EXECUTION COPY
AMENDMENT NO. 2 TO CREDIT AGREEMENT
This AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of March 12, 1999
(the "Amendment"), amends in certain respects the Credit Agreement dated as of
February 27, 1998 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Foamex Carpet
Cushion, Inc. ("New GFI" or the "Borrower"), the institutions from time to time
party thereto as Lenders, the institutions from time to time party thereto as
Issuing Banks, Citicorp USA, Inc. ("Citicorp") as collateral agent (the
"Collateral Agent") and The Bank of Nova Scotia, as funding agent (the "Funding
Agent", and together with the Collateral Agent, the "Administrative Agents").
W I T N E S S E T H:
WHEREAS, the Borrower (which has executed this Amendment) has requested
the undersigned, which constitute the Requisite Lenders, to amend the Credit
Agreement as set forth herein. The Lenders party hereto have agreed to amend the
Credit Agreement to accommodate the request of the Borrower contained herein,
subject to the terms set forth herein.
NOW, THEREFORE, in consideration of the above recital of the Borrower,
the Lenders party hereto and the Administrative Agents agree as follows:
SECTION 1. Defined Terms. Terms defined in the Credit Agreement and
not otherwise defined herein have the meanings given such terms in the Credit
Agreement.
SECTION 2. Amendments to the Credit Agreement. The Credit Agreement
is hereby amended as follows:
2.1. Amendment to Section 1. Section 1 of the Credit Agreement is
hereby amended by the following:
2.1.1 Amendment to the definition of EBDAIT. The definition of
EBDAIT is hereby amended and restated in its entirety as follows:
"'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 plus (v)
non-recurring costs in an amount not to exceed $2,600,000 incurred during the
First Fiscal Quarter of 1999; minus (b)(i) extraordinary gains (or plus
extraordinary losses) from asset sales calculated pursuant to GAAP for such
period to the extent such gains or losses were included in the calculation of
Net Income plus (ii) interest or investment income."
2.2. Amendment to Section 9.04. Section 9.04 of the Credit Agreement is
hereby amended by (i) deleting the word "and" located at the end of clause
"(iv)", (ii) deleting the "." at the end of clause "(v)" and inserting "; and"
in lieu thereof and (iii) adding a new clause "(vi)" as follows:
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"(vi) Investments in Foamex International not to exceed
$2,500,000 in the aggregate to be used for the sole purpose of paying
non-recurring transaction costs incurred by Foamex International; provided that
such Investments shall be repaid in full in cash on or prior to July 31, 1999;".
2.3. Amendment to Article X. Article X of the Credit Agreement is hereby
amended by the following:
2.3.1 Amendment to Section 10.03 Section 10.03 of the Credit
Agreement is amended by modifying the minimum Fixed Charge Coverage
Ratio for the "Fourth Fiscal Quarter of 1998", the "First Fiscal Quarter
of 1999" and the "Second Fiscal Quarter of 1999" so that it is "1.05 :
1", "0.95 : 1" and "1.00 : 1", respectively.
2.3.2 Amendment to Section 10.04(a) Section 10.04(a) of the
Credit Agreement is amended by modifying the minimum EBDAIT level for
the "Four fiscal quarters ended December 31, 1998" so that it is
permanently waived.
2.3.3 Amendment to Section 10.04(b) Section 10.04(b) of the
Credit Agreement is amended by modifying the maximum Leverage Ratio for
the "Fourth Fiscal Quarter of 1998", the "First Fiscal Quarter of 1999"
and the "Second Fiscal Quarter of 1999" so that it is "4.00 : 1", "4.50
: 1" and "4.00 : 1", respectively.
SECTION 3. Conditions to Effectiveness. This Amendment shall become
effective on the date hereof (the "Effective Date"), provided, that the
following conditions precedent have been satisfied (unless waived by the
Requisite Lenders or unless the deadline for delivery has been extended by the
Administrative Agents):
(i) 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:
(a) this Agreement duly executed and in form and
substance satisfactory to the Requisite Lenders; and
(b) such additional documentation as the Administrative
Agents or any of the Requisite Lenders may reasonably request.
(ii) Consents. The Borrower shall have received all material
consents and authorizations required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all
material consents and authorizations of, and effected all notices to and
filings with, any Governmental Authority, in each case, as may be
necessary to allow the Borrower to lawfully and without risk of
rescission, execute, deliver and perform, in all material respects, its
obligations under this Amendment 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.
(iii) 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, impose or result in the
imposition of a Material Adverse Effect.
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(iv) No Change in Condition. No change in the condition
(financial or otherwise), business, performance, properties, assets,
operations or prospects of the Borrower or any of its Subsidiaries and
its subsidiaries shall have occurred since December 29, 1997, which
change, in the judgment of the Lenders, will have or is reasonably
likely to have a Material Adverse Effect.
(v) No Default. After giving effect to this Amendment, no Event
of Default or Potential Event of Default shall have occurred.
(vi) Representations and Warranties. All of the representations
and warranties contained in Section 6.01 of the Credit Agreement and in
any of the other Loan Documents shall be true and correct in all
material respects on and as of the Effective Date.
SECTION 4. Representations and Warranties. The Borrower hereby
represents and warrants to the Lenders party hereto that (i) the execution,
delivery and performance of this Amendment by the Borrower are within the
Borrower=s corporate powers and have been duly authorized by all necessary
corporate action, and (ii) this Amendment constitutes the legal, valid and
binding obligation of the Borrower, enforceable against the Borrower, in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
limiting creditors= rights generally or by equitable principles generally.
SECTION 5. Reference to and Effect on the Loan Documents.
5.1. Upon the effectiveness of this Amendment, on and after the date
hereof each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import, and each reference in the other Loan
Documents to the Credit Agreement, shall mean and be a reference to the Credit
Agreement as amended hereby.
5.2. Except as specifically amended above, all of the terms of the
Credit Agreement and all other Loan Documents shall remain unchanged and in full
force and effect.
5.3. The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender or the Administrative Agents under the Credit
Agreement or any of the Loan Documents, nor constitute a waiver of any provision
of the Credit Agreement or any of the Loan Documents.
5.4. As of the Effective Date of, and after giving effect to, this
Amendment, the Borrower is in compliance in all material respects with all
applicable terms, conditions and covenants of the Credit Agreement and other
Loan Documents.
SECTION 6. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement.
SECTION 7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO NEW YORK CONFLICT OF LAWS PRINCIPLES).
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SECTION 8. Guarantor Consent. By its signature below, Foamex
International consents to this Amendment in its individual capacity, and as a
guarantor under the Foamex International Guaranty, and as a guarantor hereby
affirms its obligations under such guaranty.
SECTION 9. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment or be given any substantive effect.
SECTION 10. Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the date
first above written.
FOAMEX CARPET CUSHION, INC.
By /s/ X. X. Xxxxxxxxx
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Name: X. X. Xxxxxxxxx
Title: Vice President
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FOAMEX INTERNATIONAL INC.,
individually and as a guarantor
By /s/ X. X. Xxxxxxxxx
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Name: X. X. Xxxxxxxxx
Title: Senior Vice President
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CITIBANK, N.A. as Issuing Bank
By /s/ Shapleigh X. Xxxxx
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Name: Shapleigh X. Xxxxx
Title: Vice President
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CITICORP USA, INC., as Administrative Agent,
Collateral Agent, Intercreditor Agent and
individually as a Lender
By /s/ Shapleigh X. Xxxxx
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Name: Shapleigh X. Xxxxx
Title: Vice President
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XXX XXXX XX XXXX XXXXXX, as
Administrative Agent, Funding Agent,
Issuing Bank, individually as a
Lender, and as Intercreditor Agent
By /s/ X. X. Xxxxx
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Name: X. X. Xxxxx
Title: Senior Relationship Manager
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