date of such deposit or will occur as a result of such deposit and such
deposit will not result in a breach or violation of, or constitute a
default under, any other instrument to which the Issuers or any Guarantor
is a party or by which the Issuers or any Guarantor is bound;
(3) the Issuers or any Guarantor has paid or caused to be paid all
sums payable by it under this Indenture; and
(4) the Issuers have delivered irrevocable instructions to the Trustee
under this Indenture to apply the deposited money toward the payment of the
Notes at maturity or the redemption date, as the case may be.
In addition, the Issuers must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money
has been deposited with the Trustee pursuant to subclause (b) of clause (1) of
this Section 12.01, the provisions of Section 12.02 and Section 8.06 will
survive. In addition, nothing in this Section 12.01 will be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 12.02 Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 12.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Issuers acting as
their own Paying Agent) as the Trustee may determine, to the Persons entitled
thereto, of the principal (and premium, if any) and interest for whose payment
such money has been deposited with the Trustee; but such money need not be
segregated from other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 12.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Issuers'
and any Guarantor's obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
12.01; provided that if the Issuers have made any payment of principal of,
premium, if any, or interest on any Notes because of the reinstatement of its
obligations, the Issuers shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.
ARTICLE 13.
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA ss.318(c), the imposed duties will control.
Section 13.02 Notices.
Any notice or communication by the Issuers, any Guarantor or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Issuers and/or any Guarantor:
Foamex L.P.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
With a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
If to the Trustee:
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
The Issuers, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) will be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar. Any notice or communication will also be so mailed to any Person
described in TIA ss. 313(c), to the extent required by the TIA. Failure to mail
a notice or communication to a Holder or any defect in it will not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Issuers mail a notice or communication to Holders, they will mail a
copy to the Trustee and each Agent at the same time.
Section 13.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Issuers, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take any
action under this Indenture, the Issuers shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth in
Section 13.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth in
Section 13.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
Section 13.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) must comply with the provisions of TIA ss. 314(e)
and must include:
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 13.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 13.07 No Personal Liability of Partners, Directors, Officers,
Incorporators, Employees, Stockholders, Members and Agents.
No past, present or future partner, director, officer, employee,
incorporator, stockholder, member or agent of the Issuers or any of their
Restricted Subsidiaries, as such, shall have any liability for any obligations
of the Issuers or any Guarantor under the Notes, this Indenture, the Subsidiary
Guarantees or the Security Documents or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of the Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. The waiver may not be
effective to waive liabilities under the federal securities laws.
Section 13.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES, THE SUBSIDIARY GUARANTEES AND THE SECURITY
DOCUMENTS WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
Section 13.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Issuers or their Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 13.10 Successors.
All agreements of the Issuers in this Indenture and the Notes will bind
their successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 11.04.
Section 13.11 Severability.
In case any provision in this Indenture or in the Notes is invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby.
Section 13.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy will be an original, but all of them together represent the same agreement.
Section 13.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and will in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
SIGNATURES
Dated as of March 25, 2002
FOAMEX L.P.
By: FMXI, INC., its Managing General Partner
FOAMEX CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
GUARANTORS:
FOAMEX ASIA, INC.
FOAMEX CARPET CUSHION LLC
FOAMEX LATIN AMERICA, INC.
FOAMEX MEXICO, INC.
FOAMEX MEXICO II, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
