Foamex International Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
July 31, 2000
The Bank Nova Scotia
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: X. Xxxxxx Xxxxxxxxx
Foamex International Inc. Share Exchange
Dear Sirs:
This will confirm our agreement concerning a portion of the
7,197,426 shares (the "Shares") of common stock, par value $.01 per share (the
"Common Stock"), of Foamex International Inc. ("Foamex") currently held of
record by Xxxxx Xxxx Sub, Inc. ("Trace") and Trace International Holdings, Inc.
("TII"), which are subject to liens and security interests in favor of The Bank
of Nova Scotia ("Scotia Bank"), a creditor of TII, the holder of all of the
outstanding shares of capital stock of Trace, and of Trace.
We understand that Scotia Bank and Xxxx X. Xxxxxxx, in his capacity
as the Chapter 7 trustee for the estates of Trace and TII (the "Trustee"), have
entered into a Stipulation of Settlement (the "Stipulation of Settlement") in
the form attached hereto as Exhibit "A," which is subject to approval by the
United States Bankruptcy Court for the Southern District of New York (the
"Bankruptcy Court"). The Stipulation of Settlement provides, among other things,
that Scotia Bank will have the right to take title to 1,500,000 of the Shares so
that the agreement described herein may be effectuated.
Foamex and Scotia Bank desire to facilitate the orderly transfer of
Common Stock held of record by Trace to Scotia Bank (and its potential
transferees) following Bankruptcy Court approval of the Stipulation of
Settlement in a manner that does not constitute a "change in control", as
defined in instruments governing certain outstanding indebtedness issued by
Foamex L.P. and Foamex Carpet Cushion, Inc., subsidiaries of Foamex.
Accordingly, Foamex and Scotia Bank hereby agree as follows:
1. The Share Exchange. On the terms and subject to the conditions set forth
herein, at the Closing (as defined below), (a) Scotia Bank shall transfer,
assign and deliver to Foamex a certificate representing 1,500,000 shares of
Common Stock (the "Exchanged Shares"), together with stock powers endorsed in
blank, and (b) Foamex shall issue, in exchange for the Exchanged Shares, a
certificate registered in the name of Scotia Bank representing 15,000 shares of
Series B Preferred Stock, par value $1.00 per share (the "Series B Preferred
Stock"), of Foamex. The Series B Preferred Stock shall have the rights, terms
and preferences as set forth in the form of Certificate of Designations attached
hereto as Exhibit "B" (the "Certificate"). The exchange contemplated by this
paragraph 1 is referred to herein as the "Share Exchange").
2. Closing. The closing of the Share Exchange (the "Closing") shall take
place within two business days following the satisfaction or waiver of the
conditions set forth in paragraph 5 below at the offices of Xxxx, Weiss,
Rifkind, Xxxxxxx & Xxxxxxxx, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000.
3. Foamex Representations and Warranties. Foamex represents and warrants to
Scotia Bank as follows:
(a) Organization and Good Standing. Each of Foamex and its material
subsidiaries is a corporation or other entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now being conducted.
Each of Foamex and its material subsidiaries is duly qualified or licensed and
in good standing to do business in each jurisdiction in which the character of
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so duly qualified or licensed and in good standing would not
have a material adverse effect on the business, assets, condition (financial or
otherwise) or the results of operations of Foamex and its material subsidiaries,
taken as a whole.
(b) Authorization; Binding Agreement. Foamex has all requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Foamex and constitutes the legal, valid and binding
agreement of Foamex enforceable against Foamex in accordance with its terms,
except to the extent that enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by principles of equity regarding
the availability of remedies.
(c) Filings; Consents. Except for (i) the filing of the Certificate with
the Secretary of State of Delaware, (ii) obtaining an appropriate determination
from the Administrative Agents under each of (A) the Second Amended and Restated
Foamex International Guaranty, dated as of February 27, 1998, as amended, made
by Foamex in favor of Citicorp USA, Inc., as Collateral Agent, and (B) the
Foamex International Guaranty, dated as of February 27, 1998, as amended, made
by Foamex in favor of Citicorp USA, Inc., as intercreditor collateral agent, in
each case with respect to the amendment to the Foamex Certificate of
Incorporation upon the filing of the Certificate (collectively, the
"Determinations"), and (iii) any necessary filings with the Securities and
Exchange Commission to report the Share Exchange, Foamex is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency or other party in connection
with the execution and delivery by Foamex of this Agreement and the performance
by it of the transactions contemplated hereby. The execution and delivery of
this Agreement by Foamex and the performance by it of the transactions
contemplated hereby do not and will not conflict with or violate any statute,
ordinance, rule or regulation applicable to Foamex, or any writ or injunction to
which Foamex is a party or by which Foamex or its properties are bound, and do
not and will not breach, conflict with or violate, or cause an event of default
under, any Credit Documents listed on Schedule I to the opinion of counsel dated
as of the date of this Agreement, provided to Citicorp USA, Inc. and Scotia Bank
as Administrative Agents under each of the Foamex L.P. Credit Agreement and the
Foamex Carpet Credit Agreement (as each such term is defined in the Certificate)
("Schedule I"). The Common Stock Transfer (as defined in paragraph 6(c) below)
does not and will not breach, conflict with or violate, or cause an event of
default under, any Credit Documents listed on Schedule I. A copy of Schedule I
is attached hereto.
(d) Preferred Stock. The shares of Series B Preferred Stock to be issued
hereunder to Scotia Bank shall be duly authorized, validly issued, fully paid
and non-assessable and will not be subject to any preemptive or similar rights.
(e) Capitalization. On the date of this Agreement, there are 25,059,994
shares of Common Stock issued and outstanding. On the date of this Agreement,
Foamex has no other shares of capital stock issued and outstanding.
4. Scotia Bank Representations and Warranties. Scotia Bank represents and
warrants to Foamex as follows:
(a) Filings; Consents. Except for the approval of the Stipulation of
Settlement by the Bankruptcy Court and any necessary filings with the Securities
and Exchange Commission to report the Share Exchange or the Common Stock
Transfer (as defined below), Scotia Bank is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or other party in connection with the execution and delivery
by Scotia Bank of this Agreement and the performance by it of the transactions
contemplated hereby. The execution and delivery by Scotia Bank and the
performance by it of the transactions contemplated hereby does not and will not
conflict with or violate any statute, ordinance, rule or regulation applicable
to Scotia Bank, or any writ or injunction to which Scotia Bank is a party or by
which Scotia Bank or its properties are bound, and does not and will not
conflict with, or cause an event of default under, any material contract to
which Scotia Bank is a party.
(b) Exchange. Upon approval of the Stipulation of Settlement by the
Bankruptcy Court, Scotia Bank will have full power and authority to cause the
Trustee to deliver the Exchanged Shares to Foamex at the Closing. Foamex will
acquire good and marketable title thereto, free and clear of any mortgages,
liens, charges, restrictions, security interests, adverse claims, pledges,
encumbrances or demands whatsoever, all to the extent created by or at the
direction of Scotia Bank.
(c) Investment Intent. The shares of Series B Preferred Stock to be
acquired by Scotia Bank pursuant to this Agreement will be acquired for its own
account and with no intention of distributing or reselling such securities or
the Common Stock issuable upon conversion thereof in any transaction that would
be in violation of the securities laws of the United States of America, or any
state, without prejudice, however, to its right at all times to sell or
otherwise dispose of all or any part of such shares under an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), or under an exemption from such registration available under
the Securities Act. If Scotia Bank should in the future decide to dispose of any
of the shares of Series B Preferred Stock or any Common Stock into which such
shares may be converted, Scotia Bank understands and agrees that it may do so
only in compliance with the Securities Act and applicable state securities laws,
as then in effect. It agrees to the imprinting of a legend on certificates
representing all of the shares of Series B Preferred Stock or any Common Stock
into which such shares may be converted to the following effect: "THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS."
5. Conditions to Obligations. The obligation of Foamex and Scotia Bank to
consummate the Share Exchange shall be subject to the fulfillment at or prior to
the Closing, of the following conditions, any of which may be waived by the
mutual agreement of Foamex and Scotia Bank:
(a) Each of the representations and warranties contained in paragraphs 3
and 4 hereof shall be true and correct in all material respects as of the date
of the Closing, and Scotia Bank and Foamex shall have complied in all material
respects with the covenants contained in paragraphs 6 and 7 hereof to the extent
such covenants are to be performed prior to Closing.
(b) The Certificate shall have been duly filed with the Secretary of State
of Delaware.
(c) Foamex shall have received the Determinations.
(d) The Bankruptcy Court shall have approved the Stipulation of Settlement
by entry of an order in all material respects satisfactory to Foamex and Scotia
Bank, which order (i) shall not have been stayed, modified or reversed and (ii)
shall have become a final, non-appealable order.
(e) No action, suit or other proceeding shall be pending before any court,
governmental or regulatory official, body or authority in which it is sought to
restrain or prohibit the transactions contemplated hereby, and no injunction,
judgment, order, decree or ruling with respect thereto shall be in effect.
(f) Counsel to Foamex shall have delivered an opinion to Scotia Bank
substantially in the form of Exhibit "C" hereto.
(g) The Closing shall occur on or before October 31, 2000.
6. Covenants of Foamex.
(a) Foamex covenants that it at all times will reserve and keep available,
free from preemptive rights, out of the aggregate of its authorized but unissued
shares of Common Stock or its issued shares of Common Stock held in its
treasury, or both, for the purpose of effecting conversion of the Series B
Preferred Stock, up to 1,500,000 shares of Common Stock deliverable upon the
conversion of all outstanding shares of Series B Preferred Stock not theretofore
converted. Foamex covenants that any shares of Common Stock issued upon
conversion of the Series B Preferred Stock shall be validly issued, fully paid
and non-assessable.
(b) If Foamex adopts a stockholder rights plan, such plan shall provide
that the shares of Common Stock to be held by the Trustee or Scotia Bank
immediately following the Share Exchange shall be "grandfathered" under the
terms of such plan, so as not to trigger the exercisability of any rights issued
thereunder solely as a result of a person or entity acquiring such shares from
the Trustee, Scotia Bank or their respective transferees; provided that any
additional shares of Common Stock acquired by a holder who beneficially owns
such initial amount shall trigger such exercisability.
(c) After the Closing, Foamex shall cooperate in the transfer of the
5,697,426 shares of Common Stock by the Trustee to Scotia Bank contemplated by
Section 4 of the Stipulation of Settlement (the "Common Stock Transfer").
7. Covenant of Scotia Bank. Prior to consummation of the Share Exchange,
Scotia Bank shall not take title to, or otherwise become the beneficial owner of
any shares of Common Stock, whether acquired from the Trustee or otherwise,
except in an amount up to 53,000 shares of Common Stock owned by Scotia Bank as
of the date of this Agreement.
8. Miscellaneous.
(a) This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements,
written or oral, with respect thereto.
(b) No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party of any right, power or privilege hereunder, nor any single
or partial exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege hereunder.
(c) This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York.
(d) This Agreement may be executed in counterparts, each of which shall be
deemed an original but both of which together shall constitute one and the same
instrument.
(e) All representations, warranties and covenants of the parties shall
survive the Closing.
If Scotia Bank agrees to the foregoing, please sign as indicated below and
return a copy to the undersigned.
FOAMEX INTERNATIONAL INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
--------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: President and Chief Executive
Officer
Agreed to:
THE BANK OF NOVA SCOTIA
By: /s/ X.X. Xxxxxxxxx
----------------------
Name: X.X. Xxxxxxxxx
Title: Managing Director
Exhibit B
to Share Exchange Agreement
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES B PREFERRED STOCK
of
FOAMEX INTERNATIONAL INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
-----------------------
Foamex International Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
hereby certifies that the following resolution was adopted by the Board of
Directors of the Corporation (the "Board of Directors") as required by Section
151 of the General Corporation Law at a meeting duly called and held on June 30,
2000:
RESOLVED, that pursuant to the authority granted to and vested in
the Board of Directors in accordance with the provisions of the Restated
Certificate of Incorporation of the Corporation (the "Charter"), the Board of
Directors hereby creates a series of Preferred Stock, par value $1.00 per share,
of the Corporation, and hereby states the designation and number of shares, and
fixes the relative rights, preferences, and limitations thereof (in addition to
the provisions set forth in the Charter which are applicable to the Preferred
Stock of all classes and series) as follows:
Section 1. Designation and Amount. The shares of such series shall
be designated as "Series B Preferred Stock" (the "Series B Preferred Stock") and
the number of shares constituting the Series B Preferred Stock shall be 15,000.
Section 2. Rank. The shares of Series B Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of assets, (i)
senior to (x) the Series A Preferred Stock, par value $1.00 per share, hereafter
created in connection with a Shareholders Rights Plan providing for the issuance
of such Series A Preferred Stock under certain circumstances and (y) any other
class of Preferred Stock hereafter created, and (ii) senior to the Common Stock,
par value $.01 per share, of the Corporation (the "Common Stock"). The
securities described in clauses (i) and (ii) are referred to herein as "Junior
Stock".
Section 3. Dividends and Distributions.
(a) The holders of shares of Series B Preferred Stock, in preference
to the holders of Common Stock, and of any other Junior Stock, shall be entitled
to receive, when and as declared by the Board of Directors, out of any funds
legally available for the purpose, cash dividends in an amount per share
(rounded to the nearest cent), subject to the provisions for adjustment set
forth in Section 7, equal to 100 times the aggregate per share amount of all
cash dividends, and 100 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions, other than a dividend or
distribution payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared
on the Common Stock.
(b) The Corporation shall declare a dividend or distribution on the
shares of Series B Preferred Stock as provided in paragraph (a) of this Section
3 immediately after it declares such dividend or distribution on the Common
Stock (other than a dividend or distribution payable in shares of Common Stock)
and shall pay such dividend or distribution on the shares of Series B Preferred
Stock immediately before paying any dividend or distribution on the Common Stock
(other than a dividend or distribution payable in shares of Common Stock).
(c) The Board of Directors may fix a record date for the
determination of holders of shares of Series B Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment
thereof and in the case of dividends and distributions declared pursuant to
paragraph (b) of this Section 3, shall be the same date as the record date for
the determination of holders of Common Stock entitled to receive payment of a
dividend or distribution triggering declaration of the dividend or distribution
declared pursuant to paragraph (b) of this Section 3.
(d) Dividends paid on the shares of Series B Preferred Stock in an
amount less than the total amount of such dividends at the time payable on such
shares shall be allocated pro rata on a share by share basis among all such
shares at the time outstanding.
Section 4. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation (which shall not
include any transaction covered by Section 5), no distribution shall be made to
the holders of any Junior Stock (either as to dividends or upon liquidation,
dissolution or winding up) unless, prior thereto, the holders of shares of
Series B Preferred Stock shall have received an amount per share, subject to the
provisions for adjustment set forth in Section 7, equal to $100, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment; provided, that the holders of shares of
Series B Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of shares
of Common Stock.
Section 5. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination, exchange or other transaction
in which the Common Stock is exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series B Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share, subject to the provisions for adjustment set
forth in Section 7, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
Section 6. Conversion.
(a) Any holder of shares of Series B Preferred Stock shall have the
right, at its option, at any time, to convert, for no further consideration,
subject to the provisions for adjustment set forth in Section 7 and the proviso
set forth below, any or all of such holder's shares of Series B Preferred Stock
into such number of fully paid and non-assessable shares of Common Stock as is
equal to the product of (x) the number of shares of Series B Preferred Stock
being so converted multiplied by (y) 100; provided that, until the termination
of (a) the Credit Agreement, dated as of June 12, 1997, as amended and restated
as of February 27, 1998, as further amended and restated as of June 29, 1999, as
amended or as may be amended, among Foamex L.P., FMXI, Inc., the lenders named
therein, the issuing banks named therein, and Citicorp USA, Inc. and The Bank of
Nova Scotia, as administrative agents (the "Foamex L.P. Credit Agreement"), (b)
the Credit Agreement, dated as of February 27, 1998, as amended or as may be
amended, among Foamex Carpet Cushion, Inc., the lenders named therein, the
issuing banks named therein, and Citicorp USA, Inc. and The Bank of Nova Scotia,
as administrative agents (the "Foamex Carpet Credit Agreement"), (c) the
Indenture, dated as of June 12, 1997, as supplemented from time to time, by and
among Foamex L.P., Foamex Capital Corporation, General Felt Industries, Inc.,
Foamex Fibers, Inc. and The Bank of New York, as trustee (the "June 1997
Indenture") and (d) the Indenture, dated as of December 23, 1997, as
supplemented from time to time, by and among Foamex L.P., Foamex Capital
Corporation, General Felt Industries, Inc., Foamex Fibers, Inc., Foamex LLC,
Xxxxx Holdings Corp. and the Bank of New York, as trustee (the "December 1997
Indenture" and, together with the Foamex L.P. Credit Agreement, the Foamex
Carpet Credit Agreement and the June 1997 Indenture, the "Credit Agreements and
Indentures") or until amendments to the Credit Agreements and Indentures,
including amendments to Section 11.01(m) of the Foamex L.P. Credit Agreement,
Section 11.01(l) of the Foamex Carpet Credit Agreement, Section 4.15 of the June
1997 Indenture, and Section 4.15 of the December 1997 Indenture, eliminate the
consequences on a "change in control", such conversion would not result in any
holder of shares of Series B Preferred Stock becoming, after giving effect to
such conversion, the Beneficial Owner (as defined below) of 25% or more of the
Voting Stock (as defined below) of the Corporation. For purposes of this
Certificate of Designations, "Voting Stock" and "Beneficial Owner" each have the
meaning set forth in the Foamex L.P. Credit Agreement and the Foamex Carpet
Credit Agreement.
(b) Notwithstanding any limitation contained in paragraph (a) of
this Section 6, in the event of any offer or series of related offers to
purchase or exchange any shares of Common Stock, the consummation of which would
result in an aggregate of 25% or more of the then outstanding Common Shares
being purchased or exchanged, which offer or series of related offers do not
include an offer for the Series B Preferred Stock that is at least, per share,
equal to 100 times the consideration per share offered for the Common Stock, any
holder of the Series B Preferred Stock shall have the right, at its option,
beginning not less than five business days prior to the publicly announced
expiration of such offer, to convert, for no further consideration, subject to
the provisions for adjustment set forth in Section 7, any or all of such
holder's shares of Series B Preferred Stock into such number of fully paid and
non-assessable shares of Common Stock as is equal to the product of (X) the
number of shares of Series B Preferred Stock being so converted multiplied by
(Y) 100.
(c) The issuance by the Corporation of shares of Common Stock upon a
conversion of Series B Preferred Stock into shares of Common Stock shall be
effective as of the surrender of the certificate or certificates for the Series
B Preferred Stock (or depositary receipts issued pursuant to Section 11 hereof)
to be converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto). On and after the
effectiveness of conversion, the person or persons entitled to receive the
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder or holders of such shares of Common Stock whether or not the
Corporation has complied with the provisions hereof.
Section 7. Effect of Common Stock Splits, etc. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under Sections 3, 4, 5 or 6 shall be adjusted by
multiplying each such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. Redemption. The shares of Series B Preferred Stock shall
not be redeemable.
Section 9. Voting Rights. Holders of shares of Series B Preferred
Stock shall not be entitled or permitted to vote on any matter required or
permitted to be voted upon by the stockholders of the Corporation, except as
otherwise required under Delaware law. Except as set forth herein, or as
otherwise provided by Delaware law, holders of shares of Series B Preferred
Stock shall have no special voting rights and their consent shall not be
required for taking any corporate action.
Section 10. Certain Restrictions. Whenever dividends or
distributions payable on the shares of Series B Preferred Stock as provided in
Section 3 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series B Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any Junior Stock; or
(ii) redeem, purchase or otherwise acquire for consideration any
shares of Series B Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors) to
all holders of shares of the Corporation upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and the
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among the
respective series or classes.
Section 11. Fractional Shares. The Corporation may issue fractions
and certificates representing fractions of shares of Series B Preferred Stock in
integral multiples of 1/100th of a share of Series B Preferred Stock, or in lieu
thereof, at the election of the Board of Directors at the time of the first
issue of any shares of Series B Preferred Stock, evidence such fractions by
depositary receipts, pursuant to an appropriate agreement between the
Corporation and a depository selected by it; provided that such agreement shall
provide that the holders of such depositary receipts shall have all rights,
privileges and preferences to which they would be entitled as beneficial owners
of shares of Series B Preferred Stock. In the event that fractional shares of
Series B Preferred Stock are issued, the holders thereof shall have all the
rights provided herein of holders of full shares of Series B Preferred Stock in
the proportion which such fraction bears to a full share.
Section 12. Reacquired Shares. Any shares of Series B Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock subject to the conditions and restrictions on issuance
set forth herein, in the Certificate of Incorporation, or in any other
Certificate of Designations creating a series of Preferred Stock or any similar
stock or as otherwise required by law.
Section 13. Reservation. The Corporation shall at all times reserve
and keep available out of its authorized and unissued shares of Common Stock,
solely for issuance upon the conversion of the Series B Preferred Stock, free
from any preemptive rights or other obligations such number of shares of Common
Stock as shall from time to time be issuable upon the conversion of all of the
Series B Preferred Stock outstanding.
Section 14. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series B Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series B Preferred Stock, voting
together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its [Title] and attested by its Secretary this ____
day of ___, 2000.
FOAMEX INTERNATIONAL INC.
By: ________________________________
Name:
Title:
ATTEST:
--------------------------------
Name:
Title:
