[Execution Copy]
CREDIT AGREEMENT
Dated as of February 27, 1998
among
FOAMEX CARPET CUSHION, INC.
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS ISSUING BANKS
and
CITICORP USA, INC.
and
THE BANK OF NOVA SCOTIA
as Administrative Agents
CREDIT AGREEMENT
This CREDIT AGREEMENT dated as of February 27, 1998 (as amended,
amended and restated, supplemented or modified from time to time, the
"Agreement") is entered into among Foamex Carpet Cushion, Inc., a Delaware
corporation ("New GFI" or the "Borrower"), the institutions from time to time a
party hereto as Lenders, whether by execution of this Agreement or an Assignment
and Acceptance, the institutions from time to time a party hereto as Issuing
Banks, whether by execution of this Agreement or an Assignment and Acceptance,
Citicorp USA, Inc., a Delaware corporation ("Citicorp"), in its capacity as the
collateral agent for the Lenders and the Issuing Banks hereunder (in such
capacity, the "Collateral Agent") and The Bank of Nova Scotia ("Scotiabank"), in
its capacity as funding agent for the Lenders and Issuing Banks (in such
capacity, the "Funding Agent"; together with the Collateral Agent, the
"Administrative Agents").
W I T N E S S E T H:
WHEREAS, subject to the terms of this Agreement, the Borrower wishes to
obtain from the Lenders Commitments (to include availability for Revolving
Loans, Swing Loans and Letters of Credit) pursuant to which Borrowings of
Revolving Loans and Swing Loans, in a maximum aggregate principal amount
(together with all Letter of Credit Obligations) not to exceed $20,000,000 will
be made to the Borrower from time to time prior to the Commitment Termination
Date (provided, that the aggregate outstanding principal amount of such Swing
Loans, Revolving Loans and Letter of Credit Obligations at any time shall not
exceed the then existing Commitment Amount) with all the proceeds of the Credit
Extensions to be used for the purposes specified in Sections 2.01(d); and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to extend such
Commitments and make or maintain such Loans to the Borrower and issue (or
participate in) Letters of Credit for the account of the Borrower;
NOW, THEREFORE, in consideration of the above premises each of the
Borrower, the Lenders, the Issuing Banks and the Administrative Agents agree as
follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms used in this Agreement
(including the preamble and the recitals hereto) shall have the following
meanings, applicable both to the singular and the plural forms of the terms
defined:
"Accommodation Obligation" means any Contractual Obligation, contingent
or otherwise, of one Person with respect to any (x) Indebtedness of another
Person or (y) any other obligation or liability of another Person which is not a
Credit Party, if the primary purpose or intent thereof by the Person incurring
the Accommodation Obligation is to provide assurance to the obligee of such
Indebtedness, obligation or liability of another that such Indebtedness,
obligation or liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders thereof will be
protected (in whole or in part) against loss in respect thereof including,
without limitation, direct and indirect guarantees, endorsements (except for
collection or deposit in the ordinary course of business), notes co-made or
discounted, recourse agreements, take-or-pay agreements, keep-well agreements,
agreements to purchase or repurchase such Indebtedness, obligation or liability
or any security therefor or to provide funds for the payment or discharge
thereof, agreements to maintain solvency, assets, level of income, or other
financial condition, and agreements to make payment other than for value
received.
"Administrative Agents" has the meaning ascribed to such term in the
preamble and their respective successors pursuant to Section 12.07.
"Administrative Services Agreement" means the administrative services
agreement, dated as of February 27, 1998, between Foamex and GFI and assigned to
the Borrower, as such agreement may be amended, supplemented or modified from
time to time.
"Affiliate", as applied to any Person, means any other Person that
directly or indirectly controls, is controlled by, or is under common control
with, that Person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to vote ten percent (10%) or more of the Securities
having voting power for the election of directors of such Person or otherwise to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting Securities or by contract or otherwise.
"Agreement" has the meaning ascribed to such term in the preamble.
"Amendatory Agreement" means the Second Amendment to Credit Agreement
and Certain Loan Documents, dated as of February 27, 1998, among the parties to
the Existing Credit Agreement and Foamex International.
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"Applicable Commitment Fee Margin" means, with respect to the fees
payable to the Lenders pursuant to Section 4.03(c), at all times a per annum
rate equal to 0.50%.
"Applicable Lending Office" means, with respect to a particular Lender,
its LIBO Rate Lending Office in respect of provisions relating to LIBO Rate
Loans and its Domestic Lending Office in respect of provisions relating to Base
Rate Loans.
"Applicable Margin" means:
(a) with respect to the unpaid principal amount of each
Revolving Loan maintained as a Base Rate Loan, a per annum rate of
2.00%;
(b) with respect to the unpaid principal amount of each
Revolving Loan maintained as a LIBO Rate Loan, a per annum rate of
3.00%.
"Asset Transfer Documents" means the Asset Purchase Agreement, dated as
of February 27, 1998, by and among TFLLC, GFI, the Borrower, and Foamex
International and the Ancillary Agreements (as such term is defined therein), as
the same may be amended, supplemented or modified from time to time.
"Assignment and Acceptance" means an Assignment and Acceptance attached
hereto and made a part hereof (with blanks appropriately completed) delivered to
the Administrative Agents in connection with an assignment of a Lender's
interest under this Agreement in accordance with the provisions of Section
13.01.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
xx.xx. 101 et seq.), as amended from time to time, and any successor statute.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall at all
times be equal to the higher of:
(a) the rate of interest announced publicly by the Funding
Agent in New York, New York from time to time, as the Funding Agent's
base rate; and
(b) the sum of (A) one half of one percent (0.50%) per annum
plus (B) the Federal Funds Rate in effect from time to time during such
period.
"Base Rate Loans" means all Loans which bear interest at a rate
determined by reference to the Base Rate as provided in Section 4.01(a).
"Benefit Plan" means a defined benefit plan as defined in Section 3(35)
of ERISA (other than a Multiemployer Plan) in respect of which the Borrower or
any ERISA Affiliate is, or within
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the immediately preceding six (6) years was, an "employer" as defined in Section
3(5) of ERISA and which is subject to Title IV of ERISA.
"Borrower" has the meaning assigned thereto in the preamble.
"Borrowing" means a borrowing consisting of Loans of the same type
made, continued or converted on the same day.
"Business Day" means a day, in the applicable local time, which is not
a Saturday or Sunday or a legal holiday and on which banks are not required or
permitted by law or other governmental action to close (i) in New York, New York
and (ii) in the case of LIBO Rate Loans, in London, England and (iii) in the
case of letter of credit transactions for a particular Issuing Bank, in the
place where its office for issuance or administration of the pertinent Letter of
Credit is located.
"Business Plan" means each Business Plan of the Borrower delivered
after the Effective Date to the Administrative Agents pursuant to Section
7.01(f).
"Capital Expenditures" means, for any period, the aggregate of all
expenditures of the Borrower (whether payable in cash or other Property or
accrued as a liability (but without duplication)) during such period that, in
conformity with GAAP, are required to be included in fixed asset accounts as
reflected in the balance sheets of the Borrower; provided, however, (i) Capital
Expenditures shall include, whether or not such a designation would be in
conformity with GAAP, (A) that portion of Capital Leases which is capitalized on
the balance sheet of the Borrower and (B) expenditures for Equipment which is
purchased simultaneously with the trade-in of existing Equipment owned by the
Borrower, to the extent the gross purchase price of the purchased Equipment
exceeds the book value of the Equipment being traded in at such time; and (ii)
Capital Expenditures shall exclude, whether or not such a designation would be
in conformity with GAAP, expenditures made in connection with the replacement or
restoration of Property, to the extent reimbursed or financed from insurance or
condemnation proceeds which do not result in a permanent reduction in the
Revolving Loan Commitments pursuant to Section 3.01.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Cash Collateral" means cash or Cash Equivalents held by the Collateral
Agent, any of the Issuing Banks or any of the Lenders as security for the
Obligations.
"Cash Collateral Account" means an interest bearing account named
"Foamex Carpet Cushion Inc.", Account No.: 4075-4472, Account Name: "Citibank
N.A. F/A/O Foamex Carpet Cushion, Inc.", maintained at Citibank's offices in New
York, New York in which Cash Collateral of any Credit Party shall be deposited.
The Cash Collateral Account shall be under
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the sole dominion and control of the Collateral Agent; provided, that all
amounts deposited therein shall be held by the Collateral Agent for the benefit
of the Administrative Agents, the Lenders and the Issuing Banks and shall be
subject to the terms of Section 11.03.
"Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by a Federal Governmental Authority and backed by the
full faith and credit of the United States government; (b) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any Lender or any commercial
bank organized or licensed under the laws of the United States, any state
thereof, the District of Columbia, any foreign bank, or its branches or agencies
(fully protected against currency fluctuations), which, at the time of
acquisition, are rated A-1 (or better) by Standard & Poor's Ratings Services, a
division of the McGraw Hill Corporation, or P-1 (or better) by Xxxxx'x Investors
Service, Inc.; and (c) commercial paper, other than commercial paper issued by
the Borrower or any of its Affiliates, which is at the time of acquisition rated
A-1 (or better) by Standard & Poor's Ratings Services, a division of the McGraw
Hill Corporation, or P-1 (or better) by Xxxxx'x Investors Service, Inc.;
provided, that the maturities of such Cash Equivalents shall not exceed 90 days.
"Cash Interest Expense" means, for any period, total interest expense,
whether paid or accrued (without duplication) (including the interest component
of Capital Leases), of the Borrower, including, without limitation, (i) all bank
fees, commissions, discounts and other fees and charges owed with respect to
letters of credit and (ii) net costs (and reduction for net benefits) under
interest rate Hedging Obligations, but excluding, however, (a) amortization of
discount, (b) interest paid in property other than cash or (c) any other
interest expense not payable in cash, all as determined in conformity with GAAP.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. xx.xx. 9601 et seq., any amendments
thereto, any successor statutes, and any regulations or legally enforceable
guidance promulgated thereunder.
"Change of Control" means any event pursuant to which (a) another
Person is substituted for FMXI as the managing general partner of Foamex,
whether by agreement with FMXI, as a result of bankruptcy of FMXI or otherwise,
(b) another Person in addition to FMXI becomes a general partner of Foamex, (c)
FMXI withdraws as managing general partner of Foamex pursuant to the Partnership
Agreement or otherwise, (d) Xxxxxxxx X. Xxxxx ceases (i) to control at least
fifty-one percent (51%) of the Equity Interests in TIHI entitled to elect a
majority of the board of directors or (ii) to legally and beneficially own,
directly or indirectly and of record, at least thirty percent (30%) of the
issued and outstanding Equity Interests in TIHI, (e) TIHI and Trace Foam Sub,
Inc. ceases to legally and beneficially own and control, directly or indirectly
and of record, at least thirty percent (30%) of the voting Equity Interests in
Foamex International, (f) any Person or group of Persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act) other than TIHI and its
wholly-owned Subsidiaries has acquired beneficial ownership (within the meaning
of Rule 13d-3 promulgated by the Securities and Exchange Commission under said
Act)
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of the Equity Interests in Foamex International in the aggregate amount in
excess of twenty percent (20%) but only if such Person or group owns Equity
Interests in excess of the Equity Interests owned directly or indirectly by
TIHI, (g) there is a sale, transfer or other assignment or disposition of any of
the Equity Interests in Foamex by FMXI, (h) Foamex International ceases to own
and control 100% of the issued and outstanding Equity Interests in the Borrower,
or (i) during any period of two consecutive calendar years, individuals who at
the beginning of such period constituted the Board of Directors of the Borrower
or Foamex International or whose nomination for election by the shareholders of
such Person, was approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the directors of the Borrower or Foamex
International, as the case may be, then in office.
"Citibank" means Citibank, N.A.
"Citicorp" is defined in the preamble.
"Claim" means any claim or demand, by any Person, of whatsoever kind or
nature for any alleged Liabilities and Costs, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil statute,
Permit, ordinance or regulation, common law or otherwise.
"Collateral" means all Property and interests in Property now owned or
hereafter acquired by any Credit Party upon which a Lien is granted to the
Collateral Agent or any Lender or Issuing Bank under any of the Loan Documents.
"Collateral Agent" is defined in the preamble.
"Commercial Letter of Credit" means any documentary letter of credit
issued by an Issuing Bank pursuant to Section 2.03 for the account of the
Borrower which is drawable upon presentation of documents evidencing the sale or
shipment of goods purchased by the Borrower in the ordinary course of its
business.
"Commitment" means, with respect to any Lender, the obligation of such
Lender to make Revolving Loans and to participate in Letters of Credit pursuant
to the terms and conditions of this Agreement, and which shall not exceed the
principal amount set forth opposite such Lender's name under the heading
"Commitment" on the signature pages hereof or the signature page of the
Assignment and Acceptance by which it became (or becomes) a Lender, as modified
from time to time pursuant to the terms of this Agreement or to give effect to
any applicable Assignment and Acceptance, and "Commitments" means the aggregate
principal amount of the Commitments of all the Lenders, the maximum amount of
which shall not exceed a principal amount of $20,000,000, as reduced from time
to time pursuant to Section 3.01.
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"Commitment Amount" means, as of any date of determination, an amount
equal to the Commitments in effect at such time.
"Commitment Availability" means, at any time of determination, the
excess of :
(a) the Commitments then in effect
over
(b) the aggregate amount of Revolving Credit Obligations then
outstanding.
"Commitment Termination Date" means the earliest to occur of:
(a) February 27, 2004; and
(b) the date on which any Commitment Termination Event occurs.
"Commitment Termination Event" means:
(a) the occurrence of any Event of Default or Potential Event
of Default described in Section 11.01(f) or (g); or
(b) the occurrence and continuance of any other Event of
Default and either:
(i) the declaration of all of the Loans to be due and
payable pursuant to Section 11.02 or
(ii) the giving of notice by the Administrative
Agents, acting at the direction of the Requisite Lenders to
the Borrower that the Commitments have been terminated.
"Compliance Certificate" has the meaning ascribed to such term in
Section 7.01(d).
"Concentration Accounts" means the accounts named "General Felt
Industries Inc." and "Foamex Carpet Cushion Inc." Account Nos. 4060-5549 and
4075-0148, respectively, of the Collateral Agent, or any similar account
established for any other Credit Party, in each case maintained at its office at
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx into which all funds from the Lockbox
Accounts of such Credit Parties shall be deposited.
"Constituent Documents" means, (a) with respect to any corporation, (i)
the articles/certificate of incorporation (or the equivalent organizational
documents) of such corporation, (ii) the by-laws (or the equivalent governing
documents) of such corporation and (iii) any document setting forth the
designation, amount and/or relative rights, limitations and
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preferences of any class or series of such corporation's Equity Interests,
(b) with respect to any partnership (whether limited or general), (i) the
certificate of partnership (or equivalent filings), (ii) the partnership
agreement (or the equivalent organizational documents) of such partnership and
(iii) any document setting forth the designation, amount and/or relative rights,
limitation and preferences of any of such partnership's Equity Interests and (c)
with respect to a limited liability company its articles or agreement of limited
liability company, operating or management agreement and any similar document.
"Contaminant" means any pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls (PCBs), or any hazardous
or toxic constituent thereof as these terms are defined in federal, state or
local laws or regulations.
"Contract Assignment and Security Agreement" means the Contract
Assignment and Security Agreement, dated as of February 27, 1998 between the
Borrower and the Collateral Agent, as such agreement may be amended,
supplemented or modified from time to time.
"Contractual Obligation", as applied to any Person, means any provision
of any Securities issued by that Person or any indenture, mortgage, deed of
trust, security agreement, pledge agreement, guaranty, contract, undertaking,
agreement or instrument to which that Person is a party or by which it or any of
its properties is bound, or to which it or any of its properties is subject.
"Credit Agents" means the Collateral Agent, Funding Agent,
Administrative Agents and the Intercreditor Agent.
"Credit Extensions" means all Loans and Letter of Credit Obligations.
"Credit Parties" means the Borrower and Foamex International.
"Cure Loans" has the meaning ascribed to such term in Section
3.02(b)(v)(C).
"Customary Permitted Liens" means:
(a) Liens (other than Liens in favor of the PBGC) with respect
to the payment of Taxes, assessments or governmental charges in all
cases which are not yet due or which are being contested in good faith
by appropriate proceedings and with respect to which adequate reserves
or other appropriate provisions are being maintained in accordance with
GAAP;
(b) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good
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faith by appropriate proceedings and with respect to which adequate
reserves or other appropriate provisions are being maintained in
accordance with GAAP;
(c) Liens (other than any Lien in favor of the PBGC) incurred
or deposits made in the ordinary course of business in connection with
worker's compensation, unemployment insurance or other types of social
security benefits or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money), surety,
appeal and performance bonds and contractual landlord liens; provided
that (i) all such Liens do not in the aggregate materially detract from
the value of the Borrower's assets or Property or materially impair the
use thereof in the operation of their respective businesses, and (ii)
all Liens of attachment or judgment and Liens securing bonds to stay
judgments or in connection with appeals do not secure at any time an
aggregate amount exceeding $1,000,000; and
(d) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of real property which do not materially
interfere with the ordinary conduct of the business of the Borrower.
"Xxxxx Letter of Credit" means that certain Irrevocable Letter of
Credit No. 2253/97/00000 issued by The Bank of Nova Scotia in favor of Bretlin,
Inc. in the original amount of $1,075,161.29, as the same may be renewed,
extended, amended or replaced.
"Xxxxx Letter of Credit Escrow Arrangements" means the escrow
agreement, dated as of October 7, 1997, and amended as of October 20, 1997
whereby GFI, Bretlin Inc., and The Bank of Nova Scotia Trust Company of New York
entered into an agreement relating to the escrow arrangements for the Dixie
Letter of Credit.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"Dollars" and "$" mean the lawful money of the United States.
"Domestic Lending Office" means, with respect to any Lender, such
Lender's office, located in the United States, specified as the "Domestic
Lending Office" under its name on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such other United
States office of such Lender as it may from time to time specify by written
notice to the Borrower and the Funding Agent.
"EBDAIT" means, for any period, (a) the sum of the amounts for such
period of (i) Net Income plus (ii) depreciation, amortization expense and other
non-cash charges plus (iii) Interest Expense plus (iv) Federal, state, foreign
and local income taxes provided for by the Borrower; minus (b) (i) extraordinary
gains (or plus extraordinary losses) from asset sales calculated
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pursuant to GAAP for such period to the extent such gains or losses were
included in the calculation of Net Income minus (ii) interest or investment
income.
"Effective Date" means the first date on which all of the conditions
precedent set forth in Section 5.01 hereof shall be satisfied or waived by the
Lenders, but in no event shall such date be later than March 17, 1998.
"Eligible Assignee" means (a) a Lender or any Affiliate thereof; or (b)
a finance company, insurance company, bank, other financial institution or fund
or any Person whose investment manager or investment advisor is the investment
manager or investment advisor of such Lender, reasonably acceptable to the
Administrative Agents and the Borrower (such acceptance not to be unreasonably
withheld or delayed).
"Environmental, Health or Safety Requirements of Law" means all valid
and enforceable Requirements of Law derived from or relating to federal, state
and local laws or regulations relating to or addressing the environment, health
or safety, including but not limited to any law, regulation, or order relating
to the use, handling, or disposal of any Contaminant, any law, regulation, or
order relating to Remedial Action, and any law, regulation, or order relating to
workplace or worker safety and health, as such Requirements of Law are
promulgated by the specifically authorized agency responsible for administering
such Requirements of Law.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for any (a) liabilities under any Environmental, Health or Safety
Requirement of Law, or (b) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"Equipment" means, with respect to the Borrower, all of the Borrower's
present and future (a) equipment and fixtures, including, without limitation,
machinery, manufacturing, distribution and office equipment, assembly systems,
tools, appliances, furniture and vehicles, (b) other tangible personal Property
(other than the Borrower's inventory), and (c) any and all accessions, parts and
appurtenances attached to any of the foregoing or used in connection therewith,
and any substitutions therefor and replacements, products and proceeds thereof.
"Equity Interests", with respect to any Person, means any capital stock
issued by such Person, regardless of class or designation, or any limited or
general partnership interest in such Person, regardless of designation, or any
limited company membership interest and all warrants, options, purchase rights,
conversion or exchange rights, voting rights, calls or claims of any character
with respect thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, any
amendments thereto, any successor statutes, and any regulations or guidance
promulgated thereunder.
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"ERISA Affiliate" means (a) any corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Internal Revenue Code) as the Borrower; (b) a partnership or other trade or
business (whether or not incorporated) which is under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with the Borrower; and
(c) solely for purposes of liability under Section 412(c)(11) of the Internal
Revenue Code, the Lien created under Section 412(n) of the Internal Revenue
Code, or for tax imposed for failure to meet minimum funding standards under
Section 4971 of the Internal Revenue Code, a member of the same affiliated
service group (within the meaning of Section 414(m) of the Internal Revenue
Code) as the Borrower, any corporation described in clause (a) above or any
partnership or trade or business described in clause (b) above.
"Event of Default" means any of the occurrences set forth in Section
11.01 after the expiration of any applicable grace period and the giving of any
applicable notice, in each case as expressly provided in Section 11.01.
"Existing Credit Agreement" has the meaning ascribed to such term in
the Foamex Credit Agreement.
"Fair Market Value" means, with respect to any asset of any Person, the
value of the consideration obtainable in a sale of such asset in the open
market, assuming a sale by a willing seller to a willing purchaser dealing at
arms length and arranged in an orderly manner over a reasonable period of time,
each having reasonable knowledge of the nature and characteristics of such
asset, neither being under any compulsion to act, determined (a) in good faith
by the board of directors of such Person or (b) in an appraisal of such asset,
provided that such appraisal was performed relatively contemporaneously with
such sale by an independent third party appraiser and the basic assumptions
underlying such appraisal have not materially changed between the date thereof
and the date of such sale.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day in New York, New York, for the next preceding
Business Day) in New York, New York by the Federal Reserve Bank of New York, or
if such rate is not so published for any day which is a Business Day in New
York, New York, the average of the quotations for such day on such transactions
received by the Administrative Agents from three federal funds brokers of
recognized standing selected by the Administrative Agents.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any Governmental Authority succeeding to its functions.
"FII Intercreditor Agreement" means the Intercreditor Agreement, dated
as of February 27, 1998, between the Intercreditor Agent, the intercreditor
agent for the collateral agent under
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the Foamex Credit Agreement and acknowledged by Foamex International, as amended
and restated, supplemented or otherwise modified from time to time.
"Fiscal Month" means a fiscal month.
"Fiscal Quarter" means a fiscal quarter.
"Fiscal Year" means a fiscal year.
"Fixed Charge Coverage Ratio" means, with respect to any period, the
ratio of
(a) the result (for such period) of
(i) EBDAIT
minus
(ii) Capital Expenditures of the Borrower
to
(b) Fixed Charges for such period.
"Fixed Charges" means, for any period, the sum of the amounts for such
period of (a) Cash Interest Expense, plus (b) scheduled payments of principal of
Indebtedness of the Borrower (including the principal component of Capital Lease
obligations), plus (c) charges for federal, state, foreign and local income
taxes actually paid during such period plus (d) payments under the Tax Sharing
Agreement.
"FMXI" means FMXI, Inc., a Delaware corporation and wholly-owned
Subsidiary of Foamex International.
"Foamex" means Foamex L.P., a Delaware limited partnership.
"Foamex Credit Agreement" means the Credit Agreement, dated as of June
12, 1997, as amended and restated on February 27, 1998, among Foamex, FMXI, the
Lenders and the Administrative Agents, as such agreement may be amended, amended
and restated, modified or otherwise changed from time to time.
"Foamex/GFI Note" means the intercompany promissory note of Foamex in
the principal amount of $34,000,000 having a maturity date of March 17, 2000 as
originally approved by the
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Requisite Lenders on the Effective Date and as such promissory note may
thereafter be amended, supplemented or modified from time to time.
"Foamex International" means Foamex International Inc., a Delaware
corporation.
"Foamex International Guaranty" means the Guaranty dated as of February
27, 1998 executed by Foamex International in favor of the Administrative Agents,
the Lenders and the Issuing Banks pursuant to which Foamex International
guarantees, among other things, all of the Obligations of the Borrower, as the
same may be amended, supplemented or modified from time to time.
"Foamex International Pledge Agreement" means the Foamex Pledge
Agreement dated as of February 27, 1998 between Foamex International and the
Intercreditor Agent, as the same may be amended, supplemented or modified from
time to time.
"Funded Debt" means, to the extent the following would be reflected on
a balance sheet of the Borrower prepared in accordance with GAAP, the principal
(or accreted) amount of all Indebtedness of the Borrower in respect of borrowed
money, evidenced by debt securities, debentures, acceptances, notes or other
similar instruments, in respect of Capital Lease Obligations, in respect of
Reimbursement Obligations or in respect of the deferred purchase price of
property or services, except accounts payable and accrued expenses arising in
the ordinary course of business.
"Funding Agent" is defined in the preamble.
"Funding Date" means, with respect to any Revolving Loan, the date of
the funding of such Revolving Loan, and with respect to any Swing Loan, the date
of the funding of such Swing Loan.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accounting Standards Board or in such other
statements by such other entity as may be in general use by significant segments
of the accounting profession as in effect on the date hereof (unless otherwise
specified herein as in effect on another date or dates).
"GFI" means General Felt Industries, Inc., a Delaware corporation.
"Governmental Authority" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government (including the National Association of Insurance
Commissioners).
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"Hedging Obligation" means, with respect to any Person, the obligations
of such Person under (a) interest rate or currency swap agreements, interest
rate or currency cap agreements, interest rate or currency collar agreements and
(b) other agreements or arrangements designed to protect such Person against or
expose such Person to fluctuations in interest rates and/or currency rates.
"Holder" means any Person entitled to enforce any of the Obligations,
whether or not such Person holds any evidence of Indebtedness, including,
without limitation, each Administrative Agent, each Lender and each Issuing
Bank.
"Indebtedness", as applied to any Person, means, at any time (without
duplication) (a) all indebtedness, obligations or other liabilities of such
Person (i) for borrowed money or evidenced by debt securities, debentures,
acceptances, notes or other similar instruments, and any accrued interest, fees
and charges relating thereto, (ii) under profit payment agreements in respect of
obligations to redeem, repurchase or exchange any Securities of such Person or
to pay dividends in respect of any stock, (iii) with respect to letters of
credit issued for such Person's account, (iv) to pay the deferred purchase price
of property or services, except accounts payable and accrued expenses arising in
the ordinary course of business as presently conducted, (v) in respect of
Capital Leases, or (vi) which are Accommodation Obligations; (b) all
indebtedness, obligations or other liabilities of such Person or others secured
by a Lien (other than Customary Permitted Liens) on any property of such Person,
whether or not such indebtedness, obligations or liabilities are assumed by such
Person, all as of such time; (c) all indebtedness, obligations or other
liabilities of such Person in respect of Hedging Obligations and foreign
exchange contracts, net of liabilities owed to such Person by the counterparties
thereon; and (d) all preferred Equity Interests in such Person subject to
mandatory redemption upon the occurrence of any contingency (but only to the
extent such contingency has occurred).
"Intercreditor Agent" means Citicorp USA, Inc., in its capacity as
intercreditor agent under the FII Intercreditor Agreement and the New GFI
Intercreditor Agreement.
"Interest Coverage Ratio" means, with respect to any period, the ratio
of :
(a) EBDAIT for such period
to
(b) Cash Interest Expense for such period.
"Interest Expense" means, for any period, total interest expense,
whether paid or accrued (without duplication) (including the interest component
of Capital Leases), of the Borrower, including, without limitation, all bank
fees, commissions, discounts and other fees and charges owed with respect to
letters of credit and net costs (and reduction for net benefits) under interest
rate Hedging Obligations.
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"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, any successor
statute and any regulations or guidance promulgated thereunder.
"Investment" means, with respect to any Person, (a) any purchase or
other acquisition by that Person of Securities, or of a beneficial interest in
Securities, issued by any other Person, (b) any purchase by that Person of all
or substantially all of the assets of a business conducted by another Person,
and (c) any direct or indirect loan, advance (other than prepaid expenses,
accounts receivable and advances to employees and similar items made or incurred
in the ordinary course of business as presently conducted) or capital
contribution by that Person to any other Person, including all Indebtedness to
such Person arising from a sale of property by such Person other than in the
ordinary course of its business. The amount of any Investment shall be the
original cost of such Investment, plus the cost of all additions thereto less
the amount of any return of capital or principal to the extent such return is in
cash with respect to such Investment without any adjustments for increases or
decreases in value or write-ups, write-downs or write-offs with respect to such
Investment.
"IRS" means the Internal Revenue Service and any Person succeeding to
the functions thereof.
"Issuing Banks" means Citibank, Scotiabank and each other Lender
approved by the Administrative Agents and the Borrower who has agreed to become
an Issuing Bank for the purpose of issuing Letters of Credit pursuant to Section
2.03.
"L/C Sublimit" means $5,000,000.
"Lease Agreement" means the Lease Agreement, dated as of February 27,
1998, between GFI and the Borrower relating to the Pico Rivera, California
facility as such agreement may be amended or modified and in effect from time to
time.
"Lender" means Citicorp, Scotiabank and the other financial
institutions on the signature pages hereof together with their respective
successors and assigns (including, without limitation, any Replacement Lender)
and the Swing Bank.
"Letter of Credit" means any Commercial Letter of Credit or Standby
Letter of Credit.
"Letter of Credit Fee" has the meaning ascribed to such term in Section
4.03(b).
"Letter of Credit Obligations" means, at any particular time, the sum
of (a) all outstanding Reimbursement Obligations at such time, plus (b) the
aggregate undrawn face amount of all outstanding Letters of Credit at such time,
plus (c) the aggregate face amount of all Letters of Credit requested by the
Borrower at such time but not yet issued (unless the request for an unissued
Letter of Credit has been denied pursuant to Section 2.03(c)(i)).
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"Letter of Credit Reimbursement Agreement" means, with respect to a
Letter of Credit, such form of application therefor and form of reimbursement
agreement therefor (whether in a single or several documents, taken together) as
the Issuing Bank from which such letter of credit is requested may employ in the
ordinary course of business for its own account, with such modifications thereto
as may be agreed upon by the Issuing Bank and the Borrower and as are not
materially adverse (in the judgment of the Issuing Bank) to the interests of the
Lenders; provided, however, in the event of any conflict between the terms of
any Letter of Credit Reimbursement Agreement and this Agreement, the terms of
this Agreement shall control.
"Liabilities and Costs" means all liabilities, obligations,
responsibilities, losses, damages, personal injury, death costs, punitive
damages, economic damages, consequential damages, treble damages, intentional,
willful or wanton injury or damage to the environment, natural resources or
public health or welfare, costs and expenses (including, without limitation,
attorney, expert and consulting fees and costs of investigation, feasibility or
Remedial Action studies), fines, penalties and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past, present or
future.
"LIBO Rate" means, with respect to any LIBO Rate Interest Period
applicable to a Borrowing of LIBO Rate Loans, an interest rate per annum
determined by the Funding Agent to be the average (rounded upward to the nearest
whole multiple of one-sixteenth of one percent (0.0625%) per annum if such
average is not such a multiple) of the rates per annum at which deposits in
Dollars are offered by the principal office of each of the Reference Banks in
London, England to major banks in the London interbank market at approximately
11:00 a.m. (London time) on the LIBO Rate Interest Rate Determination Date for
such LIBO Rate Interest Period for a period equal to such LIBO Rate Interest
Period and in an amount substantially equal to the amount of such Reference
Bank's LIBO Rate Loan and for a period equal to such LIBO Rate Interest Period.
"LIBO Rate Affiliate" means, with respect to each Lender, the
Affiliate of such Lender (if any) set forth below such Lender's name under the
heading "LIBO Rate Affiliate" on the signature pages hereof or on the Assignment
and Acceptance by which it became a Lender or such Affiliate of a Lender as it
may from time to time specify by written notice to the Borrower and the Funding
Agent.
"LIBO Rate Interest Payment Date" means (a) with respect to any LIBO
Rate Loan, the last day of each LIBO Rate Interest Period applicable to such
Loan and (b) with respect to any LIBO Rate Loan having a LIBO Rate Interest
Period in excess of three (3) calendar months, the last day of each three (3)
calendar month interval during such LIBO Rate Interest Period.
"LIBO Rate Interest Period" has the meaning ascribed to such term in
Section 4.02(b).
"LIBO Rate Interest Rate Determination Date" has the meaning ascribed
to such term in Section 4.02(c).
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"LIBO Rate Lending Office" means, with respect to any Lender, the
office or offices of such Lender (if any) set forth below such Lender's name
under the heading "LIBO Rate Lending Office" on the signature pages hereof or on
the Assignment and Acceptance by which it became a Lender or such office or
offices of such Lender as it may from time to time specify by written notice to
the Borrower and the Funding Agent.
"LIBO Rate Loans" means those Loans outstanding which bear interest at
a rate determined by reference to the LIBO Rate and the Applicable LIBO Rate
Margin as provided in Section 4.01(a).
"LIBO Rate Reserve Requirement" means any reserve requirement as
prescribed by the Federal Reserve Board for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve System in
New York, New York with deposits exceeding five billion Dollars in respect of
"Eurocurrency Liabilities" (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on LIBO Rate
Loans is determined or any category of extensions of credit or other assets
which includes loans by a nonUnited States office of any bank to United States
residents).
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, conditional sale agreement, deposit arrangement, security interest,
encumbrance, lien (statutory or other), preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever in
respect of any property of a Person, whether granted voluntarily or imposed by
law, and includes the interest of a lessor under Capital Lease or under any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement or similar notice (other
than a financing statement filed by a "true" lessor or consignor pursuant to ss.
9-408 of the UCC), naming the owner of such proper as debtor, under the UCC or
other comparable law of any jurisdiction.
"Loan Account" has the meaning ascribed to such term in Section
3.05(b).
"Loan Documents" means this Agreement, the Notes, the Security
Agreement, the Foamex International Pledge Agreement, the New GFI Intercreditor
Agreement, the FII Intercreditor Agreement, the Foamex International Guaranty,
the Contract Assignment Agreement, the Foamex International Pledge Agreement,
the Mortgage, Hedging Obligations to which any Lender or any Affiliate of a
Lender is a party, foreign exchange contracts to which any Lender or any
Affiliate of a Lender is a party, the fee letter referred to in Section 4.03,
and all other instruments, agreements and written Contractual Obligations
between the Borrower and any of the Administrative Agents, any Lender or any
Issuing Bank delivered to either of the Administrative Agents, such Lender or
such Issuing Bank pursuant to or in connection with this Agreement.
"Loan Parties" means, collectively, the Borrower and Foamex
International.
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"Loans" means Revolving Loans, Base Rate Loans, LIBO Rate Loans and
Swing Loans.
"Lockbox Account" has the meaning ascribed to such term in Section
3.06(a).
"Lockbox Agreement" means a lockbox agreement executed by each Lockbox
Bank, the Borrower, and the Collateral Agent as such agreement may be amended,
modified or supplemented from time to time.
"Lockbox Bank" means, with respect to the Borrower, each bank that has
executed a Lockbox Agreement and has been confirmed by the Collateral Agent not
to be in uncertain financial condition, into which the Borrower deposits
proceeds of Collateral and identified as such on Schedule 1.01.2.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U and Regulation G.
"Material Adverse Effect" means a material adverse effect upon (a) the
condition (financial or otherwise), business performance, properties,
operations, assets or prospects of the Borrower (or, prior to the Effective
Date, GFI and its Subsidiaries), (b) the ability of any Loan Party to perform
its obligations under the Loan Documents, or (c) the ability of the Lenders, the
Issuing Banks or the Collateral Agent to enforce the Loan Documents.
"Mortgage" means any mortgage, leasehold mortgage or deed of trust
executed by the Borrower in favor of the Collateral Agent, and substantially in
the form of Exhibit L hereto.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by the Borrower or any ERISA Affiliate and which is subject
to Title IV of ERISA.
"Net Cash Proceeds of Sale" means (a) proceeds received by the Borrower
in cash from the sale, lease, assignment or other disposition of any Property,
other than dispositions of assets permitted under Section 9.02(i), net of (i)
the costs of sale, assignment or other disposition, (ii) any income, franchise,
transfer or other tax liability arising from such transaction (including
payments made or to be made pursuant to the Tax Sharing Agreement to the extent
permitted pursuant to Section 9.06 and after taking into account any available
tax credits or deductions arising from such transaction) and (iii) amounts
applied to the repayment of Indebtedness (other than the Obligations) secured by
a Lien permitted by Section 9.03 on the asset disposed of, if such net proceeds
arise from any individual sale, assignment or other disposition or from any
group of related sales, assignments or other dispositions; and (b) proceeds of
insurance (net of the reasonable expenses of collection) on account of the loss
of or damage to any such Property or Properties, and payments of compensation
for any such Property or Properties taken by condemnation or eminent domain to
the extent such proceeds are not utilized to repair or replace the Property
subject to such loss, damage or condemnation within 180 days (or if consented to
in
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writing by the Administrative Agents, 360 days) of the date of such loss, damage
or condemnation; provided, that any such proceeds not so utilized in such 180
day period shall immediately be deemed to be "Net Cash Proceeds of Sale". "Net
Cash Proceeds of Sale" shall not include rental income not in excess of
$1,000,000 in any Fiscal Year arising from the lease or sublease of the
Philadelphia, Pennsylvania facility.
"Net Income" means, for any period, the net earnings (or loss) after
taxes of the Borrower for such period taken as a single accounting period
determined in conformity with GAAP.
"Net Worth" means, at any time, with respect to any Person (a) the sum
of total assets of such Person minus (b) total liabilities of such Person (it
being understood that Equity Interests in such Person shall not constitute
liabilities except to the extent such Equity Interests are Indebtedness). Assets
and liabilities shall be determined in accordance with GAAP, except that
Investments in and moneys due from Affiliates of the Borrower shall be excluded
from or added back, as applicable, to total assets of the Borrower (other than
trade receivables due from Affiliates incurred in the ordinary course of
business less than sixty (60) days past due).
"New GFI" is defined in the preamble.
"New GFI Intercreditor Agreement" means the Intercreditor Agreement,
dated as of February 27, 1998, and acknowledged by New GFI, as amended, amended
and restated, supplemented or otherwise modified from time to time.
"New GFI Note" means the intercompany promissory note issued by the
Borrower to the order of TFLLC in the principal amount of $70,200,000 having a
maturity date of February 27, 2004 as originally approved by the Requisite
Lenders on the Effective Date and as such promissory note may thereafter be
amended, supplemented or modified from time to time.
"Non Pro Rata Loan" has the meaning ascribed to such term in Section
3.02(b)(v).
"Notes" means collectively the Revolving Loan Notes and the Swing Loan
Notes.
"Notice of Borrowing" means a Notice of Borrowing substantially in the
form attached hereto as Exhibit B.
"Notice of Conversion/Continuation" means a Notice of
Conversion/Continuation substantially in the form attached hereto as Exhibit C
with respect to a proposed conversion or continuation of a Loan pursuant to
Section 4.01(c).
"Obligations" means all Loans, Reimbursement Obligations, advances,
debts, liabilities, obligations, covenants and duties owing by the Borrower to
either Administrative Agent, any Lender, any Issuing Bank, any Affiliate of
either Administrative Agent, any Lender or any Issuing Bank, or any Person
entitled to indemnification pursuant to Section 3.03 of this
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Agreement, of any kind or nature, present or future, whether or not evidenced by
any note, guaranty or other instrument, arising under this Agreement, the Notes
or any other Loan Document, whether or not for the payment of money, whether
arising (i) under or in connection with any cash management services provided by
the Administrative Agents or an Affiliate of the Administrative Agents, (ii) by
reason of an extension of credit, opening or amendment of a Letter of Credit or
payment of any draft drawn thereunder, loan, guaranty, indemnification, foreign
exchange contract or Hedging Obligation or (iii) in any other manner, whether
direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limitation, all interest, charges,
expenses, fees, attorneys' fees and disbursements and any other sum chargeable
to the Borrower under this Agreement or any other Loan Document.
"Obligor" means the Borrower and any other Person (other than the
Credit Agents, the Issuing Banks or any Lender) obligated under any Loan
Document.
"Officer's Certificate" means a certificate executed on behalf of such
corporation by (i) the chairman or vice-chairman of its board of directors (if
an officer of such corporation) or (ii) its president, any of its
vice-presidents, its chief financial officer, or its treasurer.
"Operating Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which is not
a Capital Lease.
"OSHA" means the Occupational Safety and Health Act of 1970, any
amendments thereto, any successor statutes and any regulations or guidance
promulgated thereunder.
"Other Indebtedness" means all of the Indebtedness of the Borrower
other than the Obligations.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"Permits" means any permit, approval, authorization license, variance,
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Business" means the manufacture and distribution of carpet
cushion products, nonwoven textile fiber and related products.
"Permitted Existing Accommodation Obligations" means those
Accommodation Obligations of the Borrower identified as such on Schedule 1.01.3.
"Permitted Existing Indebtedness" means the Indebtedness of the
Borrower identified as such on Schedule 1.01.4.
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"Permitted Existing Investments" means those Investments of the
Borrower identified as such on Schedule 1.01.5.
"Permitted Existing Liens" means the Liens on the assets of the
Borrower identified as such on Schedule 1.01.6.
"Person" means any natural person, corporation, limited partnership,
general partnership, joint stock company, joint venture, association, company,
trust, bank, trust company, land trust, business trust, limited liability
company or other organization, whether or not a legal entity, and any
Governmental Authority.
"Plan" means an employee benefit plan defined in Section 3(3) of ERISA
(other than a Multiemployer Plan) in respect of which either Borrower or any
ERISA Affiliate is, or within the immediately preceding six (6) years was, an
"employer" as defined in Section 3(5) of ERISA.
"Potential Event of Default" means an event which, with the giving of
notice or the lapse of time, or both, would constitute an Event of Default.
"Prepayment Percentage" means, as of any date of determination, a
fraction (expressed as a percentage) (x) the numerator of which is the
Commitment Amount as of such date and (y) the denominator of which is the sum of
(i) the Commitment Amount as of such date and (ii) the outstanding principal
amount of the New GFI Note as of such date.
"Proceeds of Issuance of Equity Interests or Indebtedness" means net
cash proceeds received by the Borrower or Foamex International at any time from
and after the Effective Date on account of the issuance of (a) any Equity
Interest in the Borrower or Foamex International (which proceeds do not
constitute Net Cash Proceeds of Sale) or (b) Indebtedness (other than
Indebtedness permitted under Section 9.01) of the Borrower or Foamex
International, in each case net of all transaction costs and underwriters'
discounts with respect thereto and, in the case of any issuance by Foamex
International, which proceeds are not required to be applied to prepay loans
under the Foamex Credit Agreement.
"Process Agent" has the meaning ascribed to such term in Section
13.17(a).
"Property" means any and all real property or personal property,
whether tangible or intangible, plant, building, facility, structure,
underground storage tank or unit, Equipment, inventory, general intangibles,
receivables, Equity Interests, Securities, account, deposit, claim, right or
other asset owned, leased or operated by the Borrower (including any surface
water thereon or adjacent thereto, and soil and groundwater thereunder).
"Pro Rata Share" means, with respect to any Lender (including, without
limitation, the Swing Bank), (a) with respect to Revolving Loans and Letters of
Credit, the percentage obtained
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by dividing (i) such Lender's Commitment by (ii) the aggregate amount of all
Commitments (in each case, as reduced from time to time in accordance with the
provisions of this Agreement.
"Protective Advance" has the meaning ascribed to such term in Section
12.09.
"Quarterly Payment Date" means each March 31, June 30, September 30 and
December 31.
"RCRA" means the Resource Conservation and Recovery Act of 1976, 42
U.S.C. xx.xx. 6901 et seq., any amendments thereto, any successor statutes, and
any regulations or legally enforceable guidance promulgated thereunder.
"Reference Banks" means Citicorp, Scotiabank and one other Lender
reasonably satisfactory to the Borrower, Citicorp and Scotiabank.
"Register" has the meaning ascribed to such term in Section 13.01(c).
"Regulation G" means Regulation G of the Federal Reserve Board as in
effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board as in
effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board as in
effect from time to time.
"Reimbursement Date" has the meaning ascribed to such term in Section
2.03(d)(i)(A).
"Reimbursement Obligations" means the aggregate non-contingent
reimbursement or repayment obligations of the Borrower with respect to amounts
drawn under Letters of Credit.
"Related Obligations" has the meaning ascribed to such term in Section
12.09(f).
"Release" means release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment or into or out of any Property, including the movement of
Contaminants through or in the air, soil, surface water, groundwater or
Property.
"Remedial Action" means actions required to (a) clean up, remove, treat
or in any other way address Contaminants in the indoor or outdoor environment;
(b) prevent the Release or threat of Release or minimize the further Release of
Contaminants; or (c) investigate and determine if a remedial response is needed
and to design such a response and post-remedial investigation, monitoring,
operation and maintenance and care.
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"Replacement Lender" has the meaning ascribed to such term in Section
3.07.
"Reportable Event" means any of the events described in Section 4043 of
ERISA for which notice as required thereunder has not been waived.
"Requirements of Law" means, as to any Person, the Constituent Document
or other organizational or governing documents of such Person, and any law, rule
or regulation, or deter mination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, the Securities Act, the Securities Exchange Act,
Regulations G, U and X, ERISA, the Fair Labor Standards Act and any certificate
of occupancy, zoning ordinance, building or land use requirement or Permit or
labor or employment, rule or regulation and including any Environmental Health
or Safety Requirements of Law.
"Requisite Lenders" means Lenders whose Pro Rata Shares, in the
aggregate, equal or exceed fifty-one percent (51%) of the aggregate amount of
Revolving Credit Obligations and unutilized Commitments; provided, however,
that, in the event any of the Lenders shall have failed to fund its Pro Rata
Share of any Revolving Loan requested by the Borrower which such Lenders are
obligated to fund under the terms of this Agreement without delivering to the
Funding Agent written notice of the failure of the Borrower to satisfy the
conditions set forth in Section 5.02 and (i) any such failure to fund has not
been cured or (ii) such conditions have been satisfied, then, for so long as
such failure to fund continues, "Requisite Lenders" means Lenders (excluding all
Lenders whose failure to fund their respective Pro Rata Shares of such Loans
have not been so cured) whose Pro Rata Shares represent, equal or exceed
fifty-one percent (51%) of the aggregate Pro Rata Shares of such Lenders;
provided, further, however, that, in the event that the Commitments have been
terminated pursuant to the terms of this Agreement, "Requisite Lenders" means
Lenders (without regard to such Lenders, performance of their respective
obligations hereunder) whose aggregate ratable shares (stated as a percentage)
of the aggregate outstanding principal balance of all Loans and Letter of Credit
Obligations are greater than or equal to fifty-one percent (51%).
"Restricted Junior Payment" means (a) any dividend or distribution,
direct or indirect, on account of any Equity Interests in the Borrower now or
hereafter outstanding, (b) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
Equity Interests in the Borrower now or hereafter outstanding, (c) any payment
or prepayment of principal of, premium, if any, or interest, fees or other
charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to, any Indebtedness which is subordinated on terms satisfactory to the
Administrative Agents to the Obligations and which is permitted hereunder, (d)
any payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
Equity Interests in the Borrower now or hereafter outstanding and (e) any
payment made by the Borrower to any Affiliate pursuant to the Tax Sharing
Agreement.
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"Revolving Credit Obligations" means, at any particular time, the sum
of (a) the outstanding principal amount of the Revolving Loans at such time,
plus (b) the Letter of Credit Obligations at such time, plus (c) the Swing Loan
Obligations at such time.
"Revolving Loan" has the meaning ascribed to such term in Section
2.01(a).
"Revolving Loan Notes" has the meaning assigned thereto in Section
3.05(a)(i).
"Scotiabank" means The Bank of Nova Scotia, a Canadian chartered bank.
"Securities" means any limited, general or other partnership interest,
or any limited liability company interest or any stock, shares, voting trust
certificates, bonds, debentures, notes or other Equity Interests or evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
any certificates of interest, shares, or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not include any evidence of
the Obligations.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"Security Agreement" means the Security Agreement dated as of February
27, 1998 between the Borrower and the Collateral Agent, as such agreement may be
amended, supplemented or modified from time to time.
"Settlement Date" has the meaning ascribed to such term in Section
2.02(b).
"Solvent", when used with respect to any Person, means that at the time
of determination:
(a) the Fair Market Value of its assets is in excess of the
total amount of its liabilities (including, without limitation,
contingent liabilities); and
(b) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
(c) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments)
as they mature; and
(d) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
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"Standby Letter of Credit" means any letter of credit issued by an
Issuing Bank pursuant to Section 2.03 for the account of the Borrower which is
not a Commercial Letter of Credit.
"Stock Option Plan" means the 1993 Foamex International employee stock
option plan pursuant to which both qualified and non-qualified options have been
issued, as amended, and any other stock option plan adopted by the shareholders
of Foamex International.
"Subsidiary" of a Person means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned or controlled by such Person, one
or more of the other subsidiaries of such Person or any combination thereof.
"Supply Agreement" means the supply agreement in respect of the supply
of carpet cushion products, raw materials and other material supplied by Foamex
to GFI and the supplies of nonwoven textile fiber products, raw materials and
other material products to Foamex by GFI dated as of February 27, 1998 between
Foamex L.P. and GFI and assigned to the Borrower, as the same may be amended,
supplemented or modified from time to time.
"Swing Bank" means, at any time, Scotiabank or such other Lender which
becomes the replacement Swing Bank at such time.
"Swing Loan" has the meaning ascribed to such term in Section 2.02(a).
"Swing Loan Notes" has the meaning ascribed to such term in Section
3.05(a)(ii).
"Swing Loan Obligations" means the aggregate principal amount of all
Swing Loans outstanding.
"Tax Sharing Agreement" means that certain Tax Sharing Agreement
between the Borrower and Foamex International, as the same may be amended,
supplemented or modified from time to time.
"Taxes" has the meaning ascribed to such term in Section 3.03(a).
"Term Facility" means the Term Loan Agreement dated as of February 27,
1998 among Foamex, the lenders and administrative agents thereunder as assumed
on such date by TFLLC as such agreement may be amended, amended and restated,
modified or otherwise changed from time to time.
"Termination Event" means (a) a Reportable Event with respect to any
Benefit Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a
Benefit Plan during a plan year in which the Borrower or such ERISA Affiliate
was a "substantial employer" as defined in Section
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4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of 20% of Benefit Plan participants who are employees
of the Borrower or any ERISA Affiliate; (c) the imposition of an obligation on
the Borrower or any ERISA Affiliate under Section 4041 of ERISA to provide
affected parties written notice of intent to terminate a Benefit Plan in a
distress termination described in Section 4041(c) of ERISA; (d) the institution
by the PBGC of proceedings to terminate a Benefit Plan; (e) any event or
condition which constitutes grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan;
or (f) the partial or complete withdrawal of the Borrower or any ERISA Affiliate
from a Multiemployer Plan.
"TFLLC" means Trace Foam LLC, a Delaware limited liability company.
"TIHI" means Trace International Holdings, Inc., a Delaware
corporation.
"Total Net Debt" means, on any date of determination, the difference
of:
(a) the aggregate amount of Funded Debt of the Borrower
outstanding on such date
minus
(b) the aggregate amount of cash and Cash Equivalents of the
Borrower which are available on such date to be applied (without any
legal or Contractual Obligation restriction) against the Indebtedness
described in clause (a).
"Total Net Debt to EBDAIT Ratio" means, as of the last day of any
period, the ratio of
(a) Total Net Debt outstanding on the last day of such period
to
(b) EBDAIT computed for such period.
"Trace Foam" means Trace Foam Company, Inc., a Delaware corporation.
"Transaction" means the Transaction as defined in the Amendatory
Agreement and the transactions contemplated by the Asset Transfer Documents.
"Transaction Costs" means the fees, costs and expenses payable by the
Borrower in connection with the execution, delivery and performance of the Loan
Documents.
"Transaction Documents" means the Loan Documents, the Foamex/GFI Note,
the New GFI Note, the Asset Transfer Documents, the Supply Agreement, the
Administrative Services
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Agreement, the Tax Sharing Agreement, the Lease Agreement, the documents,
agreements and other writings related to the Transaction and all other
agreements entered into prior to or on the Effective Date pursuant to such
agreements.
"Triggering Event" means (a) any Event of Default occurring under
Section 11.01(f) or 11.01(g) or (b) any other Event of Default (i) occurring
under Section 11.01(a), (i), (l), (n) or (o) or (ii) which has occurred and is
continuing for a period of 30 days or more, in each case, which the
Administrative Agents have (either in their discretion or upon the direction of
the Requisite Lenders) designated in writing to the Borrower to be a "Triggering
Event".
"UCC" means the Uniform Commercial Code as enacted in the State of New
York, as it may be amended from time to time.
"Unused Commitment Fee" has the meaning ascribed to such term in
Section 4.03(c).
"Working Capital" means, as of any date of determination, the
difference of (i) the current assets (other than cash and Cash Equivalents) of
the Borrower minus (ii) the current liabilities (other than (A) current
maturities of Funded Debt and (B) other Funded Debt to the extent included as a
current liability of the Borrower) of the Borrower.
1.02 Computation of Time Periods. In this Agreement, in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding". Periods of days referred to in this Agreement shall be counted
in calendar days unless Business Days are expressly prescribed. Any period
determined hereunder by reference to a month or months or year or years shall
end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such period, provided that if such period commences on the last day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month during which such period is to end), such period
shall, unless otherwise expressly required by the other provisions of this
Agreement, end on the last day of the calendar month.
1.03 Accounting Terms. Subject to Section 13.04, for purposes of this
Agreement, all accounting terms not otherwise defined herein shall have the
meanings assigned to them in conformity with GAAP. For the purpose of (i)
determining compliance with the covenants set forth in Article X and (ii)
delivering the financial statements hereunder with respect to, in each case,
periods ended prior to the Effective Date, the financial statements and results
of operations of GFI shall be deemed to be financial statements and results of
operations of the Borrower.
1.04 Other Definitional Provisions. References to "Articles",
"Sections", "subsections", "Schedules", "Exhibits" and the "preamble" shall be
to Articles, Sections, subsections, Schedules, Exhibits and the preamble,
respectively, of this Agreement unless otherwise specifically provided.
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1.05 Other Terms. All other terms contained in this Agreement shall,
unless the context indicates otherwise, have the meanings assigned to such terms
by the UCC to the extent the same are defined therein.
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01 Revolving Credit Facility.
(a) Availability. Subject to the terms and conditions set forth in this
Agreement, each Lender hereby severally and not jointly agrees to make revolving
loans (each individually, a "Revolving Loan" and, collectively, the "Revolving
Loans") to the Borrower from time to time during the period beginning on the
Effective Date and ending on the Business Day next preceding the Commitment
Termination Date, in an amount not to exceed such Lender's Pro Rata Share of the
Commitment Availability at such time. All Revolving Loans comprising the same
Borrowing under this Agreement shall be made by the Lenders simultaneously and
proportionately to their then respective Pro Rata Shares, it being understood
that no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make a Revolving Loan hereunder nor shall the
Commitment of any Lender be increased or decreased as a result of any such
failure. Subject to the provisions of this Agreement (including, without
limitation, Sections 4.02(f) and 5.02), the Borrower may repay any outstanding
Revolving Loan made to it on any day which is a Business Day and any amounts so
repaid may be reborrowed in accordance with the provisions of this Section
2.01(a).
(b) Notice of Borrowing. When the Borrower desires to borrow under this
Section 2.01, it shall deliver to the Funding Agent a Notice of Borrowing,
signed by it, no later than 11:00 a.m. (New York time) (i) on the Business Day
immediately preceding the proposed Funding Date, in the case of a Borrowing of
Base Rate Loans and (ii) at least three (3) Business Days in advance of the
proposed Funding Date, in the case of a Borrowing of LIBO Rate Loans. Such
Notice of Borrowing shall specify (i) the proposed Funding Date (which shall be
a Business Day), (ii) the amount of the proposed Borrowing, (iii) whether the
proposed Borrowing will be of Base Rate Loans or LIBO Rate Loans, (iv) in the
case of LIBO Rate Loans, the requested LIBO Rate Interest Period, and (v)
instructions for the disbursement of the proceeds of the proposed Borrowing.
Revolving Loans made on any Funding Date shall be in minimum amount of $500,000,
other than Revolving Loans constituting (i) repayments of Swing Loans described
in the first and second sentences of Section 2.02(b), (ii) refundings of
Reimbursement Obligations, described in Section 2.03(e)(ii) and (iii) payments
of fees and expenses described in Section 3.02(b)(iv). In lieu of delivering
such a Notice of Borrowing, the Borrower may give the Funding Agent telephonic
notice of any proposed Borrowing by the time required under this Section
2.01(b), if it confirms such notice by delivery of the Notice of Borrowing to
the Funding Agent promptly, but in no event later than 5:00 p.m. (New York time)
on the same day. Any
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Notice of Borrowing (or telephonic notice in lieu thereof) given pursuant to
this Section 2.01(b) shall be irrevocable.
(c) Making of Revolving Loans. (i) Promptly after receipt of a Notice
of Borrowing under Section 2.01(b) (or telephonic notice in lieu thereof), the
Funding Agent shall notify each Lender by telex or telecopy, or other similar
form of transmission, of the proposed Borrowing. Each Lender shall deposit an
amount equal to its Pro Rata Share of the amount requested by the Borrower
specified in such Notice of Borrowing to be made as Revolving Loans with the
Funding Agent at its office in New York, New York, in immediately available
funds, not later than 11:00 a.m. (New York time) on any Funding Date applicable
thereto. Subject to the fulfillment of the condition precedent set forth in
Section 5.02, the Funding Agent shall, make the proceeds of such amounts
received by it available to the Borrower at the Funding Agent's office in New
York, New York on such Funding Date (or on the date received if later than such
Funding Date) and shall disburse such proceeds in accordance with the Borrower's
disbursement instructions set forth in the applicable Notice of Borrowing. The
failure of any Lender to deposit the amount described above with the Funding
Agent on the applicable Funding Date shall not relieve any other Lender of its
obligations hereunder to make its Revolving Loan on such Funding Date.
(ii) Unless the Funding Agent shall have been notified by any Lender on
the Business Day immediately preceding the applicable Funding Date in respect of
any Borrowing of Revolving Loans that such Lender does not intend to fund its
Revolving Loan requested to be made on such Funding Date, the Funding Agent may
assume that such Lender has funded its Revolving Loan and is depositing the
proceeds thereof with the Funding Agent on the Funding Date, and the Funding
Agent in its sole discretion may, but shall not be obligated to, disburse a
corresponding amount to the Borrower specified in the applicable Notice of
Borrowing on the Funding Date. If the Revolving Loan proceeds corresponding to
that amount are advanced to the Borrower by the Funding Agent but are not in
fact deposited with the Funding Agent by such Lender on or prior to the
applicable Funding Date, such Lender agrees to pay, and in addition the Borrower
agrees to repay, to the Funding Agent forthwith on demand such corresponding
amount, together with interest thereon, for each day from the date such amount
is disbursed to or for the benefit of the Borrower until the date such amount is
paid or repaid to the Funding Agent, in the case of the Borrower or such Lender,
at the interest rate applicable to such Borrowing. If such Lender shall pay to
the Funding Agent the corresponding amount, the amount so paid shall constitute
such Lender's Revolving Loan, and if both such Lender and the Borrower shall pay
and repay such corresponding amount, the Funding Agent shall promptly pay to the
Borrower such corresponding amount. This Section 2.01(c)(ii) does not relieve
any Lender of its obligation to make its Loan on any Funding Date; nor does this
Section relieve the Borrower of its obligation to pay or repay any Lender
funding its Loan pursuant to this Section interest on such Loan from such
Funding Date until the date on which such Loan is repaid in full.
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(d) Use of Proceeds of Revolving Loans and Swing Loans and Use of
Letters of Credit. The proceeds of the Revolving Loans and Swing Loans and
Letters of Credit may be used for the general corporate and working capital
needs of the Borrower and to pay Transaction Costs.
(e) Commitment Termination Date. The Commitments shall terminate, and
all outstanding Obligations shall be paid in full (or, in the case of contingent
Letter of Credit Obligations outstanding, payment in cash shall be made and
deposited in the Cash Collateral Account in an aggregate principal amount equal
to the then outstanding Letter of Credit Obligations to the satisfaction of the
Issuing Banks and the Requisite Lenders) on the Commitment Termination Date.
Each Lender's obligation to make Revolving Loans, the Swing Bank's obligation to
make Swing Loans, and any Issuing Bank's obligation to issue Letters of Credit
shall terminate at the close of business on the Business Day next preceding the
Commitment Termination Date.
2.02 The Swing Loan Facility.
(a) Making of Swing Loans. Upon receipt of telephonic request therefor
from the Borrower (which, if the Swing Bank so requests, shall be confirmed in
writing by delivery to the Funding Agent of a Notice of Borrowing from the
Borrower within one Business Day thereafter) no later than 11:00 a.m. (New York
time) the same day of the proposed Funding Date, the Swing Bank, in its sole
discretion, may from time to time make loans to the Borrower solely for the
Swing Bank's own account (the "Swing Loans"), up to an aggregate principal
amount at any one time outstanding which shall not exceed the lesser of (i)
$5,000,000 and (ii) the Commitment Availability at such time. The Swing Bank
shall be entitled to apply any proceeds of Collateral received by the Funding
Agent as repayment of the Obligations since the Settlement Date next preceding
such Funding Date as repayment of the Swing Loans made on any Funding Date prior
to the next following Settlement Date. The Swing Bank shall make the proceeds of
such Loans available to the Borrower in New York, New York on such Funding Date
and shall disburse such funds in Dollars and in immediately available funds to
an account of the Borrower, designated in the Notice of Borrowing. The Swing
Bank shall have no duty to make or to continue to make Swing Loans. All Swing
Loans shall be Base Rate Loans payable on the next Settlement Date with accrued
interest thereon which shall be payable to the Swing Bank solely for its own
account but shall otherwise be subject to all the terms and conditions
applicable to Revolving Loans. The Swing Bank shall not make any Swing Loan in
the period commencing on the first Business Day after it receives written notice
from any Lender (i) that one or more of the conditions precedent contained in
Section 5.02 will not on such date be satisfied, ending when such conditions are
satisfied, or (ii) that an Event of Default has occurred, and ending when such
Event of Default no longer exists, and the Swing Bank shall not otherwise be
required to determine that, or take notice whether, (A) the conditions precedent
set forth in Section 5.02 hereof have been satisfied or (B) an Event of Default
has occurred.
(b) Repayment of Swing Loans. On at least a weekly or more frequent
basis, on a settlement date to be selected by the Funding Agent in its sole
discretion (the "Settlement Date"),
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the Borrower shall promptly borrow Revolving Loans from all the Lenders pursuant
to Section 2.01 or the following sentence (irrespective of the satisfaction of
the conditions in Section 5.02 or the requirement to deliver a Notice of
Borrowing in Section 2.01(b) which conditions and requirement, for the purposes
of the repayment of Swing Loans to the Swing Bank, the Lenders irrevocably
waive) and hereby authorizes the Funding Agent to apply the proceeds of such
Revolving Loans to the repayment of any Swing Loans then outstanding. To the
extent the Funding Agent receives any amounts in repayment of outstanding
Revolving Loans prior to such Settlement Date which it has not paid to the
Lenders pursuant to Section 3.02(a), the Funding Agent shall be entitled to
advance such amounts as additional Revolving Loans of the Lenders (in accordance
with their respective Pro Rata Shares) to repay any Swing Loans outstanding on
such Settlement Date. The failure of any Lender to make available to the Funding
Agent its Pro Rata Share of such Revolving Loans shall not relieve any other
Lender of its obligation hereunder to make available to the Funding Agent such
other Lender's Pro Rata Share of such Revolving Loans on the day funds are to be
made available to repay such Swing Loans. If the Borrower fails to repay any
Swing Loan made to the Borrower within one (1) Business Day after demand
therefor by the Swing Bank or the Funding Agent, and in any event upon request
by the Swing Bank, each other Lender shall irrevocably and unconditionally
purchase from the Swing Bank, without recourse or warranty, an undivided
interest and participation in such Swing Loan in an amount equal to such other
Lender's Pro Rata Share thereof and shall pay such amount to the Swing Bank in
New York, New York in Dollars and in immediately available funds. If such amount
is not paid to the Swing Bank by any Lender, the Swing Bank shall be entitled to
recover such amount on demand from such Lender together with accrued interest
thereon, for each day from the date of demand therefor, if made prior to 12:00
noon (New York time) on any Business Day, or, if made at any other time, from
the next Business Day following the date of such demand, until the date such
amount is paid to the Swing Bank by such Lender, until three (3) Business Days
have expired at the Federal Funds Rate and thereafter at the Base Rate. If such
Lender does not pay such amount forthwith on the Swing Bank's demand therefor
and until such time as such Lender makes the required payment, the Swing Bank
shall be deemed to continue to have outstanding a Swing Loan in the amount of
such unpaid participation obligation for all purposes of this Agreement other
than those provisions requiring the other Lenders to purchase a participation
therein. This Section 2.02 does not relieve any Lender of its obligations to
purchase Pro Rata participations in any Swing Loans; nor does this Section
relieve the Borrower of its obligation to pay or repay the Lender funding its
Pro Rata Share of such payment pursuant to this Section interest on the amount
of such payment from the date of the Borrower's failure to repay such Swing Loan
until the date on which such payment is repaid in full.
2.03 Letters of Credit. Subject to the terms and conditions set forth
in this Agreement, each Issuing Bank hereby severally agrees to issue for the
account of the Borrower one or more Letters of Credit, in an outstanding amount
not to exceed at any time the L/C Sublimit subject to the following provisions:
(a) Types and Amounts. An Issuing Bank shall not have any obligation to
issue, amend or extend, and shall not issue, amend or extend, any Letter of
Credit at any time:
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(i) if the aggregate Letter of Credit Obligations with respect
to such Issuing Bank, after giving effect to the issuance, amendment or
extension of the Letter of Credit requested hereunder, shall exceed any
limit imposed by law or regulation upon such Issuing Bank or the L/C
Sublimit;
(ii) if the Issuing Bank receives written notice from the
Funding Agent at or before 11:00 a.m. (New York time) on the date of
the proposed issuance, amendment or extension of such Letter of Credit
that (A) immediately after giving effect to the issuance, amendment or
extension of such Letter of Credit, (I) the Letter of Credit
Obligations at such time would exceed the L/C Sublimit, (II) the
Revolving Credit Obligations at such time would exceed the Commitment
Amount at such time or (III) one or more of the conditions precedent
contained in Section 5.02 would not on such date be satisfied, unless
such conditions are thereafter satisfied and written notice of such
satisfaction is given to the Issuing Bank by the Funding Agent (and an
Issuing Bank shall not otherwise be required to determine that, or take
notice whether, the conditions precedent set forth in Section 5.02 have
been satisfied);
(iii) which has an expiration date later than the earlier of
(A) the date one (1) year after the date of issuance (without regard to
any automatic renewal pro visions thereof) or (B) the Business Day next
preceding the Revolving Loan Commitment Termination Date; or
(iv) which is in a currency other than Dollars unless
otherwise agreed to by the Issuing Bank and the Administrative Agents.
(b) Conditions. In addition to being subject to the satisfaction of the
conditions precedent contained in Section 5.02, the obligation of an Issuing
Bank to issue, amend or extend any Letter of Credit is subject to the
satisfaction in full of the following conditions:
(i) if the Issuing Bank so requests, the Borrower requesting
such issuance, amendment or extension shall have executed and delivered
to such Issuing Bank and the Funding Agent a Letter of Credit
Reimbursement Agreement and such other documents and materials as may
be required pursuant to the terms thereof; and
(ii) the terms of the proposed Letter of Credit shall be
satisfactory to the Issuing Bank in its sole discretion.
(c) Issuance of Letters of Credit. (i) The Borrower shall give an
Issuing Bank and the Funding Agent written notice that it has selected such
Issuing Bank to issue a Letter of Credit not later than 11:00 a.m. (New York
time) on the third (3rd) Business Day preceding the requested date for issuance
thereof under this Agreement, or such shorter notice as may be acceptable to
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such Issuing Bank and the Funding Agent. Such notice shall be irrevocable unless
and until such request is denied by the applicable Issuing Bank and shall
specify (A) that the requested Letter of Credit is either a Commercial Letter of
Credit or a Standby Letter of Credit, (B) the stated amount of the Letter of
Credit requested, (C) the effective date (which shall be a Business Day) of
issuance of such Letter of Credit, (D) the date on which such Letter of Credit
is to expire (which shall be a Business Day and no later than the earlier of (x)
the one year anniversary of the date of such Letter of Credit and (y) the
Business Day immediately preceding the Commitment Termination Date), (E) the
Person for whose benefit such Letter of Credit is to be issued, (F) other
relevant terms of such Letter of Credit and (G) the amount of the then
outstanding Letter of Credit Obligations. Such Issuing Bank shall notify the
Funding Agent immediately upon receipt of a written notice from the Borrower
requesting that a Letter of Credit be issued, or that an existing Letter of
Credit be extended or amended and, upon the Funding Agent's request therefor,
send a copy of such notice to the Funding Agent.
(ii) The Issuing Bank shall give the Funding Agent written
notice, or telephonic notice confirmed promptly thereafter in writing,
of the issuance, amendment or extension of a Letter of Credit (which
notice the Funding Agent shall promptly transmit by telegram, telex,
telecopy, telephone or similar transmission to each Lender).
(iii) Subject to the occurrence of and on and after the
Effective Date, the Xxxxx Letter of Credit shall be deemed to be a
Letter of Credit hereunder, and the obligations thereunder shall be
deemed to be Letter of Credit Obligations hereunder as if such Letter
of Credit were issued on the Effective Date.
(d) Reimbursement Obligations; Duties of Issuing Banks. (i)
Notwithstanding any provisions to the contrary in any Letter of Credit
Reimbursement Agreement applicable to a Letter of Credit:
(A) the Borrower shall reimburse the Issuing Bank for
amounts drawn under such Letter of Credit, in Dollars, no
later than the date (the "Reimbursement Date") which is the
earlier of (I) the time specified in the applicable Letter of
Credit Reimbursement Agreement and (II) one (1) Business Day
after the Borrower receives written notice from the Issuing
Bank that payment has been made under such Letter of Credit by
the Issuing Bank; and
(B) all Reimbursement Obligations with respect to any
Letter of Credit shall bear interest at the rate applicable to
Base Rate Loans in accordance with Section 4.01(a) from the
date of the relevant drawing under such Letter of Credit until
the Reimbursement Date and thereafter at the rate applicable
to Base Rate Loans in accordance with Section 4.01(d).
(ii) The Issuing Bank shall give the Funding Agent written
notice, or telephonic notice confirmed promptly thereafter in writing,
of all drawings under a Letter of Credit
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and the payment (or the failure to pay when due) by the Borrower on
account of a Reimbursement Obligation (which notice the Funding Agent
shall promptly transmit by telegram, telex, telecopy or similar
transmission to each Lender).
(iii) No action taken or omitted in good faith by an Issuing
Bank under or in connection with any Letter of Credit shall put such
Issuing Bank under any resulting liability to any Lender, the Borrower
or, so long as it is not issued in violation of Section 2.03(a),
relieve any Lender of its obligations hereunder to such Issuing Bank.
Solely as between the Issuing Banks and the Lenders, in determining
whether to pay under any Letter of Credit, the respective Issuing Bank
shall have no obligation to the Lenders other than to confirm that any
documents required to be delivered under a respective Letter of Credit
appear to have been delivered and that they appear on their face to
comply with the requirements of such Letter of Credit.
(e) Participations. (i) Immediately upon issuance by an Issuing Bank of
any Letter of Credit in accordance with the procedures set forth in this Section
2.03, each Lender shall be deemed to have irrevocably and unconditionally
purchased and received from that Issuing Bank, without recourse or warranty, an
undivided interest and participation in such Letter of Credit to the extent of
such Lender's Pro Rata Share, including, without limitation, all obligations of
the Borrower with respect thereto (other than amounts owing to the Issuing Bank
under Section 2.03(g)) and any security therefor and guaranty pertaining
thereto.
(ii) If any Issuing Bank makes any payment under any Letter of
Credit issued for the account of the Borrower and the Borrower does not
repay such amount to the Issuing Bank on the Reimbursement Date, the
Issuing Bank shall promptly notify the Funding Agent, which shall
promptly notify each Lender, and each Lender shall promptly and
unconditionally pay to the Funding Agent for the account of such
Issuing Bank, in immediately available funds, the amount of such
Lender's Pro Rata Share of such payment (net of that portion of such
payment, if any, made by such Lender in its capacity as an Issuing
Bank), and the Funding Agent shall promptly pay to the Issuing Bank
such amounts received by it, and any other amounts received by the
Funding Agent for the Issuing Bank's account, pursuant to this Section
2.03(e). All such payments shall constitute Revolving Loans made to the
Borrower pursuant to Section 2.01 (irrespective of the satisfaction of
the conditions in Section 5.02 or the requirement in Section 2.01(b) to
deliver a Notice of Borrowing which conditions and requirement, for the
purpose of refunding any Reimbursement Obligation owing to any Issuing
Bank, the Lenders irrevocably waive). If a Lender does not make its Pro
Rata Share of the amount of such payment available to the Funding
Agent, such Lender agrees to pay to the Funding Agent for the account
of the Issuing Bank, forthwith on demand, such amount together with
interest thereon after the date such payment was first due at the
Federal Funds Rate. The failure of any Lender to make available to the
Funding Agent for the account of an Issuing Bank its Pro Rata Share of
any such payment shall neither relieve any other Lender of its
obligation hereunder to make available to the Funding Agent for the
account
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of such Issuing Bank such other Lender's Pro Rata Share of any payment
on the date such payment is to be made nor increase the obligation of
any other Lender to make such payment to the Funding Agent. This
Section does not relieve any Lender of its obligations to purchase Pro
Rata Share participations in Letters of Credit; nor does this Section
relieve the Borrower of its obligation to pay or repay any Issuing Bank
funding its Pro Rata Share of such payment pursuant to this Section
interest on the amount of such payment from such date such payment is
to be made until the date on which payment is repaid in full.
(iii) Whenever an Issuing Bank receives a payment on account
of a Reimbursement Obligation, including any interest thereon, as to
which the Funding Agent has previously received proceeds of Revolving
Loans from any Lender for the account of such Issuing Bank pursuant to
this Section 2.03(e), such Issuing Bank shall promptly pay to the
Funding Agent an amount equal to such Lenders Pro Rata Share thereof
and the Funding Agent shall pay such amounts over to such Lender as a
repayment of such Revolving Loan in accordance with Section 3.02.
(iv) Upon the request of any Lender, an Issuing Bank shall
furnish such Lender copies of any Letter of Credit or Letter of Credit
Reimbursement Agreement to which such Issuing Bank is party and such
other documentation as reasonably may be requested by such Lender.
(v) The obligations of a Lender to make payments to the
Funding Agent for the account of any Issuing Bank with respect to a
Letter of Credit shall be irrevocable, shall not be subject to any
qualification or exception whatsoever except willful misconduct or
gross negligence of such Issuing Bank, and shall be honored in
accordance with this Article II (irrespective of the satisfaction of
the conditions described in Section 5.02) which conditions, for the
purposes of the repayment of Letters of Credit to the Issuing Bank, the
Lenders irrevocably waive under all circumstances, including, without
limitation, any of the following circumstances:
(A) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(B) the existence of any claim, setoff, defense or
other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of a
beneficiary named in a Letter of Credit (or any Person for
whom any such transferee may be acting), the Funding Agent,
the Issuing Bank, any Lender, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the account
party and beneficiary named in any Letter of Credit);
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(C) any draft, certificate or any other document
presented under the Letter of Credit having been determined to
be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any
respect;
(D) the surrender or impairment of any security for
the performance or observance of any of the terms of any of
the Loan Documents;
(E) any failure by that Issuing Bank to make any
reports required pursuant to Section 2.03(h) or the inaccuracy
of any such report; or
(F) the occurrence of any Event of Default or
Potential Event of Default.
(f) Payment of Reimbursement Obligations. (i) The Borrower
unconditionally agrees to pay to each Issuing Bank, in Dollars, the amount of
all Reimbursement Obligations, interest and other amounts payable to such
Issuing Bank under or in connection with the related Letter of Credit
Reimbursement Agreement and the Letter of Credit issued pursuant thereto when
such amounts are due and payable, irrespective of any claim, setoff, defense or
other right which the Borrower may have at any time against any Issuing Bank or
any other Person.
(ii) In the event any payment by the Borrower received by an
Issuing Bank with respect to a Letter of Credit and distributed by the
Funding Agent to the Lenders on account of their participations is
thereafter set aside, avoided or recovered from such Issuing Bank in
connection with any receivership, liquidation or bankruptcy proceeding,
each Lender which received such distribution shall, upon demand by such
Issuing Bank, contribute to such Issuing Bank such Lender's Pro Rata
Share of the amount set aside, avoided or recovered together with
interest at the rate required to be paid by such Issuing Bank upon the
amount required to be repaid by it.
(g) Issuing Bank Charges. With respect to each Letter of Credit, the
Borrower shall pay to each Issuing Bank, solely for its own account, (i) a fee
of one-quarter of one percent (0.25%) of the undrawn face amount of each Letter
of Credit payable quarterly in arrears (on the Business Day closest to each
calendar quarter-end after the date of issuance thereof) and (ii) the standard
charges assessed by such Issuing Bank in connection with the issuance,
administration, amendment and payment or cancellation of letters of credit and
such compensation for the Borrower's account as may be agreed upon by the
Borrower and such Issuing Bank from time to time.
(h) Issuing Bank Reporting Requirements. Each Issuing Bank shall, no
later than the tenth (10th) Business Day following the last day of each calendar
month, provide to the Funding Agent and the Borrower separate schedules for
Commercial Letters of Credit and Standby Letters of Credit issued as Letters of
Credit, in form and substance reasonably satisfactory to the Funding Agent,
setting forth the aggregate Letter of Credit Obligations outstanding to it at
the end of each
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month and any information requested by the Funding Agent or the Borrower
relating to the date of issue, account party, amount, expiration date and
reference number of each Letter of Credit issued by it.
(i) Indemnification; Exoneration. (i) In addition to all other amounts
payable to an Issuing Bank, the Borrower hereby agrees to defend, indemnify, and
save each Administrative Agent, each Issuing Bank and each Lender harmless from
and against any and all claims, demands, liabilities, penalties, damages, losses
(other than loss of profits), costs, charges and expenses (including reasonable
attorneys' fees but excluding taxes) which such Administrative Agent, such
Issuing Bank or such Lender may incur or be subject to as a consequence, direct
or indirect, of (A) the issuance of any Letter of Credit to the Borrower other
than as a result of the gross negligence or willful misconduct of the Issuing
Bank, as determined by a court of competent jurisdiction, or (B) the failure of
the Issuing Bank issuing a Letter of Credit to honor a drawing under such Letter
of Credit as a result of any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto government or Governmental Authority.
(ii) As between the Borrower on the one hand and the
Administrative Agents, the Lenders and the Issuing Banks on the other
hand, the Borrower assumes all risks of the acts and omissions of, or
misuse of Letters of Credit by, the respective beneficiaries of the
Letters of Credit. In furtherance and not in limitation of the
foregoing, subject to the provisions of the Letter of Credit
Reimbursement Agreements applicable to any Letter of Credit, the
Issuing Banks and the Lenders shall not be responsible for: (A) the
form, validity, legality, sufficiency, accuracy, genuineness or legal
effect of any document submitted by any party in connection with the
application for and issuance of the Letters of Credit, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity,
legality or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (C) failure of the
beneficiary of a Letter of Credit to comply duly with conditions
required in order to draw upon such Letter of Credit; (D) errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (E) errors in interpretation of technical terms; (F)
any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any Letter of Credit or of
the proceeds thereof; (G) the misapplication by the beneficiary of a
Letter Credit of the proceeds of any drawing under such Letter of
Credit; and (H) any consequences arising from causes beyond the control
of the Administrative Agents, the Issuing Banks or the Lenders.
(j) Obligations Several. The obligations of each Lender under this
Section 2.03 are several and not joint, and no Lender shall be responsible for
the obligation to issue Letters of Credit or participation obligation hereunder,
respectively, of any other Issuing Bank or Lender.
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2.04 Authorized Officers and Administrative Agents. The Borrower shall
deliver to each Administrative Agent from time to time an Officer's Certificate
setting forth the names of the officers, employees and agents authorized to
request Loans and Letters of Credit and to request a conversion/continuation of
any Loan and containing a specimen signature of each such officer, employee or
agent. The officers, employees and agents so authorized shall also be authorized
to act for the Borrower in respect of all other matters relating to the Loan
Documents. The Administrative Agents shall be entitled to rely conclusively on
such officer's or employee's authority to request such Loan, Letter of Credit or
such conversion/continuation until the Administrative Agents receive written
notice to the contrary. The Administrative Agents shall have no duty to verify
the authenticity of the signature appearing on any written Notice of Borrowing
or Notice of Conversion/Continuation or any other document, and, with respect to
an oral request for such a Loan, Letter of Credit or such
conversion/continuation, the Administrative Agents shall have no duty to verify
the identity of any person representing himself or herself as one of the
officers, employees or agents authorized to make such request or otherwise to
act on behalf of the Borrower. None of the Administrative Agents, the Lenders or
the Issuing Banks shall incur any liability to the Borrower or any other Person
in acting upon any telephonic notice referred to above which any Administrative
Agent believes in good faith to have been given by a duly authorized officer or
other person authorized to borrow behalf of the Borrower.
ARTICLE III
PAYMENTS AND PREPAYMENTS
3.01 Prepayments and Repayments; Reductions in Revolving Loan
Commitments.
(a) Voluntary Prepayments/Reductions. (i) The Borrower may, at any time
and from time to time, prepay or repay any Loan, in whole or in part; provided,
however, LIBO Rate Loans may only be prepaid (A) in whole or in part on the
expiration date of the then applicable LIBO Rate Interest Period, upon at least
three (3) Business Days' prior written notice to the Funding Agent (which the
Funding Agent shall promptly transmit to each Lender) or (B) otherwise upon
payment of the amounts described in Section 4.02(f). Any notice of prepayment
given to the Funding Agent under this Section 3.01(a)(i) shall specify the type
of Loans to be prepaid or repaid, the date (which shall be a Business Day) of
prepayment or repayment, and the aggregate principal amount of the prepayment or
repayment. When notice of prepayment is delivered as provided herein, the
principal amount of the Loans specified in the notice shall become due and
payable on the prepayment date specified in such notice.
(ii) The Borrower, upon at least three (3) Business Days' prior written
notice to the Funding Agent (which the Funding Agent shall promptly transmit to
each Lender), shall have the right, at any time and from time to time, to
terminate in whole or permanently reduce in part Commitments, provided that the
Borrower shall have made whatever payment may be required to reduce the
Revolving Credit Obligations to an amount less than or equal to the Commitment
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Amount as reduced or terminated on the date of such reduction. Any notice of
termination or reduction given to the Funding Agent under this Section
3.01(a)(ii) shall specify the date (which shall be a Business Day) of such
termination or reduction and, with respect to a partial reduction, the aggregate
principal amount thereof. When notice of termination or reduction is delivered
as provided herein, the principal amount of the Revolving Loans specified in the
notice shall become due and payable on the date specified in such notice.
(iii) The prepayments and payments in respect of reductions and
terminations described in clauses (i) and (ii) of this Section 3.01(a) may be
made without premium or penalty (except as provided in Section 4.02(f)).
(b) Mandatory Payments. (i) Within one (1) Business Day after the
Borrower's receipt of any Net Cash Proceeds of Sale, the Borrower shall make or
cause to be made a mandatory prepayment of the Obligations (or, to the extent no
Revolving Loans are outstanding, a deposit in the Cash Collateral Account) in an
amount equal to the Prepayment Percentage of such proceeds.
(ii) Within one (1) Business Day after any Credit Party or any agent
thereof, receives any amount of Proceeds of Issuance of Equity or Indebtedness,
the Borrower shall make or cause to be made a mandatory prepayment of the
Obligations (or, to the extent no Revolving Loans are outstanding, a deposit in
the Cash Collateral Account) in an amount equal to (x) 100% of the amount of
such proceeds (reduced by the amount of such proceeds received by Foamex
International and required to be applied and so applied to the obligations under
the Foamex Credit Agreement pursuant to Section 3.01(b)(vi) thereof as in effect
on the Effective Date) multiplied by (y) the Prepayment Percentage; provided,
however, that no prepayment of the Loans shall be required from Proceeds of
Issuance of Equity or Indebtedness due to sales of Equity Interests in Foamex
International under the Stock Option Plan until the aggregate amount of such
sales equals $10,000,000 and any subsequent multiple of $10,000,000 (it being
understood that no such prepayment shall be required until such proceeds equals
at least $10,000,000 and that all such proceeds shall be subject to this clause
(ii) and not just the excess over $10,000,000) with any such prepayment being
due on or prior to the 30th day following the close of the Fiscal Year in which
such proceeds equaled or exceeded such $10,000,000 or multiple thereof.
(iii) Immediately upon any acceleration of the Stated Maturity Date of
any Loans pursuant to Section 11.02, the Borrower shall repay all the Loans,
unless, pursuant to Section 11.02, only a portion of all the Loans is so
accelerated (in which case the portion so accelerated shall be so prepaid).
(iv) After the occurrence and during the continuance of a Triggering
Event, the Collateral Agent is hereby authorized by the Borrower to transfer to
the Funding Agent, and the Funding Agent is hereby authorized to apply to the
Obligations then outstanding, any and all amounts held in the Borrower's
Concentration Account, such amounts to be applied by the Funding Agent in
accordance with the provisions of Section 3.02.
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(c) Mandatory Reductions in Commitments. The Commitments shall be
permanently reduced by the amount of each payment made pursuant to Section
3.01(b) which is applied to the Revolving Credit Obligations or deposited in the
Cash Collateral Account.
3.02 Payments.
(a) Manner and Time of Payment. All payments of principal of and
interest on the Loans and Reimbursement Obligations and other Obligations
(including, without limitation, fees and expenses) which are payable to the
Administrative Agents, the Lenders or any Issuing Bank shall be made without
condition or reservation of right, in immediately available funds, delivered to
the Funding Agent (or, in the case of Reimbursement Obligations, to the
pertinent Issuing Bank) not later than 1:00 p.m. (New York time) on the date and
at the place due, to such account of the Funding Agent (or such Issuing Bank) as
it may designate, for the account of the Administrative Agents, the Lenders or
such Issuing Bank, as the case may be; and funds received by the Funding Agent,
including, without limitation, funds in respect of any Revolving Loans to be
made on that date, not later than 1:00 p.m. (New York time) on any given
Business Day shall be credited against payment to be made that day and funds
received by the Funding Agent after that time shall be deemed to have been paid
on the next succeeding Business Day.
(b) Apportionment of Payments. (i) Subject to the provisions of
Sections 3.02(b)(ii) and (iv), all payments of principal and interest in respect
of outstanding Swing Loans and Revolving Loans, all payments in respect of
Reimbursement Obligations, as applicable, all payments of fees and all other
payments in respect of any other Obligations, shall be allocated among such of
the Lenders and Issuing Banks as are entitled thereto, as provided herein. All
such payments and any other amounts received by the Funding Agent from or for
the benefit of the Borrower shall be applied to the Borrower's Obligations as
follows: first, to pay principal of and interest on any portion of any
outstanding Swing Loans, second to pay principal of and interest on any portion
of the Revolving Loans which the Funding Agent may have advanced on behalf of
any Lender other than Scotiabank for which the Funding Agent has not then been
reimbursed by such Lender or the Borrower, third, to pay principal of and
interest on any Protective Advance for which the Collateral Agent has not then
been paid by the Borrower or reimbursed by the Lenders, fourth, to pay principal
of and interest on all Revolving Loans which are Base Rate Loans constituting
Non Pro Rata Loans, fifth, to pay all other obligations then due and payable
other than Base Rate Loans constituting Cure Loans, sixth, to pay principal of
and interest on Base Rate Loans constituting Cure Loans, and seventh, as the
Borrower so designates. Unless otherwise designated by the Borrower, all
principal payments in respect of Loans shall be applied to the outstanding
Loans, first, to repay outstanding Base Rate Loans, and then to repay
outstanding LIBO Rate Loans with those LIBO Rate Loans which have earlier
expiring LIBO Rate Interest Periods being repaid prior to those which have later
expiring LIBO Rate Interest Periods.
(ii) After the occurrence of an Event of Default and while the same is
continuing, the Funding Agent may, and at the direction of the Requisite Lenders
shall, apply all payments in respect of any Obligations of the Borrower against,
and the Collateral Agent may, and at the
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direction of the Requisite Lenders shall, transfer to the Funding Agent all
proceeds of Collateral of the Borrower for application to, the Obligations of
the Borrower in the following order:
(A) first, to pay principal or interest on any portion of the
Swing Loans of the Borrower;
(B) second, to pay principal of and interest on any portion of
the Revolving Loans of the Borrower which the Funding Agent may have
advanced on behalf of any Lender other than Scotiabank for which the
Funding Agent has not then been reimbursed by such Lender or the
Borrower;
(C) third, to pay principal of and interest on any Protective
Advance for which the Collateral Agent has not then been paid by the
Borrower or reimbursed by the Lenders;
(D) fourth, to pay Obligations in respect of any expense
reimbursements or indemnities of the Borrower then due to the
Administrative Agents;
(E) fifth, to pay Obligations in respect of any expense
reimbursements or indemnities of the Borrower then due to the Lenders
and the Issuing Banks;
(F) sixth, to pay interest and fees due in respect of Loans of
the Borrower, to the extent not already paid pursuant to clause (B) of
this Section 3.02(b)(iii);
(G) seventh, to pay or prepay (or, to the extent such
Obligations are contingent, to deposit into the Cash Collateral Account
pursuant to Section 11.02(b)) principal outstanding on the Revolving
Loans, the Reimbursement Obligations of the Borrower and all other
Letter of Credit Obligations of the Borrower and Hedging Obligations of
the Borrower to which any of the Lenders or any Affiliate of any of the
Lenders is a party; and
(H) eighth, to the ratable payment of all other Obligations of
the Borrower;
provided, however, if sufficient funds are not available to fund all payments to
be made in respect of any of the Obligations described in any of the foregoing
clauses (A) through (H), the available funds being applied with respect to any
such Obligations (unless otherwise specified in such clause) shall be allocated
to the payment of such Obligations ratably, based on the proportion of each
Administrative Agent's, each Lender's or each Issuing Bank's interest in the
aggregate outstanding Obligations described in such clauses.
The order of application of funds set forth in this Section 3.02(b)(ii)
and the related provisions of this Agreement are set forth solely to determine
the application of funds among the Administrative Agents, the Lenders, the
Issuing Banks and other Holders as among themselves. The order of priority set
forth in clauses (A) through (H) of this Section 3.02(b)(ii) may at any
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time and from time to time be changed by the agreement of the Requisite Lenders
without necessity of notice to or consent of or approval by the Borrower, any
Holder which is not a Lender or Issuing Bank, or any other Person; provided that
the priority listed in any of clauses (E) through (H) may not be changed with
respect to clauses (A) through (D) and provided, further that the order of
priority set forth in clauses (A) through (D) of this Section 3.02(b)(ii) may be
changed only with the prior written consent of the Administrative Agents.
(iii) The Funding Agent, in its sole discretion subject only to the
terms of this Section 3.02(b)(iii), may pay from the proceeds of Revolving Loans
(which Loans have not been requested by the Borrower pursuant to a Notice of
Borrowing) made to the Borrower hereunder, whether made following a request by
the Borrower pursuant to Section 2.01 or 2.02 or a deemed request as provided in
this Section 3.02(b)(iii), all amounts then due and payable by the Borrower
hereunder, including, without limitation, amounts payable with respect to
payments of principal, interest, Reimbursement Obligations and fees and all
reimbursements for expenses pursuant to Section 13.02. The Borrower hereby
irrevocably authorizes the Lenders to make Revolving Loans, which Revolving
Loans shall be Base Rate Loans, in each case, upon notice from the Funding Agent
as described in the following sentence for the purpose of paying principal,
interest, Reimbursement Obligations and fees due from the Borrower, reimbursing
expenses pursuant to Section 13.02 and paying any and all other amounts due and
payable by the Borrower hereunder or under the Notes, and agrees that all such
Revolving Loans so made shall be deemed to have been requested by it pursuant to
Section 2.01 or 2.02 as of the date of the aforementioned notice. The Funding
Agent shall request Revolving Loans on behalf of the Borrower as described in
the preceding sentence by notifying the Lenders by telex, telecopy, telegram or
other similar form of transmission (which notice the Funding Agent shall
thereafter promptly transmit to the Borrower), of the amount and Funding Date of
the proposed Borrowing and that such Borrowing is being requested on the
Borrower's behalf pursuant to this Section 3.02(b)(iii). On the proposed Funding
Date, the Lenders shall make the requested Loans in accordance with the
procedures and subject to the conditions specified in Section 2.01 or 2.02
(irrespective of the satisfaction of the conditions described in Section 5.02 or
the requirement to deliver a Notice of Borrowing in Section 2.01(b), which
conditions and requirement, for the purposes of the payment of Revolving Loans
at the request of the Funding Agent as described in the preceding sentence, the
Lenders irrevocably waive).
(iv) Subject to Section 3.02(b)(v), the Funding Agent shall promptly
distribute to each Lender and Issuing Bank at its primary address set forth on
the appropriate signature page hereof or the signature page to the Assignment
and Acceptance by which it became a Lender or Issuing Bank, or at such other
address as a Lender, an Issuing Bank or other Holder may request in writing,
such funds as such Person may be entitled to receive, subject to the provisions
of Article XII; provided, that the Funding Agent shall under no circumstances be
bound to inquire into or determine the validity, scope or priority of any
interest or entitlement of any Holder and may suspend all payments or seek
appropriate relief (including, without limitation, instructions from the
Requisite Lenders or an action in the nature of interpleader) in the event of
any doubt or dispute as to any apportionment or distribution contemplated
hereby.
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(v) In the event that any Lender fails to fund its Pro Rata Share of
any Revolving Loan requested by the Borrower which such Lender is obligated to
fund under the terms of this Agreement (the Pro Rata Share of each other Lender
of such Revolving Loan funded by each other Lender being hereinafter referred to
as a "Non Pro Rata Loan"), excluding any such Lender who has delivered to the
Funding Agent written notice that one or more of the conditions precedent
contained in Section 5.02 will not on the date of such request be satisfied and
until such conditions are satisfied, until the earlier of such Lender's cure of
such failure and the termination of the Commitments, the proceeds of all amounts
thereafter repaid to the Funding Agent by the Borrower and otherwise required to
be applied to such Lender's share of all other Obligations pursuant to the terms
of this Agreement shall be advanced to the Borrower by the Funding Agent on
behalf of such Lender to cure, in full or in part, such failure by such Lender,
but shall nevertheless be deemed to have been paid to such Lender in
satisfaction of such other Obligations. Notwithstanding anything in this
Agreement to the contrary:
(A) the foregoing provisions of this Section 3.02(b)(v) shall
apply only with respect to the proceeds of payments of Obligations and
shall not affect the conversion or continuation of Loans pursuant to
Section 4.01(c);
(B) a Lender shall be deemed to have cured its failure to fund
its Pro Rata Share of any Revolving Loan at such time as an amount
equal to such Lender's original Pro Rata Share of the requested
principal portion of such Revolving Loan is fully funded to the
Borrower, whether made by such Lender itself or by operation of the
terms of this Section 3.02(b)(v), and whether or not the Non Pro Rata
Loan with respect thereto has been repaid, converted or continued;
(C) amounts advanced to the Borrower to cure, in full or in
part, any such Lender's failure to fund its Pro Rata Share of any
Revolving Loan ("Cure Loans") shall bear interest at the Base Rate in
effect from time to time, and for all other purposes of this Agreement
shall be treated as if they were Base Rate Loans; and
(D) regardless of whether or not an Event of Default has
occurred or is continuing, and notwithstanding the instructions of the
Borrower as to its desired application, all repayments of principal
which, in accordance with the other terms of this Section 3.02, would
be applied to the outstanding Base Rate Loans shall be applied in
accordance with the terms of the second sentence of Section 3.02(b)(i).
(c) Payments on Non-Business Days. Whenever any payment to be made by
the Borrower hereunder or under the Notes is stated to be due on a day which is
not a Business Day, the payment shall instead be due on the next succeeding
Business Day, and any such extension of time shall be included in the
computation of the payment of interest and fees hereunder.
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3.03 Taxes.
(a) Payment of Taxes. Any and all payments by the Borrower hereunder or
under any Note or other document evidencing any Obligations shall be made, in
accordance with Section 3.02, free and clear of and without reduction for any
and all taxes, levies, imposts, deductions, charges, withholdings, and all stamp
or documentary taxes, excise taxes, ad valorem taxes and other taxes imposed on
the value of the Property, charges or levies which arise from the execution,
delivery or registration, or from payment or performance under, or otherwise
with respect to, any of the Loan Documents or the Commitments and all other
liabilities with respect thereto excluding, in the case of each Lender, each
Issuing Bank and each Administrative Agent, taxes imposed on its income,
capital, profits or gains and franchise taxes imposed on it by (i) the United
States, except certain withholding taxes contemplated pursuant to Section
3.03(d)(ii)(C), (ii) the Governmental Authority of the jurisdiction in which
such Lender's Applicable Lending Office is located or any political subdivision
thereof or (iii) the Governmental Authority in which such Person is organized,
managed and controlled or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to withhold or deduct any Taxes from or in respect of any sum
payable hereunder or under any such Note or document to any Lender, any Issuing
Bank or any Administrative Agent, (x) the sum payable to such Lender or such
Administrative Agent shall be increased as may be necessary so that after making
all required withholding or deductions (including withholding or deductions
applicable to additional sums payable under this Section 3.03) such Lender, such
Issuing Bank or such Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such withholding or
deductions been made, (y) the Borrower shall make such withholding or
deductions, and (z) the Borrower shall pay the full amount withheld or deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(b) Indemnification. The Borrower will indemnify each Lender, each
Issuing Bank and each Administrative Agent against, and reimburse each on demand
for, the full amount of all Taxes (including, without limitation, any Taxes
imposed by any Governmental Authority on amounts payable under this Section 3.03
and any additional income or franchise taxes resulting therefrom) incurred or
paid by such Lender, such Issuing Bank or such Administrative Agent (as the case
may be) or any bank holding company parent of such Lender or Issuing Bank and
any liability (including penalties, interest, and out-of-pocket expenses paid to
third parties) arising therefrom or with respect thereto, whether or not such
Taxes were lawfully payable. A certificate as to any additional amount payable
to any Person under this Section 3.03 submitted by it to the Borrower shall,
absent manifest error, be final, conclusive and binding upon all parties hereto.
Each Lender and each Issuing Bank agrees, within a reasonable time after
receiving a written request from the Borrower, to provide the Borrower and each
Administrative Agent with such certificates as are reasonably required, and take
such other actions as are reasonably necessary to claim such exemptions as such
Lender or such Issuing Bank may be entitled to claim in respect of all or a
portion of any Taxes which are otherwise required to be paid or deducted or
withheld
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pursuant to this Section 3.03 in respect of any payments under this
Agreement or under the Notes.
(c) Receipts. Within thirty (30) days after the date of any payment of
Taxes by the Borrower, the Borrower will furnish to the Funding Agent, at its
address referred to in Section 13.08, the original or a certified copy of a
receipt, if any, or other documentation reasonably satisfactory to the Funding
Agent, evidencing payment thereof. The Borrower shall furnish to the Funding
Agent upon the request of the Funding Agent from time to time an Officer's
Certificate stating that all Taxes of which it is aware are due have been paid
and that no additional Taxes of which it is aware are due.
(d) Foreign Bank Certifications. (i) Each Lender that is not created or
organized under the laws of the United States or a political subdivision thereof
(each a "Non-U.S. Lender") shall deliver to the Borrower and the Funding Agent
not later than the date on which such Lender becomes a Lender, (A) a true and
accurate certificate executed in duplicate by a duly authorized officer of such
Lender to the effect that such Lender is eligible to receive payments hereunder
and under the Notes without deduction or withholding of United States federal
income tax (I) under the provisions of an applicable tax treaty concluded by the
United States (in which case the certificate shall be accompanied by two duly
completed copies of IRS Form 1001 (or any successor or substitute form or
forms)) or (II) under Section 1441(c)(1) as modified for purposes of Section
1442(a) of the Internal Revenue Code (in which case the certificate shall be
accompanied by two duly completed copies of IRS Form 4224 (or any successor or
substitute form or forms)) or (B) in the case of a Lender or Issuing Bank
claiming exemption from United State withholding tax under Section 871(h) or
881(c) of the Internal Revenue Code with respect to payments of "portfolio
interest" (a "Registered Holder"), (i) a certificate representing that such
Registered Holder is not a "bank" for purposes of Section 881(c)(3) of the
Internal Revenue Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Internal Revenue Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Internal Revenue Code.
(ii) Each Lender further agrees to deliver to the Borrower and the
Funding Agent from time to time, a true and accurate certificate executed in
duplicate by a duly authorized officer of such Lender before or promptly upon
the occurrence of any event requiring a change in the most recent certificate
previously delivered by it to the Borrower and the Funding Agent pursuant to
this Section 3.03(d) (including, but not limited to, a change in such Lender's
lending office). Each certificate required to be delivered pursuant to this
Section 3.03(d)(ii) shall certify as to one of the following:
(A) that such Lender can continue to receive payments
hereunder and under the Notes without deduction or withholding of
United States federal income tax;
(B) that such Lender cannot continue to receive payments
hereunder and under the Notes without deduction or withholding of
United States federal income tax as
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specified therein but does not require additional payments pursuant to
Section 3.03(a) because it is entitled to recover the full amount of
any such deduction or withholding from a source other than the
Borrower;
(C) that such Lender is no longer capable of receiving
payments hereunder and under the Notes without deduction or withholding
of United States federal income tax as specified therein by reason of a
change in law (including the Internal Revenue Code or applicable tax
treaty) after the later of the Effective Date or the date on which such
Lender became a Lender and that it is not capable of recovering the
full amount of the same from a source other than the Borrower; or
(D) that such Lender is no longer capable of receiving
payments hereunder without deduction or withholding of United States
federal income tax as specified therein other than by reason of a
change in law (including the Internal Revenue Code or applicable tax
treaty) after the later of the Effective Date or the date on which such
Lender became a Lender.
Each Lender agrees to deliver to the Borrower and the Funding Agent further duly
completed copies of the above-mentioned IRS forms on or before the earlier of
(x) the date that any such form expires or becomes obsolete or otherwise is
required to be resubmitted as a condition to obtaining an exemption from
withholding from United States federal income tax and (y) fifteen (15) days
after the occurrence of any event requiring a change in the most recent form
previously delivered by such Lender to the Borrower and the Funding Agent,
unless any change in treaty, law, regulation, or official interpretation thereof
which would render such form inapplicable or which would prevent the Lender from
duly completing and delivering such form has occurred prior to the date on which
any such delivery would otherwise be required and the Lender promptly advises
the Borrower that it is not capable of receiving payments hereunder and under
the Notes without any deduction or withholding of United States federal income
tax.
(iii) The Borrower shall not be required to pay any additional amount
to, or to indemnify, pursuant to paragraphs (a) or (b) of this Section 3.03, any
Non-U.S. Lender or any Issuing Bank in respect of United States Federal
withholding tax to the extent imposed as a result of (A) the failure by such
Non-U.S. Lender or Issuing Bank to comply with the provisions of
paragraphs(d)(i) or (d)(ii) of this Section 3.03 or (B) a representation made
pursuant to the provisions of such paragraphs (d)(i) or (d)(ii) proving to have
been false or incorrect when made.
3.04 Increased Capital. If after the date hereof any Lender or Issuing
Bank determines that (i) the adoption or implementation of or any change in or
in the interpretation or administration of any law or regulation or any
guideline or request from any central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over any
Lender, Issuing Bank or banks or financial institutions generally (whether or
not having the force of law), or compliance with any of the above affects or
would affect the amount of capital required or expected to be maintained by such
Lender or Issuing Bank or any
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corporation controlling such Lender or Issuing Bank and (ii) the amount of such
capital is increased by or based upon (A) the making or maintenance by any
Lender of its Loans or Commitments, any Lender's participation in or obligation
to participate in the Loans, Letters of Credit or other advances made hereunder
or the existence of any Lender's obligation to make Loans or (B) the issuance or
maintenance by any Issuing Bank of, or the existence of any Issuing Bank's
obligation to issue, Letters of Credit, then, in any such case, upon written
demand by such Lender or Issuing Bank (with a copy of such demand to the Funding
Agent), the Borrower shall pay to the Funding Agent for the account of such
Lender or Issuing Bank, from time to time as specified by such Lender or Issuing
Bank, additional amounts sufficient to compensate such Lender or Issuing Bank or
such corporation therefor. Such demand shall be accompanied by a statement as to
the amount of such compensation and include a brief summary of the basis for
such demand. Such statement shall be conclusive and binding for all purposes,
absent manifest error. Such Lender or Issuing Bank shall notify the Borrower of
any event referred to in clause (i) of this Section within 180 days of obtaining
actual knowledge of such event.
3.05 Promise to Repay; Evidence of Indebtedness.
(a) Promise to Repay.
(i) The Borrower hereby agrees to pay when due the principal
amount of each Revolving Loan which is made to it, and further agrees
to pay all unpaid interest accrued thereon, in accordance with the
terms of this Agreement and the promissory notes evidencing the
Revolving Loans owing to the Lenders, and the Borrower shall execute
and deliver to each Lender such promissory notes as are necessary to
evidence the Revolving Loans owing to the Lenders after giving effect
to any assignment thereof pursuant to Section 13.01, all substantially
in the form of Exhibit A-1 (all such promissory notes and all
amendments thereto, replacements thereof and substitutions therefor
being collectively referred to as the "Revolving Loan Notes"; and
"Revolving Loan Note" means any one of the Notes).
(ii) The Borrower hereby agrees to pay when due the principal
amount of each Swing Loan which is made to it, and further agrees to
pay all unpaid interest accrued thereon, in accordance with the terms
of this Agreement and the promissory note evidencing the Swing Loans
owing to the Swing Bank, and the Borrower shall execute and deliver to
the Swing Bank such promissory note as is necessary to evidence the
Swing Loans owing to the Swing Bank, substantially in the form of
Exhibit A-2 (all such promissory notes and all amendments thereto,
replacements thereof and substitutions therefor being collectively
referred to as the "Swing Loan Notes"; and "Swing Loan Note" means any
one of the Notes).
(b) Loan Account. Each Lender shall maintain in accordance with its
usual practice an account or accounts (a "Loan Account") evidencing the
Indebtedness of the Borrower to such Lender resulting from each Loan owing to
such Lender from time to time, including the amount
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of principal and interest payable and paid to such Lender from time to time
hereunder and under the Notes.
(c) Control Account. The Register maintained by the Funding Agent
pursuant to Section 13.01(c) shall include a control account, and a subsidiary
account for each Lender, in which accounts (taken together) shall be recorded
(i) the date and amount of each Borrowing made hereunder, the type of Loan
comprising such Borrowing and any LIBO Rate Interest Period applicable thereto,
(ii) the effective date and amount of each Assignment and Acceptance delivered
to and accepted by it and the parties thereto, (iii) the amount of any principal
or interest due and payable or to become due and payable from the Borrower to
each Lender hereunder or under the Notes, and (iv) the amount of any sum
received by the Funding Agent from the Borrower hereunder and each Lender's
share thereof.
(d) Entries Binding. The Funding Agent will render and deliver a
statement of the Register monthly to the Borrower and each Lender. All entries
on any such statement shall, fifteen (15) days after the same is sent, be
presumed to be correct and shall constitute prima facie evidence of the
information contained in such statement. Each of the Borrower and the Lenders
shall have the express right to rebut such presumption by conclusively
demonstrating the existence of an error on the part of the Funding Agent.
3.06 Deposit Accounts. (a) The Borrower shall maintain lockbox accounts
(the "Lockbox Accounts") in the name of the Collateral Agent with the Lockbox
Banks of the Borrower and shall, promptly upon receipt thereof, deposit in its
respective Lockbox Accounts, all monies that constitute checks, notes, drafts or
funds received by the Borrower in the ordinary course of business or otherwise
and that constitute proceeds of Collateral. Any amounts which are required to be
paid to the Funding Agent hereunder which are not proceeds of Collateral shall
be paid directly to the Funding Agent and not deposited in a Lockbox Account.
(b) Funds on deposit in a Lockbox Account of the Borrower on each
Business Day shall be transferred to the Concentration Accounts of the Borrower
in accordance with the terms of the Lockbox Agreements and shall be transferred
from the Concentration Accounts of the Borrower either (i) if no Triggering
Event has occurred and is continuing, as the Borrower may direct in writing or
(ii) after the occurrence and during the continuance of a Triggering Event, to
the Funding Agent to be applied to the Obligations in accordance with Section
3.02(b). The Borrower hereby grants to the Collateral Agent a security interest
in the Concentration Accounts of the Borrower and all funds from time to time
deposited therein, including, without limitation, all overnight investments.
(c) The Borrower agrees to pay to the Collateral Agent any and all
reasonable fees, costs and expenses which the Collateral Agent incurs in
connection with opening and maintaining the Lockbox Accounts, the Concentration
Accounts or any other similar payment collection mechanism for the Borrower and
depositing for collection any check or item of payment received by and/or
delivered to the Lockbox Banks or the Collateral Agent on account of the
Obligations
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of the Borrower. The Borrower agrees to reimburse the Collateral Agent for any
amounts paid to any Lockbox Bank arising out of any required indemnification by
the Collateral Agent of such Lockbox Bank against damages incurred by the
Lockbox Bank in the operation of a Lockbox Account for the Borrower. The
Borrower shall enter into Lockbox Agreements on terms satisfactory to the
Administrative Agents on or prior to the 90th day following the Effective Date.
3.07 Replacement of Lender. If (i) the Borrower becomes obligated to
pay additional amounts to any Lender pursuant to Section 3.03, 3.04 or 4.01(f)
(other than with respect to a LIBO Rate Reserve Requirement) as a result of any
condition described in such Sections which is not generally applicable to all
Lenders, then, unless such Lender has theretofore taken steps to remove or cure,
and has removed or cured, the conditions creating the cause for such obligation
to pay such additional amounts, within fifteen (15) days of being on
notification of such condition, (ii) a Lender refuses in writing to give its
written consent to any amendment which requires the consent of all Lenders which
amendment has received the written consent of at least the Requisite Lenders
pursuant to clause (ii) of the second sentence of Section 13.07 or (iii) a
Lender invokes the provisions of Section 4.02(e), in each case, the Borrower may
designate another bank which is reasonably acceptable to the Administrative
Agents (such bank being herein called a "Replacement Lender") to purchase for
cash all of the Notes of such Lender and all of such Lender's rights hereunder,
without recourse to or warranty (other than title) by, or expense to, such
Lender for a purchase price equal to the outstanding principal amount of the
Notes payable to such Lender plus any accrued but unpaid interest on such Notes
and accrued but unpaid commitment and other fees, expense reimbursements and
indemnities in respect of that Lender's Commitments. Such Lender shall
consummate such sale in accordance with such terms (and, if such Lender is an
Issuing Bank, such other terms as may be necessary to compensate fully such
Lender) within a reasonable time not exceeding 60 days from the date the
Borrower designated a Replacement Lender, and thereupon such Lender shall no
longer be a party hereto or have any obligations or rights hereunder (except
rights which, pursuant to the provisions of this Agreement, survive the
termination of this Agreement and the repayment of the Notes), and the
Replacement Lender shall succeed to such obligations and rights.
ARTICLE IV
INTEREST AND FEES
4.01 Interest on the Loans and other Obligations.
(a) Rate of Interest. All Loans and the outstanding principal balance
of all other Obligations shall bear interest on the unpaid principal amount
thereof from the date such Loans are made and such other Obligations are due and
payable until paid in full, except as otherwise provided in Section 4.01(d), as
follows:
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(i) If a Base Rate Loan or such other Obligation, at a rate
per annum equal to the sum of (A) the Base Rate, as in effect from time
to time as interest accrues plus (B) the Applicable Margin; and
(ii) If a LIBO Rate Loan, at a rate per annum equal to the sum
of (A) the LIBO Rate determined for the applicable LIBO Rate Interest
Period plus (B) the Applicable Margin.
Subject to Section 4.01(c)(i), the applicable basis for determining the rate of
interest on the Loans shall be selected at the time a Notice of Borrowing or a
Notice of Conversion/Continuation is delivered by the Borrower to the Funding
Agent; provided, however, the Borrower may not select the LIBO Rate as the
applicable basis for determining the rate of interest on such a Loan if at the
time of such selection an Event of Default or a Potential Event of Default would
occur or has occurred and is continuing. If on any day any Loan is outstanding
with respect to which notice has not been timely delivered to the Funding Agent
in accordance with the terms of this Agreement specifying the basis for
determining the rate of interest on that day, then for that day interest on that
Loan shall be determined by reference to the Base Rate.
(b) Interest Payments. (i) Interest accrued on each Base Rate Loan
shall be payable in arrears (A) on each Quarterly Payment Date, commencing on
the first such day following the making of such Base Rate Loan, (B) upon the
prepayment thereof in full or in part when made in connection with a prepayment
of the Loans or a permanent reduction in the Commitments, and (C) if not
theretofore paid in full, at maturity (whether by acceleration or otherwise) of
such Base Rate Loan.
(ii) Interest accrued on each LIBO Rate Loan shall be payable in
arrears (A) on each LIBO Rate Interest Payment Date applicable to such Loan, (B)
upon the payment or prepayment thereof in full or in part, and (C) if not
theretofore paid in full, at maturity (whether by acceleration or otherwise) of
such LIBO Rate Loan.
(iii) Interest accrued on the principal balance of all other
Obligations shall be payable in arrears (A) on each Quarterly Payment Date,
commencing on the first such day following the incurrence of such Obligation,
(B) upon repayment thereof in full or in part, and (C) if not theretofore paid
in full, at the time such other Obligation becomes due and payable (whether by
acceleration or otherwise).
(c) Conversion or Continuation. (i) The Borrower shall have the option
(A) to convert at any time all or any part of outstanding Base Rate Loans to
LIBO Rate Loans; or (B) to continue all or any part of outstanding LIBO Rate
Loans, in accordance with the terms of Section 4.01(a), having LIBO Rate
Interest Periods which expire on the same date as LIBO Rate Loans, and the
succeeding LIBO Rate Interest Period of such continued Loans shall commence on
such expiration date; provided, however, (I) no portion of any outstanding Loan
may be continued as (and shall be immediately converted into a Base Rate Loan),
or be converted into, a LIBO Rate
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Loan (x) if the continuation of, or the conversion into, would violate any of
the provisions of Section 4.02 or (y) if an Event of Default or a Potential
Event of Default would occur or has occurred and is continuing and (II) if the
option set forth in clause (B) of this Section is not exercised, in accordance
with the terms of Section 4.01(c)(ii), in respect of a LIBO Rate Loan, such LIBO
Rate Loan shall convert automatically into a Base Rate Loan on the final date of
the applicable LIBO Rate Interest Period.
(ii) To convert or continue a Loan under Section 4.01(c)(i), the
Borrower shall deliver a Notice of Conversion/Continuation to the Funding Agent
no later than 11:00 a.m. (New York time) at least three (3) Business Days in
advance of the proposed conversion/continuation date. A Notice of
Conversion/Continuation shall specify (A) the proposed conversion/continuation
date (which shall be a Business Day), (B) the principal amount of the Loan to be
converted/continued, (C) whether such Loan shall be converted and/or continued,
and (D) in the case of a conversion to, or continuation of, a LIBO Rate Loan,
the requested LIBO Rate Interest Period. In lieu of delivering a Notice of
Conversion/Continuation, the Borrower may give the Funding Agent telephonic
notice of any proposed conversion/continuation by the time required under this
Section 4.01(c)(ii), and such notice shall be confirmed in writing delivered to
the Funding Agent promptly (but in no event later than 5:00 p.m. (New York time)
on the same day). Promptly after receipt of a Notice of Conversion/Continuation
under this Section 4.01(c)(ii) (or telephonic notice in lieu thereof), the
Funding Agent shall notify each Lender by telex or telecopy, or other similar
form of transmission, of the proposed conversion/continuation. Any Notice of
Conversion/Continuation for conversion to, or continuation of, a Loan (or
telephonic notice in lieu thereof) shall be irrevocable, and the Borrower shall
be bound to convert or continue in accordance therewith.
(d) Default Interest. Notwithstanding the rates of interest specified
in Section 4.01(a) or elsewhere in this Agreement, effective immediately upon
(i) the occurrence of an Event of Default described in Section 11.01(a) or (ii)
the occurrence of any other Event of Default and notice from the Requisite
Lenders of the effectiveness of this Section 4.01(d), and for as long thereafter
as such Event of Default shall be continuing, the principal balance of all Base
Rate Loans, and the principal balance of all other Obligations (other than LIBO
Rate Loans), shall bear interest at a rate which is two percent (2%) per annum
in excess of the Base Rate plus the Applicable Margin, and the principal balance
of all LIBO Rate Loans shall bear interest at a rate which is two percent (2%)
per annum in excess of the LIBO Rate plus the Applicable Margin.
(e) Computation of Interest. Interest on all Obligations shall be
computed on the basis of the actual number of days elapsed in the period during
which interest accrues and a year of 360 days or, in the case of Base Rate
Loans, a year of 365 or 366 days, as the case may be. In computing interest on
any Loan, the date of the making of the Loan or the first day of a LIBO Rate
Interest Period, as the case may be, shall be included and the date of payment
or the expiration date of a LIBO Rate Interest Period, as the case may be, shall
be excluded; provided, however, if a Loan is repaid on the same day on which it
is made, one (1) day's interest shall be paid on such Loan.
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(f) Changes; Legal Restrictions. If after the date hereof any Lender or
Issuing Bank determines that the adoption or implementation of or any change in
or in the interpretation or administration of any law or regulation or any
guideline or request from any central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over any
Lender, Issuing Bank or over banks or financial institutions generally (whether
or not having the force of law), compliance with which:
(A) does or will subject a Lender or an Issuing Bank (or its
Applicable Lending Office or LIBO Rate Affiliate) to charges (other
than Taxes) of any kind which such Lender or Issuing Bank reasonably
determines to be applicable to the Commitments of the Lenders and/or
the Issuing Banks to make LIBO Rate Loans or issue and/or participate
in Letters of Credit or change the basis of taxation of payments to
that Lender or Issuing Bank of principal, fees, interest, or any other
amount payable hereunder with respect to LIBO Rate Loans or Letters of
Credit; or
(B) does or will impose, modify, or hold applicable, in the
determination of a Lender or an Issuing Bank, any reserve (including
the actual imposition of any LIBO Rate Reserve Requirement), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities (including those
pertaining to Letters of Credit) in or for the account of, advances or
loans by, commitments made, or other credit extended by, or any other
acquisition of funds by, a Lender or an Issuing Bank or any Applicable
Lending Office or LIBO Rate Affiliate of that Lender or Issuing Bank;
and the result of any of the foregoing is to increase the cost to that Lender or
Issuing Bank of making, renewing or maintaining the Loans or its Commitments or
issuing or participating in the Letters of Credit or to reduce any amount
receivable thereunder; then, in any such case, upon written demand by such
Lender or Issuing Bank (with a copy of such demand to the Funding Agent), the
Borrower shall immediately pay to the Funding Agent for the account of such
Lender or Issuing Bank, from time to time as specified by such Lender or Issuing
Bank, such amount or amounts as may be necessary to compensate such Lender or
Issuing Bank or its LIBO Rate Affiliate for any such additional cost incurred or
reduced amount received. Such demand shall be accompanied by a statement as to
the amount of such compensation and include a brief summary of the basis for
such demand. Such statement shall be conclusive and binding for all purposes,
absent manifest error. If such increased costs are incurred as a result of a
Lender's or Issuing Bank's selection of a particular Applicable Lending Office,
such Lender or Issuing Bank shall take reasonable efforts to make, fund and
maintain its Loans and to make, fund and maintain its obligations under the
Letters of Credit through another Applicable Lending Office of such Lender or
Issuing Bank in another jurisdiction, if the making, funding or maintaining of
such Loans or obligations in respect of Letters of Credit through such other
office of such Lender or Issuing Bank does not, in the judgment of such Lender
or Issuing Bank, otherwise materially adversely affect such Lender or Issuing
Bank or such Loans or obligations in respect of Letters of Credit of such Lender
or Issuing Bank.
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4.02 Special Provisions Governing LIBO Rate Loans. With respect to LIBO
Rate Loans:
(a) Amount of LIBO Rate Loans. Each LIBO Rate Loan shall be
for a minimum amount of $1,000,000 and in integral multiples of
$100,000 in excess of that amount.
(b) Determination of LIBO Rate Interest Period. By giving
notice as set forth in Section 2.01(b) (with respect to any Borrowing
of LIBO Rate Loans) or Section 4.01(c) (with respect to a conversion
into or continuation of LIBO Rate Loans), the Borrower shall have the
option, subject to the other provisions of this Section 4.02, to select
an interest period (each, a "LIBO Rate Interest Period") to apply to
the Loans described in such notice, subject to the following
provisions:
(i) The Borrower may only select, as to a particular
Borrowing of LIBO Rate Loans, a LIBO Rate Interest Period of
either one, two, three or six months in duration;
(ii) In the case of immediately successive LIBO Rate
Interest Periods applicable to a Borrowing of LIBO Rate Loans,
each successive LIBO Rate Interest Period shall commence on
the day on which the next preceding LIBO Rate Interest Period
expires;
(iii) If any LIBO Rate Interest Period would
otherwise expire on a day which is not a Business Day, such
LIBO Rate Interest Period shall be extended to expire on the
next succeeding Business Day if the next succeeding Business
Day occurs in the same calendar month, and if there will be no
succeeding Business Day in such calendar month, the LIBO Rate
Interest Period shall expire on the immediately preceding
Business Day;
(iv) The Borrower may not select a LIBO Rate Interest
Period as to any Loan if such LIBO Rate Interest Period
terminates later than the Commitment Termination Date; and
(v) There shall be no more than five (5) LIBO Rate
Interest Periods in effect at any one time.
(c) Determination of Interest Rate. As soon as practicable on the
second Business Day prior to the first day of each LIBO Rate Interest Period
(the "LIBO Rate Interest Rate Determination Date"), the Funding Agent shall
determine (pursuant to the procedures set forth in the definition of "LIBO
Rate") the interest rate which shall apply to the LIBO Rate Loans for which an
interest rate is then being determined for the applicable LIBO Rate Interest
Period and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to the Borrower and to each Lender. The Funding Agent's
determination shall be presumed to be correct, absent manifest error, and shall
be binding upon the Borrower.
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(d) Interest Rate Unascertainable, Inadequate or Unfair. In the event
that at least one (1) Business Day before the LIBO Rate Interest Rate
Determination Date:
(i) the Funding Agent is advised by any Reference Bank that
deposits in Dollars (in the applicable amounts) are not being offered
by such Reference Bank in the London interbank market for such LIBO
Rate Interest Period; or
(ii) the Administrative Agents determine that adequate and
fair means do not exist for ascertaining the applicable interest rates
by reference to which the LIBO Rate then being determined is to be
fixed; or
(iii) the Requisite Lenders advise the Funding Agent that the
LIBO Rate for LIBO Rate Loans comprising such Borrowing will not
adequately reflect the cost to such Requisite Lenders of obtaining
funds in Dollars in the London interbank market in the amount
substantially equal to such Lenders' LIBO Rate Loans in Dollars and for
a period equal to such LIBO Rate Interest Period;
then the Funding Agent shall forthwith give notice thereof to the Borrower,
whereupon (until the Funding Agent notifies the Borrower that the circumstances
giving rise to such suspension no longer exist) the right of the Borrower to
elect to have Loans bear interest based upon the LIBO Rate shall be suspended
and each outstanding LIBO Rate Loan shall be converted into a Base Rate Loan on
the last day of the then current LIBO Rate Interest Period therefor,
notwithstanding any prior election by the Borrower to the contrary.
(e) Illegality. (i) If at any time any Lender determines (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties) that the making or continuation of any LIBO Rate Loan has
become unlawful or impermissible by compliance by that Lender with any law,
governmental rule, regulation or order of any Governmental Authority (whether or
not having the force of law and whether or not failure to comply therewith would
be unlawful or would result in costs or penalties), then, and in any such event,
such Lender may give notice of that determination, in writing, to the Borrower
and the Funding Agent, and the Funding Agent shall promptly transmit the notice
to each other Lender.
(ii) When notice is given by a Lender under Section 4.02(e)(i), (A) the
Borrower's right to request from any Lender and each Lender's obligation, if
any, to make LIBO Rate Loans shall be immediately suspended, and each Lender
shall make a Base Rate Loan as part of any requested Borrowing of LIBO Rate
Loans and (B) if LIBO Rate Loans are then outstanding, the Borrower shall
immediately, or if permitted by applicable law, no later than the date permitted
thereby, upon at least one (1) Business Day's prior written notice to the
Funding Agent and the Lenders, convert each Loan into a Base Rate Loan.
(iii) If at any time after a Lender gives notice under Section
4.02(e)(i) such Lender determines that it may lawfully make LIBO Rate Loans,
such Lender shall promptly give notice
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of that determination, in writing, to the Borrower and the Funding Agent, and
the Funding Agent shall promptly transmit the notice to each other Lender. The
Borrower's right to request, and such Lender's obligation, if any, to make LIBO
Rate Loans shall thereupon be restored.
(f) Compensation. In addition to all amounts required to be paid by
each Borrower pursuant to Section 4.01, the Borrower shall compensate each
Lender, upon demand, for all losses, expenses and liabilities (including,
without limitation, any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Lender's LIBO Rate Loans to the Borrower but excluding any loss of
Applicable Margin on the relevant Loans) which that Lender may sustain (i) if
for any reason a Borrowing, conversion into or continuation of LIBO Rate Loans
does not occur on a date specified therefor in a Notice of Borrowing or a Notice
of Conversion/Continuation given by the Borrower or in a telephonic request by
it for borrowing or conversion/continuation or a successive LIBO Rate Interest
Period does not commence after notice therefor is given pursuant to Section
4.01(c), including, without limitation, pursuant to Section 4.02(d), (ii) if for
any reason any LIBO Rate Loan is prepaid (including, without limitation,
mandatorily pursuant to Section 3.01(b)) on a date which is not the last day of
the applicable LIBO Rate Interest Period, (iii) as a consequence of a required
conversion of a LIBO Rate Loan to a Base Rate Loan as a result of any of the
events indicated in Section 4.02(d) or 4.02(e), or (iv) as a consequence of any
failure by the Borrower to repay LIBO Rate Loans when required by the terms of
this Agreement. The Lender making demand for such compensation shall deliver to
the Borrower concurrently with such demand a written statement in reasonable
detail as to such losses, expenses and liabilities, and this statement shall be
conclusive as to the amount of compensation due to that Lender, absent manifest
error.
(g) Booking of LIBO Rate Loans. Any Lender may make, carry or transfer
LIBO Rate Loans at, to, or for the account of, its LIBO Rate Lending Office or
LIBO Rate Affiliate or its other offices or Affiliates. No Lender shall be
entitled, however, to receive any greater amount under Section 3.03, 3.04,
4.01(f) or 4.02(f) as a result of the transfer of any such LIBO Rate Loan to any
office (other than such LIBO Rate Lending Office) or any Affiliate (other than
such LIBO Rate Affiliate) than such Lender would have been entitled to receive
immediately prior thereto, unless (i) the transfer occurred at a time when
circumstances giving rise to the claim for such greater amount did not exist and
(ii) such claim would have arisen even if such transfer had not occurred.
(h) Affiliates Not Obligated. No LIBO Rate Affiliate or other Affiliate
of any Lender shall be deemed a party to this Agreement or shall have any
liability or obligation under this Agreement.
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4.03 Fees.
(a) Administrative Agents' Fees. The Borrower shall pay to the
Administrative Agents, solely for the account of the Administrative Agents, the
fees applicable to the Borrower as set forth in the letter from Citicorp and
Scotiabank addressed to certain Affiliates of the Borrower dated February 9,
1998.
(b) Letter of Credit Fee. In addition to any charges paid pursuant to
Section 2.03(g), the Borrower shall pay to the Funding Agent, for the account of
the Lenders entitled thereto, based on their respective Pro Rata Shares, a fee
accruing at a per annum rate equal to the then Applicable Margin for LIBO Rate
Loans less 1/8 of 1% on the undrawn face amount of each outstanding Letter of
Credit for the period of time such Letter of Credit is outstanding, payable on
each Quarterly Payment Date, in arrears (the "Letter of Credit Fees"); provided,
however, upon: (A) the occurrence of an Event of Default described in Section
11.1(a) or (B) the occurrence of any other Event of Default and notice from the
Requisite Lenders of the effectiveness of Section 4.01(d), and for so long
thereafter as such Event of Default shall be continuing, the rate at which the
Letter of Credit Fees shall accrue and be payable shall be equal to the then
Applicable Margin for LIBO Rate Loans (less 1/8 of 1%) plus two percent (2.0%)
per annum.
(c) Unused Commitment Fee. The Borrower shall pay to the Funding Agent,
for the account of the Lenders entitled thereto, in accordance with their
respective Pro Rata Shares, a fee (the "Unused Commitment Fee"), accruing at the
rate of the Applicable Commitment Fee Margin on the amount from time to time by
which the Commitments exceed the sum of (i) the outstanding principal amount of
the Revolving Loans, plus (ii) the outstanding Reimbursement Obligations, plus
(iii) the aggregate undrawn face amount of all outstanding Letters of Credit,
for the period commencing on the Effective Date and ending on the Commitment
Termination Date, such portion of the fee being payable quarterly, in arrears,
commencing with the first Quarterly Payment Date following the Effective Date.
Notwithstanding the foregoing, in the event that any Lender fails to fund its
Pro Rata Share of any Loan requested by the Borrower which such Lender is
obligated to fund under the terms of this Agreement, (I) such Lender shall not
be entitled to any Unused Commitment Fees with respect to its Commitment until
such failure has been cured in accordance with Section 3.02(b)(vi)(B) and (II)
until such time, the Unused Commitment Fee shall accrue in favor of the Lenders
which have funded their respective Pro Rata Shares of such requested Loan, shall
be allocated among such performing Lenders ratably based upon their relative
Commitments, and shall be calculated based upon the average amount by which the
aggregate applicable Commitments of such performing Lenders exceeds the sum of
(1) the outstanding principal amount of the Loans owing to such performing
Lenders, plus (2) the outstanding Reimbursement Obligations owing to such
performing Lenders, plus (3) the aggregate participation interests of such
performing Lenders arising pursuant to Section 2.03(e) with respect to undrawn
and outstanding Letters of Credit.
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(d) Calculation and Payment of Fees. All of the above fees payable on a
per annum percentage basis shall be calculated on the basis of the actual number
of days elapsed in a 360- day year. All such fees shall be payable in addition
to, and not in lieu of, interest, compensation, expense reimbursements,
indemnification and other Obligations. Fees shall be payable to the Funding
Agent at its office in New York, New York in immediately available funds. All
fees shall be fully earned and nonrefundable when paid. All fees specified or
referred to in this Agreement due to any Administrative Agent, any Issuing Bank
or any Lender, including, without limitation, those referred to in this Section
4.03, shall bear interest, if not paid when due, at the interest rate for Base
Rate Loans in accordance with Section 4.01(d), shall constitute Obligations and
shall be secured by all of the Collateral.
ARTICLE V
CONDITIONS TO LOANS AND LETTERS OF CREDIT
5.01 Conditions Precedent to the Effectiveness of this Agreement. This
Agreement shall become effective on the date (the "Effective Date") when each of
the conditions precedent set forth below have been satisfied.
(a) Documents. The Administrative Agents shall have received on or
before the Effective Date all of the following in form and substance
satisfactory to the Requisite Lenders:
(i) this Agreement and all other agreements, documents,
instruments, reports and appraisals described in the List of Closing
Documents, attached hereto and made a part hereof as Exhibit D, each
duly executed where appropriate and in form and substance satisfactory
to the Lenders; without limiting the foregoing, the Borrower hereby
directs its counsel, Xxxxxxx Xxxx & Xxxxxxxxx and each of its local
counsel, to prepare and deliver to the Administrative Agents, the
Lenders, the Issuing Banks and Xxxxx, Xxxxx & Xxxxx, counsel to the
Funding Agent, the opinions referred to in such List of Closing
Documents; and
(ii) such additional documentation as either Administrative
Agent or any of the Lenders may reasonably request.
(b) Perfection of Liens. The Administrative Agents shall have received
evidence that all Liens granted to the Collateral Agent with respect to all
Collateral are perfected and of first priority, except as otherwise permitted
under this Agreement.
(c) Consummation of Transaction. The Transaction shall have been or
shall contemporaneously herewith be consummated on terms satisfactory to the
Lenders, and all documentation relating to the Transaction shall be in form and
substance satisfactory to the Requisite Lenders. All of the conditions precedent
set forth in the Amendatory Agreement and
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the Term Facility shall have been satisfied without amendment thereto or waiver
or forbearance thereof by any party thereto without the prior written consent of
the Requisite Lenders.
(d) Consents. The Borrower and Foamex International shall have received
all consents and authorizations required pursuant to any material Contractual
Obligation with any other Person and shall have obtained all consents and
authorizations of, and effected all notices to and filings with, any
Governmental Authority, in each case, as may be necessary to allow each of the
Borrower and Foamex International, lawfully and without risk of rescission, (i)
to execute, deliver and perform, in all material respects, its obligations under
this Agreement, the other Loan Documents and the Transaction Documents to which
it is, or is to be, a party and each other agreement or instrument to be
executed and delivered by it pursuant thereto or in connection therewith and
(ii) to create and perfect or continue the validity and perfection of the Liens
on the Collateral to be owned by it in the manner and for the purpose
contemplated by the Loan Documents.
(e) No Legal Impediments. No law, regulation, order, judgment or decree
of any Governmental Authority shall, and neither Administrative Agent shall have
received any notice that litigation is pending or threatened which is likely to
(i) enjoin, prohibit or restrain the making of the Loans and/or the issuance of
Letters of Credit and/or the consummation of the transactions contemplated by
the Transaction Documents or (ii) impose or result in the imposition of a
Material Adverse Effect.
(f) No Change in Condition. No change in the condition (financial or
otherwise), business, performance, properties, assets, operations or prospects
of Foamex International, Foamex, the Borrower or GFI shall have occurred since
December 29, 1996 which change, in the judgment of the Lenders, will have or is
reasonably likely to have a Material Adverse Effect.
(g) No Default. No Event of Default or Potential Event of Default shall
have occurred and be continuing or would result from the making of the Loans.
(h) Financial Information, etc. The Administrative Agents shall have
received on or prior to the Effective Date an estimated pro forma opening
balance sheet of (i) the Borrower as at December 28, 1997 and a pro forma
balance sheet of TFLLC as at February 27, 1998 (in each case giving pro forma
effect as of such date to the Transaction and reflecting the existing and
proposed legal and capital structure (both debt and equity) of each such Person,
in each case in form and substance reasonably satisfactory to the Requisite
Lenders.
(i) Equity Contributions. The Borrower shall have received a cash
equity contribution from Foamex International to the common equity of the
Borrower in the amount of at least $20,000,000.
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(j) Solvency, etc. The Administrative Agents shall have received a
solvency opinion, dated the Effective Date, duly executed and delivered by a
firm of recognized national standing acceptable to the Administrative Agents.
(k) Fees and Expenses Paid. There shall have been paid to the Funding
Agent, for the account of the Administrative Agents and the Lenders, as
applicable, all fees due and payable on or before the Effective Date and all
expenses due and payable on or before the Effective Date.
5.02 Conditions Precedent to All Loans and Letters of Credit. The
obligation of each Lender to make any Loan and of the Swing Bank to make any
Swing Loan, requested to be made by it on the Effective Date or any date after
the Effective Date and the agreement of each Issuing Bank to issue any Letter of
Credit on the Effective Date or any date after the Effective Date is subject to
the following conditions precedent as of each such date:
(a) Representations and Warranties. As of such date, both
before and after giving effect to the Loans to be made or the Letter of
Credit to be issued on such date, all of the representations and
warranties of the Borrower contained in Section 6.01 and in any other
Loan Document (other than representations and warranties which
expressly speak as of a different date) shall be true and correct in
all material respects.
(b) No Defaults. No Event of Default shall have occurred and
be continuing or would result from the making of the requested Loan or
issuance of the requested Letter of Credit.
(c) No Legal Impediments. No law, regulation, order, judgment
or decree of any Governmental Authority shall, and neither
Administrative Agent shall have received from any Lender or Issuing
Bank notice that, in the judgment of such Lender or Issuing Bank,
litigation is pending or threatened which is likely to enjoin, prohibit
or restrain, or impose or result in the imposition of any material
adverse condition upon, (i) such Lender's making of the requested Loan
or participation in the requested Letter of Credit, (ii) the Swing
Bank's making of the requested Swing Loan or (iii) such Issuing Bank's
issuance of the requested Letter of Credit.
(d) No Material Adverse Effect. No change in the condition
(financial or otherwise), business, performance, properties, assets,
operations or prospects of the Borrower, Foamex, Foamex International
or TFLLC shall have occurred since December 29, 1996, which has had or
is reasonably likely to have a Material Adverse Effect.
Each submission by the Borrower to the Funding Agent of a Notice of Borrowing
with respect to a Loan or a Notice of Conversion/Continuation with respect to
any Loan (excluding any automatic conversion to Base Rate Loans pursuant to the
proviso at the end of Section 4.01(c)) and each acceptance by the Borrower of
the proceeds of each Loan made, converted or continued hereunder,
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each submission by the Borrower to an Issuing Bank of a request for issuance of
a Letter of Credit and the issuance of such Letter of Credit, shall constitute a
representation and warranty by the Borrower and, in the case of a submission by
the Borrower as of the Funding Date in respect of such Revolving Loan or Swing
Loan, the date of conversion or continuation and the date of issuance of such
Letter of Credit, that all the conditions contained in this Section 5.02 have
been satisfied or waived in accordance with Section 13.07.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of the Borrower. In order to induce
the Lenders and the Issuing Banks to enter into this Agreement and to make
and/or maintain the Loans and the other financial accommodations to the Borrower
and to issue the Letters of Credit described herein, the Borrower hereby
represents and warrants to each Lender, each Issuing Bank and the Administrative
Agents as of the Effective Date and as of each date thereafter on which such
representations and warranties shall be made or deemed to be made that the
following statements are true, correct and complete:
(a) Organization; Corporate Powers. (i) The Borrower (A) is a
corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware, (B) is duly qualified to
operate as a foreign corporation and is in good standing under the laws
of each jurisdiction in which failure to be so qualified and in good
standing will have or is reasonably likely to have a Material Adverse
Effect, and (C) has all requisite corporate power and authority to own,
operate and encumber its Property and to conduct its business as
presently conducted and as proposed to be conducted pursuant to the
Business Plan of the Borrower in connection with and following the
consummation of the transactions contemplated by this Agreement.
(b) Authority.
(i) The Borrower has the requisite corporate power
and authority to execute, deliver and perform each of the
Transaction Documents to which it is a party.
(ii) The execution, delivery and performance as the
case may be, of each of the Transaction Documents which have
been executed and to which the Borrower is party and the
consummation of the transactions contemplated thereby, have
been duly approved by the board of directors of the Borrower,
and such approvals have not been rescinded, revoked or
modified in any manner. No other
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corporate action or proceedings on the part of the Borrower or
other corporate or shareholder action are necessary to
consummate such transactions.
(iii) Each of the Transaction Documents to which the
Borrower is a party has been duly executed, or delivered, on
behalf of the Borrower and constitutes its legal, valid and
binding obligation, enforceable against the Borrower in
accordance with its terms, is in full force and effect and all
parties thereto have performed and complied with all the
terms, provisions, agreements and conditions set forth therein
and required to be performed or complied with by such parties
on or before the Effective Date, and, as of the Effective
Date, no default (or event that with the passing of time or
giving of notice or both would constitute an event of default)
or breach of any covenant by any such party exists thereunder.
(c) Subsidiaries; Ownership of Equity Interests. (i) One
hundred percent of the Equity Interests in the Borrower is owned
beneficially and of record by Foamex International and (ii) the
Borrower owns no Equity Interest in any Person other than Equity
Interests in unaffiliated persons received of the type specified in
Section 9.04 (iii). None of the Equity Interests of the Borrower is
subject to any vesting, redemption, or repurchase agreement, and, to
the Borrower's best knowledge, there are no warrants or options
outstanding with respect to such Equity Interests, except in each case
as contemplated in the Transaction Documents.
(d) No Conflict. The execution, delivery and performance of
each of the Transaction Documents to which the Borrower is a party do
not and will not (i) conflict with the Constituent Documents of the
Borrower, (ii) to the Borrower's best knowledge, constitute a tortious
interference with any Contractual Obligation of any Person (other than
a Lender) or (iii) except as set forth on Schedule 6.01-D, conflict
with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under (A) any Transaction Document, or
(B) any Contractual Obligation of the Borrower, or require termination
of any Contractual Obligation, the consequences of which violation,
breach, default or termination, will have or is reasonably likely to
have a Material Adverse Effect or may subject either Administrative
Agent, any of the Lenders or any of the Issuing Banks to any liability,
(iv) result in or require the creation or imposition of any Lien
whatsoever upon any of the Property or assets of the Borrower other
than Liens contemplated by the Loan Documents, or (v) require any
approval of the Borrower, or to the Borrower's best knowledge, direct
or indirect, Equity Interest holders (which has not been obtained).
(e) Governmental Consents. Except as set forth on Schedule
6.01-E, the execution, delivery and performance of each of the
Transaction Documents to which the Borrower is a party do not and will
not require any registration with, consent or approval of, or notice
to, or other action to, with or by any Governmental Authority, except
(i) filings, consents or notices which have been made, obtained or
given, or, in a timely
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manner, will be made, obtained or given, and registrations with,
filings, approvals and consents required under the Securities Act, the
Securities Exchange Act and state securities and "Blue Sky" laws in
connection with the transactions contemplated by the Transaction
Documents, and (ii) filings necessary to create or perfect security
interests in the Collateral, and (iii) routine corporate filings to
maintain good standing in each state in which the Borrower conducts its
business.
(f) Governmental Regulation. The Borrower is not subject to
regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, or the Investment
Company Act of 1940, or any other federal or state statute or
regulation which limits its ability to incur indebtedness or its
ability to consummate the transactions contemplated in the Transaction
Documents.
(g) Financial Position. All financial projections and related
materials and documents delivered to the Administrative Agents pursuant
to this Agreement are based upon facts and assumptions that the
Borrower believes to be reasonable in light of the then current and
foreseeable business conditions. All monthly, quarterly and annual
financial statements of the Borrower delivered to the Administrative
Agents were prepared in conformity with GAAP and fairly present the
financial position of the Borrower, as at the respective dates thereof
and the results of operations and changes in financial position for
each of the periods covered thereby, subject, in the case of unaudited
interim financials, to changes resulting from the audit and normal
year-end adjustments and, with respect to all financial statements
delivered prior to the Effective Date, such statements were in
conformity with GAAP as interpreted by the Borrower at such time (it
being understood that actual results may differ from the projections).
As of the date of delivery, the Borrower does not have any
Accommodation Obligation, contingent liability or liability for any
Taxes, long-term leases or commitments, not reflected in any of its
audited financial statements delivered to the Administrative Agents
pursuant to this Agreement or otherwise disclosed to the Administrative
Agents and the Lenders in writing, which will have or is reasonably
likely to have a Material Adverse Effect.
(h) Pro Forma Financials. The pro forma balance sheet of the
Borrower as of December 28, 1997 and the pro forma balance sheet of
TFLLC as of February 27, 1998 (in each case giving pro forma effect as
of such date to the Transaction and the other transactions contemplated
by the Transaction Documents and this Agreement and on a historical
basis giving effect to the transactions contemplated by the Transaction
Documents) delivered on the Effective Date, copies of each of which
have been, or will be, furnished to the Lenders on such dates, present
on a pro forma basis the financial condition of the Borrower, and TFLLC
as of such dates and reflect on a pro forma basis those liabilities
reflected in the notes thereto and resulting from consummation of the
transactions contemplated in the Transaction Documents and this
Agreement, and the payment or accrual of all Transaction Costs paid or
to be payable on the Effective Date
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with respect to any of the foregoing. The projections and assumptions
expressed in the pro forma financials furnished pursuant to this
Section 6.01(h) are reasonable based on facts and on assumptions that
the Borrower believes to be reasonable in light of the then current and
foreseeable business conditions (it being understood that actual
results may differ from the projections).
(i) Business Plan. The Business Plan of the Borrower most
recently delivered to the Administrative Agents after the Effective
Date pursuant to Section 7.01(f), represents the Borrower's reasonable
and good faith plan and estimate as of the date of delivery to the
Administrative Agents of the Borrower's future business and financial
activities for the periods set forth therein. Such Business Plan has
been based on facts and on assumptions that the Borrower believe to be
reasonable in light of the then current and foreseeable business
conditions.
(j) Litigation; Adverse Effects. Except as set forth in
Schedule 6.01-J, there is no action, suit, proceeding, investigation or
arbitration or series of related actions, suits, proceedings,
investigations or arbitrations before or by any Governmental Authority
or private arbitrator pending or, to the knowledge of the Borrower,
threatened against the Borrower or any of its Property (i) challenging
the validity or the enforceability of any of the Transaction Documents
or (ii) which will or is reasonably likely to result in any Material
Adverse Effect. The Borrower is not (A) in violation of any applicable
Requirements of Law which violation will have or is reasonably likely
to have a Material Adverse Effect, or (B) subject to or in default with
respect to any final judgment, writ, injunction, restraining order or
order of any nature, decree, rule or regulation of any court or
Governmental Authority which will have or is reasonably likely to have
a Material Adverse Effect.
(k) No Material Adverse Change. Since December 29, 1996, there
has been no change in the condition (financial or otherwise), business,
performance, properties, assets, operations or prospects of Trace Foam,
TFLLC, the Borrower or GFI which change, in the judgment of the
Lenders, will have or is reasonably likely to have a Material Adverse
Effect.
(l) Payment of Taxes. All tax returns and reports of the
Borrower required to be filed have been timely filed, and all taxes,
assessments, fees and other governmental charges thereupon and upon
their respective Property, assets, income and franchises which are
shown in such returns or reports to be due and payable have been paid
prior to any penalty being imposed unless the terms of Section 8.04
permit non-payment thereof. Borrower has no knowledge of any proposed
tax assessment against the Borrower that will have or is reasonably
likely to have a Material Adverse Effect.
(m) Performance. The Borrower has, except as set forth on
Schedule 6.01-J, not received notice and has no actual knowledge that
it is in default in the performance,
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observance or fulfillment of any of the obligations, covenants or
conditions contained in any Contractual Obligation applicable to the
Borrower, except where such default or defaults, if any, will not have
or is not reasonably likely to have a Material Adverse Effect.
(n) Disclosure. The representations and warranties of the
Borrower contained in the Transaction Documents to which it is a party
and all certificates and other documents delivered to the
Administrative Agents pursuant to the terms thereof, and the factual
disclosures applicable to the Borrower set forth therein, did not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained
herein or therein, in light of the circumstances under which and the
time at which they were made, not misleading. The Borrower has not
intentionally withheld any fact from the Administrative Agents, the
Issuing Banks or the Lenders in regard to any matter which will have or
is reasonably likely to have a Material Adverse Effect.
(o) Requirements of Law. Except as otherwise stated in
Schedules 6.01-D and 6.01-P, the Borrower is in compliance with all
Requirements of Law applicable to its business, in each case where the
failure to so comply individually or in the aggregate will have or is
reasonably likely to have a Material Adverse Effect.
(p) Environmental Matters. (i) Except as disclosed on Schedule
6.01-P, to the knowledge of the Borrower and the Borrower's employees,
consultants or agents:
(A) the operations of the Borrower comply in all
material respects with all applicable Environmental, Health or Safety
Requirements of Law;
(B) the Borrower has obtained or has taken
appropriate steps, as required by Environmental Health or Safety
Requirements of Law, to obtain all environmental, health and safety
Permits necessary for its respective operations, and all such Permits
are in good standing and the Borrower is currently in material
compliance with all terms and conditions of such Permits;
(C) none of the Borrower or any of its present or
past Property or operations is subject to or the subject of any
investigation respecting (I) any violation of any Environmental, Health
or Safety Requirements of Law or (II) any Remedial Action or has
received any notice of any Claims or Liabilities and Costs arising from
the Release or threatened Release of a Contaminant into the
environment;
(D) none of the operations of the Borrower is subject
to any judicial or administrative proceeding, order, judgment, decree
or settlement alleging or addressing a violation of or a liability
under any Environmental, Health or Safety Requirement of Law;
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(E) the Borrower:
(1) has not experienced any Release of a
Contaminant in amounts sufficient to require reporting under
any applicable Requirement of Law without having submitted the
required report;
(2) has not treated, stored or disposed of a
hazardous waste on-site, as that term is defined under 40
C.F.R. Part 261 or any state equivalent except in compliance
with applicable Requirements of Law; or
(3) has not reported any material violation
of any applicable Environmental, Health or Safety Requirement
of Law;
(F) none of the Borrower's present or past Property
is listed or proposed for listing on the National Priorities List
("NPL") pursuant to CERCLA or on the Comprehensive Environmental
Response Compensation Liability Information System List ("CERCLIS") or
any similar state list of sites requiring Remedial Action and the
Borrower is unaware of any conditions on such Property which if known
to a Governmental Authority, would qualify such Property for inclusion
on any such list;
(G) the Borrower has not sent or directly arranged
for the transport of any waste to any site listed on the NPL or
proposed for listing on the NPL or to a site included on the CERCLIS
list, or any similar state list;
(H) there is not now, nor has there ever been on or
in the Property:
(1) any generation, treatment, recycling,
storage or disposal of any hazardous waste, as that term is
defined under 40 C.F.R. Part 261 or any state equivalent
except in compliance with applicable Requirements of Law;
(2) any landfill, waste pile, underground
storage tank or surface impoundment;
(3) any asbestos-containing material; or
(4) a Release of any polychlorinated
biphenyls (PCB) used in hydraulic oils, electrical
transformers or other Equipment;
(I) the Borrower has not received any notice or Claim
to the effect that it is or may be liable to any Person as a result of
the Release or threatened Release of a Contaminant into the
environment;
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(J) there have been no Releases of any Contaminants
in reportable or significant quantities to the environment from any
Property;
(K) the Borrower does not have any known contingent
liability in connection with any Release or threatened Release of any
Contaminants into the environment;
(L) no Environmental Lien has attached to any
Property of the Borrower; and
(M) the Borrower has not entered into any agreements
with any Person relating to any Remedial Action or environmentally
related Claim.
(ii) the Borrower is conducting and will continue to conduct
its respective business and operations in an environmentally
responsible manner, and the Borrower has
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not been, and has no reason to believe that it shall be, subject to
Liabilities and Costs arising out of or relating to environmental,
health or safety matters that have or will result in cash expenditures
by the Borrower in excess of $10,000,000, in the aggregate for any
calendar year ending after the Effective Date.
(q) ERISA. None of the Borrower or any ERISA Affiliate
currently maintains or contributes to any Benefit Plan or Multiemployer
Plan other than those listed on Schedule 6.01-Q hereto. Except as
disclosed in Schedule 6.01-Q hereto, each Plan which is intended to be
qualified under Section 401(a) of the Internal Revenue Code as
currently in effect has been determined by the IRS to be so qualified.
Except as disclosed in Schedule 6.01-Q, none of the Borrower or any
ERISA Affiliate maintains or contributes to any employee welfare
benefit plan within the meaning of Section 3(l) of ERISA which provides
benefits to employees after termination of employment other than as
required by Section 601 of ERISA or applicable law. The Borrower and
the ERISA Affiliates are in compliance in all material respects with
the responsibilities, obligations and duties imposed on them by ERISA
and the Internal Revenue Code with respect to all Plans. No Benefit
Plan has incurred any accumulated funding deficiency (as defined in
Section 302(a)(2) of ERISA and 412(a) of the Internal Revenue Code)
whether or not waived. None of the Borrower or any ERISA Affiliates
nor, to the knowledge of the Borrower, any fiduciary of any Plan (i)
has engaged in a nonexempt prohibited transaction described in Sections
406 of ERISA or 4975 of the Internal Revenue Code or (ii) has taken or
failed to take any action which would constitute or result in a
Termination Event. None of the Borrower or any ERISA Affiliate is
subject to any liability under Section 4063, 4064, 4069, 4204 or
4212(c) of ERISA. None of the Borrower or any ERISA Affiliate has
incurred any liability to the PBGC which remains outstanding other than
the payment of premiums, and there are no premium payments which have
become due which are unpaid. Schedule B to the most recent annual
report filed with the IRS with respect to each Benefit Plan and
furnished to the Administrative Agents is complete and accurate.
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Since the date of the latest Schedule B, there has been no material
adverse change in the funding status or financial condition of the
Benefit Plan relating to such Schedule B. None of the Borrower or any
ERISA Affiliate has (i) failed to make a required contribution or
payment to a Multiemployer Plan or (ii) made a complete or partial
withdrawal under Section 4203 or 4205 of ERISA from a Multiemployer
Plan. None of the Borrower or any such ERISA Affiliate has failed to
make a required installment or any other required payment under Section
412 of the Internal Revenue Code on or before the due date for such
installment or other payment. None of the Borrower or any such ERISA
Affiliate is required to provide security to a Benefit Plan under
Section 401(a)(29) of the Internal Revenue Code due to a Plan amendment
that results in an increase in current liability for the plan year.
Except as disclosed on Schedule 6.01-Q, the Borrower has no, by reason
of the transactions contemplated hereby, obligation to make any payment
to any employee pursuant to any Plan or existing contract or
arrangement. The Borrower has given or made available to the
Administrative Agents copies of all of the following: each Benefit Plan
and related trust agreement (including all amendments to such Plan and
trust) in existence as of the Effective Date and the most recent
summary plan description, actuarial report, determination letter issued
by the IRS and Form 5500 filed in respect of each such Benefit Plan in
existence; a listing of all of the Multiemployer Plans currently
contributed to by the Borrower or any ERISA Affiliate with the
aggregate amount of the most recent annual contributions required to be
made by the Borrower and each ERISA Affiliate to each such
Multiemployer Plan, any information which has been provided to the
Borrower or any ERISA Affiliate regarding withdrawal liability under
any Multiemployer Plan and the collective bargaining agreement pursuant
to which such contribution is required to be made; each employee
welfare benefit plan within the meaning of Section 3(1) of ERISA which
provides benefits to employees of the Borrower or any of such ERISA
Affiliates after termination of employment other than as required by
Section 601 of ERISA, the most recent summary plan description for such
plan and the aggregate amount of the most recent annual payments made
to terminated employees under each such plan.
(r) Labor Matters. Schedule 6.01-R accurately sets forth all
labor contracts to which the Borrower is a party on the Effective Date
and the expiration date of each such contract. There are no strikes,
lockouts or other disputes relating to any collective bargaining or
similar agreement to which the Borrower is a party which have or is
reasonably likely to have a Material Adverse Effect.
(s) Securities Activities. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying
Margin Stock.
(t) Solvency. After giving effect to the transactions
contemplated in the Transaction Documents and the Loans to be made on
such date as Loans requested hereunder are made, and the disbursement
of the proceeds of such Loans pursuant to the Borrower's instructions,
the Borrower is Solvent.
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(u) Patents, Trademarks, Permits, Etc.; Government Approvals.
(i) The Borrower is licensed or otherwise has the lawful right to use,
or has all permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and processes
used in or necessary for the conduct of its business as currently
conducted which are material to its condition (financial or otherwise),
operations, performance and prospects. Except as set forth on Schedule
6.01-U, no claims are pending or, to the best of the Borrower's
knowledge following diligent inquiry, threatened that the Borrower is
infringing or otherwise adversely affecting the rights of any Person
with respect to such permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and
processes, except for such claims and infringements as do not, in the
aggregate, give rise to any liability on the part of the Borrower which
has or is reasonably likely to have a Material Adverse Effect.
(ii) The consummation of the transactions
contemplated by the Transaction Documents will not impair the
ownership of or rights under (or the license or other right to
use, as the case may be) any permits and governmental
approvals, patents, trademarks, trade names, copyrights,
technology, know-how or processes by the Borrower in any
manner which has or is reasonably likely to have a Material
Adverse Effect.
(v) Assets and Properties. The Borrower has good and
marketable title (except Liens securing the Obligations and Liens
permitted under Section 9.03) to all the Collateral and all of its
other assets and Property (tangible and intangible) owned by it, except
insofar as marketability may be limited by any laws or regulations of
any Governmental Authority affecting such assets, and all such assets
and Property are free and clear of all Liens except Liens securing the
Obligations and Liens permitted under Section 9.03. Substantially all
of the assets and Property owned by, leased to or used by the Borrower
are in adequate operating condition and repair, ordinary wear and tear
excepted, are free and clear of any known defects except such defects
as do not substantially interfere with the continued use thereof in the
conduct of normal operations, and are able to serve the function for
which they are currently being used, except in each case where the
failure of such asset to meet such requirements would not have or is
not reasonably likely to have a Material Adverse Effect. Neither this
Agreement nor any other Transaction Document, nor any transaction
contemplated under any such agreement, will affect any right, title or
interest of the Borrower in and to any of such assets in a manner that
would have or is reasonably likely to have a Material Adverse Effect.
(w) Insurance. Schedule 6.01-W accurately sets forth as of the
Effective Date all insurance policies and programs currently in effect
with respect to the respective Property and assets and business of the
Borrower, specifying for each such policy and program, (i) the amount
thereof, (ii) the risks insured against thereby, (iii) the name of the
insurer and each insured party thereunder, (iv) the policy or other
identification number thereof, (v) the expiration date thereof and (vi)
the annual premium with respect thereto. Such
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insurance policies and programs are in amounts sufficient to cover the
replacement value of the respective Property and assets of the Borrower
subject to customary deductibles.
(x) Transaction with Affiliates. Schedule 6.01-X lists each
and every existing agreement and arrangement as of the Effective Date
that (i) the Borrower has entered into with any Affiliate of the
Borrower or (ii) any Affiliate of the Borrower is subject to or has
entered into with respect to any of the Borrower's Properties,
including, in the case of each of clauses (i) and (ii), any management
or similar agreement. The Administrative Agents have been provided a
true, accurate and complete copy of each existing written agreement or
arrangement set forth on Schedule 6.01-X and a true, accurate and
complete description of each existing or proposed agreement or
arrangement set forth in Schedule 6.01-X that is not in writing.
ARTICLE VII
REPORTING COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until all of the Obligations (other than indemnities
not yet due) are paid in full (or in the case of contingent Obligations (other
than indemnities not yet due), Cash Collateral has been deposited in the Cash
Collateral Account in the full amount of such Obligations on terms satisfactory
to the Lenders), unless the Requisite Lenders shall otherwise give prior written
consent thereto:
7.01 Financial Statements. The Borrower shall maintain a system of
accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in conformity with GAAP,
and each of the financial statements described below (except as otherwise
expressly provided) shall be prepared from such system and records. The Borrower
shall deliver or cause to be delivered to the Administrative Agents and the
Lenders:
(a) Monthly Reports. As soon as practicable, and in any event
within forty-five (45) days after the end of each calendar month in
each Fiscal Year (or within sixty (60) days after the end of each
calendar month which corresponds to the end of a fiscal quarter), the
balance sheets and results of operations of the Borrower as at the end
of such period, and the related statements of income and cash flow of
the Borrower for such Fiscal Month and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Month, setting forth in each case in comparative form the corresponding
figures for the corresponding calendar month of the previous Fiscal
Year and the corresponding figures from the financial forecast for the
current Fiscal Year delivered pursuant to Section 7.01(f), certified by
the chief financial officer of the Borrower as fairly presenting the
financial position of the Borrower as at the dates
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indicated and the results of their operations and cash flow for the
periods indicated in accordance with GAAP, subject to normal year end
adjustments (but excluding GAAP footnotes).
(b) [Intentionally Omitted].
(c) Annual Reports. As soon as practicable, and in any event
within ninety-five (95) days after the end of each Fiscal Year, the
balance sheets and results of operations of the Borrower as at the end
of such Fiscal Year, and the related statements of income and cash flow
of the Borrower for such Fiscal Year (which shall be audited by Coopers
& Xxxxxxx or any other independent certified public accountants) as at
the end of such Fiscal Year which shall be prepared in conformity with
GAAP applied on a basis consistent with prior years (except for changes
with which Coopers & Xxxxxxx or any such other independent certified
public accountants, if applicable, shall concur and which shall have
been disclosed in the notes to the financial statements), and which
shall set forth in each case in comparative form the corresponding
figures for the previous Fiscal Year and the corresponding figures from
the financial forecast for the Fiscal Year being reported or delivered
pursuant to Section 7.01(f), and (iii) an opinion on such financial
statements by Coopers & Xxxxxxx or such other independent certified
public accountants acceptable to the Administrative Agents, which
opinion shall be unqualified.
(d) Officer's Certificate. Together with each delivery of any
financial statement pursuant to paragraphs (a) and (c) of this Section
7.01, (i) an Officers' Certificate of the Borrower substantially in the
form of Exhibit E attached hereto and made a part hereof, stating that
the executive officers signatory thereto have reviewed the terms of the
Loan Documents, and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions (in the
case of such certification for statements delivered pursuant to Section
7.01(c)) and the financial condition of the Borrower during the
accounting period covered by such financial statements, that such
review has not disclosed the existence during or at the end of such
accounting period, and that such officers do not have knowledge of the
existence as at the date of such Officers' Certificate, of any
condition or event which constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
the Borrower has taken, is taking and proposes to take with respect
thereto; and (ii) a certificate substantially in the form of Exhibit F
attached hereto (the "Compliance Certificate"), signed by the
Borrower's chief financial officer, setting forth calculations (with
such specificity as the Administrative Agents may reasonably request)
for the period then ended which demonstrate compliance, when
applicable, with the provisions of Article X.
(e) Accountant's Statement and Privity Letter. Together with
each delivery of the financial statements referred to in Section
7.01(c), a written statement of the firm of independent certified
public accountants giving the report thereon (i) stating that their
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audit examination has included a review of the terms of this Agreement
as it relates to accounting matters and (ii) stating whether, in
connection with their audit examination, any condition or event which
constitutes an Event of Default or Potential Event of Default has come
to their attention, and if such condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided, that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such condition or event that would
not be disclosed in the course of their audit examination. The
statement referred to above shall, at the request of either of the
Administrative Agents, be accompanied by (x) a copy of the management
letter or any similar report delivered to the Borrower or to any
officer or employee thereof by such accountants in connection with such
financial statements and (y) a letter in substantially the form of
Exhibit G attached hereto and made a part hereof from the Borrower to
such accountants informing such accountants that the Lenders are
relying upon the financial statements audited by such accountants and
delivered to the Administrative Agents and the Lenders pursuant to
Section 7.01(c) and that a primary intent of the Borrower in having
such financial statements audited is to induce the Lenders to continue
to make Loans to the Borrower under this Agreement. Either
Administrative Agent and each Lender may, with the consent of the
Borrower (which consent shall not be unreasonably withheld),
communicate directly with such accountants.
(f) Business Plans; Financial Projections. No later than the
last day of each Fiscal Year beginning with Fiscal Year 1998, (i) an
annual business plan for the next Fiscal Year for the Borrower,
substantially in the form of the business plan heretofore delivered to
the Administrative Agents and the Lenders; and (ii) a plan and
financial forecast consisting of balance sheets, income statements and
cash flow statements on a monthly basis for the next 12 months and on
an annual basis, based upon facts and assumptions that the Borrower
believes to be reasonable in light of the then current and foreseeable
business conditions, for the next three succeeding Fiscal Years of the
Borrower (it being understood that actual results may differ from the
projections).
(g) Balance Sheet. On or before ninety (90) days after the
Effective Date, a balance sheet of the Borrower as of March 29, 1998
(after giving effect to all transactions contemplated by the
Transaction Documents and the payment of all Transaction Costs),
certified as fairly presenting the financial position of the Borrower
by the chief financial officer of the Borrower, together with the
Borrower's reconciliation, in form and substance satisfactory to the
Requisite Lenders, of all changes from the estimated pro forma balance
sheet of the Borrower referred to in Section 6.01(h).
7.02 Events of Default. Promptly upon the Borrower obtaining knowledge
(i) of any condition or event which constitutes an Event of Default or Potential
Event of Default, (ii) that any Person has given any written notice to the
Borrower or taken any other action with respect to a claimed default or event or
condition of the type referred to in Section 11.01(e), or (iii) of any condition
or event which has or is reasonably likely to have a Material Adverse Effect or
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adversely affect the value of, or the Collateral Agent's interest in, the
Collateral (taken as a whole) in any material respect, the Borrower shall
deliver to the Administrative Agents and the Lenders an Officer's Certificate
specifying (A) the nature and period of existence of any such claimed default,
Event of Default, Potential Event of Default, condition or event, (B) the notice
given or action taken by such Person in connection therewith, and (C) what
action the Borrower has taken, is taking and proposes to take with respect
thereto.
7.03 Lawsuits. (i) Promptly upon the Borrower obtaining knowledge of
the institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting the Borrower or
any Property of the Borrower not previously disclosed pursuant to Section
6.01(j), which action, suit, proceeding, governmental investigation or
arbitration exposes, or in the case of multiple actions, suits, proceedings,
governmental investigations or arbitrations arising out of the same general
allegations or circumstances which expose, in the Borrower's reasonable
judgment, the Borrower to liability in an amount aggregating $500,000 or more
(exclusive of claims covered by insurance policies of the Borrower unless the
insurers of such claims have disclaimed coverage or reserved the right to
disclaim coverage on such claims), the Borrower shall give written notice
thereof to the Administrative Agents and the Lenders and provide, if requested,
such other information as may be reasonably available to enable each Lender and
either Administrative Agent and its counsel to evaluate such matters; and (ii)
in addition to the requirements set forth in clause (i) of this Section 7.03,
the Borrower upon request of either Administrative Agent or of the Requisite
Lenders shall promptly give written notice of the status of any action, suit,
proceeding, governmental investigation or arbitration covered by a report
delivered pursuant to clause (i) above and provide such other information as may
be reasonably available to it to enable each Lender and each Administrative
Agent and its counsel to evaluate such matters.
7.04 Insurance. As soon as practicable and in any event by the last day
of each Fiscal Year, the Borrower shall deliver to the Administrative Agents and
the Lenders (i) a report in form and substance reasonably satisfactory to the
Administrative Agents and the Lenders outlining all material insurance coverage
maintained as of the date of such report by the Borrower and the duration of
such coverage and (ii) if requested by the Administrative Agents, evidence that
all premiums with respect to such coverage have been paid when due.
7.05 ERISA Notices. The Borrower shall deliver or cause to be
delivered, within the time limits set forth below, to the Administrative Agents
and the Lenders, at the Borrower's expense, the following information and
notices as soon as reasonably possible, and in any event:
(a) within ten (10) Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know that a Termination Event
has occurred, a written statement of the chief financial officer of the
Borrower describing such Termination Event and the action, if any,
which the Borrower or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto, and when known, any action taken
or threatened by the IRS, DOL or PBGC with respect thereto;
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(b) within ten (10) Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know that a prohibited
transaction (defined in Section 406 of ERISA and Section 4975 of the
Internal Revenue Code) has occurred with respect to any Plan, a
statement of the chief financial officer of the Borrower describing
such transaction and the action which the Borrower or any ERISA
Affiliate has taken, is taking or proposes to take with respect
thereto;
(c) within ten (10) Business Days or such longer period as may
be reasonably agreed to by either Administrative Agent after the
Borrower or ERISA Affiliate receives written notice from such
Administrative Agent requesting same, copies of each annual report
(form 5500 series), including Schedule B thereto, filed with respect to
each Benefit Plan;
(d) within ten (10) Business Days after the request of either
Administrative Agent, copies of each actuarial report for any Benefit
Plan if received by the Borrower or Multiemployer Plan and each annual
report for any Multiemployer Plan;
(e) within ten (10) Business Days after the filing of the same
with the IRS, a copy of each funding waiver request filed with respect
to any Benefit Plan and all communications received by the Borrower or
any ERISA Affiliate with respect to such request;
(f) within ten (10) Business Days after the request of either
Administrative Agent regarding the occurrence of any material increase
in the benefits of any existing Benefit Plan or the establishment of
any new Benefit Plan or the commencement of contributions to any
Benefit Plan to which the Borrower or any ERISA Affiliate was not
previously contributing, notification of such increase, establishment
or commencement;
(g) within ten (10) Business Days after the Borrower or any
ERISA Affiliate receives notice of any unfavorable determination letter
from the IRS regarding the qualification of a Plan under Section 401(a)
of the Internal Revenue Code, copies of each such letter;
(h) within ten (10) Business Days after the Borrower or any
ERISA Affiliate fails to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code on or
before the due date for such installment or payment, a notification of
such failure;
(i) within ten (10) Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know (A) a Multiemployer Plan
has been terminated, (B) the administrator or plan sponsor of a
Multiemployer Plan has provided the Borrower or any ERISA Affiliate
with notice of an intention to terminate a Multiemployer Plan, or (C)
the
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PBGC has instituted or will institute proceedings under Section 4042 of
ERISA to terminate a Multiemployer Plan.
For purposes of this Section 7.05, the Borrower and any ERISA Affiliate shall be
deemed to know all facts known by the administrator of any Plan of which the
Borrower or ERISA Affiliate is the plan sponsor. Section 7.05 shall only apply
with respect to a Plan for which the Borrower or any ERISA Affiliate is an
"employer" as defined in Section 3(5) of ERISA.
7.06 Environmental Notices. (a) The Borrower shall notify the
Administrative Agents and the Lenders in writing, promptly upon the Borrower's
learning thereof, of any:
(i) notice or claim to the effect that the Borrower is or may
be liable to any Person as a result of the Release or threatened
Release of any Contaminant into the environment;
(ii) notice that the Borrower is subject to investigation by
any Governmental Authority evaluating whether any Remedial Action is
needed to respond to the Release or threatened Release of any
Contaminant into the environment;
(iii) notice that any Property of the Borrower is subject to
an Environmental Lien;
(iv) notice of violation to the Borrower of any Environmental,
Health or Safety Requirement of Law;
(v) condition which might reasonably constitute or result in a
material violation of any Environmental, Health or Safety Requirement
of Law;
(vi) commencement or threat of any judicial or administrative
proceeding alleging a material violation by the Borrower of any
Environmental, Health or Safety Requirement of Law;
(vii) new or proposed changes to any existing Environmental,
Health or Safety Requirement of Law that could result in a Material
Adverse Effect; or
(viii) any proposed acquisition of stock, assets, real estate,
or leasing of property, or any other action by the Borrower that could
subject the Borrower to environmental, health or safety Liabilities and
Costs.
(b) Within forty-five (45) days after the end of each Fiscal Year, the
Borrower shall submit to the Administrative Agents and the Lenders a report
summarizing the status of environmental, health or safety compliance, hazard or
liability issues identified in notices required pursuant to Section 7.06(a),
disclosed on Schedule 6.01-P or identified in any notice or report required
herein.
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7.07 Labor Matters. The Borrower shall notify the Administrative Agents
and the Lenders in writing, promptly upon the Borrower's learning thereof, of
(i) any material labor dispute to which the Borrower may become a party,
including, without limitation, any strikes, lockouts or other disputes relating
to the Borrower's plants and other facilities and (ii) any material liability
incurred with respect to the closing of any plant or other facility of the
Borrower.
7.08 Other Reports. The Borrower shall deliver or cause to be delivered
to the Administrative Agents and the Lenders copies of all financial statements,
reports and notices, if any, sent or made available generally by the Borrower to
its Securities holders or filed with the Securities and Exchange Commission, all
press releases made available generally by the Borrower to the public concerning
material developments in the business of the Borrower and all notifications
received by the Borrower pursuant to the Securities Exchange Act and the rules
promulgated thereunder.
7.09 Change of Control. Promptly upon, and in any event within three
(3) Business Days of, the Borrower obtaining knowledge of the occurrence or
potential occurrence of a Change of Control, the Borrower shall deliver to the
Administrative Agents an Officer's Certificate specifying, with respect to a
Change of Control, (i) the cause and nature of such Change of Control and (ii)
the estimated date on which the Change of Control will become effective.
7.10 Government Contracts. Promptly upon, and in any event within ten
(10) Business Days of, any Credit Party becoming a party to a Federal, state or
local government contract having a value in excess of $500,000, the Borrower
shall notify the Collateral Agent of such contract and shall provide the
Collateral Agent with any information related to such contract that the
Collateral Agent may reasonably request.
7.11 Other Information. Promptly upon receiving a request therefor from
either Administrative Agent or from the Requisite Lenders, the Borrower shall
prepare and deliver to the Administrative Agents and the Lenders such other
information with respect to the Borrower, or the Collateral, including, without
limitation, schedules identifying and describing the Collateral and any
dispositions thereof and financial information, as from time to time may be
reasonably requested by either Administrative Agent or by the Requisite Lenders.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until all of the Obligations (other than indemnities
not yet due) are paid in full (or, in the case of contingent Obligations (other
than indemnities not yet due), cash collateral has been deposited in the Cash
Collateral Account in the full amount of such Obligations on terms
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satisfactory to the Lenders), unless the Requisite Lenders shall otherwise give
prior written consent thereto:
8.01 Corporate Existence, etc. The Borrower shall, at all times,
maintain its corporate existence and preserve and keep, or cause to be preserved
and kept, in full force and effect its rights and franchises material to its
business except where the loss or termination of such rights and franchises is
not likely to have a Material Adverse Effect.
8.02 Corporate Powers; Conduct of Business. The Borrower shall qualify
and remain qualified to do business in each jurisdiction in which the nature of
its business requires it to be so qualified except in such jurisdictions where
the failure so to qualify would not cause or be likely to cause a Material
Adverse Effect.
8.03 Compliance with Laws, etc. The Borrower shall (a) comply with all
Requirements of Law and all restrictive covenants affecting the Borrower or the
business, Property, assets or operations of the Borrower, and (b) obtain as
needed all Permits necessary for its operations and maintain such Permits in
good standing, except in the case where noncompliance with either clause (a) or
(b) above is not reasonably likely to have a Material Adverse Effect.
8.04 Payment of Taxes and Claims; Tax Consolidation. The Borrower shall
pay (a) all taxes, assessments and other governmental charges imposed upon it or
on any of its Property or assets or in respect of any of its franchises,
business, income or Property before any penalty accrues thereon, and (b) all
claims (including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien (other than a Lien permitted by Section 9.03) upon any of the
Borrower's Property or assets, prior to the time when any penalty or fine shall
be incurred with respect thereto; provided, however, that no such taxes,
assessments and governmental charges referred to in clause (a) above or claims
referred to in clause (b) above need be paid if being contested in good faith by
appropriate proceedings diligently instituted and conducted and if such reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor. The Borrower will not file or consent to the
filing of any consolidated income tax return with any Person (except as required
by law and other than Foamex International).
8.05 Insurance. The Borrower shall maintain for itself, in full force
and effect the insurance policies and programs listed on Schedule 6.01-X or
substantially similar policies and programs or other policies and programs as
are reasonably acceptable to the Administrative Agents. All such policies and
programs shall be maintained with insurers reasonably acceptable to the
Administrative Agents. Each certificate and policy relating to coverages (other
than Property in which the Collateral Agent does not have an insurable interest)
shall contain an endorsement naming the Collateral Agent as an additional
insured or loss payee, as applicable, under such policy. Such endorsement or an
independent instrument furnished to the Collateral Agent shall provide that the
insurance companies will give the Collateral Agent at least thirty (30) days'
written notice before any such policy or policies of insurance shall be canceled
or
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altered adversely to the interests of the Administrative Agents, the Issuing
Banks and the Lenders or canceled and that no act, whether willful or negligent,
or default of the Borrower or any other Person shall affect the right of the
Collateral Agent to recover under such policy or policies of insurance in case
of loss or damage. In the event the Borrower at any time or times hereafter
shall fail to obtain or maintain any of the policies or insurance required
herein or to pay any premium in whole or in part relating thereto, then the
Collateral Agent, without waiving or releasing any obligations or resulting
Event of Default hereunder, may at any time or times thereafter (but shall be
under no obligation to do so) obtain and maintain such policies of insurance and
pay such premiums and take any other action with respect thereto which the
Collateral Agent deems advisable. All sums so disbursed by the Collateral Agent
shall constitute Protective Advances hereunder and be part of the Obligations,
payable as provided in this Agreement.
8.06 Inspection of Property. The Borrower shall permit any authorized
representative(s) designated by either Administrative Agent or by any Lender to
visit and inspect any of the Properties of the Borrower, to examine, audit,
check and make copies of their respective financial and accounting records,
books, journals, orders, receipts and any correspondence and other data relating
to their respective businesses or the transactions contemplated hereby and by
the Transaction Documents (including, without limitation, in connection with
environmental compliance, hazard or liability), and to discuss their affairs,
finances and accounts with their officers and independent certified public
accountants, all upon reasonable notice and at such reasonable times during
normal business hours, as often as may be reasonably requested. Each such
visitation and inspection (i) by or on behalf of any Lender shall be at such
Lender's expense and (ii) by or on behalf of either Administrative Agent shall
be at the Borrower's expense.
8.07 Books and Records; Discussions. The Borrower shall keep and
maintain in all material respects proper books of record and account in which
entries in conformity with GAAP shall be made of all dealings and transactions
in relation to their respective businesses and activities, including, without
limitation, transactions and other dealings with respect to the Collateral.
8.08 Insurance and Condemnation Proceeds. The Borrower hereby directs
all insurers under policies insuring any loss of Collateral and payors of any
condemnation claim or award relating to the Collateral to pay all proceeds
relating to Collateral and payable under such policies or with respect to such
claim or award directly to the Collateral Agent, for the benefit of the
Administrative Agents, the Issuing Banks and the Lenders, and in no case to the
Borrower. The Collateral Agent shall, upon receipt of such proceeds, apply the
same to either the repair or replacement of such Collateral or the repayment of
Loans in accordance with Section 3.01(b).
8.09 ERISA Compliance. The Borrower shall, and shall cause each of its
ERISA Affiliates to, establish, maintain and operate all Plans to comply in all
material respects with the provisions of ERISA, the Internal Revenue Code, all
other applicable laws, and the regulations
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and interpretations thereunder and the respective requirements of the governing
documents for such Plans.
8.10 Maintenance of Property. The Borrower shall maintain in all
material respects all of the owned and leased Property of the Borrower used and
necessary in the business of the Borrower in adequate, working condition and
repair, ordinary wear and tear excepted, and not permit, commit or suffer any
waste or abandonment of any such Property and from time to time shall make or
cause to be made all material repairs, renewal and replacements thereof,
including, without limitation, any capital improvements which may be required;
provided, however, that such Property may be altered or renovated in the
ordinary course of business and disposed of in accordance with the provisions in
Section 9.02.
8.11 Condemnation. Immediately upon learning of the institution of any
proceeding for the condemnation or other taking of any of the owned or leased
real property of the Borrower, the Borrower shall notify the Administrative
Agents of the pendency of such proceeding, and permit the Administrative Agents
to participate in any such proceeding, and from time to time will deliver to the
Administrative Agents all instruments reasonably requested by the Administrative
Agents to permit such participation.
8.12 Environmental Matters. The Borrower shall (i) maintain an
environmental health and safety plan for all manufacturing facilities which, at
a minimum, addresses measures for response to catastrophic releases of
Contaminants into the environment or workplace, a copy of which plan shall be
delivered to the Administrative Agents; and (ii) maintain a health and safety
management system, which includes a corporate environmental health and safety
management structure, environmental health and safety personnel at each
facility, and a periodic facility audit program directed by the corporate
environmental health and safety management unit.
8.13 Future Mortgages. The Borrower shall, prior to the acquisition of
any fee interest or material leasehold interest in real property, notify the
Collateral Agent and provide the Collateral Agent with the opportunity
reasonably to request a Mortgage with respect to such interest upon its
acquisition, which Mortgage shall be substantially in the form of the Mortgages
delivered on the Effective Date.
The Borrower shall, with respect to any leasehold Mortgage, exercise
good-xxxxx xxxx fide efforts to obtain consent to such leasehold Mortgage,
provided, however, such entity shall not be required (i) to make any payments to
the landlord or to incur any additional costs (other than reasonable customary
costs) or (ii) to make any changes adverse to such entity with respect to such
lease and provided, further, that the failure to obtain such consent and
therefore the failure to provide such leasehold Mortgage shall not be a default
hereunder.
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ARTICLE IX
NEGATIVE COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until all of the Obligations (other than indemnities
not yet due) are paid in full (or, in the case of contingent Obligations (other
than indemnities not yet due), Cash Collateral has been deposited in the Cash
Collateral Account in the full amount of such Obligations on terms satisfactory
to the Lenders), unless the Requisite Lenders shall otherwise give prior written
consent thereto:
9.01 Indebtedness. The Borrower shall not directly or indirectly
create, incur, assume or otherwise become or remain directly or indirectly
liable with respect to any Indebtedness, except:
(i) the Obligations;
(ii) to the extent otherwise permitted to be made pursuant to
this Agreement, the Transaction Costs in an amount not to exceed
$1,500,000 in the aggregate;
(iii) the Permitted Existing Indebtedness;
(iv) to the extent permitted by Article X and in any event in
an aggregate amount not to exceed $1,000,000 at any time in respect of
Capital Leases and purchase money Indebtedness incurred to finance the
acquisition of fixed assets, and Indebtedness incurred to refinance
such Capital Leases and purchase money Indebtedness;
(v) Indebtedness constituting Accommodation Obligations
permitted by Section 9.05;
(vi) Indebtedness in respect of Hedging Obligations (including
any amendments, supplements or modifications thereto) so long as the
Indebtedness thereunder receives "hedge accounting" treatment in
accordance with regulations promulgated by the Securities and Exchange
Commission and staff interpretations thereof and such Hedging
Obligations were not entered into for speculative purposes; and
(vii) the New GFI Note in a principal amount not to exceed
$70,200,000.
9.02 Sales of Assets. The Borrower shall not sell, assign, transfer,
lease, convey or otherwise dispose of any Property, whether now owned or
hereafter acquired, or any income or profits therefrom, or enter into any
agreement to do so, except (i)(x) sales of inventory, or (y) the licensing of
intellectual property, or (z) the sale of services, in each case, in the
ordinary course of business, (ii) sales of assets outside the ordinary course of
business not in excess of $500,000 in a single transaction or series of related
transactions not in excess of $1,000,000 in the
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aggregate in any Fiscal Year; provided, that (A) no sales or other dispositions
(other than sales of obsolete or used Equipment) shall be permitted if they are
to be made for less than 90% of net book value of such properties or assets and
(B) any Net Cash Proceeds of Sale in respect of such sales or other dispositions
shall be remitted to the Funding Agent and applied to the repayment of the Loans
in accordance with Section 3.01(b) and (iii) the lease or sublease by the
Borrower of its Philadelphia, Pennsylvania facility.
9.03 Liens. The Borrower shall not directly or indirectly create,
incur, assume or permit to exist any Lien on or with respect to any of their
respective Property or assets except:
(i) Liens created by the Loan Documents;
(ii) Permitted Existing Liens;
(iii) Customary Permitted Liens;
(iv) purchase money Liens (including the interest of a lessor
under a Capital Lease and Liens to which any Property is subject at the
time of the Borrower's purchase thereof) securing Indebtedness of the
Borrower permitted under Section 9.01(iv); and
(v) Liens securing the New GFI Note.
9.04 Investments. The Borrower shall not directly or indirectly make or
own any Investment except:
(i) Permitted Existing Investments in an amount not greater
than the amount thereof on the Effective Date;
(ii) Investments in Cash Equivalents;
(iii) Investments received in connection with the bankruptcy
or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(iv) Investments in Hedging Obligations permitted under
Section 9.01(vi); and
(v) Xxxxx Letter of Credit Escrow Arrangements.
9.05 Accommodation Obligations. The Borrower shall not directly or
indirectly create or become or be liable with respect to any Accommodation
Obligation, except Permitted Existing Accommodation Obligations.
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9.06 Restricted Junior Payments. The Borrower shall not declare or make
any Restricted Junior Payment except so long as no Event of Default or Potential
Event of Default has occurred and is continuing (or would result therefrom),
distributions to Foamex International in respect of the Borrower's obligations
under the Tax Sharing Agreement to which it is a party to the extent the
proceeds of such distributions shall be used to pay an actual tax liability of
the Borrower or its beneficial owners; provided, however, if a payment otherwise
required by the Tax Sharing Agreement is reduced because the distribution would
not be used to pay an actual tax liability, the obligation of the Borrower to
make such payment shall not be discharged but shall be suspended and made upon
termination of this Agreement or subject to the terms of any refinancing of the
Obligations.
9.07 Conduct of Business. The Borrower shall not engage in any business
other than a Permitted Business.
9.08 Transactions with Shareholders and Affiliates. The Borrower shall
not directly or indirectly enter into any transaction (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service), with any holder or holders of more than five percent
(5%) of any class of Equity Interests in Foamex International or TIHI or any of
their respective Subsidiaries. Nothing contained in this Section 9.08 shall
prohibit (i) any transaction expressly permitted by Section 9.04(i), Section
9.05 and Section 9.06; (ii) increases in compensation and benefits for officers
and employees of the Borrower or any of the Borrower's predecessors in interest
which are customary in the industry or consistent with the past business
practice of the Borrower or consistent with market conditions; (iii) payment of
customary directors' fees and indemnities; (iv) performance of any obligations
arising under the Transaction Documents; (v) transactions listed on Schedule
6.01-Y and (vi) sales and purchases of Inventory between and among the Borrower
on the one hand and Foamex L.P. and its Subsidiaries, TIHI and its Subsidiaries
and any joint ventures involving the participation of any of the aforementioned
parties on the other hand, in each case on an arms length basis in the ordinary
cause of business.
9.09 Restriction on Fundamental Changes. The Borrower shall not enter
into any merger or consolidation, or liquidate, wind-up or dissolve (or suffer
any liquidation or dissolution), or convey, lease, sell, transfer or otherwise
dispose of, in one transaction or series of transactions, all or substantially
all of the Borrower's business or Property, whether now or hereafter acquired,
except transactions permitted under Section 9.02 or transactions contemplated by
the Transaction Documents.
9.10 Sales and Leasebacks. The Borrower shall not become liable,
directly, by assumption or by Accommodation Obligation, with respect to any
lease, whether an Operating Lease or a Capital Lease, of any Property (whether
real or personal or mixed) (i) which it sold or transferred or is to sell or
transfer to any other Person or (ii) which it intends to use for substantially
the same purposes as any other Property which has been or is to be sold or
transferred by it to any other Person in connection with such lease.
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9.11 Margin Regulations; Securities Laws. The Borrower shall not use
all or any portion of the proceeds of any credit extended under this Agreement
to purchase or carry Margin Stock.
9.12 ERISA. The Borrower shall not:
(i) engage, or permit any of its ERISA Affiliates to engage,
in any prohibited transaction described in Sections 406 of ERISA or
4975 of the Internal Revenue Code for which a statutory or class
exemption is not available or a private exemption has not been
previously obtained from the DOL;
(ii) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Internal Revenue Code),
with respect to any Benefit Plan, whether or not waived;
(iii) terminate, or permit any ERISA Affiliate to terminate,
any Benefit Plan which would result in any liability of the Borrower or
any ERISA Affiliate under Title IV of ERISA;
(iv) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto;
(v) fail, or permit any ERISA Affiliate to fail, to pay any
required installment or any other payment required under Section 412 of
the Internal Revenue Code on or before the due date for such
installment or other payment; or
(vi) amend, or permit any ERISA Affiliate to amend, a Benefit
Plan resulting in an increase in current liability for the plan year
such that the Borrower or any ERISA Affiliate is required to provide
security to such Plan under Section 401(a)(29) of the Internal Revenue
Code.
9.13 Issuance of Equity Interests. The Borrower shall not issue any
Equity Interests except to the existing holders of its Equity Interests.
9.14 Constituent Documents. The Borrower shall not amend, modify or
otherwise change any of the terms or provisions in any of its Constituent
Documents as in effect on the Effective Date except for such amendments or
modifications deemed immaterial by the Administrative Agents.
9.15 Cancellation of Debt; Prepayment. The Borrower shall not cancel
any material claim or debt, except in the ordinary course of its business, or
prepay, redeem, purchase, repurchase or retire any long-term Indebtedness, other
than (i) Indebtedness in respect of the
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Obligations and (ii) repayments of the New GFI Note and Indebtedness permitted
to be incurred pursuant to Section 9.01 (iii) and (iv).
9.16 Fiscal Year. The Borrower shall not change its Fiscal Year for
accounting or tax purposes from a period consisting of the 12 month period
ending on Sunday nearest December 31 in each calendar year.
9.17 Transaction Documents. The Borrower shall not amend, supplement or
otherwise modify the Transaction Documents or cause the Transaction Documents to
be amended, supplemented or otherwise modified without the prior written consent
of the Requisite Lenders except for such amendments, supplements or
modifications deemed immaterial by the Administrative Agents.
9.18 Environmental Matters. The Borrower shall not:
(i) become subject to any Liabilities and Costs which would
have a Material Adverse Effect arising out of or related to (a) the
Release or threatened Release at any location of any Contaminant into
the environment, or any Remedial Action in response thereto, or (b) any
violation of any environmental, health and safety Requirements of Law;
or
(ii) either directly or indirectly, create, incur, assume or
permit to exist any Environmental Lien on or with respect to any of its
Property.
ARTICLE X
FINANCIAL COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until all of the Obligations are paid in full (or, in
the case of contingent Obligations (other than indemnities not yet due), Cash
Collateral has been deposited in the Cash Collateral Account in the full amount
of such Obligations on terms satisfactory to the Lenders), unless the Requisite
Lenders shall otherwise give prior written consent thereto:
10.01 Minimum Net Worth. The Net Worth of the Borrower at all times
during any period from the last day of the fiscal quarter in each Fiscal Year of
the Borrower set forth below to the next to last day of the next succeeding
fiscal quarter shall not be less than the minimum amount set forth opposite the
first such fiscal quarter:
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||
Fiscal Quarter Minimum Net Worth
-------------- -----------------
(in millions)
First fiscal quarter of 1998 ($8.00)
Second fiscal quarter of 1998 ($5.50)
Third fiscal quarter of 1998 ($3.00)
Fourth fiscal quarter of 1998 ($0.50)
First fiscal quarter of 1999 $2.00
Second fiscal quarter of 1999 $4.00
Third fiscal quarter of 1999 $6.00
Fourth fiscal quarter of 1999 $10.00
First fiscal quarter of 2000 $11.00
Second fiscal quarter of 2000 $12.00
Third fiscal quarter of 2000 $13.00
Fourth fiscal quarter of 2000 $15.00
First fiscal quarter of 2001 $17.00
Second fiscal quarter of 2001 $19.00
Third fiscal quarter of 2001 $21.00
Fourth fiscal quarter of 2001 $25.00
First fiscal quarter of 2002 $26.00
Second fiscal quarter of 2002 $27.00
Third fiscal quarter of 2002 $28.00
Fourth fiscal quarter of 2002 $30.00
First fiscal quarter of 2003 $32.00
Second fiscal quarter of 2003 $34.00
Third fiscal quarter of 2003 $36.00
Fourth fiscal quarter of 2003 $40.00
First fiscal quarter of 2004 and $42.00
thereafter
||
10.02 Minimum Interest Coverage Ratio. The Interest Coverage Ratio of
the Borrower as determined as of the last day of each fiscal quarter of the
Borrower set forth below for the four
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fiscal quarter period ending on such date, shall not be less than the minimum
ratio set forth opposite such fiscal quarter:
||
Fiscal Quarter Minimum Ratio
-------------- -------------
Fourth fiscal quarter of 1998 2.50 to 1.00
First fiscal quarter of 1999 2.50 to 1.00
Second fiscal quarter of 1999 2.50 to 1.00
Third fiscal quarter of 1999 2.50 to 1.00
Fourth fiscal quarter of 1999 3.00 to 1.00
First fiscal quarter of 2000 3.00 to 1.00
Second fiscal quarter of 2000 3.00 to 1.00
Third fiscal quarter of 2000 3.00 to 1.00
Fourth fiscal quarter of 2000 3.50 to 1.00
First fiscal quarter of 2001 3.50 to 1.00
Second fiscal quarter of 2001 3.50 to 1.00
Third fiscal quarter of 2001 3.50 to 1.00
Fourth fiscal quarter of 2001 3.50 to 1.00
First fiscal quarter of 2002 3.50 to 1.00
Second fiscal quarter of 2002 3.50 to 1.00
Third fiscal quarter of 2002 3.50 to 1.00
Fourth fiscal quarter of 2002 3.50 to 1.00
First fiscal quarter of 2003 3.50 to 1.00
Second fiscal quarter of 2003 3.50 to 1.00
Third fiscal quarter of 2003 3.50 to 1.00
Fourth fiscal quarter of 2003 3.50 to 1.00
First fiscal quarter of 2004 and 3.50 to 1.00
thereafter
||
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10.03 Minimum Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio of the Borrower, as determined as of the last day of each fiscal quarter
of the Borrower set forth below for the four fiscal quarter period ending on
such date, shall not be less than the minimum ratio set forth opposite such
fiscal quarter:
||
Fiscal Quarter Minimum Ratio
-------------- -------------
Fourth fiscal quarter of 1998 1.10 to 1.00
First fiscal quarter of 1999 1.10 to 1.00
Second fiscal quarter of 1999 1.10 to 1.00
Third fiscal quarter of 1999 1.10 to 1.00
Fourth fiscal quarter of 1999 1.10 to 1.00
First fiscal quarter of 2000 1.10 to 1.00
Second fiscal quarter of 2000 1.10 to 1.00
Third fiscal quarter of 2000 1.10 to 1.00
Fourth fiscal quarter of 2000 1.10 to 1.00
First fiscal quarter of 2001 1.00 to 1.00
Second fiscal quarter of 2001 1.00 to 1.00
Third fiscal quarter of 2001 1.00 to 1.00
Fourth fiscal quarter of 2001 1.00 to 1.00
First fiscal quarter of 2002 1.00 to 1.00
Second fiscal quarter of 2002 1.00 to 1.00
Third fiscal quarter of 2002 1.00 to 1.00
Fourth fiscal quarter of 2002 1.00 to 1.00
First fiscal quarter of 2003 1.00 to 1.00
Second fiscal quarter of 2003 1.00 to 1.00
Third fiscal quarter of 2003 1.00 to 1.00
Fourth fiscal quarter of 2003 1.00 to 1.00
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Fiscal Quarter Minimum Ratio
-------------- -------------
First fiscal quarter of 2004 and 1.00 to 1.00
thereafter
||
10.04 EBDAIT; and Maximum Leverage Ratio. (a) The EBDAIT of the
Borrower at all times during the applicable periods set forth below, commencing
on the first day of the first fiscal quarter of such period and ending on the
last day of the last fiscal quarter of such applicable period, shall not be less
than the minimum amount set forth opposite the applicable period.
EBDAIT
Period (in millions)
------ -------------
Fiscal quarter ended March 1998 $1.5
Two fiscal quarters ended June 1998 $5.5
Three fiscal quarters ended September 1998 $10.0
Four fiscal quarters ended December 1998 $16.0
||
(b) The Total Net Debt to EBDAIT Ratio of the Borrower, as determined
as of the last day of each fiscal quarter of the Borrower set forth below for
the four fiscal quarter period ending on such date, shall not exceed the maximum
ratio set forth below:
Fiscal Quarter Minimum Ratio
-------------- -------------
Fourth fiscal quarter of 1998 3.50 to 1.00
First fiscal quarter of 1999 3.50 to 1.00
Second fiscal quarter of 1999 3.50 to 1.00
Third fiscal quarter of 1999 3.50 to 1.00
Fourth fiscal quarter of 1999 2.75 to 1.00
First fiscal quarter of 2000 2.75 to 1.00
Second fiscal quarter of 2000 2.75 to 1.00
Third fiscal quarter of 2000 2.75 to 1.00
Fourth fiscal quarter of 2000 2.25 to 1.00
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Fiscal Quarter Minimum Ratio
-------------- -------------
First fiscal quarter of 2001 2.25 to 1.00
Second fiscal quarter of 2001 2.25 to 1.00
Third fiscal quarter of 2001 2.25 to 1.00
Fourth fiscal quarter of 2001 2.25 to 1.00
First fiscal quarter of 2002 2.25 to 1.00
Second fiscal quarter of 2002 2.25 to 1.00
Third fiscal quarter of 2002 2.25 to 1.00
Fourth fiscal quarter of 2002 2.25 to 1.00
First fiscal quarter of 2003 2.25 to 1.00
Second fiscal quarter of 2003 2.25 to 1.00
Third fiscal quarter of 2003 2.25 to 1.00
Fourth fiscal quarter of 2003 2.25 to 1.00
First fiscal quarter of 2004 and 2.25 to 1.00
thereafter
||
10.05 Capital Expenditures. Capital Expenditures made or incurred by
the Borrower during each Fiscal Year set forth below shall not exceed in the
aggregate the amount set forth opposite such Fiscal Year:
Fiscal Year Maximum Amount
----------- --------------
1998 $3,000,000
1999 $3,000,000
2000 $3,000,000
2001 $3,000,000
2002 $3,000,000
2003 $3,000,000
2004 and thereafter $3,000,000
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ARTICLE XI
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.01 Events of Default. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. The Borrower shall fail
to pay when due any of the Obligations and if such non-payment relates
to interest on the Loans or fees, such non-payment continues for a
period of more than five (5) days.
(b) Breach of Certain Covenants. The Borrower shall fail duly
and punctually to perform or observe any agreement, covenant or
obligation binding on such Person under Sections 3.05, 3.06, 7.09,
8.01, 8.02 and 8.06, Article IX or Article X.
(c) Breach of Representation or Warranty. Any representation
or warranty made or deemed made by the Borrower to either
Administrative Agent, any Lender or any Issuing Bank herein or by the
Borrower in any of the other Loan Documents or in any statement or
certificate at any time given by any such Person pursuant to any of the
Loan Documents shall be false or misleading in any material respect on
the date as of which made (or deemed made).
(d) Other Defaults. The Borrower shall default in the
performance of or compliance with any term contained in this Agreement
(other than as covered by clause (a), (b) or (c) of this Section
11.01); except as set forth in Section 11.01(o), any default or event
of default shall occur under any of the other Transaction Documents,
and such default or event of default shall continue for thirty (30)
days after the occurrence thereof.
(e) Default as to Other Indebtedness. The Borrower shall fail
to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) with respect to any
other Indebtedness (other than an Obligation) in excess of $1,000,000
(excluding the New GFI Note); or any breach, default or event of
default shall occur, or any other condition shall exist under any
instrument, agreement or indenture pertaining to any such Indebtedness,
if the effect thereof is to cause an acceleration, mandatory redemption
or other required repurchase of such Indebtedness, or during the
continuance of such breach, default or event of default, permit the
holder(s) of such Indebtedness to accelerate the maturity of any such
Indebtedness or require a redemption or other repurchase of such
Indebtedness; or any such Indebtedness shall be otherwise declared to
be due and payable (by acceleration or otherwise) or required to be
prepaid, redeemed or otherwise repurchased by the Borrower (other than
by a regularly scheduled required prepayment) prior to the stated
maturity thereof; in each case such accelerated, repurchased or other
Indebtedness to exceed, in the aggregate, $1,000,000.
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(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i)
An involuntary case shall be commenced against any Loan Party, TFLLC or
Foamex and the petition shall not be dismissed, stayed, bonded or
discharged within forty-five (45) days after commencement of the case;
or a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of any such Person in an involuntary case,
under any applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect; or any other similar relief shall be granted
under any applicable federal, state, local or foreign law; or the board
of directors (or other governing body) of any such Person (or any
committee thereof) adopts any resolution or otherwise authorizes any
action to approve any of the foregoing.
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over any Loan
Party, TFLLC or Foamex or over all or a substantial part of the
Property of any such Person shall be entered; or an interim receiver,
trustee or other custodian of any such Person or of all or a
substantial part of the Property of any Loan Party shall be appointed
or a warrant of attachment, execution or similar process against any
substantial part of the Property of any such Person shall be issued and
any such event shall not be stayed, dismissed, bonded or discharged
within forty-five (45) days after entry, appointment or issuance; or
the board of directors of any such Person (or any committee thereof)
adopts any resolution or otherwise authorizes any action to approve any
of the foregoing.
(g) Voluntary Bankruptcy; Appointment of Receiver, etc. Any
Loan Party, TFLLC or Foamex shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment
of or taking possession by a receiver, trustee or other custodian for
all or a substantial part of its Property; or any such Person shall
make any assignment for the benefit of creditors or shall be unable or
fail, or admit in writing its inability, to pay its debts as such debts
become due.
(h) Judgments and Attachments. Any money judgment (other than
a money judgment covered by insurance as to which the insurance company
has acknowledged coverage), writ or warrant of attachment, or similar
process against any Loan Party or any of their respective assets
involving in any case an amount in excess of $1,000,000 is entered and
shall remain undischarged, unvacated, unbonded or unstayed for a period
of sixty (60) days or in any event later than five (5) days prior to
the date of any proposed sale thereunder.
(i) Loan Documents; Failure of Security. At any time, for any
reason, (i) any Loan Document ceases to be in full force and effect or
any Loan Party seeks to repudiate
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its obligations thereunder and the Liens intended to be created thereby
are, or any Loan Party seeks to render such Liens, invalid and
unperfected, or (ii) Liens in favor of the Administrative Agents, the
Collateral Agent, the Issuing Banks and/or the Lenders contemplated by
the Loan Documents shall, at any time, for any reason, be invalidated
or otherwise cease to be in full force and effect, or such Liens shall
be subordinated or shall not have the priority contemplated by this
Agreement, the Loan Documents or the other Transaction Documents.
(j) Termination Event. Any Termination Event occurs which
could reasonably subject the Borrower or any ERISA Affiliate to
liability in excess of $1,000,000.
(k) Waiver Application. The plan administrator of any Benefit
Plan for which the Borrower or an ERISA Affiliate is an "employer" as
defined in Section 3(5) of ERISA applies under Section 412(d) of the
Internal Revenue Code for a waiver of the minimum funding standards of
Section 412(a) of the Internal Revenue Code and the substantial
business hardship upon which the application for the waiver is based
could reasonably subject the Borrower or any ERISA Affiliate to
liability in excess of $1,000,000.
(l) Change of Control. Any Change of Control occurs.
(m) Material Adverse Change. An event shall exist or occur
which would materially and adversely impair (i) the ability of any
Credit Party to perform its obligations under the Loan Documents or
(ii) the ability of the Lenders, the Issuing Banks or the Collateral
Agent to enforce the Loan Documents.
(n) Liens on Equity Interests. Any Lien shall be granted in
favor of any Person on the Equity Interests of the Borrower other than
any such Lien granted pursuant to a Transaction Document.
(o) Default under Certain Transaction Documents. Any "event of
default" (as defined therein) shall have occurred and be continuing
under any of the Supply Agreement, the Lease Agreement (other than an
"event of default" arising out of any act or omission of the
"Landlord"), the New GFI Note or the FII Guaranty.
An Event of Default shall be deemed "continuing" until cured or waived
in writing in accordance with Section 13.07.
11.02 Rights and Remedies.
(a) Acceleration and Termination. Upon the occurrence of any Event of
Default described in Section 11.01(f) or 11.01(g), the Commitments shall
automatically and immediately terminate and the unpaid principal amount of, and
any and all accrued interest on, the Obligations and all accrued fees shall
automatically become immediately due and payable, without
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presentment, demand, or protest or other requirements of any kind (including,
without limitation, valuation and appraisement, diligence, presentment, notice
of intent to demand or accelerate and of acceleration), all of which are hereby
expressly waived by the Borrower; and upon the occurrence and during the
continuance of any other Event of Default, the Collateral Agent shall at the
request, or may with the consent, of the Requisite Lenders, by written notice to
the Borrower, (A) declare that the Commitments are terminated, whereupon the
Commitments and the obligation of each Lender to make any Loan hereunder and of
each Lender or Issuing Bank to issue or participate in any Letter of Credit not
then issued shall immediately terminate, and/or (B) declare the unpaid principal
amount of and any and all accrued and unpaid interest on the Obligations to be,
and the same shall thereupon be, immediately due and payable, without
presentment, demand, or protest or other requirements of any kind (including,
without limitation, valuation and appraisement, diligence, presentment, notice
of intent to demand or accelerate and of acceleration), all of which are hereby
expressly waived by the Borrower.
(b) Deposit for Letters of Credit. In addition, after the occurrence
and during the continuance of an Event of Default, the Borrower shall, promptly
upon demand by the Collateral Agent, deliver to the Collateral Agent, Cash
Collateral in such form as requested by the Collateral Agent for deposit into
the Cash Collateral Account, together with such endorsements, and execution and
delivery of such documents and instruments as the Collateral Agent may request
in order to perfect or protect the Collateral Agent's Lien with respect thereto,
in an aggregate principal amount equal to the then outstanding Letter of Credit
Obligations.
(c) Rescission. If at any time after termination of the Commitments
and/or acceleration of the maturity of the Loans, the Borrower shall pay all
arrears of interest and all payments on account of principal of the Loans and
Reimbursement Obligations which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Events of
Default and Potential Events of Default (other than nonpayment of principal of
and accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 13.07, then upon
the written consent of the Requisite Lenders and written notice to the Borrower,
the termination of the Commitments and/or the acceleration and their
consequences may be rescinded and annulled; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right or
remedy consequent thereon. The provisions of the preceding sentence are intended
merely to bind the Lenders and the Issuing Banks to a decision which may be made
at the election of the Requisite Lenders; they are not intended to benefit the
Borrower and do not give the Borrower the right to require the Lenders to
rescind or annul any acceleration hereunder, even if the conditions set forth
herein are met.
(d) Enforcement. The Borrower acknowledges that in the event the
Borrower fails to perform, observe or discharge any of its respective
obligations or liabilities under this Agreement or any other Loan Document, any
remedy of law may prove to be inadequate relief to the Administrative Agents,
the Issuing Banks and the Lenders; therefore, the Borrower agrees that
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the Administrative Agents, the Issuing Banks and the Lenders shall be entitled
to temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
11.03 The Cash Collateral Account. (a) If requested by the Borrower and
subject to the right of the Collateral Agent to withdraw funds from the Cash
Collateral Account as provided below, the Collateral Agent shall, so long as no
Event of Default shall have occurred and be continuing, from time to time invest
funds on deposit in the Cash Collateral Account and accrued interest thereon,
reinvest proceeds of any such investments which may mature or be sold, and
invest interest or other income received from any such Investments, in each case
in such Cash Equivalents as the Borrower may select. After an Event of Default,
the Collateral Agent shall invest any funds held in the Cash Collateral Account
which are not applied to the payment of the Obligations in overnight Cash
Equivalents. Such funds, interest, proceeds or income which are not so invested
or reinvested in Cash Equivalents shall, except as otherwise provided in this
Section 11.03, be deposited and held by the Collateral Agent in the Cash
Collateral Account. None of either Administrative Agent, any Lender or any
Issuing Bank shall be liable to the Borrower for, or with respect to, any
decline in value of amounts on deposit in the Cash Collateral Account which
shall have been invested pursuant to this Section 11.03(a) at the direction of
the Borrower. Cash Equivalents from time to time purchased and held pursuant to
this Section 11.03(a) shall constitute Cash Collateral and shall, for purposes
of this Agreement, be deemed to be part of the funds held in the Cash Collateral
Account in amounts equal to their respective outstanding principal amounts.
Notwithstanding the foregoing, prior to the occurrence of an Event of Default,
the Collateral Agent shall be authorized to release amounts deposited in the
Cash Collateral Account pursuant to Section 3.01(b) to the Borrower upon its
request therefor and the Borrower's representation to the Collateral Agent that
it would meet the conditions set forth in Section 5.02 with respect to the
making of a new Revolving Loan.
(b) The Collateral Agent may, at any time after an Event of Default has
occurred and is continuing, sell or cause to be sold any Cash Equivalents held
by the Collateral Agent as Cash Collateral at any broker's board or at public or
private sale, in one or more sales or lots, at such price as the Collateral
Agent may deem best, without assumption of any credit risk, and the purchaser of
any or all such Cash Equivalents so sold shall thereafter own the same,
absolutely free from any claim, encumbrance or right of any kind whatsoever.
Either Administrative Agent, any of the Lenders and any of the Issuing Banks
may, in its own name or in the name of a designee or nominee, buy such Cash
Equivalents at any public sale and, if permitted by applicable law, buy such
Cash Equivalents at any private sale. The Collateral Agent shall apply the
proceeds of any such sale, net of any expenses incurred in connection therewith,
and any other funds deposited in the Cash Collateral Account to the payment of
the Obligations in accordance with this Agreement. The Borrower agrees that (i)
any sale of Cash Equivalents conducted in conformity with reasonable commercial
practices of banks, commercial finance companies, insurance companies or other
financial institutions disposing of property similar to such Cash Equivalents
shall be deemed to be commercially reasonable and (ii) any requirements of
reasonable notice shall be met if such notice is received by the Borrower at its
notice address on the signature pages hereto at least ten (10) Business Days
before the time of the sale or
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disposition. Any other requirement of notice, demand or advertisement for sale
is waived to the extent permitted by law. The Collateral Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(c) If at any time the Collateral Agent determines that any funds held
in the Cash Collateral Account are subject to any interest, right, claim or Lien
of any Person other than the Collateral Agent, the Borrower will, forthwith upon
demand by the Collateral Agent, pay to the Collateral Agent, as additional funds
to be deposited and held in the Cash Collateral Account an amount equal to the
amount of funds subject to such interest, right, claim or Lien.
(d) The Collateral Agent shall exercise reasonable care in the custody
and preservation of any funds held in the Cash Collateral Account and shall be
deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Collateral Agent accords its own like
property, it being understood that the Collateral Agent shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any such funds but may do so at its option. All expenses
incurred in connection therewith shall be for the sole account of the Borrower
and shall constitute Obligations hereunder.
ARTICLE XII
THE CREDIT AGENTS
12.01 Appointment. (a) Each Lender and each Issuing Bank hereby
designates and appoints Citicorp as the Collateral Agent and the Intercreditor
Agent, and as an Administrative Agent and Scotiabank as the Funding Agent, and
as an Administrative Agent of such Lender or such Issuing Bank under this
Agreement, and each Lender and each Issuing Bank hereby irrevocably authorizes
the Credit Agents to take such action on its behalf under the provisions of this
Agreement and the Loan Documents and to exercise such powers as are set forth
herein or therein together with such other powers as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of the Notes or any
amount payable under any provision of Article III when due) or the other Loan
Documents, no Credit Agent shall be required to exercise any discretion or take
any action. Notwithstanding the foregoing, the Credit Agents shall be required
to act or refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Requisite Lenders and such
instructions shall be binding upon all Lenders, Issuing Banks and Holders of
Notes; provided, however, no Credit Agent shall be required to take any action
which (i) such Credit Agent reasonably believes will expose it to personal
liability unless such Credit Agent receives an indemnification satisfactory to
it from the Lenders with respect to such action or (ii) is contrary to this
Agreement, the other Loan Documents or applicable law. The Credit Agents agree
to act as such on the express conditions contained in this Article XII.
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(b) The provisions of this Article XII are solely for the benefit of
the Credit Agents, the Lenders and Issuing Banks, and Borrower shall not have
any rights to rely on or enforce any of the provisions hereof (other than as
expressly set forth in Section 12.07). In performing its functions and duties
under this Agreement, each Credit Agent shall act solely as agent of the Lenders
and the Issuing Banks and does not assume and shall not be deemed to have
assumed any obligation or relationship of agency, trustee or fiduciary with or
for the Borrower. Each Credit Agent may perform any of its duties hereunder, or
under the Loan Documents, by or through its agents or employees.
12.02 Nature of Duties. The Credit Agents shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of the Credit Agents shall be mechanical and
administrative in nature. The Credit Agents shall not have by reason of this
Agreement a fiduciary relationship in respect of any Holder. Nothing in this
Agreement or any of the Loan Documents, expressed or implied, is intended to or
shall be construed to impose upon the Credit Agents any obligations in respect
of this Agreement or any of the Loan Documents except as expressly set forth
herein or therein. Each Lender and each Issuing Bank shall make its own
independent investigation of the financial condition and affairs of the Borrower
in connection with the making and the continuance of the Loans hereunder and
with the issuance of the Letters of Credit and shall make its own appraisal of
the creditworthiness of the Borrower initially and on a continuing basis, and
the Credit Agents shall not have any duty or responsibility, either initially or
on a continuing basis, to provide any Holder with any credit or other
information with respect thereto (except for reports required to be delivered by
any Credit Agent under the terms of this Agreement). If any Credit Agent seeks
the consent or approval of the Lenders to the taking or refraining from taking
of any action hereunder, such Credit Agent shall send notice thereof to each
Lender. The Collateral Agent shall promptly notify each Lender at any time that
the Lenders so required hereunder have instructed any Credit Agent to act or
refrain from acting pursuant hereto.
12.03 Rights, Exculpation, etc.
(a) Liabilities; Responsibilities. None of the Credit Agents, any
Affiliate of any Credit Agent, or any of their respective officers, directors,
employees or agents shall be liable to any Holder for any action taken or
omitted by them hereunder or under any of the Loan Documents, or in connection
therewith, except that no Person shall be relieved of any liability for gross
negligence or willful misconduct as determined by a court of competent
jurisdiction. The Credit Agents shall not be liable for any apportionment or
distribution of payments made by it in good faith pursuant to Section 3.02(b),
and if any such apportionment or distribution is subsequently determined to have
been made in error the sole recourse of any Holder to whom payment was due, but
not made, shall be to recover from other Holders any payment in excess of the
amount to which they are determined to have been entitled. The Credit Agents
shall not be responsible to any Holder for any recitals, statements,
representations or warranties herein or for the execution, effectiveness,
genuineness, validity, legality, enforceability, collectibility, or sufficiency
of this Agreement or any of the other Transaction Documents or the transactions
contemplated thereby,
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or for the financial condition of the Borrower. No Credit Agent shall be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any of the Loan
Documents or the financial condition of the Borrower, or the existence or
possible existence of any Potential Event of Default or Event of Default.
(b) Right to Request Instructions. Any Credit Agent may at any time
request instructions from the Lenders with respect to any actions or approvals
which by the terms of any of the Loan Documents such Credit Agent is permitted
or required to take or to grant, and such Credit Agent shall be absolutely
entitled to refrain from taking any action or to withhold any approval and shall
not be under any liability whatsoever to any Person for refraining from any
action or withholding any approval under any of the Loan Documents until it
shall have received such instructions from those Lenders from whom such Credit
Agent is required to obtain such instructions for the pertinent matter in
accordance with the Loan Documents. Without limiting the generality of the
foregoing, no Holder shall have any right of action whatsoever against any
Credit Agent as a result of such Credit Agent acting or refraining from acting
under the Loan Documents in accordance with the instructions of the Requisite
Lenders or, where required by the express terms of this Agreement, a greater
proportion of the Lenders.
12.04 Reliance. The Credit Agents shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it.
12.05 Indemnification. To the extent that the Credit Agents are not
reimbursed and indemnified by the Borrower, the Lenders will reimburse and
indemnify the Credit Agents for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against it in any way relating to or arising out of
the Loan Documents or any action taken or omitted by the Credit Agents under the
Loan Documents, in proportion to each Lender's Pro Rata Share; provided,
however, the Lenders shall have no obligation to reimburse and indemnify the
Credit Agents hereunder with respect to matters caused by or resulting from the
willful misconduct or gross negligence of the Credit Agents, as determined by a
court of competent jurisdiction. The obligations of the Lenders under this
Section 12.05 shall survive the payment in full of the Loans, the Reimbursement
Obligations and all other Obligations and the termination of this Agreement.
12.06 Citicorp and Scotiabank Individually. With respect to its Pro
Rata Shares of the Commitments hereunder, if any, and the Loans made by it, if
any, Citicorp and Scotiabank shall have and may exercise the same rights and
powers hereunder and are subject to the same obligations and liabilities as and
to the extent set forth herein for any other Lender. The terms
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"Lenders" or "Requisite Lenders" or any similar terms shall, unless the context
clearly otherwise indicates, include each of Citicorp and Scotiabank in its
individual capacity as a Lender or one of the Requisite Lenders. Citicorp and
Scotiabank and their respective Affiliates may accept deposits from, lend money
to, and generally engage in any kind of banking, trust or other business with
the Borrower as if they were not acting as Credit Agents pursuant hereto.
12.07 Successor Administrative Agent.
(a) Resignation. The Administrative Agents may resign from the
performance of all their functions and duties hereunder at any time by giving at
least thirty (30) Business Days' prior written notice to the Borrower and the
Lenders. Such resignation shall take effect upon the acceptance by a successor
Administrative Agent of appointment pursuant to this Section 12.07.
(b) Remaining Administrative Agent. Upon any such notice of resignation
by an Administrative Agent, the remaining Administrative Agent may in its
discretion, appoint itself to the resigning Administrative Agent's functions and
duties. The remaining Administrative Agent shall give the Lenders notice at
least 15 days prior to the effectiveness of such resignation.
(c) Appointment by Requisite Lenders. Upon any such notice of
resignation and if the remaining Administrative Agent has not notified the
Lenders that it has assumed the functions and duties of the resigning
Administrative Agent, the Requisite Lenders shall have the right to appoint a
successor Administrative Agent selected from among the Lenders which appointment
shall be subject to the prior written approval of the Borrower (which may not be
unreasonably withheld, and shall not be required upon the occurrence and during
the continuance of an Event of Default).
(d) Appointment by Retiring Administrative Agent. If a successor
Administrative Agent shall not have been appointed within the thirty (30)
Business Day period provided in paragraph (a) of this Section 12.07, the
retiring Administrative Agent, with the consent of the Borrower (which may not
be unreasonably withheld, and shall not be required upon the occurrence and
during the continuance of an Event of Default), shall then appoint a successor
Administrative Agent who shall serve as Administrative Agent until such time, if
any, as the Requisite Lenders appoint a successor Administrative Agent as
provided above.
(e) Rights of the Successor and Retiring Administrative Agents. Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Administrative Agent's resignation hereunder as an
Administrative Agent, the provisions of this Article XII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Administrative Agent under this Agreement.
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12.08 Relations Among Lenders. Each Lender and each Issuing Bank agrees
that it will not take any legal action, nor institute any actions or
proceedings, against the Borrower or any other obligor hereunder or with respect
to any Collateral, without the prior written consent of the Requisite Lenders.
Without limiting the generality of the foregoing, no Lender may accelerate or
otherwise enforce its portion of the Obligations, or unilaterally terminate its
Commitments except in accordance with Section 11.02(a).
12.09 Concerning the Collateral and the Loan Documents.
(a) Protective Advances. The Collateral Agent may from time to time,
before or after the occurrence of an Event of Default, make such disbursements
and advances pursuant to the Loan Documents which the Collateral Agent, in its
sole discretion, deems necessary or desirable to preserve or protect the
Collateral or any portion thereof or to enhance the likelihood or maximize the
amount of repayment of the Loans and other Obligations; provided, however, such
disbursements and advances shall not exceed $5,000,000 in the aggregate
(collectively, "Protective Advances"). The Collateral Agent shall notify the
Borrower and each Lender in writing of each such Protective Advance, which
notice shall include a description of the purpose of such Protective Advance.
The Borrower agrees to pay the Collateral Agent, upon demand, the principal
amount of all outstanding Protective Advances, together with interest thereon at
the rate from time to time applicable to Base Rate Loans from the date of such
Protective Advance until the outstanding principal balance thereof is paid in
full. If the Borrower fails to make payment in respect of any Protective Advance
within one (1) Business Day after the date the Borrower receives written demand
therefor from the Collateral Agent, the Collateral Agent shall promptly notify
each Lender having a Commitment and each such Lender agrees that it shall
thereupon make available to the Collateral Agent, in Dollars in immediately
available funds, the amount equal to such Lender's Pro Rata Share of such
Protective Advance. If such funds are not made available to the Collateral Agent
by such Lender within one (1) Business Day after the Collateral Agent's demand
therefor, the Collateral Agent will be entitled to recover any such amount from
such Lender together with interest thereon at the Federal Funds Rate for each
day during the period commencing on the date of such demand and ending on the
date such amount is received. The failure of any Lender to make available to the
Collateral Agent its Revolving Loan Commitment Pro Rata Share of any such
Protective Advance shall neither relieve any other Lender of its obligation
hereunder to make available to the Collateral Agent such other Lender's
Revolving Loan Commitment Pro Rata Share of such Protective Advance on the date
such payment is to be made nor increase the obligation of any other Lender to
make such payment to the Collateral Agent. All outstanding principal of, and
interest on, Protective Advances shall constitute obligations secured by the
Collateral until paid in full by the Borrower. Notwithstanding the foregoing, no
Lender shall be required to fund any Protective Advance in an amount exceeding
such Lender's then remaining Commitment.
(b) Authority. Each Lender and each Issuing Bank authorizes and directs
the Collateral Agent to enter into the Loan Documents relating to the Collateral
for the benefit of the Lenders and the Issuing Banks. Each Lender and each
Issuing Bank agrees that any action taken by the
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Collateral Agent or the Requisite Lenders (or, where required by the express
terms of this Agreement, a greater proportion of the Lenders) in accordance with
the provisions of this Agreement or the other Loan Documents, and the exercise
by the Collateral Agent or the Requisite Lenders (or, where so required, such
greater proportion) of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders and Issuing Banks. Without limiting the
generality of the foregoing, the Collateral Agent shall have the sole and
exclusive right and authority to (i) act as the disbursing and collecting agent
for the Lenders and the Issuing Banks with respect to all proceeds of
Collateral; (ii) execute and deliver each Loan Document relating to the
Collateral and accept delivery of each such agreement delivered by the Borrower;
(iii) act as collateral agent for the Lenders and the Issuing Banks for purposes
of the perfection of all security interests and Liens created by such agreements
and all other purposes stated therein, provided, however, the Collateral Agent
hereby appoints, authorizes and directs the Lenders and the Issuing Banks to act
as collateral sub-agent for the Administrative Agents, the Lenders and the
Issuing Banks for purposes of the perfection of all security interests and Liens
with respect to the Borrower's respective deposit accounts maintained with, and
cash and Cash Equivalents held by, such Lender or such Issuing Bank; (iv)
manage, supervise and otherwise deal with the Collateral; (v) take such action
as is necessary or desirable to maintain the perfection and priority of the
security interests and liens created or purported to be created by the Loan
Documents; and (vi) except as may be otherwise specifically restricted by the
terms of this Agreement or any other Loan Document, exercise all remedies given
to the Administrative Agents, the Lenders or the Issuing Banks with respect to
the Collateral under the Loan Documents relating thereto, applicable law or
otherwise.
(c) Release of Collateral. (i) Each Lender hereby directs, in
accordance with the terms of this Agreement, the Collateral Agent to release any
Lien held by the Collateral Agent for the benefit of the Administrative Agents,
the Lenders and the Issuing Banks:
(A) against all of the Collateral, upon payment in full of the
Obligations and termination of this Agreement (or, to the extent
certain Obligations remain contingent (other than in respect of
indemnities), sufficient Cash Collateral has been deposited with the
Collateral Agent in the amount of such contingent obligations on terms
satisfactory to the Lenders);
(B) against any part of the Collateral sold or disposed of by
the Borrower, as certified to the Collateral Agent by the Borrower in
an Officer's Certificate if such sale or disposition is permitted by
Section 9.02 or is otherwise consented to by the Requisite Lenders.
(d) Each Lender and each Issuing Bank hereby directs the Collateral
Agent to execute and deliver or file such termination and partial release
statements and do such other things as are necessary to release Liens to be
released pursuant to this Section 12.09(c) promptly upon the effectiveness of
any such release.
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(e) Additional Collateral Matters. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it pursuant to this Agreement, the Collateral Agent shall have no obligation
whatsoever to the Lenders or to any other Person to assure that the Collateral
exists or is owned by the Borrower or is cared for, protected or insured or has
been encumbered or that the Liens granted to the Collateral Agent pursuant to
the Loan Documents have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Collateral Agent in this
Section 12.09 or in any of the Loan Documents, it being understood and agreed
that in respect of the Collateral, or in any act, omission or event related
thereto, the Collateral Agent may act in any manner it may deem appropriate, in
its sole discretion, given its own interest in the Collateral as one of the
Lenders and that the Collateral Agent shall have no duty or liability whatsoever
to any Lender.
(f) Collateral Matters Relating to Related Obligations. The benefit of
the Loan Documents and of the provisions of this Agreement relating to the
Collateral shall extend to and be available in respect of any Obligations
("Related Obligations") which arise under any Hedging Obligations or which are
otherwise owed to Persons other than the Administrative Agents, the Lenders and
the Issuing Banks, solely on the condition and understanding, as among the
Administrative Agents and all Holders, that (i) the Related Obligations shall be
entitled to the benefit of the Collateral to the extent expressly set forth in
this Agreement and the Loan Documents, and to such extent the Collateral Agent
shall hold and have the right and power to act with respect to, the Collateral
on behalf of and as agent for the holders of the Related Obligations; but the
Administrative Agents are otherwise acting solely as agents for the Lenders and
the Issuing Banks and shall have no separate fiduciary duty, duty of loyalty,
duty of care, duty of disclosure or other obligations whatsoever to any holder
of Related Obligations; and (ii) all matters, acts and omissions relating in any
manner to the Collateral, or the omission, creation, perfection, priority,
abandonment or release of any Lien, shall be governed solely by the provisions
of this Agreement and the Loan Documents and no separate Lien, right, power or
remedy shall arise or exist in favor of any Holder under any separate instrument
or agreement or in respect of any Related Obligations; and (iii) each Holder
shall be bound by all actions taken or omitted, in accordance with the
provisions of this Agreement and the Loan Documents, by the Administrative
Agents and the Requisite Lenders, each of whom shall be entitled to act at its
sole discretion and exclusively in its own interest given its own Commitments
and its own interest in the Loans, Letter of Credit Obligations and other
obligations to it arising under this Agreement or the other Loan Documents,
without any duty or liability to any other Holder or as to any Related
Obligations and without regard to whether any Related Obligations remain
outstanding or are deprived of the benefit of the Collateral or become unsecured
or are otherwise affected or put in jeopardy thereby; and (iv) no holder of
Related Obligations and no other Holder (except the Administrative Agents and
the Lenders, to the extent set forth in this Agreement) shall have any right to
be notified of, or to direct, require or be heard with respect to, any action
taken or omitted in respect of the Collateral or under this Agreement or the
Loan Documents; and (v) no holder of
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any Related Obligations shall exercise any right of set-off, banker's lien or
similar right except as expressly provided in Section 13.05.
ARTICLE XIII
MISCELLANEOUS
13.01 Assignments and Participations.
(a) Assignments. No assignments or participations of any Lender's
rights or obligations under this Agreement shall be made except in accordance
with this Section 13.01. Each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all of its rights and obligations with respect to the Revolving Loans
and/or the Letters of Credit) in accordance with the provisions of this Section
13.01.
(b) Limitations on Assignments. Each assignment shall be subject to the
following conditions: (i) each assignment shall be in a minimum principal amount
of $2,500,000 or the remaining portion of the assigning Lender's rights and
obligations hereunder, if less (provided, however, such minimum shall not apply
in the case of any such assignment between Lenders), (ii) each such assignment
shall be to an Eligible Assignee, and (iii) such assignment shall be accompanied
by pro rata assignment of such Lender's Tranche B Loans under, and as defined
in, the Term Facility (except as otherwise agreed to by the Administrative
Agents), and (iv) the parties to each such assignment shall execute and deliver
to the Funding Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance. Upon such execution, delivery, acceptance and
recording in the Register, from and after the effective date specified in each
Assignment and Acceptance and agreed to by the Funding Agent, (x) the assignee
thereunder shall, in addition to any rights and obligations hereunder held by it
immediately prior to such effective date, if any, have the rights and
obligations hereunder that have been assigned to it pursuant to such Assignment
and Acceptance and shall, to the fullest extent permitted by law, have the same
rights and benefits hereunder as if it were an original Lender hereunder and (y)
the assigning Lender shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of such assigning Lender's rights and obligations under this Agreement, the
assigning Lender shall cease to be a party hereto).
(c) The Register. The Funding Agent shall maintain at its address
referred to in Section 13.08 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register (the "Register") for the recordation of the
names and addresses of the Lenders and the Commitment under each Loan of, and
principal amount of the Loans and Letter of Credit Obligations under each
facility owing to, each Lender from time to time and whether such Lender is an
original Lender or the assignee of another Lender pursuant to an Assignment and
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Acceptance. The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Administrative Agents and
the Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior written notice.
(d) Fee. Upon its receipt of an Assignment and Acceptance executed by
the assigning Lender and an Eligible Assignee and a processing and recordation
fee of $3,500 (payable by the assigning Lender or the assignee, as shall be
agreed between them), the Funding Agent shall, if such Assignment and Acceptance
has been completed and is in compliance with this Agreement and in substantially
the form of Exhibit H hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Borrower and the Collateral Agent.
(e) Participations. Each Lender may sell participations to one or more
banks, finance companies, insurance companies, other financial institutions or
funds in or to all or a portion of its rights and obligations under and in
respect of any and all facilities under this Agreement (including, without
limitation, all or a portion of any or all of its Commitments hereunder and the
Loans owing to it and its undivided interest in the Letters of Credit);
provided, however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitments hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the Borrower, the
Administrative Agents and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (iv) such participant's rights to agree or
to restrict such Lender's ability to agree to the modification, waiver or
release of any of the terms of the Loan Documents or to the release of any
Collateral covered by the Loan Documents, to consent to any action or failure to
act by any party to any of the Loan Documents or any of their respective
Affiliates, or to exercise or refrain from exercising any powers or rights which
any Lender may have under or in respect of the Loan Documents or any Collateral,
shall be limited to the right to consent to (A) increase in the Commitment of
the Lender from whom such participant purchased a participation, (B) reduction
of the principal of, or rate or amount of interest on the Loan(s) subject to
such participation (other than by the payment or prepayment thereof), (C)
postponement of any date fixed for any payment of principal of, or interest on,
the Loan(s) subject to such participation, (D) release of any guarantor of the
Obligations or all or a substantial portion of the Collateral except as provided
in Section 12.09(c), (E) any decrease in the amounts payable to the Lenders
resulting from a failure of the Borrower to comply with the terms of Section
3.03, (F) any increase in the amounts Lenders are required or expected to
reserve in respect of the Loans resulting from a failure of the Borrower to
comply with the terms of Section 3.04, or (G) any decrease in the amount of fees
payable to Lenders under Article IV hereof.
(f) Information Regarding the Borrower. Any Lender may, in connection
with any assignment or participation or proposed assignment or participation
pursuant to this Section
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13.01, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by the Administrative Agents or by or on behalf of the Borrower; provided that,
prior to any such disclosure, such assignee or participant, or proposed assignee
or participant, shall agree to preserve in accordance with Section 13.20 the
confidentiality of any confidential information described therein.
(g) Payment to Participants. Anything in this Agreement to the contrary
notwithstanding, in the case of any participation, all amounts payable by the
Borrower under the Loan Documents shall be calculated and made in the manner and
to the parties required hereby as if no such participation had been sold.
(h) Lenders' Creation of Security Interests. Notwithstanding any other
provision set forth in this Agreement, any Lender may at any time create a
security interest in all or any portion of its rights under this Agreement
(including, without limitation, Obligations owing to it and Notes held by it) in
favor of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Board.
(i) Assignments by Issuing Banks. If any Issuing Bank ceases to be a
Lender under this Agreement by virtue of any assignment made pursuant to this
Section 13.01, then, as of the effective date of such cessation, such Issuing
Bank's obligations to issue Letters of Credit pursuant to Section 2.03 shall
terminate and such Issuing Bank shall be an Issuing Bank hereunder only with
respect to outstanding Letters of Credit issued prior to such date.
13.02 Expenses.
(a) Generally (the Administrative Agents). The Borrower agrees upon
demand to pay, or reimburse each Administrative Agent for all of such
Administrative Agent's reasonable internal and external audit, legal, appraisal,
valuation, filing, document duplication and reproduction and investigation
expenses and for all other out-of-pocket costs and expenses of every type and
nature (including, without limitation, the reasonable fees, expenses and
disbursements of Sidley & Austin and Xxxxx, Xxxxx & Xxxxx, local legal counsel,
auditors, accountants, appraisers, printers, insurance and environmental
advisers, and other consultants and agents) incurred by such Administrative
Agent in connection with (A) such Administrative Agent's audit and investigation
of the Borrower in connection with the preparation, negotiation, and execution
of the Loan Documents and such Administrative Agent's periodic audits of the
Borrower; (B) the preparation, negotiation, execution and interpretation of this
Agreement (including, without limitation, the satisfaction or attempted
satisfaction of any of the conditions set forth in Article V), the Loan
Documents and the making of the Loans hereunder; (C) the creation, perfection or
protection of the Liens under the Loan Documents (including, without limitation,
any reasonable fees and expenses for local counsel in various jurisdictions);
(D) the ongoing administration of this Agreement and the Loans, including
consultation with attorneys in connection therewith and with respect to such
Administrative Agent's rights and responsibilities under this Agreement and the
other Loan Documents; (E) the protection, collection or enforcement of any of
the
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Obligations or the enforcement of any of the Loan Documents; (F) the
commencement, defense or intervention in any court proceeding relating to the
Obligations, the Property, the Borrower, this Agreement or any of the other Loan
Documents; (G) the response to, and preparation for, any subpoena or request for
document production with which such Administrative Agent is served or deposition
or other proceeding in which such Administrative Agent is called to testify, in
each case, relating in any way to the Obligations, the Property, the Borrower,
this Agreement or any of the other Loan Documents; and (H) any amendments,
consents, waivers, assignments, restatements, or supplements to any of the Loan
Documents and the preparation, negotiation, and execution of the same.
(b) After Default. The Borrower further agrees to pay or reimburse the
Administrative Agents, the Issuing Banks and the Lenders upon demand for all
out-of-pocket costs and expenses, including, without limitation, reasonable
attorneys' fees (including allocated costs of internal counsel and costs of
settlement) incurred by either Administrative Agent, any Issuing Bank or any
Lender after the occurrence of an Event of Default (i) in enforcing any Loan
Document or Obligation or any security therefor or exercising or enforcing any
other right or remedy available by reason of such Event of Default; (ii) in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "workout" or in any insolvency
or bankruptcy proceeding; (iii) in commencing, defending or intervening in any
litigation or in filing a petition, complaint, answer, motion or other pleadings
in any legal proceeding relating to the Obligations, the Property, the Borrower
and related to or arising out of the transactions contemplated hereby or by any
of the other Transaction Documents; and (iv) in taking any other action in or
with respect to any suit or proceeding (bankruptcy or otherwise) described in
clauses (i) through (iii) above.
13.03 Indemnity. The Borrower further agrees to defend, protect,
indemnify, and hold harmless each Credit Agent, each and all of the Lenders and
Issuing Banks and each of their Affiliates, and each of their respective
officers, directors, employees, attorneys and agents (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth in Article V) (collectively, the
"Indemnitees") from and against any and all liabilities, obligations, losses
(other than loss of profits), damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(excluding any taxes and including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees in any manner relating to or arising out of
(a) this Agreement, the Existing Credit Agreement, any prior iterations of the
Existing Credit Agreement (or any matter indemnified against or for as set forth
therein), executed by each of the parties thereto prior to the date hereof,
including, without limitation, the Transaction Documents or the other Loan
Documents, or any act, event or transaction related or attendant thereto, the
making of the Loans and the issuance of and participation in Letters of Credit
hereunder, the management of such Loans and Letters of Credit, the use or
intended use of the proceeds of the Loans or Letters of Credit hereunder, or any
of the
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other transactions contemplated by the Transaction Documents, (b) any
Liabilities and Costs under federal, state or local environmental, health or
safety laws, regulations or common law principles arising from or in connection
with the past, present or future operations of the Borrower, or any of its
predecessors in interest, or the past, present or future environmental condition
of any Property of the Borrower or any of its respective predecessors in
interest (relating to the period during which the Borrower, any of its
respective predecessors in interest, or the Lenders, in such capacity, owned or
operated such Property), the presence of asbestos-containing materials at any
respective Property of the Borrower or the Release or threatened Release of any
Contaminant into the environment from any respective Property of the Borrower or
(c) any other transaction contemplated in the Transaction Documents
(collectively, the "Indemnified Matters"); provided, however, the Borrower shall
not have any obligation to an Indemnitee hereunder with respect to Indemnified
Matters with respect to costs caused by or resulting from the willful misconduct
or gross negligence of such Indemnitee, as determined by a court of competent
jurisdiction. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrower shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable law, to the
payment and satisfaction of all Indemnified Matters incurred by the Indemnitees.
13.04 Change in Accounting Principles. If any change in the accounting
principles used in the preparation of the most recent financial statements
referred to in Section 7.01 are hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the Borrower with
the agreement of their independent certified public accountants and such changes
result in a change in the method of calculation of any of the covenants,
standards or terms found in Article IX and Article X, the parties hereto agree
to enter into negotiations in order to amend such provisions so as to equitably
reflect such changes with the desired result that the criteria for evaluating
compliance with such covenants, standards and terms by the Borrower shall be the
same after such changes as if such changes had not been made; provided, however,
no change in GAAP that would affect the method of calculation of any of the
covenants, standards or terms shall be given effect in such calculations until
such provisions are amended, in a manner satisfactory to the Requisite Lenders
and the Borrower, to so reflect such change in accounting principles.
13.05 Set-off. In addition to any Liens granted under the Loan
Documents and any rights now or hereafter granted under applicable law, upon the
occurrence and during the continuance of any Event of Default, each Lender, each
Issuing Bank and any Affiliate of any Lender or Issuing Bank and each purchaser
of a participation pursuant to Section 13.01(e) is hereby authorized by the
Borrower at any time or from time to time, without notice to any Person (any
such notice being hereby expressly waived) to set-off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured
(but not including trust accounts)) and any other Indebtedness at any time held
by or owing to such Lender, Issuing Bank, any of their Affiliates or
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any such purchaser to or for the credit or the account of the Borrower against
and on account of the obligations of the Borrower to such Lender, Issuing Bank,
any of their Affiliates or any such purchaser, including, but not limited to,
all Loans and Letters of Credit and all claims of any nature or description
arising out of or in connection with this Agreement, irrespective of whether or
not (i) such Lender, Issuing Bank or such purchaser shall have made any demand
hereunder or (ii) the Collateral Agent, at the request or with the consent of
the Requisite Lenders, shall have declared the principal of and interest on the
Loans and other amounts due hereunder to be due and payable as permitted by
Article XI and even though such Obligations may be contingent or unmatured. Each
Lender, each Issuing Bank and each such purchaser agrees that it shall not,
without the express consent of the Requisite Lenders, and that it shall, to the
extent it is lawfully entitled to do so, upon the request of the Requisite
Lenders, exercise its set-off rights hereunder against any accounts of the
Borrower now or hereafter maintained with such Lender, Issuing Bank or any
Affiliate of either of them or such purchaser.
13.06 Ratable Sharing. The Lenders agree among themselves that (i) with
respect to all amounts received by them which are applicable to the payment of
the Obligations (excluding the fees described in Sections 2.03(g), 3.03, 3.04,
4.01(f), 4.02(f) and 4.03), equitable adjustment will be made so that, in
effect, all such amounts will be shared among them ratably in accordance with
their applicable Pro Rata Shares, whether received by voluntary payment, by the
exercise of the right of set-off or banker's lien, by counterclaim or
cross-action or by the enforcement of any or all of the Obligations (excluding
the fees described in Sections 2.03(g), 3.03, 3.04, 4.01(f), 4.02(f) and 4.03 or
the Collateral), (ii) if any of them shall by voluntary payment or by the
exercise of any right of counterclaim, set-off, banker's lien or otherwise,
receive payment of a proportion of the aggregate amount of the Obligations held
by it, which is greater than the amount which such Lender is entitled to receive
hereunder, the Lender receiving such excess payment shall purchase, without
recourse or warranty, an undivided interest and participation (which it shall be
deemed to have done simultaneously upon the receipt of such payment) in such
Obligations owed to the others so that all such recoveries with respect to such
Obligations shall be applied ratably in accordance with their Pro Rata Shares;
provided, however, that if all or part of such excess payment received by the
purchasing party is thereafter recovered from it, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such party to the extent necessary to adjust for such recovery, but without
interest except to the extent the purchasing party is required to pay interest
in connection with such recovery. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 13.06
may, to the fullest extent permitted by law, exercise all its rights of payment
(including, subject to Section 13.05, the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
13.07 Amendments and Waivers. Unless otherwise provided in this
Agreement, no amendment or modification of any provision of this Agreement shall
be effective without the written agreement of the Requisite Lenders and the
Borrower, and no termination or waiver of any provision of this Agreement, or
consent to any departure by the Borrower therefrom, shall be
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effective without the written concurrence of the Requisite Lenders, which the
Requisite Lenders shall have the right to grant or withhold in their sole
discretion. Notwithstanding the foregoing, any amendment, modification,
termination, waiver or consent with respect to (i) any provision in Article X
shall be effective by a written agreement of the Requisite Lenders and the
Borrower and (ii) any of the following provisions of this Agreement shall be
effective only by a written agreement, signed by each Lender affected thereby:
(a) waiver of any of the conditions specified in Sections 5.01 and 5.02 (except
with respect to a condition based upon another provision of this Agreement, the
waiver of which requires only the concurrence of the Requisite Lenders and
express waiver of such conditions set forth in this Agreement), (b) increase in
the aggregate amount of the Commitments of such Lender, (c) reduction of the
principal of, rate or amount of interest on the Loans, the Reimbursement
Obligations or any fees or other amounts payable to such Lender (other than by
the payment or prepayment thereof), (d) postponement of the Commitment
Termination Date or any other date fixed for any payment of principal of, or
interest on, the Loans, the Reimbursement Obligations or any fees or other
amounts payable to such Lender (except with respect to Section 3.01(b)), (e)
release of any guarantor of the Obligations (except in connection with a
transaction permitted by Section 12.09(c)) or of all or any substantial portion
of the Collateral (except as provided in Section 12.09(c)), (f) change in the
aggregate Pro Rata Share of the Lenders which shall be required for the Lenders
or any of them to take action hereunder (including, without limitation, the
definition of "Requisite Lenders") or (g) amendment of Sections 3.03, 3.04,
13.02, 13.03 13.05 and 13.06 or this Section 13.07. The Collateral Agent may,
but shall have no obligation to, with the written concurrence of any Lender,
execute amendments, modifications, waivers or consents on behalf of that Lender.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances. Notwithstanding anything to the
contrary contained in this Section 13.07, no amendment, modification, waiver or
consent shall affect the rights or duties of either Administrative Agent under
this Agreement or the other Loan Documents, unless made in writing and signed by
such Administrative Agent in addition to the Lenders required above to take such
action.
13.08 Notices. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given 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. Notices to either Administrative Agent
pursuant to Article II, III or XII shall not be effective until received by such
Administrative Agent. For the purposes hereof, the addresses of the parties
hereto (until notice of a change thereof is delivered as provided in this
Section 13.08) shall be as set forth below each party's name on the signature
pages hereof or the signature page of any applicable Assignment and Acceptance,
or, as to each party, at such other address as may be designated by such party
in a written notice to all of the other parties to this Agreement.
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13.09 Survival of Warranties and Agreements. All representations and
warranties made herein, and all obligations of the Borrower in respect of taxes,
indemnification and expense reimbursement shall survive the execution and
delivery of this Agreement and the other Loan Documents, the making and
repayment of the Loans, the issuance and discharge of Letters of Credit
hereunder and the termination of this Agreement and shall not be limited in any
way by the passage of time or occurrence of any event and shall expressly cover
time periods when either Administrative Agent, any of the Issuing Banks or any
of the Lenders may have come into possession or control of any of the Borrower's
Property, except as limited by applicable statutes of limitation.
13.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of either Administrative Agent, any Lender or any Issuing
Bank in the exercise of any power, right or privilege under any of the Loan
Documents shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing under the Loan Documents are cumulative to and not exclusive
of any rights or remedies otherwise available.
13.11 Marshaling; Payments Set Aside. No Credit Agent, any Lender or
any Issuing Bank shall be under any obligation to xxxxxxxx any assets in favor
of the Borrower or any other party or against or in payment of any or all of the
Obligations. To the extent that the Borrower makes a payment or payments to the
Credit Agents, the Lenders or the Issuing Banks or any of such Persons receives
payment from the proceeds of the Collateral or exercise their rights of set-off,
and such payment or payments or the proceeds of such enforcement or set-off or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party, then to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or set-off had not occurred.
13.12 Severability. In case any provision in or obligation under this
Agreement or the other Loan Documents shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
13.13 Headings. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement or be given any substantive effect.
13.14 Governing Law. THIS AGREEMENT SHALL BE INTERPRETED, AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
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13.15 Limitation of Liability. No claim may be made by the Borrower,
any Lender, any Issuing Bank, any Credit Agent or any other Person against any
Credit Agent, any other Issuing Bank or any other Lender or the Affiliates,
directors, officers, employees, attorneys or agents of any of them for any
special, consequential or punitive damages in respect of any claim for breach of
contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and the Borrower, each Lender, each Issuing
Bank and each Credit Agent hereby waives, releases and agrees not to xxx upon
any such claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
13.16 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and permitted assigns of the Lenders and the Issuing Banks. The
rights hereunder of the Borrower, or any interest therein, may not be assigned
without the written consent of all Lenders.
13.17 Certain Consents and Waivers of the Borrower.
(a) Personal Jurisdiction. EACH OF THE ADMINISTRATIVE AGENTS, THE
LENDERS, THE ISSUING BANKS AND THE BORROWER 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 AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
LOAN DOCUMENT, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
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. THE BORROWER IRREVOCABLY
DESIGNATES AND APPOINTS CORPORATION SERVICE COMPANY, 00 XXXXXXXX XXXXXX, XXX
XXXX, XXX XXXX 00000 AS THEIR 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
OF THE ADMINISTRATIVE AGENTS, THE LENDERS, THE ISSUING BANKS AND THE BORROWER
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. THE BORROWER WAIVES IN ALL DISPUTES ANY
OBJECTION
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THAT THEY MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
THE BORROWER AGREES THAT THE COLLATERAL AGENT SHALL HAVE THE RIGHT TO
PROCEED AGAINST THE BORROWER 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 OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE ADMINISTRATIVE AGENTS, ANY
LENDER OR ANY ISSUING BANK. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE
TO THE LOCATION OF THE COURT IN WHICH THE ADMINISTRATIVE AGENTS, ANY LENDER OR
ANY ISSUING BANK MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
(b) Service of Process. THE BORROWER 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 THE BORROWER'S NOTICE ADDRESS SPECIFIED
BELOW, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. THE
BORROWER 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 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 THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
(c) Waiver of Jury Trial. EACH OF THE ADMINISTRATIVE AGENT AND THE
BORROWER IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
13.18 Counterparts; Effectiveness; Inconsistencies. This Agreement and
any amendments, waivers, consents, or supplements hereto may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement and each of the other Loan Documents shall be
construed to the extent reasonable to be consistent one with the other, but to
the extent that the terms and conditions of this Agreement are actually
inconsistent with the terms and conditions of any other Loan Document, this
Agreement shall govern.
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13.19 Limitation on Agreements. All agreements between the Borrower,
the Credit Agents, each Lender and each Issuing Bank in the Loan Documents are
hereby expressly limited so that in no event shall any of the Loans or other
amounts payable by the Borrower under any of the Loan Documents be directly or
indirectly secured (within the meaning of Regulation U) by Margin Stock.
13.20 Confidentiality. Subject to Section 13.01(f), the Lenders and the
Issuing Banks shall hold all nonpublic information obtained pursuant to the
requirements of this Agreement and identified as such by the Borrower in
accordance with such Lender's or such Issuing Bank's customary procedures for
handling confidential information of this nature and in accordance with safe and
sound lending practices and in any event may make disclosure to any of its legal
or financial advisors or as reasonably required by a bona fide offeree,
transferee or participant in connection with the contemplated transfer or
participation or any recipient reasonably acceptable to the Borrower or as
required or requested by any Governmental Authority or representative thereof or
pursuant to legal process and shall require any such legal or financial advisor,
offeree, transferee or participant or other approved recipient to agree (and
require any of its offerees, transferees or participants or other approved
recipient to agree) to comply with this Section 13.20. In no event shall any
Lender or any Issuing Bank be obligated or required to return any materials
furnished by the Borrower; provided, however, each offeree shall be required to
agree that if it does not become a transferee or participant it shall return all
materials furnished to it by the Borrower in connection with this Agreement. Any
and all confidentiality agreements entered into between any Lender or any
Issuing Bank and the Borrower shall survive the execution of this Agreement.
13.21 Entire Agreement. This Agreement, taken together with all of the
other Loan Documents, embodies the entire agreement and understanding among the
parties hereto and all prior agreements and understandings, written and oral,
relating to the subject matter hereof.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first above written.
BORROWER: FOAMEX CARPET CUSHION, INC.
By /s/ Xxxxxx Xxxxxxxxx
------------------------------
Title:
Notice Address:
FOAMEX CARPET CUSHION, INC.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxx
Telecopier No. (000) 000-0000
with a copy to:
Trace International Holdings, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxxxx X. Xxxxx, Xx., Esq., and
Xxxxxx X. Xxxxxx
Telecopier No. (000) 000-0000
CITICORP USA, INC., as Administrative
Agent, Collateral Agent, Intercreditor Agent
and individually as a Lender
By /s/ Xxx Xxxxxx
-------------------------------
Title: Attorney-in-Fact
LIBO Rate Lending Office or
LIBO Rate Affiliate:
Citicorp USA, INC.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.:
Telecopier No. (000) 000-0000
Notice Address:
Citicorp USA, INC.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.:
Telecopier No. (000) 000-0000
Commitments
Revolving Loan Commitment Amount: $10,000,000
CITIBANK, N.A., as Issuing Bank
By /s/ Xxx Xxxxxx
---------------------------
Title: Attorney-in-Fact
Notice Address:
Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.:
Telecopier No. (000) 000-0000
THE BANK OF NOVA SCOTIA, as
Administrative Agent, Funding
Agent, Issuing Bank, and
individually as a Lender
By /s/ Xxxxx Xxxxx
----------------------------------------
Title: Senior Relationship Manager
LIBO Rate Lending Office or
LIBO Rate Affiliate:
The Bank of Nova Scotia-New York
Agency
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Loan Accounting - [Xxxxxx Xxxxxxx]
Telecopier No. (000) 000-0000
Notice Address:
The Bank of Nova Scotia-New York
Agency
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxx Xxxxxxxx
Telecopier No. (000) 000-0000
with a copy to:
Xxxxx Xxxxx
The Bank of Nova Scotia
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No. (000) 000-0000
Commitments
Revolving Loan Amount Commitment: $10,000,000
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms.......................................................................................2
1.02 Computation of Time Periods................................................................................27
1.03 Accounting Terms...........................................................................................27
1.04 Other Definitional Provisions..............................................................................27
1.05 Other Terms................................................................................................27
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01 Revolving Credit Facility..................................................................................28
2.02 The Swing Loan Facility....................................................................................30
2.03 Letters of Credit..........................................................................................31
2.04 Authorized Officers and Administrative Agents..............................................................37
ARTICLE III
PAYMENTS AND PREPAYMENTS
3.01 Prepayments and Repayments; Reductions in Revolving Loan Commitments.......................................38
3.02 Payments...................................................................................................39
3.03 Taxes......................................................................................................43
3.04 Increased Capital..........................................................................................46
3.05 Promise to Repay; Evidence of Indebtedness.................................................................46
3.06 Deposit Accounts...........................................................................................47
3.07 Replacement of Lender......................................................................................48
ARTICLE IV
INTEREST AND FEES
4.01 Interest on the Loans and other Obligations................................................................49
4.02 Special Provisions Governing LIBO Rate Loans...............................................................52
4.03 Fees.......................................................................................................55
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TABLE OF CONTENTS
(continued)
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ARTICLE V
CONDITIONS TO LOANS AND LETTERS OF CREDIT
5.01 Conditions Precedent to the Effectiveness of this Agreement................................................56
5.02 Conditions Precedent to All Loans and Letters of Credit....................................................58
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of the Borrower.............................................................59
ARTICLE VII
REPORTING COVENANTS
7.01 Financial Statements.......................................................................................68
7.02 Events of Default..........................................................................................70
7.03 Lawsuits...................................................................................................71
7.04 Insurance..................................................................................................71
7.05 ERISA Notices..............................................................................................71
7.06 Environmental Notices......................................................................................73
7.07 Labor Matters..............................................................................................73
7.08 Other Reports..............................................................................................74
7.09 Change of Control..........................................................................................74
7.10 Government Contracts.......................................................................................74
7.11 Other Information..........................................................................................74
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ARTICLE VIII
AFFIRMATIVE COVENANTS
8.01 Corporate Existence, etc...................................................................................75
8.02 Corporate Powers; Conduct of Business......................................................................75
8.03 Compliance with Laws, etc..................................................................................75
8.04 Payment of Taxes and Claims; Tax Consolidation.............................................................75
8.05 Insurance..................................................................................................75
8.06 Inspection of Property.....................................................................................76
8.07 Books and Records; Discussions.............................................................................76
8.08 Insurance and Condemnation Proceeds........................................................................76
8.09 ERISA Compliance...........................................................................................76
8.10 Maintenance of Property....................................................................................76
8.11 Condemnation...............................................................................................77
8.12 Environmental Matters......................................................................................77
8.13 Future Mortgages...........................................................................................77
ARTICLE IX
NEGATIVE COVENANTS
9.01 Indebtedness...............................................................................................78
9.02 Sales of Assets............................................................................................78
9.03 Liens......................................................................................................79
9.04 Investments................................................................................................79
9.05 Accommodation Obligations..................................................................................79
9.06 Restricted Junior Payments.................................................................................79
9.07 Conduct of Business........................................................................................80
9.08 Transactions with Shareholders and Affiliates..............................................................80
9.09 Restriction on Fundamental Changes.........................................................................80
9.10 Sales and Leasebacks.......................................................................................80
9.11 Margin Regulations; Securities Laws........................................................................81
9.12 ERISA......................................................................................................81
9.13 Issuance of Equity Interests...............................................................................81
9.14 Constituent Documents......................................................................................81
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TABLE OF CONTENTS
(continued)
Page
9.15 Cancellation of Debt; Prepayment...........................................................................81
9.16 Fiscal Year................................................................................................82
9.17 Transaction Documents......................................................................................82
9.18 Environmental Matters......................................................................................82
ARTICLE X
FINANCIAL COVENANTS
10.01 Minimum Net Worth.........................................................................................82
10.02 Minimum Interest Coverage Ratio...........................................................................83
10.03 Minimum Fixed Charge Coverage Ratio.......................................................................85
10.04 EBDAIT; and Maximum Leverage Ratio........................................................................86
10.05 Capital Expenditures......................................................................................87
ARTICLE XI
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.01 Events of Default.........................................................................................88
11.02 Rights and Remedies.......................................................................................90
11.03 The Cash Collateral Account...............................................................................92
ARTICLE XII
THE CREDIT AGENTS
12.01 Appointment...............................................................................................93
12.02 Nature of Duties..........................................................................................94
12.03 Rights, Exculpation, etc..................................................................................94
12.04 Reliance..................................................................................................95
12.05 Indemnification...........................................................................................95
12.06 Citicorp and Scotiabank Individually......................................................................95
12.07 Successor Administrative Agent............................................................................96
12.08 Relations Among Lenders...................................................................................96
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TABLE OF CONTENTS
(continued)
Page
12.09 Concerning the Collateral and the Loan Documents..........................................................97
ARTICLE XIII
MISCELLANEOUS
13.01 Assignments and Participations...........................................................................100
13.02 Expenses.................................................................................................102
13.03 Indemnity................................................................................................103
13.04 Change in Accounting Principles..........................................................................104
13.05 Set-off..................................................................................................104
13.06 Ratable Sharing..........................................................................................105
13.07 Amendments and Waivers...................................................................................105
13.08 Notices..................................................................................................106
13.09 Survival of Warranties and Agreements....................................................................106
13.10 Failure or Indulgence Not Waiver; Remedies Cumulative....................................................107
13.11 Marshaling; Payments Set Aside...........................................................................107
13.12 Severability.............................................................................................107
13.13 Headings.................................................................................................107
13.14 Governing Law............................................................................................107
13.15 Limitation of Liability..................................................................................107
13.16 Successors and Assigns...................................................................................108
13.17 Certain Consents and Waivers of the Borrower.............................................................108
13.18 Counterparts; Effectiveness; Inconsistencies.............................................................109
13.19 Limitation on Agreements.................................................................................109
13.20 Confidentiality..........................................................................................109
13.21 Entire Agreement.........................................................................................110
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EXHIBITS
Exhibit A-1 -- Form of Revolving Note
Exhibit A-2 -- Form of Swing Loan Note
Exhibit B -- Form of Notice of Borrowing
Exhibit C -- Form of Notice of Conversion/Continuation
Exhibit D -- List of Closing Documents
Exhibit E -- Form of Officer's Certificate to Accompany Reports
Exhibit F -- Compliance Certificate
Exhibit G -- Form of Privity Letter from Borrower to Accountants
Exhibit H -- Form of Assignment and Acceptance
Exhibit I -- Form of Foamex International Guaranty
Exhibit J -- Form of Foamex International Pledge Agreement
Exhibit K -- Security Agreement
Exhibit L -- Form of Leasehold Mortgage
Exhibit M -- Form of Closing Date Certificate
Exhibit N -- Form of Contract Assignment and Security Agreement
SCHEDULES
Schedule 1.01.2 -- Lockbox Banks
Schedule 1.01.3 -- Permitted Existing Accommodation Obligations
Schedule 1.01.4 -- Permitted Existing Indebtedness
Schedule 1.01.5 -- Permitted Existing Investments
Schedule 1.01.6 -- Permitted Existing Liens
Schedule 6.01-D -- Conflicts with Contractual Obligations and Requirements of Law
Schedule 6.01-E -- Governmental Consents
Schedule 6.01-J -- Litigation; Adverse Effects
Schedule 6.01-P -- Existing Environmental Matters
Schedule 6.01-Q -- ERISA Matters
Schedule 6.01-R -- Labor Contracts
Schedule 6.01-U -- Patent, Trademark & Permit Claims Pending
Schedule 6.01-W -- Insurance Policies
Schedule 6.01-X -- Related Party Contracts
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