[EXECUTION COPY]
AMENDED AND RESTATED PARTNERSHIP PLEDGE AGREEMENT
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THIS AMENDED AND RESTATED PARTNERSHIP PLEDGE AGREEMENT (this
"Partnership Pledge Agreement"), dated as of June 30, 1999, is made by FMXI,
Inc., a Delaware corporation (a "Grantor" or "FMXI") and Foamex International
Inc., a Delaware corporation (a "Grantor" or "FII"; and, if together with FMXI,
the "Grantors") in favor of Citicorp USA, Inc., as FII Intercreditor Collateral
Agent (together with any successor(s) thereto in such capacity, the "Collateral
Agent") for each of the Secured Parties (as defined below).
W I T N E S S E T H:
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WHEREAS, pursuant to that certain Credit Agreement, dated as of June
12, 1997, as amended and restated as of February 27, 1998, as further amended
and restated as of June 29, 1999 (as amended, supplemented, amended and restated
or modified from time to time, the "Credit Agreement"), among Foamex L.P., a
Delaware limited partnership ("Partnership" or the "Borrower"), FMXI, Inc.,
certain institutions party thereto from time to time as lenders (the "Lenders"),
certain institutions party thereto from time to time as issuing banks (the
"Issuing Banks"), Citicorp USA, Inc., as collateral agent for the Lenders and
the Issuing Banks, and The Bank of Nova Scotia, as Funding Agent for the Lenders
and the Issuing Banks (together with the collateral agent therein, the
"Administrative Agents"), the Lenders and the Issuing Banks have extended Loans
and Commitments to make Credit Extensions to the Borrower;
WHEREAS, FII has heretofore entered into a guaranty, dated as of
February 27, 1998 (the "FII Guaranty"), pursuant to which it has guaranteed
certain obligations of New GFI;
WHEREAS, the Collateral Agent has heretofore entered into the FII
Intercreditor Agreement, dated as of February 27, 1998 (as amended,
supplemented, amended and restated or modified from time to time, the "FII
Intercreditor Agreement"), pursuant to which it has agreed to act as a
collateral agent (the "FII Intercreditor Collateral Agent") with respect to,
among other things, the Collateral;
WHEREAS, the Grantors have heretofore executed, in favor of the
Collateral Agent, that certain Partnership Pledge Agreement, dated as of
February 27, 1998 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Existing Pledge Agreement").
WHEREAS, the Grantors and the Collateral Agent have agreed to hereby
amend and restate the Existing Pledge Agreement.
WHEREAS, each Grantor has duly authorized the execution, delivery and
performance of this Partnership Pledge Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, each Grantor agrees, for the benefit of each
Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Partnership Pledge Agreement, including its
preamble and recitals, shall have the following meanings (such definitions to be
equally applicable to the singular and plural forms thereof):
"Administrative Agents" is defined in the first recital.
"Collateral" is defined in Section 2.1.
"Collateral Agent" is defined in the preamble.
"Commodity Account" means an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" means a commodity futures contract, an option on a
commodity futures contract, a commodity option or any other contract that, in
each case, is (a) traded on or subject to the rules of a board of trade that has
been designated as a contract market for such a contract pursuant to the federal
commodities laws or (b) traded on a foreign commodity board of trade, exchange
or market, and as is carried on the books of a Commodity Intermediary for a
Commodity Customer.
"Commodity Customer" means a person for whom a Commodity Intermediary
carries a Commodity Contract on its books.
"Commodity Intermediary" means (a) a person who is registered as a
futures commission merchant under the federal commodities laws or (b) a person
who in the ordinary course of its business provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities laws.
"Credit Agreement" is defined in the first recital.
"Credit Extensions" means the Loans and Letters of Credit.
"Entitlement Holder" means a person identified in the records of a
Securities Intermediary as the person having a Security Entitlement against the
Securities Intermediary. If a person acquires a Security Entitlement by virtue
of Section 8-
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501(b)(2) or (3) of the U.C.C., such person is the Entitlement Holder.
"FII" is defined in the preamble.
"FII Guaranty" is defined in the second recital.
"FII Intercreditor Agreement" is defined in the third recital.
"FII Intercreditor Collateral Agent" is defined in the third recital.
"Financial Asset" means (a) a Security, (b) an obligation of a person
or a share, participation or other interest in a person or in property or an
enterprise of a person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another person in a Securities Account if the
Securities Intermediary has expressly agreed with the other person that the
property is to be treated as a Financial Asset under Article 8 of the U.C.C. As
the context requires, the term Financial Asset shall mean either the interest
itself or the means by which a person's claim to it is evidenced, including a
certificated or uncertificated Security, a certificate representing a Security
or a Security Entitlement.
"FMXI" is defined in the preamble.
"Grantor" and "Grantors" are defined in the preamble.
"Investment Property" means all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts
and Commodity Accounts of the Grantor.
"Issuing Banks" is defined in the first recital.
"Lenders" is defined in the first recital.
"New GFI Intercreditor Collateral Agent" means the collateral agent
appointed pursuant to the New GFI Intercreditor Agreement, dated as of February
27, 1998.
"Partnership" is defined in the first recital.
"Partnership Pledge Agreement" is defined in the preamble.
"Secured Obligations" is defined in Section 2.2.
"Secured Parties" means, collectively, (i) the Lenders, the Issuing
Banks, the Administrative Agents, the Collateral Agent, the Funding Agent and
any Lender in its capacity as a
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counterparty to a Hedging Obligation, (ii) the New GFI Intercreditor Collateral
Agent, (iii) the FII Intercreditor Collateral Agent and (iv) each holder of a
Guaranteed Obligation (as defined in the FII Guaranty).
"Securities" means any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c) (i) are, or are of a type,
dealt with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the U.C.C.
"Securities Account" means an account to which a Financial Asset is or
may be credited in accordance with an agreement under which the person
maintaining the account undertakes to treat the person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
"Securities Intermediary" means (a) a clearing corporation or (b) a
person, including a bank or broker, that in the ordinary course of its business
maintains Securities Accounts for others and is acting in that capacity.
"Security Entitlements" means the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.
"U.C.C." means the Uniform Commercial Code, as in effect in the State
of New York.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Partnership Pledge
Agreement, including its preamble and recitals, have the meanings provided in
the Credit Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the U.C.C.
are used in this Partnership Pledge Agreement, including its preamble and
recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security. As collateral security for the payment
and performance of the Secured Obligations, each Grantor hereby grants, pledges,
hypothecates, assigns, charges,
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mortgages, delivers and transfers to the Collateral Agent for its benefit and
the ratable benefit of each of the other Secured Parties a continuing security
interest in all right, title and interest of such Grantor, whether now existing
or hereafter arising or acquired, in, to and under the Partnership Agreement,
including, without limitation, such Grantor's rights, now existing or hereafter
arising or acquired, to receive from time to time its share of profits, income,
surplus, compensation, return of capital, distributions and other reimbursements
and payments from the Partnership (including, without limitation, specific
properties of the Partnership upon dissolution and otherwise), in respect of any
and all of the following (the "Collateral"):
(a) all general or limited partnership interests now owned or
hereafter acquired by such Grantor in the Partnership as a result of
exchange offers, direct investments or contributions or otherwise;
(b) such Grantor's accounts, general intangibles and other
rights to payment or reimbursement, now existing or hereafter arising
or acquired, from its ownership of an interest in the Partnership;
(c) all Investment Property now owned or hereafter acquired by
any Grantor relating to its ownership interest in the Partnership; and
(d) the proceeds of and from any and all of the foregoing.
SECTION 2.2. Security for Obligations. This Partnership Pledge
Agreement secures the payment of (i) all obligations of each Grantor now or
hereafter existing under the Credit Agreement, the Partnership Guaranty, the
Foamex International Guaranty and each other Loan Document to which such Grantor
is or may become a party, (ii) all Obligations of the Borrower now or hereafter
existing under the Credit Agreement and each other Loan Document to which the
Borrower is or may become a party, (iii) all other obligations of each other
Obligor now or hereinafter existing under each Loan Document to which such other
Obligor is or may become a party, whether for principal, interest, costs, fees,
expenses or otherwise and (iv) all obligations of FII under the FII Guaranty
(all such Obligations of such Grantor, FII and all such obligations the Borrower
and such other Obligor being the "Secured Obligations").
SECTION 2.3. Continuing Security Interest; Transfer of Notes. This
Partnership Pledge Agreement shall create a continuing security interest in the
Collateral and shall
(a) remain in full force and effect until payment in full of
all Secured Obligations;
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(b) be binding upon each Grantor, their respective successors,
transferees and assigns, and
(c) inure, together with the rights and remedies of the
Secured Parties hereunder, to the benefit of the Secured Parties.
Without limiting the generality of the foregoing clause (c), any Secured Party
may assign or otherwise transfer (in whole or in part) any Secured Obligation
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all the rights and benefits in respect thereof
granted to such Secured Party under any Secured Obligation (including this
Security Agreement) or otherwise, subject, however, to any contrary provisions
in such assignment or transfer. Upon the payment in full in cash of all Secured
Obligations, the termination or expiration of all Letters of Credit, the
termination of all Commitments and the termination of the FII Guaranty, the
security interest granted herein shall terminate and all rights to the
Collateral shall revert to the respective Grantor. Upon any such termination,
the Collateral Agent will, at each Grantor's sole expense, execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination. Upon any sale or other transfer of Collateral
permitted by the terms of the Credit Agreement, the security interest created
hereunder in such Collateral (but not in the proceeds thereof) shall be deemed
to be automatically released and the Collateral Agent will, at each Grantor's
sole expense, execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence such release.
SECTION 2.4. Each Grantor Remains Liable. Anything herein to the
contrary notwithstanding
(a) each Grantor shall remain liable under the Partnership
Agreement to the extent set forth therein and shall perform all of its
duties and obligations under the Partnership Agreement to the same
extent as if this Partnership Pledge Agreement had not been executed;
(b) the exercise by any Secured Party of any of its rights
hereunder shall not release any Grantor from any of its respective
duties or obligations under the Partnership Agreement; and
(c) the Secured Parties shall not have any obligation or
liability under the Partnership Agreement by reason of this Partnership
Pledge Agreement, nor shall the Secured Parties be obligated to perform
any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned
hereunder.
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SECTION 2.5. Security Interest Absolute. All rights of the Secured
Parties and the security interests granted to the Secured Parties hereunder, and
all obligations of each Grantor hereunder, shall be absolute and unconditional,
irrespective of
(a) any lack of validity or enforceability of any Loan
Document or the FII Guaranty;
(b) the failure of any Secured Party
(i) to assert any claim or demand or to enforce any
right or remedy against the Partnership, any other Obligor or
any other Person under the provisions of any Loan Document,
the FII Guaranty or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any of the Secured
Obligations;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations or any
other extension, compromise or renewal of any Secured Obligations;
(d) any reduction, limitation, impairment or termination of
any Secured Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject
to (and each Grantor hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Secured Obligations;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
any Loan Document or the FII Guaranty;
(f) any addition, exchange, release, surrender or
non-perfection of any collateral (including the Collateral), or any
amendment to or waiver or release of or addition to or consent to
departure from any guaranty, for any of the Secured Obligations; or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the
Partnership, any other Obligor, any surety or any guarantor.
SECTION 2.6. Postponement of Subrogation. Each Grantor agrees that it
will not exercise any rights which it may acquire by way of subrogation under
this Partnership Pledge Agreement, by any payment made hereunder or otherwise,
until the prior payment, in full and in cash, of all Obligations of the Borrower
and each
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other Obligor, the termination or expiration of all Letters of Credit and the
termination of all Commitments and the FII Guaranty. Any amount paid to each
Grantor on account of any such subrogation rights prior to the payment in full
of all Obligations of the Borrower and each other Obligor, the termination or
expiration of all Letters of Credit and the termination of all Commitments and
the FII Guaranty shall be held in trust for the benefit of the Secured Parties
and shall immediately be paid to the Collateral Agent and credited and applied
against the Obligations of the Borrower and each other Obligor, whether matured
or unmatured, in accordance with the terms of the Credit Agreement; provided,
however, that if
(a) any Grantor has made payment to the Secured Parties of all
or any part of the Obligations of the Borrower or any other Obligor,
and
(b) all Obligations of the Borrower and each other Obligor
have been paid in full, all Letters of Credit have expired or been
terminated and all Commitments and the FII Guaranty have been
terminated,
each Secured Party agrees that, at such Grantor's request, the Secured Parties
will execute and deliver to such Grantor appropriate documents (without recourse
and without representation or warranty) necessary to evidence the transfer by
subrogation to such Grantor of an interest in the Secured Obligations resulting
from such payment by such Grantor. In furtherance of the foregoing, for so long
as any Secured Obligations, Letters of Credit, Commitments or the FII Guaranty
remain outstanding, each Grantor shall refrain from taking any action or
commencing any proceeding against the Borrower or any other Obligor (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in the respect of payments made under this
Partnership Pledge Agreement to any Secured Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. Each Grantor represents
and warrants to each Secured Party as set forth in this Article.
SECTION 3.1.1. Filing. No presently effective Uniform Commercial Code
financing statement (other than any which may have been filed for the benefit of
the Secured Parties) covering any of the Collateral is on file in any public
office.
SECTION 3.1.2. Ownership of Collateral. Such Grantor is and will be the
lawful owner of all Collateral owned by such Grantor, free and clear of all
Liens and claims whatsoever, other than the security interest hereunder, and has
full power and
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authority to execute this Partnership Pledge Agreement and perform such
Grantor's obligations hereunder, and to subject the Collateral to the security
interest hereunder.
SECTION 3.1.3. Validity, etc. Such Grantor has furnished to the Secured
Parties a true and correct copy of the Partnership Agreement and all amendments
thereto, which Partnership Agreement, as so amended, constitutes the valid,
binding and enforceable obligations of such Grantor, sets forth the entire
agreement of the parties thereto with respect to the subject matter thereof, has
not been further amended or modified and remains in full force and effect.
SECTION 3.1.4. Partnership Interests, Profits. The character (general
and/or limited partner) of such Grantor's interest in the Partnership, and such
Grantor's percentage interest in the Partnership's profits (with profit
interests as a general and as a limited partner separately stated) are as set
forth in Schedule I hereto (with such changes thereto as are expressly permitted
by the Credit Agreement or as otherwise consented to in writing by the
Collateral Agent). Except as expressly permitted by the Credit Agreement, no
changes in any Grantor's percentage interest in the Partnership or the
Partnership's profits shall be made without the prior written consent of the
Collateral Agent.
SECTION 3.1.5. Certificate. No interest of such Grantor in the
Partnership is represented by a certificate of interest or similar instrument,
except such certificates or instruments, if any, as have been delivered to the
Collateral Agent and are held in its possession (and such Grantor covenants and
agrees that any such certificates or instruments hereafter received by such
Grantor with respect to any of the Collateral will be promptly delivered to the
Collateral Agent).
SECTION 3.1.6. Performance of Obligations. Such Grantor has
substantially performed all of its respective obligations to date under the
Partnership Agreement and has not received notice of the failure of any other
party thereto to perform substantially its obligations thereunder.
SECTION 3.1.7. Location, Records, etc. The place(s) of business and
chief executive office of such Grantor and the office(s) where such Grantor
keeps its records concerning the Collateral are located at the addresses
specified in Schedule II hereto. Such Grantor has no trade name nor has such
Grantor been known by any legal name different from the one set forth on the
signature page hereto.
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ARTICLE IV
COVENANTS
SECTION 4.1. Certain Covenants. Each Grantor covenants and agrees that,
so long as any portion of the Secured Obligations shall remain unpaid, such
Grantor will, unless the Requisite Lenders shall otherwise consent in writing,
perform the obligations set forth in this Section.
SECTION 4.1.1. Maintenance of Records. Subject to the provisions of
Section 4.1.2 hereof, such Grantor will keep, at its address indicated on
Schedule II hereto, all its records concerning the Collateral, which records
will be of such character as will enable the Collateral Agent or its designees
to determine at any time the status thereof.
SECTION 4.1.2. Notice of Change of Address, etc. Such Grantor will
furnish notice in writing to the Collateral Agent, as soon as practicable and in
any event within five days after the occurrence and during the continuance from
time to time of any change in the address of such Grantor's location (as
described on Schedule II hereto) or in the name of such Grantor.
SECTION 4.1.3. Information. Such Grantor will furnish the Collateral
Agent such information concerning the Collateral as the Collateral Agent may
from time to time reasonably request, and permit the Collateral Agent and its
designees from time to time to inspect, audit and make copies of and extracts
from all records and all other papers in the possession of such Grantor which
pertain to the Collateral, and, upon request of the Collateral Agent (which may
be made only on and after the occurrence of an Event of Default), deliver to the
Collateral Agent all of such original records and papers.
SECTION 4.1.4. Amendment of Partnership Agreement. Such Grantor will
provide the Collateral Agent, not less than ten days prior to entering into the
same, a copy of any amendment or supplement to, or modification or waiver of,
any term or provision of the Partnership Agreement, provided that none of the
Grantors will enter into any such amendment, supplement or modification, or
execute any such waiver, except as permitted by the terms of the Credit
Agreement.
SECTION 4.1.5. Notice of Litigation. Such Grantor will notify the
Collateral Agent of the institution of any litigation or governmental proceeding
against or affecting any of the Collateral, to the extent and as soon as
practicable after such Grantor shall have knowledge thereof.
SECTION 4.1.6. Withdrawal from Partnership. Such Grantor will not,
without the express written consent of the Collateral Agent and the Lenders,
actively cause itself to withdraw as a
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general partner or limited partner, as the case may be, of the Partnership.
SECTION 4.1.7. Notice of Dissolution. Such Grantor will notify the
Collateral Agent in writing promptly upon learning of the occurrence of any
event which is reasonably likely to cause termination and/or dissolution of The
Partnership.
SECTION 4.1.8. Liens. No Grantor shall
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral; or
(b) create or suffer to exist any Lien upon or with respect to
any of the Collateral to secure Indebtedness of any Person or entity,
except for the security interest created by this Partnership Pledge
Agreement and as permitted by the Credit Agreement or the FII Guaranty.
SECTION 4.1.9. Further Assurances, etc. Such Grantor agrees that, from
time to time at its own expense, such Grantor will promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Collateral Agent may reasonably request, in
order to perfect, preserve and protect any security interest granted or
purported to be granted hereby or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, such Grantor will
(a) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Collateral Agent
may request, in order to perfect and preserve the security interests
and other rights granted or purported to be granted to the Collateral
Agent hereby; and
(b) furnish to the Collateral Agent, from time to time at the
Collateral Agent's request, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Collateral Agent may reasonably
request, all in reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
such Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of such Grantor where permitted
by law. A photographic or other reproduction of this Partnership Pledge
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.
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SECTION 4.1.10. Transfer of Interests. Such Grantor agrees that it will
not transfer, sell or otherwise dispose of an interest in the Partnership if (i)
a Change of Control would occur as a result of such transfer, sale or other
disposition or (ii) an Event of Default shall have occurred and be continuing at
the time of the consummation of such transfer, sale or other disposition or an
Event of Default would be caused thereby. Such Grantor shall cause each
transferee of such Grantor of an interest in the Partnership to agree in writing
in form and substance satisfactory to the Collateral Agent that (i) such
transferee will not further transfer, sell or otherwise dispose of such an
interest if such transfer, sale, or other disposition would cause an Event of
Default under the Credit Agreement, (ii) such transferee shall cause each of its
subsequent transferees to agree in writing to comply with the obligation set
forth in the preceding clause (i) and (iii) such transferee shall become a party
hereto by executing and delivering to the Collateral Agent a counterpart of this
Partnership Pledge Agreement.
ARTICLE V
THE COLLATERAL AGENT
SECTION 5.1. Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Collateral Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, if an Event of Default shall have
occurred and be continuing, from time to time in the Collateral Agent's
discretion, to take any action and to execute any instrument which the
Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Partnership Pledge Agreement, including, without limitation:
(a) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above;
(c) to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce the
rights of the Secured Parties with respect to any of the Collateral;
and
(d) to perform the affirmative obligations of such Grantor
hereunder.
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Each Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Collateral Agent May Perform. If any Grantor fails to
perform any agreement contained herein, after the occurrence of an Event of
Default the Collateral Agent may itself perform, or cause performance of, such
agreement, and the expenses of the Collateral Agent incurred in connection
therewith shall be payable by such Grantor pursuant to Section 6.2.
SECTION 5.3. Collateral Agent Has No Duty. In addition to, and not in
limitation of, Section 2.4, the powers conferred on the Collateral Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining to
any Collateral.
SECTION 5.4. Reasonable Care. The Collateral Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, the Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
of the Collateral, if it takes such action for that purpose as any Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure of the Collateral
Agent to comply with any such request at any time shall not in itself be deemed
a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Event of Default shall have
occurred and be continuing the Collateral Agent may exercise from time to time
any rights and remedies available to it under applicable law. Without limiting
the foregoing, upon the occurrence and continuance of an Event of Default, the
Collateral Agent may, to the fullest extent permitted by applicable law, without
notice, advertisement, hearing or process of law of any kind, (x) sell any or
all of the Collateral, free of all rights and claims of each Grantor therein and
thereto at any public or private sale or broker's board, and (y) bid for and
purchase any or all of the Collateral at any such public or private sale or
broker's board. Any notification of intended disposition of any of the
Collateral required by law shall be deemed reasonably and properly given if
given at least ten days (or such longer period required by law) before such
disposition. Each Grantor agrees that in any sale of the Collateral after an
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Event of Default (where such Collateral may be deemed to constitute a security),
the Collateral Agent is hereby authorized to comply with any limitation or
restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law or in order to
obtain any required approval of the purchaser by any Regulatory Authority, and
each Grantor further agrees that such compliance shall not result in such sale
being considered or deemed not to have been made in a commercially reasonable
manner. Any proceeds of any disposition of any of the Collateral shall be
applied, by the Collateral Agent, first, in accordance with Section 3.02(b)(iii)
of the Credit Agreement, and second, without duplication, after payment in full
in cash or cash equivalents of all Secured Obligations under the Credit
Agreement and each other Loan Document, to the FII Intercreditor Collateral
Agent for payment to the holders of all other Secured Obligations, pro rata.
SECTION 6.2. Indemnity and Expenses.
(a) Each Grantor jointly and severally agrees to indemnify the
Collateral Agent and each Secured Party from and against any and all
claims, losses and liabilities arising out of or resulting from this
Partnership Pledge Agreement (including, without limitation,
enforcement of this Partnership Pledge Agreement), except claims,
losses or liabilities resulting from the Collateral Agent's or such
Secured Party's gross negligence or willful misconduct.
(b) Each Grantor will upon demand pay to the Collateral Agent
the amount of any and all reasonable expenses, including the reasonable
fees and disbursements of its counsel and of any experts and agents,
which the Collateral Agent may incur in connection with
(i) the administration of this Partnership Pledge
Agreement,
(ii) the custody, preservation, use or operation of,
or the sale of, collection from, or other realization upon,
any of the Collateral,
(iii) the exercise or enforcement of any of the
rights of the Collateral Agent hereunder, or
(iv) the failure by any of the Grantors to perform or
observe any of the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Partnership Pledge Agreement is a Loan
Document and shall (unless otherwise
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expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions thereof.
SECTION 7.2. Amendments; etc. No amendment to or waiver of any
provision of this Partnership Pledge Agreement nor consent to any departure by
any Grantor herefrom, shall in any event be effective unless the same shall be
in writing and signed by the Collateral Agent, with the consent of the Requisite
Lenders, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 7.3. Notices. All notices and other communications provided for
hereunder shall be in writing and may be personally served, telecopied, telexed
or sent by courier service or United States certified mail and shall be deemed
to have been given when delivered in person or by courier service, upon receipt
of a telecopy or telex or four (4) Business Days after deposit in the United
States mail with postage prepaid and properly addressed. For the purposes
hereof, the address of each Grantor shall be the address specified on the
signature page of such Grantor hereto, or at such other address as may be
designated by such Grantor in a written notice to the Collateral Agent.
SECTION 7.4. Section Captions. Section captions used in this
Partnership Pledge Agreement are for convenience of reference only, and shall
not affect the construction of this Partnership Pledge Agreement.
SECTION 7.5. Severability. Wherever possible each provision of this
Partnership Pledge Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Partnership Pledge Agreement shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Partnership Pledge Agreement.
SECTION 7.6. Certain Consents and Waivers of the Grantors.
SECTION 7.6.1. Personal Jurisdiction. EACH GRANTOR IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING IN NEW YORK,
NEW YORK, AND ANY COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN
SUCH COURTS, IN ANY ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED
TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED IN CONNECTION WITH THIS
PARTNERSHIP PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT TO WHICH SUCH GRANTOR IS
A PARTY, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND SUCH GRANTOR IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT.
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EACH GRANTOR IRREVOCABLY DESIGNATES AND APPOINTS CORPORATION SERVICE COMPANY, 00
XXXXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000, AS ITS AGENT (THE "PROCESS AGENT")
FOR SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT, SUCH
SERVICE BEING HEREBY ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT. EACH GRANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH GRANTOR WAIVES
IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE.
EACH GRANTOR AGREES THAT THE COLLATERAL AGENT SHALL HAVE THE RIGHT TO
PROCEED AGAINST SUCH GRANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION TO
ENABLE THE ADMINISTRATIVE AGENTS, THE LENDERS AND THE ISSUING BANKS TO REALIZE
ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE SECURED OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE ADMINISTRATIVE
AGENTS, ANY LENDER OR ANY ISSUING BANK. EACH GRANTOR WAIVES ANY OBJECTION THAT
IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE COLLATERAL AGENT MAY
COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
SECTION 7.6.2. Service of Process. EACH GRANTOR IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE PROCESS AGENT OR SUCH GRANTOR'S NOTICE ADDRESS SPECIFIED
BELOW, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. EACH
GRANTOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING WITH RESPECT TO THIS PARTNERSHIP PLEDGE AGREEMENT OR ANY
OTHER LOAN DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL
AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENTS, THE LENDERS AND ISSUING BANKS TO
BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 7.7. Governing Law, Entire Agreement, etc. THIS PARTNERSHIP
PLEDGE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY
OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR ITEM OF COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS PARTNERSHIP PLEDGE AGREEMENT
AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO OTHER THAN THE PARTNERSHIP
PLEDGE AGREEMENT (AS DEFINED IN THE EXISTING CREDIT AGREEMENT). THE INTENT OF
THE PARTIES IS TO AMEND AND RESTATE THE OBLIGATIONS OF
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THE GRANTORS THEREUNDER AND NOT TO AFFECT THE LIENS GRANTED THEREBY INCLUDING,
WITHOUT LIMITATION, THE PRIORITY OR PERFECTION THEREOF.
SECTION 7.8. Waiver of Jury Trial. THE COLLATERAL AGENT AND EACH
GRANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS PARTNERSHIP PLEDGE AGREEMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF THE COLLATERAL AGENT OR SUCH GRANTOR. EACH GRANTOR
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
SECURED PARTIES ENTERING INTO THE LOAN DOCUMENTS TO WHICH THEY ARE A PARTY.
SECTION 7.9. Conflicts. In the event of any conflict between the terms
of this Partnership Pledge Agreement and the FII Intercreditor Agreement, the
terms of the FII Intercreditor Agreement shall govern.
IN WITNESS WHEREOF, each Grantor has caused this Partnership Pledge
Agreement to be duly executed and delivered by its respective authorized officer
thereunto duly authorized as of the date first above written.
FMXI, Inc.
Foamex International Inc.
By /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telecopier: 000-000-0000
Amended and Restated Partnership
Pledge Agreement
CITICORP USA, INC., as
Collateral Agent
By /s/ Xxxxxxxxx Xxxxx
----------------------------------
Name: Xxxxxxxxx Xxxxx
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SCHEDULE I
Grantor Grantor's Interest in the Partnership
------- -------------------------------------
Percentage Type
---------- ----
FMXI 2% General Partner
FII 98% Limited Partner
SCHEDULE II
Address of Chief Address of
Executive Office and location of records
Grantor's Name Place(s) of Business concerning Collateral
-------------- -------------------- ---------------------
FMXI, Inc. 0000 Xxxxxxxx Xxxxxx 0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxx, Xxxxxxxxxxxx 00000
Foamex International, Inc. 0000 Xxxxxxxx Xxxxxx 0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxx, Xxxxxxxxxxxx 00000
