[Execution Copy]
FOAMEX INTERNATIONAL PLEDGE AGREEMENT
THIS FOAMEX INTERNATIONAL PLEDGE AGREEMENT (this "Pledge Agreement"),
dated as of February 27, 1998, is made by FOAMEX INTERNATIONAL INC., a Delaware
corporation (the "Pledgor"), in favor of CITICORP USA, INC., as FII
Intercreditor Collateral Agent (together with any successor(s) thereto in such
capacity, the "Collateral Agent") for each 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 and restated as of February 27, 1998 (as amended, supplemented, amended
and restated or modified from time to time, the "Credit Agreement"), among
Foamex L.P., a Delaware limited partnership ("Partnership" or the "Borrower"),
FMXI, Inc. certain institutions party thereto from time to time as lenders (the
"Lenders"), certain institutions party thereto from time to time as issuing
banks (the "Issuing Banks"), 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 therein,
the "Administrative Agents"), the Lenders and the Issuing Banks have extended
Loans and Commitments to make Credit Extensions to the Borrower;
WHEREAS, FII has entered into a guaranty, dated as of February 27, 1998
(the "FII Guaranty") pursuant to which it has guaranteed certain obligations of
New GFI;
WHEREAS, the Collateral Agent has entered into the FII Intercreditor
Agreement, dated as of February 27, 1998 (as amended, supplemented, amended and
restated or modified from time to time, the "FII Intercreditor Agreement"),
pursuant to which it has agreed to act as a collateral agent (the "FII
Intercreditor Collateral Agent") with respect to, among other things, the
Collateral;
WHEREAS, the Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor agrees, for the
benefit of each Secured Party, as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this 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):
"Administrative Agents" is defined in the first recital.
"Borrower" is defined in the first recital.
"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 the Letters of Credit.
"Distributions" means all stock dividends, liquidating dividends,
shares of stock resulting from (or in connection with the exercise of) stock
splits, reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock or other Equity Interests constituting Collateral, but shall not
include Dividends.
"Dividends" means cash dividends and cash distributions with respect to
any Pledged Shares or other Pledged Property made in the ordinary course of
business and not a liquidating dividend.
"FII Guaranty" is defined in the second recital.
"FII Intercreditor Agreement" is defined in the third recital.
"FII Intercreditor Collateral Agent" is defined in the third recital.
"Issuing Banks" is defined in the first recital.
"Lenders" is defined in the first recital.
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"New GFI Intercreditor Collateral Agent" means the collateral agent
appointed pursuant to the New GFI Intercreditor Agreement, dated as of February
27, 1998.
"Pledge Agreement" is defined in the preamble.
"Pledged Notes" means all promissory notes of New GFI substantially the
form of Exhibit A hereto which are delivered by the Pledgor to the Collateral
Agent as Pledged Property hereunder, as such promissory notes, in accordance
with Section 4.5, are amended, modified or supplemented from time to time,
together with any promissory note of New GFI taken in extension or renewal
thereof or substitution therefor.
"Pledged Property" means all Pledged Shares, all Pledged Notes, and all
other pledged shares of capital stock or other Equity Interests or promissory
notes, all other securities, all assignments of any amounts due or to become
due, all other instruments which are now being delivered or requested to be
delivered by the Pledgor to the Collateral Agent or may from time to time
hereafter be delivered or required to be delivered by the Pledgor to the
Collateral Agent for the purpose of pledge under this Pledge Agreement or any
other Loan Document, and all proceeds of any of the foregoing.
"Pledged Shares" means all shares of capital stock or other Equity
Interests of New GFI which are delivered or are required to be delivered by the
Pledgor to the Collateral Agent as Pledged Property hereunder.
"Pledgor" is defined in the preamble.
"Secured Obligations" is defined in Section 2.2.
"Securities Act" is defined in Section 6.2.
"Secured Parties" means, collectively, (i) the Lenders, the Issuing
Banks, the Administrative Agents, the Collateral Agent and the Funding Agent,
(ii) the New GFI Intercreditor Collateral Agent, (iii) the FII Intercreditor
Collateral Agent and (iv) each holder of a Guaranteed Obligation (as defined in
the FII
Guaranty).
"U.C.C." means the Uniform Commercial Code, as in effect from time to
time 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 Pledge Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
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SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or the
Credit Agreement or the context otherwise requires, terms for which meanings are
provided in the U.C.C. are used in this Pledge Agreement, including its preamble
and recitals, with such meanings.
ARTICLE II
PLEDGE
SECTION 2.1. Grant of Security Interest. The Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to the
Collateral Agent, for its benefit and the ratable benefit of each of the Secured
Parties, and hereby grants to the Collateral Agent, for its benefit and the
ratable benefit of the Secured Parties, a continuing security interest in, all
of the following property (the "Collateral"):
(a) all promissory notes of New GFI;
(b) all other Pledged Notes issued from time to time;
(c) all issued and outstanding shares of capital stock of New
GFI;
(d) all other Pledged Shares issued from time to time;
(e) all other Pledged Property, whether now or hereafter
delivered or required to be delivered to the Collateral Agent in
connection with this Pledge Agreement;
(f) all Dividends, Distributions, interest, and other payments
and rights with respect to any Pledged Property; and
(g) all proceeds of any of the foregoing; and
SECTION 2.2. Security for Obligations. This Pledge Agreement secures
the payment in full in cash of (i) all Obligations of the Pledgor now or
hereafter existing under the Credit Agreement, the Notes, the Foamex
International Guaranty, and each other Loan Document to which the Pledgor is or
may become a party, whether for principal, interest, costs, fees, expenses, or
otherwise, (ii) all obligations of each other Obligor now or hereafter existing
under each Loan Document to which such Obligor is or may become a party and (ii)
all obligations of FII under the FII Guaranty (all such Obligations of the
Pledgor, FII and all such obligations of such other Obligors being the "Secured
Obligations").
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SECTION 2.3. Delivery of Pledged Property. All certificates or
instruments representing or evidencing any Collateral, including all Pledged
Shares and all Pledged Notes, shall be delivered to and held by or on behalf of
(and, in the case of the Pledged Notes, endorsed to the order of) the Collateral
Agent pursuant hereto, shall be in suitable form for transfer by delivery, and
shall be accompanied by all necessary instruments of transfer or assignment,
duly executed in blank.
SECTION 2.4. Dividends on Pledged Shares and Payments on Pledged Notes.
In the event that any Dividend is to be paid on any Pledged Share or any payment
of principal or interest is to be made on any Pledged Note at a time when no
Default of the nature referred to in Section 11.01(f) or 11.01(g) of the Credit
Agreement or Event of Default has occurred and is continuing, such Dividend or
payment may be paid directly to the Pledgor. If any such Default or Event of
Default has occurred and is continuing, then any such Dividend or payment shall
be paid directly to the Collateral Agent.
SECTION 2.5. Continuing Security Interest; Transfer of Note. This
Pledge Agreement shall create a continuing security interest in the Collateral
and shall
(a) remain in full force and effect until payment in full in
cash of all Secured Obligations, the termination or expiration of all
Letters of Credit, the termination of all Commitments,
(b) be binding upon the Pledgor and its successors,
transferees and assigns, and
(c) inure, together with the rights and remedies of the
Collateral Agent hereunder, to the benefit of the Collateral Agent and
each other Secured Party.
Without limiting the foregoing clause (c), any Secured Party may assign or
otherwise transfer (in whole or in part) any Secured Obligation 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 Secured Party under any Secured Obligation (including this Pledge
Agreement) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer. Upon (i) the sale, transfer or other disposition of
Collateral in accordance with the Credit Agreement or (ii) the payment in full
in cash of all Secured Obligations, the termination or expiration of all Letters
of Credit, the termination of all Commitments and the termination of the FII
Guaranty, the security interest granted herein shall automatically terminate
with respect to (x) such Collateral (in the case of clause (i)) or (y) all
Collateral (in the case of
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clause (ii)). Upon any such termination, the Collateral Agent will, at the
Pledgor's sole expense, deliver to the Pledgor, without any representations,
warranties or recourse of any kind whatsoever, all certificates and instruments
representing or evidencing all Pledged Shares and all Pledged Notes, together
with all other Collateral held by the Collateral Agent hereunder, and execute
and deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence such termination.
SECTION 2.6. Security Interest Absolute. All rights of the Collateral
Agent and the security interests granted to the Collateral Agent hereunder, and
all obligations of the Pledgor hereunder, shall be absolute and unconditional
with respect to the Secured Obligations, irrespective of
(a) any lack of validity or enforceability of the Credit
Agreement, any Note, any other Loan Document or the FII Guaranty,
(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 the Borrower, any other Obligor or any
other Person under the provisions of the Credit Agreement, any
Note, any other Loan Document, the FII Guaranty or otherwise,
or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any 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 Obligation,
(d) any reduction, limitation, impairment or termination of
any Secured Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject
to (and the Pledgor 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 or otherwise,
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of
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the terms of the Credit Agreement, any Note, any other Loan
Document or the FII Guaranty,
(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
Borrower, any other Obligor, any surety or any guarantor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties, etc. The Pledgor
represents and warrants unto each Secured Party, as at the date of each pledge
and delivery hereunder (including each pledge and delivery of Pledged Shares and
each pledge and delivery of a Pledged Note) by the Pledgor to the Collateral
Agent of any Collateral, as set forth in this Article.
SECTION 3.1.1. Ownership, No Liens, etc. The Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full right
and authority to pledge and assign) such Collateral, free and clear of all liens
(except as contemplated by the FII Intercreditor Agreement), security interests,
options, or other charges or encumbrances, except any lien or security interest
granted pursuant hereto in favor of the Collateral Agent.
SECTION 3.1.2. Valid Security Interest. The delivery of such Collateral
to the Collateral Agent is effective to create a valid, perfected, first
priority security interest in such Collateral and all proceeds thereof, securing
the Secured Obligations. No filing or other action will be necessary to perfect
or protect such security interest.
SECTION 3.1.3. As to Pledged Shares. In the case of any Pledged Shares
constituting such Collateral, all of such Pledged Shares are duly authorized and
validly issued, fully paid, and non-assessable, and constitute all of the issued
and outstanding shares of capital stock.
SECTION 3.1.4. As to Pledged Notes. In the case of each Pledged Note,
all of such Pledged Notes have been duly authorized, executed, endorsed, issued
and delivered, and are the
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legal, valid and binding obligation of the issuers thereof, and are not in
default.
SECTION 3.1.5. Authorization, Approval, etc. No authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority, regulatory body or any other Person is required either
(a) for the pledge by the Pledgor of any Collateral pursuant
to this Pledge Agreement or for the execution, delivery, and
performance of this Pledge Agreement by the Pledgor, or
(b) for the exercise by the Collateral Agent of the voting or
other rights provided for in this Pledge Agreement, or, except with
respect to any Pledged Shares, as may be required in connection with a
disposition of such Pledged Shares by laws affecting the offering and
sale of securities generally, the remedies in respect of the Collateral
pursuant to this Pledge Agreement.
SECTION 3.1.6. Compliance with Laws. The Pledgor is in compliance with
the requirements of all applicable laws (including the provisions of the Fair
Labor Standards Act), rules, regulations and orders of every governmental
authority, the non-compliance with which might have a Material Adverse Effect or
materially adversely affect the value of the Collateral or the worth of the
Collateral as collateral security.
ARTICLE IV
COVENANTS
SECTION 4.1. Protect Collateral; Further Assurances, etc. The Pledgor
will not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral (except in favor of the Collateral Agent hereunder). The Pledgor will
warrant and defend the right and title herein granted unto the Collateral Agent
in and to the Collateral (and all right, title, and interest represented by the
Collateral) against the claims and demands of all Persons whomsoever. The
Pledgor agrees that at any time, and from time to time, at the expense of the
Pledgor, the Pledgor will promptly execute and deliver all further instruments,
and take all further action, that may be necessary or desirable, or that the
Collateral Agent may reasonably request, in order to perfect 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.
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SECTION 4.2. Stock Powers, etc. The Pledgor agrees that all Pledged
Shares (and all other shares of capital stock constituting Collateral) delivered
by the Pledgor pursuant to this Pledge Agreement will be accompanied by duly
executed undated blank stock powers, or other equivalent instruments of transfer
acceptable to the Collateral Agent. The Pledgor will, from time to time upon the
request of the Collateral Agent, promptly deliver to the Collateral Agent such
stock powers, instruments, and similar documents, satisfactory in form and
substance to the Collateral Agent, with respect to the Collateral as the
Collateral Agent may reasonably request and will, from time to time upon the
request of the Collateral Agent after the occurrence of any Event of Default,
promptly transfer any Pledged Shares or other shares of common stock
constituting Collateral into the name of any nominee designated by the
Collateral Agent.
SECTION 4.3. Continuous Pledge. The Pledgor will, at all times, keep
pledged to the Collateral Agent pursuant hereto all Pledged Shares and all other
shares of capital stock constituting Collateral, all Dividends and Distributions
with respect thereto, all Pledged Notes, all interest, principal and other
proceeds received by the Collateral Agent with respect to the Pledged Notes, and
all other Collateral and other securities, instruments, proceeds, and rights
from time to time received by or distributable to the Pledgor in respect of any
Collateral and will not permit New GFI to issue any capital stock which shall
not have been immediately duly pledged hereunder on a first priority perfected
basis.
SECTION 4.4. Voting Rights; Dividends, etc. The Pledgor agrees:
(a) after any Event of Default shall have occurred and be
continuing, promptly upon receipt of notice thereof by the Pledgor and
without any request therefor by the Collateral Agent, to deliver
(properly endorsed where required hereby or requested by the Collateral
Agent) to the Collateral Agent all Dividends, Distributions, all
interest, all principal, all other cash payments, and all proceeds of
the Collateral, all of which shall be held by the Collateral Agent as
additional Collateral for use in accordance with Section 6.4; and
(b) after any Event of Default shall have occurred and be
continuing and the Collateral Agent has notified the Pledgor of the
Collateral Agent's intention to exercise its voting power under this
Section 4.4(b)
(i) the Collateral Agent may exercise (to the
exclusion of the Pledgor) the voting power and all
other incidental rights of ownership with respect to
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any Pledged Shares or other shares of capital stock
constituting Collateral and the Pledgor hereby grants the
Collateral Agent an irrevocable proxy, exercisable under such
circumstances, to vote the Pledged Shares and such other
Collateral; and
(ii) promptly to deliver to the Collateral Agent such
additional proxies and other documents as may be necessary to
allow the Collateral Agent to exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by the Pledgor but which the
Pledgor is then obligated to deliver to the Collateral Agent, shall, until
delivery to the Collateral Agent, be held by the Pledgor separate and apart from
its other property in trust for the Collateral Agent. The Collateral Agent
agrees that unless an Event of Default shall have occurred and be continuing and
the Collateral Agent shall have given the notice referred to in Section 4.4(b),
the Pledgor shall have the exclusive voting power with respect to any shares of
capital stock (including any of the Pledged Shares) constituting Collateral and
the Collateral Agent shall, upon the written request of the Pledgor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by the Pledgor which are necessary to allow the Pledgor to exercise
voting power with respect to any such share of capital stock (including any of
the Pledged Shares) constituting Collateral; provided, however, that no vote
shall be cast, or consent, waiver, or ratification given, or action taken by the
Pledgor that would impair any Collateral or be inconsistent with or violate any
provision of the Credit Agreement or any other Loan Document (including this
Pledge Agreement).
SECTION 4.5. Additional Undertakings. The Pledgor will
not, without the prior written consent of the Collateral Agent:
(a) enter into any agreement amending, supplementing, or
waiving any provision of any Pledged Note (including any underlying
instrument pursuant to which such Pledged Note is issued) or
compromising or releasing or extending the time for payment of any
obligation of the maker thereof; or
(b) take or omit to take any action the taking or the omission
of which would result in any impairment or alteration of any obligation
of the maker of any Pledged Note or other instrument constituting
Collateral.
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ARTICLE V
THE COLLATERAL AGENT
SECTION 5.1. Collateral Agent Appointed Attorney-in-Fact. The Pledgor
hereby irrevocably appoints the Collateral Agent the Pledgor's attorney-in-fact,
with full authority in the place and stead of the Pledgor and in the name of the
Pledgor or otherwise, 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 Pledge Agreement,
including after the occurrence and continuance of a Default of the nature
referred to in Section 11.01(f) or 11.01(g) of the Credit Agreement or an Event
of Default:
(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; and
(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 Collateral Agent with respect to any of the Collateral.
The Pledgor 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 the Pledgor fails to
perform any agreement contained herein, 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 the Pledgor pursuant
to Section 6.4.
SECTION 5.3. Collateral Agent Has No Duty. 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
Collateral Agent shall have no duty as to any Collateral or responsibility for
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(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative
to any Pledged Property, whether or not the Collateral Agent has or is
deemed to have knowledge of such matters, or
(b) taking 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 the Pledgor
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:
(a) The Collateral Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the U.C.C. (whether or not the U.C.C.
applies to the affected Collateral) and also may, without notice except
as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of the Collateral
Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable. The Pledgor agrees that, to the extent notice
of sale shall be required by law, at least ten days' prior notice to
the Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. 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
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sale may, without further notice, be made at the time and place to
which it was so adjourned.
(b) The Collateral Agent may
(i) transfer all or any part of the Collateral into
the name of the Collateral Agent or its nominee, with or
without disclosing that such Collateral is subject to the lien
and security interest hereunder,
(ii) notify the parties obligated on any of the
Collateral to make payment to the Collateral Agent of
any amount due or to become due thereunder,
(iii) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto,
(iv) endorse any checks, drafts, or other
writings in the Pledgor's name to allow collection of
the Collateral,
(v) take control of any proceeds of the
Collateral, and
(vi) execute (in the name, place and stead of the
Pledgor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Collateral.
SECTION 6.2. Securities Laws. If the Collateral Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
6.1, the Pledgor agrees that, upon request of the Collateral Agent, the Pledgor
will, at its own expense:
(a) execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and the directors and officers
thereof to execute and deliver, all such instruments and documents, and
do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Collateral Agent, advisable to
register such Collateral under the provisions of the Securities Act of
1933, as from time to time amended (the "Securities Act"), and to cause
the registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to
be furnished, and to make all amendments and supplements thereto and to
the
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related prospectus which, in the opinion of the Collateral Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by
the Collateral Agent;
(c) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act; and
(d) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
The Pledgor further acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by the Collateral Agent or the Secured Parties by
reason of the failure by the Pledgor to perform any of the covenants contained
in this Section and, consequently, agrees that, if the Pledgor shall fail to
perform any of such covenants, it shall pay, as liquidated damages and not as a
penalty, an amount equal to the value (as determined by the Collateral Agent) of
the Collateral on the date the Collateral Agent shall demand compliance with
this Section.
SECTION 6.3. Compliance with Restrictions. The Pledgor agrees that in
any sale of any of the Collateral whenever an Event of Default shall have
occurred and be continuing, 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 (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and the Pledgor 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, nor shall the Collateral Agent be liable nor accountable to
the Pledgor for any
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discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
SECTION 6.4. Application of Proceeds. All cash proceeds received by the
Collateral Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral shall be applied by the
Collateral Agent, first, to the pro rata payment of all the Secured Obligations
(other than Secured Obligations in respect of the Credit Agreement) and second,
in accordance with Section 3.02(b)(iii) of the Credit Agreement and with each
other Loan Document.
SECTION 6.5. Indemnity and Expenses. The Pledgor hereby indemnifies and
holds harmless the Collateral Agent from and against any and all claims, losses,
and liabilities arising out of or resulting from this Pledge Agreement
(including enforcement of this Pledge Agreement), except claims, losses, or
liabilities resulting from the Collateral Agent's gross negligence or wilful
misconduct. Upon demand, the Pledgor will 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:
(a) the administration of this Pledge Agreement, the
Credit Agreement and each other Loan Document;
(b) the custody, preservation, use, or operation of,
or the sale of, collection from, or other realization upon,
any of the Collateral;
(c) the exercise or enforcement of any of the rights
of the Collateral Agent hereunder; or
(d) the failure by the Pledgor to perform or observe
any of the provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Pledge Agreement 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.
SECTION 7.2. Amendments, etc. No amendment to or waiver of any
provision of this Pledge Agreement nor consent to any departure by the Pledgor
herefrom shall in any event be effective
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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 it is given.
SECTION 7.3. Protection of Collateral. The Collateral Agent may from
time to time, at its option, perform any act which the Pledgor agrees hereunder
to perform and which the Pledgor shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of an Event of Default) and the
Collateral Agent may from time to time take any other action which the
Collateral Agent reasonably deems necessary for the maintenance, preservation or
protection of any of the Collateral or of its security interest therein.
SECTION 7.4. Addresses for Notices. All notices and other
communications provided for hereunder shall be made as set forth in Section
13.08 of the Credit Agreement.
SECTION 7.5. Section Captions. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION 7.6. Severability. Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this 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 Pledge
Agreement.
SECTION 7.7. Counterparts. This Pledge Agreement 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.
SECTION 7.8. Governing Law, Entire Agreement, etc. THIS PLEDGE
AGREEMENT 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),
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS
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.
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SECTION 7.9. Conflicts. In the event of any conflict between the terms
of this Pledge Agreement and the FII Intercreditor Agreement, the terms of the
FII Intercreditor Agreement shall govern.
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.
FOAMEX INTERNATIONAL INC.
By /s/ Xxxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
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Foamex International Pledge Agreement (New GFI)
CITICORP USA, INC., as
Collateral Agent
By /s/ Xxx Xxxxxx
-------------------------
Name:
Title: Attorney-in-Fact
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EXHIBIT A
to Foamex International
Pledge Agreement (New GFI)
PROMISSORY NOTE
$_______________ , 19__
FOR VALUE RECEIVED, the undersigned, [Name of Maker], a _______________
__________ (the "Maker"), promises to pay to the order of ___________________, a
__________ __________ (the "Payee"), in equal ________ installments, commencing
_________, 19__ to and including , 19 , the principal sum of DOLLARS ($______ ),
representing the aggregate principal amount of an intercompany loan made by the
Payee to the Maker.
The unpaid principal amount of this promissory note (this "Note") from
time to time outstanding shall bear interest at a rate of interest equal to
____________, which the Maker represents to be a lawful and commercially
reasonable rate, payable __________, and all payments of principal of and
interest on this Note shall be payable in lawful currency of the United States
of America. All such payments shall be made by the Maker to an account
established by the Payee at _______________ and shall be recorded on the grid
attached hereto by the holder hereof (including the Collateral Agent as
pledgee). Upon notice from the Collateral Agent (hereinafter defined) that a
Default (as defined in the Credit Agreement, hereinafter defined) of the nature
referred to in Section 11.01(f) or 11.01(g) of the Credit Agreement or an Event
of Default (as defined in the Credit Agreement) has occurred and is continuing
under the Credit Agreement, the Maker shall make such payments, in same day
funds, to such other account as the Collateral Agent shall direct in such
notice.
This Note is one of the Pledged Notes referred to in, and evidences
Indebtedness incurred pursuant to Section 9.01 of the Credit Agreement, dated as
of June 12, 1997, as amended and restated as of February 27, 1998 (as amended,
supplemented, amended and restated or modified from time to time, the "Credit
Agreement"), among Foamex L.P., a Delaware limited partnership, (the
"Borrower"), FMXI, Inc., a Delaware corporation, 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, the Lenders and the Issuing Banks have extended Commitments to
make Credit Extensions to the Borrower. Upon the occurrence and continuance of
an Event of Default under the Credit Agreement, and notice thereof by the
Collateral Agent to the Maker, the
A-1
Collateral Agent shall have all rights of the Payee to collect and accelerate,
and enforce all rights with respect to, the Indebtedness evidenced by this Note.
Unless otherwise defined herein or the context otherwise requires, terms used
herein have the meanings provided in the Credit Agreement.
Reference is made to the Credit Agreement for a description of the
Pledge Agreement pursuant to which this Note has been pledged to the Collateral
Agent as security for the Secured Obligations outstanding from time to time
under the Credit Agreement and each other Loan Document.
In addition to, but not in limitation of, the foregoing, the Maker
further agrees to pay all expenses, including reasonable attorneys' fees and
legal expenses, incurred by the holder (including the Collateral Agent as
pledgee) of this Note endeavoring to collect any amounts payable hereunder which
are not paid when due, whether by acceleration or otherwise.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS
NOTE. THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.
[NAME OF MAKER]
By
---------------------------
Name:
Title:
Pay to the order of CITICORP
USA, INC., as Collateral
Agent
[NAME OF PAYEE]
By
--------------------------
Name:
Title:
A-2
GRID
Intercompany Loans made by [Name of Payee] to [Name of Maker] and
payments of principal of such Loans.
===================================================================================================================
Amount of Amount of Outstanding
Intercompany Principal Principal Notation
Date Loan Payment Balance Made By
===================================================================================================================
