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EXECUTION COPY
FOAMEX L.P.
FOAMEX CAPITAL CORPORATION
GENERAL FELT INDUSTRIES, INC.
FOAMEX FIBERS, INC.
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$150,000,000
97/8% SENIOR SUBORDINATED NOTES DUE 2007
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REGISTRATION RIGHTS AGREEMENT
DATED AS OF JUNE 12, 1997
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Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
Salomon Brothers Inc
Scotia Capital Markets (USA) Inc.
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This Registration Rights Agreement (this "Agreement") is made and
entered into as of June 12, 1997, by and among Foamex L.P., a Delaware limited
partnership ("Foamex"), Foamex Capital Corporation, a Delaware corporation
("FCC" and, together with Foamex (the "Issuers"), General Felt Industries, Inc.,
a Delaware corporation ("General Felt"), Foamex Fibers, Inc., a Delaware
corporation ("Foamex Fibers" and, together with General Felt the "Subsidiary
Guarantors"), Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ("DLJ"),
Salomon Brothers Inc ("Salomon") and Scotia Capital Markets (USA) Inc. ("Scotia
Capital" and, together with DLJ and Salomon, the "Initial Purchasers"), who have
agreed to purchase the Issuers' 97/8% Senior Subordinated Notes due 2007 (the
"Senior Subordinated Notes") pursuant to the Purchase Agreement (as defined
below).
This Agreement is made pursuant to the Purchase Agreement, dated May
29, 1997 (the "Purchase Agreement"), by and among the Issuers, the Subsidiary
Guarantors and the Initial Purchasers. In order to induce the Initial Purchasers
to purchase the Senior Subordinated Notes, the Issuers have agreed to provide
the registration rights set forth in this Agreement. The execution and delivery
of this Agreement is a condition to the obligations of the Initial Purchasers
set forth in the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: New Senior Subordinated
Notes that are acquired by a Broker-Dealer in the Exchange Offer in exchange for
Senior Subordinated Notes that such Broker-Dealer acquired for its own account
as a result of market-making activities or other trading activities (other than
Senior Subordinated Notes acquired directly from the Issuers or any of their
respective affiliates).
Business Day: 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.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the New Senior Subordinated Notes to be issued in the Exchange
Offer, (b) the maintenance of such Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the
minimum period required pursuant to Section 3(b) hereof and (c) the delivery by
the Issuers to the Registrar under the Indenture of New Senior Subordinated
Notes in the same aggregate principal amount as the aggregate principal amount
of Senior Subordinated Notes validly tendered by Holders thereof pursuant to the
Exchange Offer.
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Damages Payment Date: With respect to the Transfer Restricted
Securities, each Interest Payment Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Issuers under the Act of the
New Senior Subordinated Notes pursuant to the Exchange Offer Registration
Statement pursuant to which the Issuers shall offer the Holders of all
outstanding Transfer Restricted Securities the opportunity to exchange all such
outstanding Transfer Restricted Securities for New Senior Subordinated Notes in
an aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Senior Subordinated Notes to certain "qualified
institutional buyers," as such term is defined in Rule 144A under the Act and to
certain "accredited investors," as such term is defined in Rule 501(a)(1), (2),
(3), (5) or (7) of Regulation D under the Act.
Global Note Holder: As defined in the Indenture.
Holders: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated the Closing Date, among the Issuers,
the Subsidiary Guarantors and The Bank of New York, as trustee (the "Trustee"),
pursuant to which the Notes are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Offering Memorandum: As defined in the Purchase Agreement.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
Record Holder: With respect to any Damages Payment Date, each Person
who is a Holder of Notes on the record date with respect to the Interest Payment
Date on which such Damages Payment Date shall occur.
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Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Issuers and
the Subsidiary Guarantors relating to (a) an offering of New Senior Subordinated
Notes pursuant to an Exchange Offer or (b) the registration for resale of
Transfer Restricted Securities pursuant to the Shelf Registration Statement, in
each case, (i) which is filed pursuant to the provisions of this Agreement and
(ii) including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.
Notes: The Senior Subordinated Notes and the New Senior Subordinated
Notes.
New Senior Subordinated Notes: The Issuers' 97/8% New Senior
Subordinated Notes due 2007 to be issued pursuant to the Indenture (i) in the
Exchange Offer or (ii) upon the request of any Holder of Senior Subordinated
Notes covered by a Shelf Registration Statement, in exchange for such Senior
Subordinated Notes.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to occur
of (a) the date on which such Note is exchanged in the Exchange Offer and
entitled to be resold to the public by the Holder thereof without complying with
the prospectus delivery requirements of the Act, (b) the date on which such Note
has been disposed of in accordance with a Shelf Registration Statement, (c) the
date on which such Note is disposed of by a Broker-Dealer pursuant to the "Plan
of Distribution" contemplated by the Exchange Offer Registration Statement
(including delivery of the Prospectus contained therein) or (d) the date on
which such Note is distributed to the public pursuant to Rule 144 under the Act.
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Issuers are sold to an underwriter for reoffering to the
public.
2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person owns Transfer Restricted Securities of
record.
3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have been
complied with), the Issuers and the Subsidiary Guarantors shall (i) cause to be
filed with the Commission, on or prior to 45 days after the Closing Date, the
Exchange Offer Registration Statement, (ii) use their respective reasonable best
efforts to cause such Exchange Offer Registration Statement to become effective
at the earliest possible time, but in no event later than 120 days after the
Closing Date, (iii) in connection with the foregoing, (A) file all pre-effective
amendments to such Exchange Offer Registration Statement as may be necessary in
order to cause such Exchange Offer Registration Statement to become effective,
(B) file, if
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applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all necessary
filings, if any, in connection with the registration and qualification of the
New Senior Subordinated Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer and
(iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting registration of the New Senior Subordinated Notes to
be offered in exchange for the Senior Subordinated Notes that are Transfer
Restricted Securities and to permit sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers as contemplated by Section 3(c) below.
(b) The Issuers and the Subsidiary Guarantors shall use their
respective reasonable best efforts to cause the Exchange Offer Registration
Statement to be effective continuously, and shall keep the Exchange Offer open,
for a period of not less than the minimum period required under applicable
federal and state securities laws to Consummate the Exchange Offer; provided,
however, that in no event shall such period be less than 20 Business Days. The
Issuers and the Subsidiary Guarantors shall cause the Exchange Offer to comply
with all applicable federal and state securities laws. No securities other than
the Notes shall be included in the Exchange Offer Registration Statement. The
Issuers and the Subsidiary Guarantors shall use their respective reasonable best
efforts to cause the Exchange Offer to be Consummated no later than 30 Business
Days after the Exchange Offer Registration Statement has become effective.
(c) The Issuers shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Restricted Broker-Dealer who holds Senior Subordinated Notes
that are Transfer Restricted Securities and that were acquired for the account
of such Broker-Dealer as a result of market-making activities or other trading
activities, may exchange such Senior Subordinated Notes (other than Transfer
Restricted Securities acquired directly from the Issuers or any affiliate of
either of the Issuers) pursuant to the Exchange Offer; however, such
Broker-Dealer may be deemed to be an "underwriter" within the meaning of the Act
and must, therefore, deliver a prospectus meeting the requirements of the Act in
connection with its initial sale of each New Senior Subordinated Note received
by such Broker-Dealer in the Exchange Offer, which prospectus delivery
requirement may be satisfied by the delivery by such Broker-Dealer of the
Prospectus contained in the Exchange Offer Registration Statement. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers that the Commission may require in order to permit such sales
pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Notes held by any such Broker-Dealer
except to the extent required by the Commission.
The Issuers and the Subsidiary Guarantors shall use their respective
reasonable best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 6(c) below to the extent necessary to ensure that it is available for
sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers, and to ensure that such Registration Statement conforms with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of 120 days from
the date on which the Exchange Offer is Consummated.
The Issuers and the Subsidiary Guarantors shall provide sufficient
copies of the latest version of such Prospectus to such Restricted
Broker-Dealers, in such amounts as may reasonably be requested, promptly upon
request, and in no event later than two Business Days after such request, at any
time during such 120-day period in order to facilitate such sales.
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4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Issuers are not required to file an
Exchange Offer Registration Statement with respect to the New Senior
Subordinated Notes because the Exchange Offer is not permitted by applicable law
(after the procedures set forth in Section 6(a)(i) below have been complied
with) or (ii) if any Holder of Transfer Restricted Securities shall notify the
Issuers within 20 Business Days following the Consummation of the Exchange Offer
that (A) such Holder is prohibited by law or Commission policy from
participating in the Exchange Offer or (B) such Holder may not resell the New
Senior Subordinated Notes acquired by it in the Exchange Offer to the public
without delivering a prospectus and the Prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales by
such Holder or (C) such Holder is a Broker-Dealer and holds Senior Subordinated
Notes acquired directly from the Issuers or one of their respective affiliates,
then the Issuers and the Subsidiary Guarantors shall (x) cause to be filed on or
prior to the earliest of (1) 30 days after the date on which the Issuers are
notified by the Commission or otherwise determines that they are not required to
file the Exchange Offer Registration Statement pursuant to clause (i) above and
(2) 30 days after the date on which the Issuers receive the notice specified in
clause (ii) above, a shelf registration statement pursuant to Rule 415 under the
Act, (which may be an amendment to the Exchange Offer Registration Statement (in
either event, the "Shelf Registration Statement")), relating to all Transfer
Restricted Securities the Holders of which shall have provided the information
required pursuant to Section 4(b) hereof, and (y) use their respective
reasonable best efforts to cause such Shelf Registration Statement to become
effective at the earliest possible time, but in no event later than 120 days
after the date on which the Issuers become obligated to file such Shelf
Registration Statement. If, after the Issuers have filed an Exchange Offer
Registration Statement which satisfies the requirements of Section 3(a) above,
the Issuers are required to file and make effective a Shelf Registration
Statement solely because the Exchange Offer shall not be permitted under
applicable federal law, then the filing of the Exchange Offer Registration
Statement shall be deemed to satisfy the requirements of clause (x) above. Such
an event shall have no effect on the requirements of clause (y) above, or on the
Effectiveness Target Date as defined in Section 5 below. The Issuers and the
Subsidiary Guarantors shall use their respective reasonable best efforts to keep
the Shelf Registration Statement discussed in this Section 4(a) continuously
effective, supplemented and amended as required by and subject to the provisions
of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a), and to ensure that it conforms
with the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of at
least two years (as extended pursuant to Section 6(c)(i)) following the date on
which such Shelf Registration Statement first becomes effective under the Act or
such shorter period ending when all of the Transfer Restricted Securities
available for sale thereunder have been sold pursuant thereto; provided,
however, the Issuers shall not be required to keep such Shelf Registration
Statement effective where the only Transfer Restricted Securities which have not
been sold pursuant to the Shelf Registration Statement are Transfer Restricted
Securities held by Holders who would not have been able to trigger the Issuers'
Shelf Registration Statement filing obligations pursuant to Section 4(a)(ii)(A),
(B) or (C) hereof. In the event of an Underwritten Offering pursuant to the
Shelf Registration Statement, no securities other than the Senior Subordinated
Notes shall be included in the Shelf Registration Statement.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Issuers in writing, within 20 days after receipt of a request therefor, such
information specified in Item 507 of Regulation S-K under the Act for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of
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Transfer Restricted Securities shall be entitled to Liquidated Damages pursuant
to Section 5 hereof unless and until such Holder shall have provided all such
information. Each Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Issuers all information required to
be disclosed in order to make the information previously furnished to the
Issuers by such Holder not materially misleading.
5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) any such Registration Statement has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
Exchange Offer has not been Consummated within 30 Business Days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded immediately by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself immediately declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), the Issuers hereby agree
to pay to each Holder of Transfer Restricted Securities, for the first 90-day
period immediately following the occurrence of such Registration Default,
liquidated damages in an amount equal to $.05 per week per $1,000 principal
amount of Notes constituting Transfer Restricted Securities held by such Holder
for each week or portion thereof that the Registration Default continues. The
amount of the liquidated damages payable to each Holder shall increase by an
additional $.05 per week per $1,000 in principal amount of Transfer Restricted
Securities with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum amount of liquidated damages of $.50
per week per $1,000 principal amount of Transfer Restricted Securities held by
such Holder. Notwithstanding anything to the contrary set forth herein, (1) upon
filing of the Exchange Offer Registration Statement (and/or, if applicable, the
Shelf Registration Statement), in the case of (i) above, (2) upon the
effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of (ii) above, (3)
upon Consummation of the Exchange Offer, in the case of (iii) above, or (4) upon
the filing of a post-effective amendment to the Registration Statement or an
additional Registration Statement that causes the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement) to again be
declared effective or made usable in the case of (iv) above, the liquidated
damages payable with respect to the Transfer Restricted Securities as a result
of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Global Note Holder
by wire transfer of immediately available funds or by federal funds check and to
Holders of Certificated Securities by wire transfer to the accounts specified by
them or by mailing checks to their registered addresses if no such accounts have
been specified on each Damages Payment Date. All obligations of the Issuers and
the Subsidiary Guarantors set forth in the preceding paragraph that are
outstanding with respect to any Transfer Restricted Security at the time such
security ceases to be a Transfer Restricted Security shall survive until such
time as all such obligations with respect to such security shall have been
satisfied in full.
6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Issuers and the Subsidiary Guarantors shall comply with all
applicable provisions of Section 6(c) below, shall use their respective
reasonable best efforts to effect such exchange and to permit the sale
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of Broker-Dealer Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof (which shall be in a
manner consistent with the terms of this Agreement), and shall comply with all
of the following provisions:
(i) If, following the date hereof and prior to Consummation of
the Exchange Offer, there has been published a change in Commission
policy with respect to exchange offers such as the Exchange Offer, such
that in the reasonable judgment of counsel to the Issuers there is a
substantial question as to whether the Exchange Offer is permitted by
applicable federal law or Commission policy, the Issuers and the
Subsidiary Guarantors hereby agree to seek a no-action letter or other
favorable decision from the Commission allowing the Issuers and the
Subsidiary Guarantors to Consummate an Exchange Offer for such Senior
Subordinated Notes. The Issuers and the Subsidiary Guarantors hereby
agree to pursue the issuance of such a decision to the Commission staff
level but shall not be required to take commercially unreasonable
action to effect a change of Commission policy. In connection with the
foregoing, the Issuers and the Subsidiary Guarantors hereby agree,
however, but subject to the proviso set forth above, to take all such
other actions as are reasonably requested by the Commission or
otherwise required in connection with the issuance of such decision,
including without limitation (A) participating in telephonic
conferences with the Commission, (B) delivering to the Commission staff
an analysis prepared by counsel to the Issuers setting forth the legal
bases, if any, upon which such counsel has concluded that such an
Exchange Offer should be permitted and (C) diligently pursuing a
resolution (which need not be favorable) by the Commission staff of
such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Issuers,
prior to the Consummation of the Exchange Offer, a written
representation to the Issuers and the Subsidiary Guarantors (which may
be contained in the letter of transmittal contemplated by the Exchange
Offer Registration Statement) to the effect that (A) it is not an
affiliate of either of the Issuers, (B) it is not engaged in, and does
not intend to engage in, and has no arrangement or understanding with
any person to participate in, a distribution of the New Senior
Subordinated Notes to be issued in the Exchange Offer and (C) it is
acquiring the New Senior Subordinated Notes in its ordinary course of
business. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on
the date of this Agreement rely on the position of the Commission
enunciated in Xxxxxx Xxxxxxx and Co., Inc. (available June 5, 1991) and
Exxon Capital Holdings Corporation (available May 13, 1988), as
interpreted in the Commission's letter to Shearman & Sterling dated
July 2, 1993, and similar no-action letters (including, if applicable,
any no-action letter obtained pursuant to clause (i) above), and (2)
must comply with the registration and prospectus delivery requirements
of the Act in connection with a secondary resale transaction and that
such a secondary resale transaction must be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K if the resales are of New Senior Subordinated Notes obtained by
such Holder in exchange for Senior Subordinated Notes acquired by such
Holder directly from either of the Issuers or an affiliate thereof.
(iii) To the extent required by the Commission, prior to
effectiveness of the Exchange Offer Registration Statement, the Issuers
and the Subsidiary Guarantors shall provide a supplemental letter to
the Commission (A) stating that the Issuers and the Subsidiary
Guarantors are registering the Exchange Offer in reliance on the
position of the Commission
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enunciated in Exxon Capital Holdings Corporation (available May 13,
1988), Xxxxxx Xxxxxxx and Co., Inc. (available June 5, 1991) and, if
applicable, any no-action letter obtained pursuant to clause (i) above,
(B) including a representation that neither of the Issuers nor any
Subsidiary Guarantor has entered into any arrangement or understanding
with any Person to distribute the New Senior Subordinated Notes to be
received in the Exchange Offer and that based on the representations of
the Holders, to the best of the Issuers' and the Subsidiary Guarantors'
information and belief, each Holder participating in the Exchange Offer
is acquiring the New Senior Subordinated Notes in its ordinary course
of business and has no arrangement or understanding with any Person to
participate in the distribution of the New Senior Subordinated Notes
received in the Exchange Offer and (C) any other undertaking or
representation required by the Commission as set forth in any no-action
letter obtained pursuant to clause (i) above.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement the Issuers and the Subsidiary Guarantors shall comply
with all the provisions of Section 6(c) below and shall use their respective
reasonable best efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended method
or methods of distribution thereof (as indicated in the information furnished to
the Issuers pursuant to Section 4(b) hereof), and pursuant thereto the Issuers
and the Subsidiary Guarantors will prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof within the time periods and otherwise in accordance with
the provisions hereof.
(c) General Provisions. In connection with any Registration Statement
and any related Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Exchange Offer Registration Statement and the related Prospectus, to the extent
that the same are required to be available to permit sales of Broker-Dealer
Transfer Restricted Securities by Restricted Broker-Dealers), the Issuers and
the Subsidiary Guarantors shall:
(i) use their respective reasonable best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain a material misstatement or omission or (B) not
to be effective and usable for resale of Transfer Restricted Securities
during the period required by this Agreement, the Issuers and the
Subsidiary Guarantors shall file promptly an appropriate amendment to
such Registration Statement, (1) in the case of clause (A), correcting
any such misstatement or omission, and (2) in the case of either clause
(A) or (B), use their respective best efforts to cause such amendment
to be declared effective and such Registration Statement and the
related Prospectus to become usable for their intended purpose(s) as
soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, or such shorter
period as will terminate when all Transfer Restricted Securities
covered by such Registration Statement have been sold; cause the
Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Act,
and to comply fully with Rules 424, 430A and 462 as applicable, under
the Act in a timely manner; and comply with the provisions of the Act
with respect to the disposition of all securities
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covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
selling Holders thereof set forth in such Registration Statement or
supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto, when
the same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information relating thereto, (C)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of
the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening
of any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement
thereto or any document incorporated by reference therein untrue, or
that requires the making of any additions to or changes in the
Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes
in the Prospectus in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. If at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws,
the Issuers and the Subsidiary Guarantors shall use their respective
reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
(iv) furnish to the Initial Purchasers, each selling Holder
under any Registration Statement or Prospectus and each of the
underwriter(s) in connection with such sale, if any, before filing with
the Commission, copies of any Registration Statement or any Prospectus
included therein or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such Registration
Statement), which documents (except for post-effective amendments
necessary (i) to avoid a Registration Default, or (ii) in the written
opinion of Foamex's counsel to correct a material misstatement or
omission of fact) will be subject to the review and comment of such
Holders and underwriter(s) in connection with such sale, if any, for a
period of at least five Business Days, and the Issuers will not file
any such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus (including
all such documents incorporated by reference) if the selling Holders of
the Transfer Restricted Securities covered by such Registration
Statement or the underwriter(s) in connection with such sale shall
provide notice to the Issuers within five Business Days after the
receipt thereof to the effect that (A) such Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains a material misstatement or omission or fails to comply
with the applicable requirements of the Act or (B) that any of the
information furnished to the Issuers by such selling Holder or
underwriter, if any, and included in such Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be
filed is incorrect in any respect;
(v) at reasonable times requested by the selling Holders
and/or the underwriters upon reasonable notice, prior to the filing of
any document that is to be incorporated by
10
reference into a Registration Statement or Prospectus, provide copies
of such document to the selling Holders and to the underwriter(s) in
connection with such sale, if any, make the Issuers' and the Subsidiary
Guarantors' representatives available for discussion of such document
and other customary due diligence matters, and include such information
in such document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request;
(vi) make available at reasonable times for inspection by the
selling Holders, any managing underwriter participating in any
disposition pursuant to such Registration Statement and any attorney or
accountant retained by such selling Holders or any of such
underwriter(s), all financial and other records, pertinent corporate
documents and properties of each of the Issuers and the Subsidiary
Guarantors and cause the Issuers' and the Subsidiary Guarantors'
officers, directors and employees to supply all information reasonably
requested by any such Holder, underwriter, attorney or accountant in
connection with such Registration Statement or any post-effective
amendment thereto subsequent to the filing thereof and prior to its
effectiveness;
(vii) if requested by any selling Holders or the
underwriter(s) in connection with such sale, if any, promptly include
in any Registration Statement or Prospectus, pursuant to a supplement
or post-effective amendment if necessary, such information as such
selling Holders and underwriter(s), if any, may reasonably request to
have included therein relating to such Holders, the "Plan of
Distribution" of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being
sold to such underwriter(s), the purchase price being paid therefor and
any other terms of the offering of the Transfer Restricted Securities
to be sold in such offering; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as
practicable after the Issuers are notified of the matters to be
included in such Prospectus supplement or post-effective amendment;
(viii) furnish to each selling Holder and each of the
underwriter(s) in connection with such sale, if any, without charge, at
least one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(ix) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Issuers
and the Subsidiary Guarantors hereby consent to the use (in accordance
with law) of the Prospectus and any amendment or supplement thereto by
each of the selling Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement
thereto;
(x) enter into such agreements (including an underwriting
agreement) and make such representations and warranties and take all
such other actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities
pursuant to any Registration Statement contemplated by this Agreement
as may be reasonably requested by any Holder of Transfer Restricted
Securities or underwriter in connection with any sale or resale
pursuant to any Registration Statement contemplated by this Agreement,
and in such
11
connection, whether or not an underwriting agreement is entered into
and whether or not the registration is an Underwritten Registration,
the Issuers and the Subsidiary Guarantors shall:
(A) furnish to each selling Holder and each underwriter, if
any, upon the effectiveness of the Shelf Registration Statement
and to each Restricted Broker-Dealer upon Consummation of the
Exchange Offer:
(1) a certificate, dated as of the date of
effectiveness of the Shelf Registration Statement signed on
behalf of each of the Issuers and the Subsidiary Guarantors
by (x) the President or any Vice President and (y) a
principal financial or accounting officer of each of the
Issuers and the Subsidiary Guarantors confirming, as of the
date thereof, the matters set forth in paragraphs (a)
through (c) of Section 9 of the Purchase Agreement with
respect to the Shelf Registration Statement and such other
similar matters as the Holders, underwriter(s) and/or
Restricted Broker-Dealers may reasonably request;
(2) an opinion, dated as of the date of effectiveness
of the Shelf Registration Statement of counsel for the
Issuers and the Subsidiary Guarantors, covering matters
customarily covered in opinions requested in Underwritten
Offerings and dated the date of effectiveness of the Shelf
Registration Statement; and
(3) customary comfort letters, dated as of the date of
effectiveness of the Shelf Registration Statement from the
Issuers' independent accountants, in the customary form and
covering matters of the type customarily covered in comfort
letters to underwriters in connection with Underwritten
Offerings, and affirming the matters set forth in the
comfort letters delivered pursuant to Section 9(f) of the
Purchase Agreement, without exception;
provided, however, that notwithstanding the foregoing, the
documents to be delivered pursuant to this Section
6(c)(x)(A) may contain such exceptions as are reasonably
necessary under the circumstances as they exist at the time
such documents are delivered;
(B) set forth in full or incorporated by reference in the
underwriting agreement, if any, in connection with any sale or
resale pursuant to any Shelf Registration Statement the
indemnification provisions and procedures of Section 8 hereof
with respect to all parties to be indemnified pursuant to said
Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by the selling Holders, the underwriter(s),
if any, and Restricted Broker-Dealers, if any, to evidence
compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Issuers and the Subsidiary
Guarantors pursuant to this clause (x).
The above shall be done at each closing under such
underwriting or similar agreement, as and to the extent required
thereunder, and if at any time the representations and warranties of
the Issuers and the Subsidiary Guarantors contemplated in (A)(1) above
cease to be true and correct, the Issuers and the Subsidiary Guarantors
shall so advise the underwriter(s), if any,
12
selling Holders and each Restricted Broker-Dealer promptly and if
requested by such Persons, shall confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and their respective counsel in connection with the registration
and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the selling
Holders or underwriter(s), if any, may reasonably request and do any
and all other acts or things reasonably necessary or advisable to
enable the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the applicable Registration Statement; provided,
however, that neither of the Issuers nor any Subsidiary Guarantor shall
be required to register or qualify as a foreign corporation where it is
not now so qualified or to take any action that would subject it to the
service of process in suits or to taxation, other than as to matters
and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(xii) issue, upon the request of any Holder of Senior
Subordinated Notes covered by any Shelf Registration Statement
contemplated by this Agreement, New Senior Subordinated Notes, having
an aggregate principal amount equal to the aggregate principal amount
of Senior Subordinated Notes surrendered to the Issuers by such Holder
in exchange therefor or being sold by such Holder; such New Senior
Subordinated Notes to be registered in the name of the purchaser(s) of
such Notes; in return, the Senior Subordinated Notes held by such
Holder shall be surrendered to the Issuers for cancellation;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and to register such
Transfer Restricted Securities in such denominations and such names as
the Holders or the underwriter(s), if any, may request at least two
Business Days prior to such sale of Transfer Restricted Securities;
(xiv) use their respective best efforts to cause the
disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof or the underwriter(s), if any, to consummate
the disposition of such Transfer Restricted Securities, subject to the
proviso contained in clause (xi) above;
(xv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with the
Depository Trust Company;
13
(xvii) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation
by any underwriter (including any "qualified independent underwriter")
that is required to be retained in accordance with the rules and
regulations of the NASD, and use their respective best efforts to cause
such Registration Statement to become effective and approved by such
governmental agencies or authorities as may be necessary to enable the
Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities;
(xviii) otherwise use their respective best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any
applicable Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is
defined in paragraph (c) of Rule 158 under the Act);
(xix) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders of Notes to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use their
respective best efforts to cause the Trustee to execute, all documents
that may be required to effect such changes and all other forms and
documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner; and
(xx) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(i) or any notice from the Issuers of the existence of any fact of
the kind described in Section 6(c)(iii)(D) hereof, such Holder will immediately
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof,
or until it is advised in writing by the Issuers that the use of the Prospectus
may be resumed, and has received copies of any additional or supplemental
filings that are incorporated by reference in the Prospectus (the "Advice"). If
so directed by the Issuers, each Holder will deliver to the Issuers (at the
Issuers' expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of either such notice. In the
event the Issuers shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section 6(c)(i)
or Section 6(c)(iii)(D) hereof to and including the date when each selling
Holder covered by such Registration Statement shall have received the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof
or shall have received the Advice.
7. REGISTRATION EXPENSES
(a) All expenses incident to the Issuers' and the Subsidiary
Guarantors' performance of or compliance with this Agreement will be borne by
the Issuers, regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and
14
expenses (including filings made by any Initial Purchaser or Holder with the
NASD (and, if applicable, the fees and expenses of any "qualified independent
underwriter") and its counsel that may be required by the rules and regulations
of the NASD); (ii) all fees and expenses of compliance with federal securities
and state Blue Sky or securities laws; (iii) all expenses of printing (including
printing certificates for the New Senior Subordinated Notes to be issued in the
Exchange Offer and printing of Prospectuses); (iv) all fees and disbursements of
counsel for the Issuers, the Subsidiary Guarantors and, in accordance with
Section 7(b) below, the Holders of Transfer Restricted Securities; (v) all
messenger and delivery services and telephone expenses of the Issuers and the
Subsidiary Guarantors; (vi) all application and filing fees in connection with
listing the Notes on a national securities exchange or automated quotation
system pursuant to the requirements hereof and (vii) all fees and disbursements
of independent certified public accountants of the Issuers and the Subsidiary
Guarantors (including the expenses of any special audit and comfort letters
required by or incident to such performance); provided, however, that
notwithstanding the foregoing, the Issuers will not be responsible for any
underwriter's discounts, commissions or fees attributable to the sale of the
Transfer Restricted Securities.
The Issuers will, in any event, bear their and the Subsidiary
Guarantors' internal expenses (including, without limitation, all salaries and
expenses of any of their respective officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees and expenses
of any Person, including special experts, retained by the Issuers or the
Subsidiary Guarantors.
(b) In connection with any Shelf Registration Statement required by
this Agreement, as applicable, the Issuers and the Subsidiary Guarantors will
reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities pursuant to the "Plan of Distribution" contained in or registered
pursuant to the Shelf Registration Statement, as applicable, for the reasonable
fees and disbursements of not more than one counsel, who shall be chosen by the
Holders of a majority in principal amount of the Transfer Restricted Securities
for whose benefit such Registration Statement is being prepared.
8. INDEMNIFICATION
(a) Each of the Issuers and the Subsidiary Guarantors agree, jointly
and severally, to indemnify and hold harmless (i) each Initial Purchaser, (ii)
each Holder, (iii) each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) any Initial Purchaser
or Holder (any of the persons referred to in this clause (iii) being hereinafter
referred to as a "controlling person") and (iv) the respective officers,
directors, partners, employees, representatives and agents of the Initial
Purchasers or any Holder or any controlling person (any person referred to in
clause (i), (ii), (iii) or (iv) in such capacity may hereinafter be referred to
as an "Indemnified Holder"), to the fullest extent lawful, from and against any
and all losses, claims, damages, liabilities, judgments, actions and reasonable
expenses (including without limitation and as incurred, reimbursement of all
costs of investigating, preparing, pursuing or defending any claim or action, or
any investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to any
Indemnified Holder) directly or indirectly caused by, related to, based upon,
arising out of or in connection with any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto),
or any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except insofar as
such losses, claims, damages, liabilities, judgments, actions or expenses are
caused by any untrue statement or
15
omission or alleged untrue statement or omission that is made in reliance upon
and in conformity with information relating to any Initial Purchaser or any of
the Holders furnished in writing to either of the Issuers by any of the Initial
Purchasers or any of the Holders expressly for use therein; provided however,
that the indemnification contained in this paragraph (a) with respect to any
preliminary prospectus shall not inure to the benefit of any Holder (or to the
benefit of any person controlling any Holder) on account of any such loss,
claim, damage, liability, judgment, action or expense arising from the sale of
Senior Subordinated Notes by such Holder to any person if a copy of the
Prospectus, as it may be amended or supplemented, shall not have been delivered
or sent to such person, at or prior to the written confirmation of such sale,
and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in any preliminary prospectus was
corrected in the Prospectus, as it may have been amended or supplemented;
provided that the Issuers have delivered the Prospectus, as it may be amended or
supplemented, to such Holder in requisite quantity on a timely basis to permit
such delivery or sending. Each of the Issuers and the Subsidiary Guarantors also
agree, jointly and severally, to reimburse each Indemnified Holder for any and
all fees and expenses (including, without limitation, the reasonable fees and
expenses of counsel) as they are incurred in connection with enforcing such
Indemnified Holder's rights under this Agreement (including, without limitation,
its rights under this Section 8). The Issuers shall notify the Initial
Purchasers and any Holder promptly of the institution, threat or assertion of
any claim, proceeding (including any governmental investigation) or litigation
in connection with the matters addressed by this Agreement which involves either
of the Issuers or an Indemnified Holder.
In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
of the Indemnified Holders with respect to which indemnity may be sought against
either of the Issuers or the Subsidiary Guarantors, such Indemnified Holder
shall promptly notify the Issuers in writing (provided, that the failure to give
such notice shall not relieve either of the Issuers or the Subsidiary Guarantors
of their respective obligations pursuant to this Agreement), and the Issuers
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Holder and payment of all fees and expenses
(regardless of whether it is ultimately determined that an Indemnified Holder is
not entitled to indemnification hereunder). Such Indemnified Holder shall have
the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Holder unless (i) the employment of such counsel
shall have been specifically authorized in writing by either of the Issuers,
(ii) the Issuers shall have failed to assume the defense and employ counsel or
(iii) the named parties to any such action (including any impleaded parties)
include both such Indemnified Holder and either of the Issuers or the Subsidiary
Guarantors, and such Indemnified Holder shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to such Issuer or Subsidiary Guarantor (in
which case neither Issuer shall have the right to assume the defense of such
action on behalf of such Indemnified Holder, it being understood, however, that
the Issuers and the Subsidiary Guarantors shall not, in connection with any one
such action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any appropriate local counsel) for all such Indemnified Holders,
which firm shall be designated in writing by the Indemnified Holders, and that
all such fees and expenses shall be reimbursed as they are incurred). None of
the Issuers nor the Subsidiary Guarantors shall be liable for any settlement of
any such action or proceeding effected without the prior written consent of
either of the Issuers, but if settled with the written consent of either of the
Issuers, which consent will not be unreasonably withheld, the Issuers and the
Subsidiary Guarantors agree, jointly and severally, to indemnify and hold
harmless any Indemnified Holder from and against any loss, claim, damage,
liability, judgment, action or expense by reason of any such settlement.
Notwithstanding the foregoing
16
sentence, if at any time an Indemnified Holder shall have requested either of
the Issuers or the Subsidiary Guarantors to reimburse the Indemnified Holder for
fees and expenses of counsel as contemplated by the second sentence of this
paragraph, the Issuers and the Subsidiary Guarantors agree that they shall be
liable for any settlement of any proceeding effected without either of the
Issuer's written consent if (i) such settlement is entered into more than thirty
(30) business days after receipt by either of the Issuers or the Subsidiary
Guarantors of the aforesaid request, and (ii) none of the Issuers nor the
Subsidiary Guarantors shall have reimbursed the Indemnified Holder in accordance
with such request prior to the date of such settlement. Neither Issuer nor the
Subsidiary Guarantors shall, without the prior written consent of each
Indemnified Holder settle, compromise or consent to the entry of judgment in or
otherwise seek to terminate any pending or threatened action, claim, litigation
or proceeding in respect of which indemnification or contribution may be sought
hereunder by such Indemnified Holder (whether or not any Indemnified Holder is a
party thereto), unless such settlement, compromise, consent or termination
includes an unconditional release of each Indemnified Holder from all liability
arising out of such action, claim, litigation or proceeding.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless each of the Issuers and the
Subsidiary Guarantors, any person controlling (within the meaning of Section 15
of the Act or Section 20 of the Exchange Act) either of the Issuers or any
Subsidiary Guarantor, and the officers, directors, partners, employees,
representatives and agents of each such person (the "Issuer Indemnified
Parties"), to the same extent as the foregoing indemnity from each of the
Issuers and the Subsidiary Guarantors to each of the Indemnified Holders, but
only with respect to claims and actions based on information relating to such
Holder furnished in writing by such Holder expressly for use in any Registration
Statement; provided however, that in no case shall any Holder be liable or
responsible for any amount in excess of the amount by which the total received
by such Holder with respect to its sale of Transfer Restricted Securities
pursuant to a Registration Statement exceeds (i) the amount paid by such Holder
for such Transfer Restricted Securities and (ii) the amount of any damages which
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. In case any action
shall be brought against any Issuer Indemnified Party in respect of which
indemnity may be sought against a Holder of Transfer Restricted Securities, such
Holder shall have the rights and duties given the Issuers and the Subsidiary
Guarantors, and the Issuer Indemnified Parties shall have the rights and duties
given to each Holder by the preceding paragraph.
(c) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities, judgments, actions or expenses referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities, judgments, actions or expenses (i)
in such proportion as is appropriate to reflect the relative benefits received
by the indemnifying party (or parties, as applicable), on the one hand, and the
indemnified party (or parties, as applicable), on the other hand, from the
initial placement and the sale of Transfer Restricted Securities pursuant to the
applicable Registration Statement or (ii) if such allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the indemnifying party (or parties, as
applicable), and of the indemnified party (or parties, as applicable), as well
as any other relevant equitable considerations. The relative benefits received
by the Issuers and the Subsidiary Guarantors shall be deemed to be equal to the
total proceeds from the initial placement (net of the Initial Purchasers'
commissions, but before deducting expenses) as set forth on the cover page of
the Offering Memorandum. The relative benefits of the Initial Purchasers shall
be deemed to be equal to the total purchase discounts and commissions as set
forth on the cover page of the Offering Memorandum and benefits received by any
other Indemnified Holders shall be
17
deemed to be equal to the total proceeds received by such Holder upon its sale
of Senior Subordinated Notes. The relative fault of each of the Issuers and the
Subsidiary Guarantors, on the one hand, and the Indemnified Holders, on the
other hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact related to information supplied by either of
the Issuers and the Subsidiary Guarantors, on the one hand or by the Indemnified
Holders, on the other hand and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Issuers, the Subsidiary Guarantors, the Initial Purchasers and each
Holder of Transfer Restricted Securities agree that it would not be just and
equitable if contribution pursuant to this Section 8(c) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities, judgments, actions or expenses referred to
in the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, no Initial
Purchaser (and such Initial Purchaser's related Indemnified Holders, shall be
required to contribute, in the aggregate, any amount in excess of the amount
equal to (A) the amount of the total purchase discounts and commissions
applicable to such Transfer Restricted Securities less (B) any amount paid or
contributed by the Initial Purchasers under the Purchase Agreement; nor shall
any Holder or its related Indemnified Holders be required to contribute, in the
aggregate, any amount in excess of the amount by which the total received by
such Holder with respect to the sale of its Transfer Restricted Securities
pursuant to a Registration Statement exceeds the sum of (A) the amount paid by
such Holder for such Transfer Restricted Securities plus (B) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
The indemnity and contribution agreements of each of the Issuers and
the Subsidiary Guarantors contained in this Section 8 are in addition to any
liability or obligation which either of the Issuers and the Subsidiary
Guarantors may otherwise have to the Indemnified Holders.
9. RULE 144A
The Issuers and the Subsidiary Guarantors hereby agree with each
Holder, for so long as any Transfer Restricted Securities remain outstanding and
during any period in which the Issuers and the Subsidiary Guarantors are not
subject to Section 13 or 15(d) of the Securities Exchange Act, to make
available, upon request of any Holder of Transfer Restricted Securities, to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
10. UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in customary underwriting arrangements entered
into in connection therewith and (b) completes and executes all
18
reasonable questionnaires, powers of attorney, lock-up letters and other
documents required under the terms of such underwriting arrangements.
11. SELECTION OF UNDERWRITERS
For any Underwritten Offering of Notes, the investment banker or
investment bankers and manager or managers for any Underwritten Offering of
Notes, that will administer such offering will be selected by the Holders of a
majority in aggregate principal amount of the Transfer Restricted Securities
included in such offering, and shall be subject to the approval of the Issuers,
which approval shall not be unreasonably withheld; provided however, that a
Registration Default shall not be deemed to have occurred if such Registration
Default directly or indirectly arose out of any willful or gross negligence by
such underwriters. Such investment bankers and managers are referred to herein
as the "underwriters."
12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to exercise
all rights provided herein, in the Indenture, the Purchase Agreement or granted
by law, including recovery of liquidated or other damages, will be entitled to
specific performance of its rights under this Agreement. The Issuers and the
Subsidiary Guarantors agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by them of the
provisions of this Agreement and hereby agree to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither of the Issuers nor any
Subsidiary Guarantor will, on or after the date of this Agreement, enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Issuers' and the Subsidiary Guarantors' securities under any agreement in
effect on the date hereof.
(c) Adjustments Affecting the Notes. Neither of the Issuers nor any
Subsidiary Guarantor will take any action with respect to the Notes that would
materially and adversely affect the ability of the Holders to Consummate any
Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 12(d)(i), the Issuers have obtained the written consent
of the Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Issuers have obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities. Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof that relates exclusively to the rights of
Holders whose securities are being tendered pursuant to the Exchange Offer and
that does not affect directly or indirectly the rights of other Holders whose
securities are not being tendered pursuant to such Exchange Offer may be given
by the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities subject to such Exchange Offer.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
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(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under
the Indenture;
With a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Xx.
(ii) if to any Issuer or Subsidiary Guarantor:
Foamex International Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
With a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
One Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxx
All such notices and communications shall 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 receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier promising overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities directly from such Holder at a time when such
Holder could not transfer such Transfer Restricted Securities pursuant to a
Shelf Registration Statement. Each Holder of Transfer Restricted Securities
agrees to be bound by and comply with the terms and provisions of this
Agreement.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
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(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such subject matter.
[signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
FOAMEX L.P.
By its Managing General Partner FMXI, Inc.
By:/s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Vice President
FOAMEX CAPITAL CORPORATION
By:/s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Vice President
GENERAL FELT INDUSTRIES, INC.
By:/s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Vice President
FOAMEX FIBERS, INC.
By:/s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Vice President
On behalf of each of the Initial
Purchasers by Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:/s/ Xxxx Xxxxx
---------------------------------------
Name: Xxxx Xxxxx
Title: Senior Vice President
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