[Execution Copy]
SECOND AMENDED AND RESTATED FOAMEX INTERNATIONAL GUARANTY
This SECOND AMENDED AND RESTATED FOAMEX INTERNATIONAL GUARANTY (as
amended, supplemented, amended and restated or otherwise modified from time to
time, this "Guaranty"), dated as of February 27, 1998, is made by Foamex
International Inc., a Delaware corporation (the "Guarantor"), 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 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. ("Foamex" or the "Borrower"), FMXI, Inc., a Delaware corporation and
managing general partner of Foamex ("FMXI"),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, the "Administrative Agents"), the Lenders and the Issuing
Banks have extended Loans and Commitments to make Credit Extensions to the
Borrower;
WHEREAS, as a condition precedent to the effectiveness of 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 and to be made from time to time to the
Borrower by the Lenders and the Issuing Banks pursuant to the Credit Agreement;
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 and/or maintain Credit Extensions to the Borrower 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" is defined in 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.
"FMXI" is defined in the first recital.
"Foamex" is defined in the first recital.
"Guarantor" is defined in the preamble.
"Guaranty" is defined in the preamble.
"New GFI Guaranty" means the Foamex International Guaranty, dated as of
February 27, 1998, as amended, supplemented, amended and restated from time to
time.
"Obligations" means all Obligations (as defined in the Credit
Agreement) of the Borrower and all obligations (monetary or otherwise) of each
other Obligor arising under or in connection with the Credit Agreement or any
other Loan Document.
"Process Agent" is defined in Section 6.11.1.
"Secured Parties" means, collectively, the Lenders, the Issuing Banks,
the Collateral Agent, the Funding Agent and the
-2-
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.
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 the Borrower under the
Credit Agreement, the Notes and the other Loan Documents to which it is
a party and all Obligations by each other Obligor (other than Xxxxx
Industries) 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 the Borrower 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 the Borrower, any other Obligor or
the Guarantor, or the inability or failure of the Borrower, any other Obligor or
the Guarantor to pay debts as they become due, or an assignment by the Borrower,
-3-
any other Obligor or the Guarantor for the benefit of creditors, or the
commencement of any case or proceeding in respect of the Borrower, 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 the Borrower
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.
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 the
Borrower 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 the Borrower 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 the Borrower, 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 the Borrower 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 the Borrower or
any other Obligor, or any other
-4-
extension, compromise or renewal of any Obligation of the
Borrower or any other Obligor;
(d) any reduction, limitation, impairment or termination of
any Obligations of the Borrower 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 affecting, any Obligations of the
Borrower, 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 the Borrower or any other Obligor; or
(g) any other circumstance 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.
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 the Borrower, 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 the Borrower 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
the Borrower, any other Obligor or any other Person (including any other
guarantor) or entity or any
-5-
collateral securing the Obligations of the Borrower 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 the Borrower 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 the Borrower 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 to the Collateral Agent for the benefit of the Secured
Parties and each holder of a Note and credited and applied against the
Obligations the Borrower 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 the
Borrower or any other Obligor, and
(b) all Obligations of the Borrower 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 the Borrower 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 the 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 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
-6-
(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.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. The Guarantor hereby
represents and warrants unto the Collateral Agent as set forth in this Article
III acknowledging that the Collateral Agent is relying thereon without
independent inquiry.
SECTION 3.1.1. Corporate Existence; Compliance with Law. The Guarantor
(i) is a corporation duly organized, validly existing and in good standing under
the laws of the state of Delaware; (ii) has the requisite corporate power and
authority and the legal right to own, pledge, mortgage or otherwise encumber its
properties and to conduct its business as now and heretofore conducted; (iii) is
in compliance with its Constituent Documents; and (iv) is in compliance with all
material Requirements of Law.
SECTION 3.1.2. Corporate Power; Authorization. The execution and
delivery by the Guarantor of the Loan Documents and the Transaction Documents to
which it is a party and all instruments and documents to be delivered by the
Guarantor thereunder, and the performance of its obligations thereunder: (i) are
within the Guarantor's corporate power; (ii) have been duly authorized by all
necessary or proper corporate action; (iii) are not in contravention of any
provision of the Guarantor's Constituent Documents; (iv) will not violate any
law or regulation, or any order or decree of any court or Governmental
Authority; (v) will not conflict with or result in the breach or termination of,
constitute a default under (with or without the giving of notice, the lapse of
time or both) or a tortious interference with or accelerate any performance
required by, any material indenture, mortgage, deed of trust, lease, agreement
or other instrument to which the Guarantor is a party or by which the Guarantor
or any of its property is bound; (vi)
-7-
will not result in the creation or imposition of any Lien upon any of the
property of the Guarantor, other than Liens created pursuant to the terms of the
Loan Documents and the Transaction Documents; and (vii) do not require the
consent or approval of any Governmental Authority, or any other Person which has
not been obtained.
SECTION 3.1.3. No Adverse Condition. No action has been taken by any
competent authority which restrains, prevents or imposes material adverse
conditions upon, or seeks to restrain, prevent or impose material adverse
conditions upon, the consummation of any of the transactions contemplated by the
Loan Documents or the Transaction Documents.
Section 3.1.4. Enforceability. The obligations of the Guarantor under
this Guaranty are enforceable against the Guarantor in accordance with their
terms.
ARTICLE IV
COVENANTS, ETC.
SECTION 4.1. Covenants. The Guarantor covenants and agrees that the
Guarantor will perform the obligations set forth in this Article IV until all
Obligations of the Borrower 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 shall comply with the following covenants
unless the Requisite Lenders shall otherwise give their prior written consent
thereto.
SECTION 4.1.1. Sale of Assets; Liens. The Guarantor shall not (A) sell,
assign, transfer, lease, convey or otherwise dispose of any Property, whether
now owned or hereafter acquired, or any income or profits therefrom, or enter
into any agreement to do so, except(i) as contemplated in the Foamex
International Supply Agreement, (ii) sales of assets for Fair Market Value,
(iii) that certain Canadair Challenger Model CL600-2B16, or any replacement
thereof (the "Aircraft"), which Aircraft is currently leased to the Guarantor
pursuant to that certain Aircraft Lease and Operating Agreement, dated August
17, 1995, by and between Foamex Aviation, Inc. and Jet Solutions LLC, the
proceeds of which shall be retained by the Guarantor and (iv) in connection with
the Transaction and the transactions contemplated by the Transaction Documents
or (B) directly or indirectly create, incur, assume or permit to exist any Lien
on or with respect to any of its Property except (i) Liens securing the
Obligations, (ii) Liens permitted by the Credit Agreement, (iii) Liens securing
the Aircraft and (iv) Liens created pursuant to the
-8-
Foamex International Pledge Agreement securing the Credit Agreement and the New
GFI Guaranty and the Partnership Pledge Agreement securing the Credit Agreement
and the New GFI Guaranty.
SECTION 4.1.2. Conduct of Business. The Guarantor shall not engage in
any business other than acting as a holding company and holding the Investments
of the Guarantor permitted under Section 4.1.6 hereto.
SECTION 4.1.3. Transactions with Affiliates. Except in respect of
transactions (i) described in Schedule 6.01-Z of the Credit Agreement and (ii)
contemplated by the Transaction Documents, the Guarantor shall not directly or
indirectly enter into any transactions (including, without limitation, the
purchase, sale, lease or exchange of any property or the rendering of any
service), with any holder or holders of more than five percent (5%) of any class
of Equity Interests in the Guarantor or with any of the Guarantor's Affiliates
(other than Foamex and its Subsidiaries) on terms that are less favorable to it
than terms that could be obtained in an arm's length transaction with an
unrelated party at that time.
SECTION 4.1.4. Indebtedness. Neither the Guarantor nor any of its
Subsidiaries (other than New GFI and its Subsidiaries or Foamex and its
Subsidiaries) shall directly or indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except (A) Indebtedness in respect of the Guaranty or the
Obligations, (B) Indebtedness in respect of Transaction Costs, (C) Indebtedness
in respect of the New GFI Guaranty, (D) Indebtedness in respect of loans
constituting Investments of Foamex permitted under Section 9.04 of the Credit
Agreement, (E) Indebtedness in respect of loans to the Guarantor from Persons
other than Foamex and its Subsidiaries for the purposes of funding taxes and
ordinary operating and general administrative expenses of the Guarantor and
funding loan commitments to DLJ Funding, Inc. under the DLJ Loan Commitment
Agreement dated as of December 14, 1993 between the Guarantor and DLJ Funding,
Inc. and to Marely I s.a. under the Marely Loan Commitment Agreement dated as of
December 14, 1993 between the Guarantor and Marely I s.a., (F) other unsecured
Indebtedness of the Guarantor in an aggregate principal amount not to exceed
$50,000,000 at any time,(G) Indebtedness of the Foamex Mexico Group and its
Subsidiaries and (H) Indebtedness of the Guarantor to The CIT Group Equipment
Financing, Inc. with respect to the Aircraft.
SECTION 4.1.5. Restriction on Fundamental Changes. The Guarantor shall
not enter into any merger or consolidation, or liquidate, wind-up or dissolve
(or suffer any liquidation or dissolution), purchase or otherwise acquire, in
one transaction or series of transactions, all or substantially all of the
Equity
-9-
Interests in, or other evidence of beneficial ownership of, or the business,
property or assets of, any Person except in connection with the Transaction and
the transactions contemplated by the Transaction Documents.
SECTION 4.1.6. Investments. The Guarantor shall not directly or
indirectly make or own any Investment, except (i) Investments in cash and Cash
Equivalents, (ii) Investments held by the Guarantor set forth on Schedule I
hereto, (iii) other Investments in existence on the date hereof in an aggregate
amount not to exceed $1 million, (iv) direct cash Investments in the Borrower,
any Subsidiary Guarantor or New GFI,(v) other Investments in any Fiscal Year not
in excess of $25,000,000 and (vi) Investments contemplated by the Transaction
and the Transaction Documents.
SECTION 4.1.7. Constituent Documents. Neither the Guarantor nor any of
its Subsidiaries (other than New GFI and its Subsidiaries or Foamex and its
Subsidiaries) shall amend, modify or otherwise change any of the terms or
provisions in any of its Constituent Documents as in effect on the date hereof
other than amendments or modifications deemed immaterial by the Administrative
Agents.
SECTION 4.1.8. Transaction Documents. Neither the Guarantor nor any of
its Subsidiaries (other than New GFI and its Subsidiaries or Foamex and its
Subsidiaries) shall amend, supplement or otherwise modify any of the terms or
provisions in any of the Transaction Documents to which it is a party other than
amendments, supplements or modifications deemed immaterial by the Administrative
Agents.
ARTICLE V
SUBORDINATION
The Guarantor hereby agrees that any Indebtedness of the Borrower now
or hereafter owing to the Guarantor (the "Guarantor Subordinated Debt") is
hereby subordinated to all of the Obligations and to all "Senior Indebtedness"
as defined in the New Foamex Indenture and the New Foamex Subordinated
Indenture, as the case may be, in each case whether heretofore, now or hereafter
created, on the terms set forth in Article 10 of the New Foamex Indenture to the
same extent as if such Indebtedness constituted Indebtedness evidenced by the
New Foamex Notes and the New Foamex Subordinated Indenture, as the case may be,
and to the extent necessary to comply with Section 4.15 of the New Foamex
Indenture and the New Foamex Subordinated Indenture, as the case may be, the
terms of which section are incorporated herein by reference. In addition, the
Guarantor Subordinated
-10-
Debt is subordinated on the following terms: The Guarantor Subordinated Debt
shall not be paid in whole or in part except as otherwise permitted under the
terms of the Credit Agreement. The Guarantor will not accept any payment of or
on account of any Guarantor Subordinated Debt at any time in contravention of
the foregoing. The Guarantor agrees to file all claims against the Borrower in
any bankruptcy or other proceeding in which the filing of claims is required by
law in respect of any Guarantor Subordinated Debt, and the Collateral Agent
shall be entitled to all of the Guarantor's rights thereunder. If for any reason
the Guarantor fails to file such claim at least thirty (30) days prior to the
last date on which such claim should be filed, the Collateral Agent, as the
Guarantor's attorney-in-fact, is hereby authorized to do so in the Guarantor's
name or, in the Collateral Agent's discretion, to assign such claim to and cause
proof of claim to be filed in the name of the Collateral Agent or its nominee.
In all such cases, whether in administration, bankruptcy or otherwise, the
person or persons authorized to pay such claim shall pay to the Collateral Agent
the full amount payable on the claim in the proceeding, and, to the full extent
necessary for that purpose, the Guarantor hereby assigns to the Collateral Agent
all the Guarantor's rights to any payments or distributions to which the
Guarantor otherwise would be entitled. If the amount so paid is greater than the
Guarantor's liability hereunder, the Collateral Agent will pay the excess amount
to the party entitled thereto. In addition, the Guarantor hereby appoints the
Collateral Agent as its attorney-in-fact to exercise all of the Guarantor's
voting rights with respect to the Guarantor Subordinated Debt in connection with
any bankruptcy proceeding or any plan for the reorganization of the Borrower.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1. 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 6.2. 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 the Guarantor's 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
-11-
assign any of its obligations hereunder without the prior written consent of all
Lenders.
SECTION 6.3. 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 6.4. 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 on the
signature page hereof, or at such other address as may be designated by the
Guarantor in a written notice to the Collateral Agent.
SECTION 6.5. 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 the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
SECTION 6.6. Captions. Section captions used in this Guaranty are for
convenience of reference only, and shall not affect the construction of this
Guaranty.
SECTION 6.7. 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
-12-
shall be subject to the provisions of Section 13.06 of the Credit Agreement.
SECTION 6.8. 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 6.9. No Release. This Guaranty amends and restates in its
entirety the Amended and Restated Foamex International Guaranty dated as of
December 23, 1997, made by the Guarantor in favor of Citicorp USA, Inc., as
Collateral Agent for each of the Secured Parties, for the benefit of the Secured
Parties and shall not release the Guarantor's obligations under such guaranty.
SECTION 6.10. Certain Consents and Waivers of the Guarantor.
SECTION 6.10.1. Personal Jurisdiction. (i) THE GUARANTOR 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
GUARANTY, WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY AGREEMENT, AND THE GUARANTOR IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. THE GUARANTOR 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 ACKNOWLEDGED TO BE EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT. THE GUARANTOR AGREES THAT A FINAL
JUDGEMENT ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGEMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
THE GUARANTOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(ii) THE GUARANTOR AGREES THAT THE COLLATERAL AGENT SHALL HAVE THE
RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION
TO ENABLE THE ADMINISTRATIVE AGENTS, THE LENDERS AND THE ISSUING BANKS TO
ENFORCE A JUDGMENT OR OTHER
-13-
COURT ORDER ENTERED IN FAVOR OF THE ADMINISTRATIVE AGENTS, ANY LENDER OR ANY
ISSUING BANK. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION
OF THE COURT IN WHICH THE ADMINISTRATIVE AGENTS, ANY LENDER OR ANY ISSUING BANK
MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
SECTION 6.10.2. Service of Process. THE GUARANTOR IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION
OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE PROCESS AGENT OR THE GUARANTOR'S NOTICE ADDRESS
SPECIFIED BELOW, SUCH SERVICE TO BECOME EFFECTIVE (5) FIVE DAYS AFTER SUCH
MAILING. THE GUARANTOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING WITHOUT
LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY 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 COLLATERAL AGENT TO BRING PROCEEDINGS
AGAINST THE GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 6.11. 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). EXCEPT AS SET FORTH IN
SECTION 6.10, 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 6.12. Waiver of Jury Trial. THE GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE SECURED PARTIES OR SUCH GUARANTOR. THE GUARANTOR ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS ENTERING INTO THE
CREDIT AGREEMENT.
SECTION 6.13. 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.
-14-
-15-
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 International Inc.
By /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
Notice address:
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telecopier No.: 000-000-0000
SCHEDULE I
to
Foamex International Inc. Guaranty
1,000 shares (100% of the outstanding common stock) of Foamex Delaware, Inc., a
Delaware corporation
1,000 shares (100% of the outstanding common stock) of FMXI, Inc., a Delaware
corporation
1,000 shares (100% of the outstanding common stock) of Foamex Aviation, Inc., a
Delaware corporation
1,000 shares (100% of the outstanding common stock) of Foamex Carpet Cushion
Inc., a Delaware corporation
1,000 shares (100% of the outstanding common stock) of Merger Acquisition Corp.,
a Delaware corporation
Investment in Trace Global Opportunities Fund, L.P. in the amount of $2,000,000
98% limited partner Equity Interest in Foamex
-17-
