FOAMEX GUARANTY
This FOAMEX GUARANTY (as amended, supplemented, amended and restated or
otherwise modified from time to time, this "Guaranty"), dated as of June 12,
1997, is made by Foamex L.P., a Delaware limited partnership (the "Guarantor" or
a "Borrower"), 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, for the benefit of the Secured Parties.
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 the Guarantor, General Felt Industries, Inc., a
Delaware corporation ("GFI" or a "Borrower"; and, if together with the
Guarantor, the "Borrowers"), Trace Foam Company, Inc., a Delaware corporation
and general partner of the Guarantor, FMXI, Inc., a Delaware corporation and
managing general partner of the Guarantor, 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 the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, the
Guarantor is required to execute and deliver this Guaranty;
WHEREAS, the Guarantor has duly authorized the execution, delivery and
performance of this Guaranty; and
WHEREAS, it is in the best interests of the Guarantor to execute this
Guaranty inasmuch as the Guarantor will derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to it and to GFI by
the Lenders and the Issuing Banks pursuant to the Credit Agreement;
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NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lenders and the Issuing Banks to
make Credit Extensions (including the initial Credit Extension) to GFI pursuant
to the Credit Agreement, the Guarantor 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 Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"Administrative Agents" is defined in the first recital.
"Borrower" and "Borrowers" is defined in the preamble and the first
recital.
"Collateral Agent" is defined in the preamble.
"Credit Agreement" is defined in the first recital.
"Credit Extensions" means the Loans and the Letters of Credit.
"GFI" is defined in the first recital.
"Guarantor" is defined in the preamble.
"Guaranty" is defined in the preamble.
"Obligations" means all Obligations (as defined in the Credit Agreement) of
the Borrowers and all obligations (monetary or otherwise) of each other Obligor
arising under or in connection with the Credit Agreement or any other Loan
Document.
"Secured Parties" means, collectively, the Lenders, the Issuing Banks, the
Collateral Agent, the Funding Agent and the Administrative Agents, and any
Lender in its capacity as a counterparty to a Hedging Obligation.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined herein
or the context otherwise requires, terms used in this Guaranty, including its
preamble and recitals, have the meanings provided in the Credit Agreement.
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ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. The Guarantor hereby absolutely, unconditionally and
irrevocably
(a) guarantees the full and punctual payment when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand
or otherwise, of all Obligations of GFI under the Credit Agreement, the
Notes and the other Loan Documents to which it is a party and all
Obligations of each other Obligor under the Loan Documents to which it is a
party now or hereafter existing, whether for principal, interest, fees,
expenses or otherwise (including all such amounts which would become due
but for the operation of the automatic stay under Section 362(a) of the
United States Bankruptcy Code, 11 U.S.C. ss.362(a), and the operation of
Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C.
ss.502(b) and ss.506(b)), and
(b) indemnifies and holds harmless each Secured Party and each holder
of a Note for any and all costs and expenses (including reasonable
attorney's fees and expenses) incurred by such Secured Party or such
holder, as the case may be, in enforcing any rights under this Guaranty;
This Guaranty constitutes a guaranty of payment when due and not of collection,
and the Guarantor specifically agrees that it shall not be necessary or required
that any Secured Party or any holder of any Note exercise any right, assert any
claim or demand or enforce any remedy whatsoever against GFI or any other
Obligor (or any other Person) before or as a condition to the obligations of the
Guarantor hereunder.
SECTION 2.2. Acceleration of Guaranty. The Guarantor agrees that, in the
event of the dissolution or insolvency of GFI, any other Obligor or the
Guarantor, or the inability or failure of GFI, any other Obligor or the
Guarantor to pay debts as they become due, or an assignment by GFI, any other
Obligor or the Guarantor for the benefit of creditors, or the commencement of
any case or proceeding in respect of GFI, any other Obligor or the Guarantor
under any bankruptcy, insolvency or similar laws, and if such event shall occur
at a time when any of the Obligations of GFI and each other Obligor may not then
be due and payable, the Guarantor agrees that it will pay to the Lenders
forthwith the full amount which would be payable hereunder by the Guarantor if
all such Obligations were then due and payable.
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SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in all respects be
a continuing, absolute, unconditional and irrevocable guaranty of payment, and
shall remain in full force and effect until all Obligations of GFI and each
other Obligor have been paid in full in cash, all obligations of the Guarantor
hereunder shall have been paid in full in cash, all Letters of Credit have been
terminated or expired and all Commitments shall have terminated. The Guarantor
guarantees that the Obligations of GFI and each other Obligor will be paid
strictly in accordance with the terms of the Credit Agreement and each other
Loan Document under which they arise, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of any Secured Party or any holder of any Note with respect thereto.
The liability of the Guarantor under this Guaranty shall be absolute,
unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of the Credit
Agreement, any Note or any other Loan Document;
(b) the failure of any Secured Party or any holder of any Note
(i) to assert any claim or demand or to enforce any right or
remedy against GFI, any other Obligor or any other Person (including
any other guarantor (including the Guarantor)) under the provisions of
the Credit Agreement, any Note, any other Loan Document or otherwise,
or
(ii) to exercise any right or remedy against any other guarantor
(including the Guarantor) of, or collateral securing, any Obligations
of GFI or any other Obligor;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of GFI or any other Obligor,
or any other extension, compromise or renewal of any Obligation of GFI or
any other Obligor;
(d) any reduction, limitation, impairment or termination of any
Obligations of GFI or any other Obligor for any reason, including any claim
of waiver, release, surrender, alteration or compromise, and shall not be
subject to (and the Guarantor 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
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affecting, any Obligations of GFI, any other Obligor or otherwise;
(e) any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of the Credit Agreement,
any Note or any other Loan Document;
(f) any addition, exchange, release, surrender or non- perfection of
any collateral, or any amendment to or waiver or release or addition of, or
consent to departure from, any other guaranty, held by any Secured Party or
any holder of any Note securing any of the Obligations of GFI or any other
Obligor; or
(g) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, GFI, any other Obligor,
any surety or any guarantor.
SECTION 2.4. Reinstatement, etc. The Guarantor agrees that this Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Obligations is rescinded or
must otherwise be restored by any Secured Party or any holder of any Note, upon
the insolvency, bankruptcy or reorganization of GFI, any other Obligor or
otherwise, all as though such payment had not been made.
SECTION 2.5. Waiver, etc. The Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations of GFI or any other Obligor and this Guaranty and any requirement
that the Collateral Agent, any other Secured Party or any holder of any Note
protect, secure, perfect or insure any security interest or Lien, or any
property subject thereto, or exhaust any right or take any action against GFI,
any other Obligor or any other Person (including any other guarantor) or entity
or any collateral securing the Obligations of GFI or any other Obligor, as the
case may be.
SECTION 2.6. Postponement of Subrogation, etc. The Guarantor agrees that it
will not exercise any rights which it may acquire by way of rights of
subrogation under this Guaranty, by any payment made hereunder or otherwise,
until the prior payment in full in cash of all Obligations of GFI and each other
Obligor, the termination or expiration of all Letters of Credit and the
termination of all Commitments. Any amount paid to the Guarantor on account of
any such subrogation rights prior to the payment in full in cash of all
Obligations of GFI and each other Obligor shall be held in trust for the benefit
of the Secured Parties and each holder of a Note and shall immediately be paid
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to the Collateral Agent for the benefit of the Secured Parties and each holder
of a Note and credited and applied against the Obligations of GFI and each other
Obligor, whether matured or unmatured, in accordance with the terms of the
Credit Agreement; provided, however, that if
(a) the Guarantor has made payment to the Secured Parties and each
holder of a Note of all or any part of the Obligations of GFI or any other
Obligor, and
(b) all Obligations of GFI and each other Obligor have been paid in
full in cash, all Letters of Credit have been terminated or expired and all
Commitments have been permanently terminated,
each Secured Party and each holder of a Note agrees that, at the Guarantor's
request, the Collateral Agent, on behalf of the Secured Parties and the holders
of the Notes, will execute and deliver to the Guarantor appropriate documents
(without recourse and without representation or warranty) necessary to evidence
the transfer by subrogation to the Guarantor of an interest in the Obligations
of GFI and each other Obligor resulting from such payment by the Guarantor. In
furtherance of the foregoing, for so long as any Obligations or Commitments
remain outstanding, the Guarantor shall refrain from taking any action or
commencing any proceeding against GFI 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 Guaranty to any
Secured Party or any holder of a Note.
SECTION 2.7. Successors, Transferees and Assigns; Transfers of Notes, etc.
This Guaranty shall:
(a) be binding upon the Guarantor, and its successors, transferees and
assigns; and
(b) inure to the benefit of and be enforceable by the Collateral Agent
and each other Secured Party.
Without limiting the generality of the foregoing clause (b), 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 rights and benefits in respect thereof granted
to such Lender under any Loan Document (including this Guaranty) or otherwise,
subject, however, to any contrary provisions in such assignment or transfer, and
to the provisions of Article XIII of the Credit Agreement.
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ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.1. Loan Document. This Guaranty is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof, including Article XIII thereof.
SECTION 3.2. Binding on Successors, Transferees and Assigns; Assignment. In
addition to, and not in limitation of, Section 2.7, this Guaranty shall be
binding upon the Guarantor and its successors, transferees and assigns and shall
inure to the benefit of and be enforceable by each Secured Party and each holder
of a Note and their respective successors, transferees and assigns (to the full
extent provided pursuant to Section 2.7); provided, however, that the Guarantor
may not assign any of its obligations hereunder without the prior written
consent of all Lenders.
SECTION 3.3. Amendments, etc. No amendment to or waiver of any provision of
this Guaranty, nor consent to any departure by the Guarantor herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Collateral Agent (on behalf of the Lenders or the Requisite Lenders, as the case
may be) and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 3.4. Notices. All notices and other communications provided for
hereunder shall be in writing and may be personally served, telecopied, telexed
or sent by courier service or United States certified mail and shall be deemed
to have been given when delivered in person or by courier service, upon receipt
of a telecopy or telex or four (4) Business Days after deposit in the United
States mail with postage prepaid and properly addressed. For the purposes
hereof, the address of the Guarantor shall be the address specified for the
Guarantor in the Credit Agreement or the address specified on the signature page
of any applicable Assignment and Acceptance, or, at such other address as may be
designated by the Guarantor in a written notice to the Collateral Agent.
SECTION 3.5. No Waiver; Remedies. In addition to, and not in limitation of,
Section 2.3 and Section 2.5, no failure on the part of any Secured Party or any
holder of a Note to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or
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the exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
SECTION 3.6. Captions. Section captions used in this Guaranty are for
convenience of reference only, and shall not affect the construction of this
Guaranty.
SECTION 3.7. Setoff. In addition to, and not in limitation of, any rights
of any Secured Party or any holder of a Note under applicable law, each Secured
Party and each such holder shall, upon the occurrence of any Default described
in any Section 11.01(f) or 11.01(g) of the Credit Agreement or with the consent
of the Requisite Lenders, any Event of Default, have the right to appropriate
and apply to the payment of the obligations of the Guarantor owing to it
hereunder, whether or not then due, and the Guarantor hereby grants to each
Secured Party and each such holder a continuing security interest in, any and
all balances, credits, deposits, accounts or moneys of the Guarantor then or
thereafter maintained with such Secured Party, or such holder or any agent or
bailee for such Secured Party or such holder; provided, however, that any such
appropriation and application shall be subject to the provisions of Section
13.06 of the Credit Agreement.
SECTION 3.8. Severability. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty 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 Guaranty.
SECTION 3.9. Governing Law, Entire Agreement, etc. THIS GUARANTY SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). THIS GUARANTY 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 3.10. Counterparts. This Guaranty may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
FOAMEX L.P.
BY FMXI, INC.,
the Managing General Partner
By /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
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