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