[Execution Copy]
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CREDIT AGREEMENT
Dated as of June 12, 1997,
as amended and restated as of February 27, 1998
among
FOAMEX L.P.
FMXI, INC.
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS ISSUING BANKS
and
CITICORP USA, INC.
and
THE BANK OF NOVA SCOTIA
as Administrative Agents
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CREDIT AGREEMENT
This CREDIT AGREEMENT dated as of June 12, 1997, as amended and
restated as of February 27, 1998 (as amended, amended and restated, supplemented
or modified from time to time, the "Agreement") is entered into among Foamex
L.P., a Delaware limited partnership ("Foamex" or the "Borrower"), FMXI, Inc., a
Delaware corporation and managing general partner of Foamex ("FMXI"), the
institutions from time to time a party hereto as Lenders, whether by execution
of this Agreement or an Assignment and Acceptance, the institutions from time to
time a party hereto as Issuing Banks, whether by execution of this Agreement or
an Assignment and Acceptance, Citicorp USA, Inc., a Delaware corporation
("Citicorp"), in its capacity as the collateral agent for the Lenders and the
Issuing Banks hereunder (in such capacity, the "Collateral Agent") and The Bank
of Nova Scotia ("Scotiabank"), in its capacity as funding agent for the Lenders
and Issuing Banks (in such capacity, the "Funding Agent"; together with the
Collateral Agent, the "Administrative Agents").
W I T N E S S E T H:
WHEREAS the Borrower has obtained from the Lenders Term B Loans, Term C
Loans and Term D Loans in the aggregate principal amounts of $110,000,000,
$100,000,000 and $110,000,000 respectively with the proceeds thereof used for
the purposes set forth in Section 2.04(d);
WHEREAS, subject to the terms of this Agreement, the Borrower has
obtained from the Lenders a Commitment (to include availability for Revolving
Loans, Swing Loans and Letters of Credit) pursuant to which Borrowings of
Revolving Loans and Swing Loans, in a maximum aggregate principal amount
(together with all Letter of Credit Obligations) not to exceed $200,000,000 will
be made to the Borrower from time to time prior to the Revolving Loan Commitment
Termination Date (provided, that the aggregate outstanding principal amount of
such Swing Loans, Revolving Loans and Letter of Credit Obligations at any time
shall not exceed the then existing Revolving Loan Commitment Amount) with all
the proceeds of the Credit Extensions to be used for the purposes specified in
Sections 2.01(d); and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to extend such
Commitments and make or maintain such Loans to the Borrower and issue (or
participate in) Letters of Credit for the account of the Borrower;
NOW, THEREFORE, in consideration of the above premises each of the
Borrower, FMXI, the Lenders, the Issuing Banks and the Administrative Agents
agree as follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms used in this Agreement
(including the preamble and the recitals hereto) shall have the following
meanings, applicable both to the singular and the plural forms of the terms
defined:
"Accommodation Obligation" means any Contractual Obligation, contingent
or otherwise, of one Person with respect to any (x) Indebtedness of another
Person or (y) any other obligation or liability of another Person which is not
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a Credit Party, if the primary purpose or intent thereof by the Person incurring
the Accommodation Obligation is to provide assurance to the obligee of such
Indebtedness, obligation or liability of another that such Indebtedness,
obligation or liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders thereof will be
protected (in whole or in part) against loss in respect thereof including,
without limitation, direct and indirect guarantees, endorsements (except for
collection or deposit in the ordinary course of business), notes co-made or
discounted, recourse agreements, take-or-pay agreements, keep-well agreements,
agreements to purchase or repurchase such Indebtedness, obligation or liability
or any security therefor or to provide funds for the payment or discharge
thereof, agreements to maintain solvency, assets, level of income, or other
financial condition, and agreements to make payment other than for value
received. The Supply Agreement shall not be deemed to be an Accommodation
Obligation.
"Administrative Agents" has the meaning ascribed to such term in the
preamble and their respective successors pursuant to Section 12.07.
"Administrative Services Agreement" means the administrative services
agreement, dated as of February 27, 1998, between the Borrower and GFI and
assigned to New GFI, as such agreement may be amended, supplemented or modified
from time to time.
"Affiliate", as applied to any Person, means any other Person that
directly or indirectly controls, is controlled by, or is under common control
with, that Person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to vote ten percent (10%) or more of the Securities
having voting power for the election of directors of such Person or otherwise to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting Securities or by contract or otherwise.
"Agreement" has the meaning ascribed to such term in the preamble.
"Amendatory Agreement" means the Second Amendment to Credit Agreement
and Certain Loan Documents, dated as of February 27, 1998, among the parties to
the Existing Credit Agreement and Foamex International.
"Applicable Commitment Fee Margin" means at all times during the
applicable periods set forth below with respect to the fees payable to the
Lenders pursuant to Section 4.03(c), the applicable percentage set forth below
under the column entitled "Applicable Commitment Fee Margin":
||
Total Net Debt to Applicable Commitment
EBDAIT Ratio Fee Margin
------------ ----------
Less than 4.0:1 0.375%
Greater than or equal 0.500%
to 4.0:1
||
The Total Net Debt to EBDAIT Ratio used to compute the Applicable
Commitment Fee Margin shall be the Total Net Debt to EBDAIT Ratio set forth in
the Compliance Certificate most recently delivered by the Borrower to the
Administrative Agents; changes in the Applicable Commitment Fee Margin resulting
from a change in the Total Net Debt to EBDAIT Ratio shall become effective upon
delivery by the Borrower to the Administrative Agents of a new
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Compliance Certificate pursuant to Section 7.01(d)(ii). Notwithstanding anything
to the contrary set forth in this Agreement (including the then effective Total
Net Debt to EBDAIT Ratio), the Applicable Commitment Fee Margin for the period
commencing on the Effective Date and ending on the delivery of the Compliance
Certificate in respect of the Borrower's first Fiscal Quarter of Fiscal Year
1998 shall be 0.50%. If the Borrower shall fail to deliver a Compliance
Certificate within 50 days after the end of any Fiscal Quarter (or within 60
days, in the case of the last Fiscal Quarter of the Fiscal Year) as required
pursuant to Section 7.01(d)(ii), the Applicable Commitment Fee Margin from and
including the 51st (or 61st, as the case may be) day after the end of such
Fiscal Quarter to but not including the date the Borrower delivers to the
Administrative Agents a Compliance Certificate shall conclusively equal the
highest Applicable Commitment Fee Margin set forth above. If the Borrower
delivers a Compliance Certificate pursuant to Section 7.01(d) (an "Annual
Compliance Certificate") with respect to the audited annual financial statements
of the Borrower and its Subsidiaries for a Fiscal Year which shows a variance in
the computation of the Total Net Debt to EBDAIT Ratio from such computation set
forth in the Compliance Certificate delivered pursuant to Section 7.01(d) (a
"Monthly Compliance Certificate") in connection with the last month of such
Fiscal Year and the result of such variance is that the Borrower received a
decrease in the Applicable Commitment Fee Margin upon the delivery of the
Monthly Compliance Certificate which it would not have been entitled to receive
based upon the Annual Compliance Certificate, then the Borrower shall, within
five days, deliver to the Funding Agent for the pro rata distribution to the
Lenders entitled to receive such payment, an amount equal to the difference
between the commitment fee payable pursuant to Section 4.03(c) which would have
been payable if such higher Applicable Commitment Fee Margin had been in effect
and the actual accrual of such incorrect Applicable Commitment Fee Margin.
"Applicable Lending Office" means, with respect to a particular Lender,
its LIBO Rate Lending Office in respect of provisions relating to LIBO Rate
Loans and its Domestic Lending Office in respect of provisions relating to Base
Rate Loans.
"Applicable Margin" means at all times during the applicable periods
set forth below
(a) with respect to the unpaid principal amount of each
Revolving Loan maintained as a Base Rate Loan, the applicable
percentage set forth in subclause (i) below under the column entitled
"Applicable Margin for Base Rate Loans", with respect to the unpaid
principal amount of each Term B Loan maintained as a Base Rate Loan,
the applicable percentage set forth in subclause (ii) below under the
column entitled "Applicable Margin for Term B Base Rate Loans" and with
respect to the unpaid principal amount of each Term C Loan maintained
as a Base Rate Loan, the applicable percentage set forth in subclause
(iii) below under the column entitled "Applicable Margin for Term C
Base Rate Loans";
(b) with respect to the unpaid principal amount of each
Revolving Loan maintained as a LIBO Rate Loan, the applicable
percentage set forth in subclause (i) below under the column entitled
"Applicable Margin for LIBO Rate Loans", with respect to the unpaid
principal amount of each Term B Loan maintained as a LIBO Rate Loan,
the applicable percentage in subclause (ii) below under the column
entitled "Applicable Margin for Term B LIBO Rate Loans" and with
respect to the unpaid principal amount of each Term C Loan maintained
as a LIBO Rate Loan, the applicable percentage in subclause (iii) below
under the column entitled "Applicable Margin for Term C LIBO Rate
Loans":
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(i) For Revolving Loans:
Total Net Debt Applicable Applicable
to EBDAIT Margin For Margin For
Ratio Base Rate Loans LIBO Rate Loans
----- --------------- ---------------
Less than 2.5:1 0.000% 0.625%
Greater than or equal
to 2.5:1 and less
than 3.0:1 0.000% 0.875%
Greater than or equal
to 3.0:1 and less
than 3.5:1 0.125% 1.125%
Greater than or equal
to 3.5:1 and less
than 4.0:1 0.375% 1.375%
Greater than or equal
to 4.0:1 and less
than 4.5:1 0.875% 1.875%
Greater than or equal
to 4.5:1 1.125% 2.125%;
(ii) For Term B Loans:
Total Net Debt Applicable Applicable
to EBDAIT Margin For Term B Margin For Term B
Ratio Base Rate Loans LIBO Rate Loans
----- --------------- ---------------
Less than 4.0:1 0.875% 1.875%
Greater than or equal
to 4.00:1 and less
than 4.50:1 1.125% 2.125%
Greater than or equal
to 4.50:1 1.375% 2.375%; and
(iii) For Term C Loans:
Total Net Debt Applicable Applicable
to EBDAIT Margin For Term C Margin For Term C
Ratio Base Rate Loans LIBO Rate Loans
----- --------------- ---------------
Less than 4.0:1 1.125% 2.125%
Greater than or equal
to 4.0:1 and less
than 4.5:1 1.375% 2.375%
Greater than or equal
to 4.5:1 1.625% 2.625%; and
(c) with respect to the unpaid principal amount of each Term D Loan
maintained as a LIBO Rate Loan, the applicable percentage set forth below under
the column entitled "Applicable Margin for Term D LIBO Rate Loans," and
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with respect to the unpaid principal amount of each Term D Loan maintained as a
Base Rate Loan, the applicable percentage below under the column entitled
"Applicable Margin for Term D Base Rate Loans:
||
Applicable
Total Net Debt Applicable Margin For Term
to EBDAIT Margin For Term D D
Ratio Base Rate Loans LIBO Rate Loans
--------------- ------------------ ----------------
Less than 4.0:1 1.25% 2.25%
Greater than or
equal to 4.00:1
and less than
4.50:1 1.50% 2.50
Greater than or 1.75% 2.75%.
equal to 4.50:1
||
The Total Net Debt to EBDAIT Ratio used to compute the Applicable
Margin following the Effective Date shall be the Total Net Debt to EBDAIT Ratio
set forth in the Compliance Certificate most recently delivered by the Borrower
to the Administrative Agents; changes in the Applicable Margin resulting from a
change in the Total Net Debt to EBDAIT Ratio shall become effective as to all
Loans upon delivery by the Borrower to the Administrative Agents of a new
Compliance Certificate pursuant to Section 7.01(d)(ii). Notwithstanding anything
to the contrary set forth in this Agreement (including the then effective Total
Net Debt to EBDAIT Ratio), the Applicable Margin for (i) Revolving Loans shall
be 2.125% for LIBO Rate Loans and 1.125% for Base Rate Loans, (ii) Term B Loans
shall be 2.375% for LIBO Rate Loans and 1.375% for Base Rate Loans, (iii) Term C
Loans shall be 2.625% for LIBO Rate Loans and 1.625% for Base Rate Loans and
(iv) for Term D Loans shall be 2.75% for LIBO Rate Loans and 1.75% for Base Rate
Loans, in each case for the period commencing on the Effective Date and ending
on the delivery of the Compliance Certificate in respect of the Borrower's first
Fiscal Quarter of Fiscal Year 1998. If the Borrower shall fail to deliver a
Compliance Certificate within 50 days after the end of any Fiscal Quarter (or
within 60 days, in the case of the last Fiscal Quarter of the Fiscal Year) as
required pursuant to Section 7.01(d)(ii), the Applicable Margin from and
including the 51st (or 61st, as the case may be) day after the end of such
Fiscal Quarter to but not including the date the Borrower delivers to the
Administrative Agents a Compliance Certificate shall conclusively equal the
highest Applicable Margin set forth above. If the Borrower delivers a Compliance
Certificate pursuant to Section 7.01(d) (an "Annual Compliance Certificate")
with respect to the audited annual financial statements of the Borrower and its
Subsidiaries for a Fiscal Year which shows a variance in the computation of the
Total Net Debt to EBDAIT Ratio from such computation set forth in the Compliance
Certificate delivered pursuant to Section 7.01(d) (a "Monthly Compliance
Certificate") in connection with the last month of such Fiscal Year and the
result of such variance is that the Borrower received a decrease in the
Applicable Margin upon the delivery of the Monthly Compliance Certificate which
it would not have been entitled to receive based upon the Annual Compliance
Certificate, then the Borrower shall, within five days, deliver to the Funding
Agent for the pro rata distribution to the Lenders entitled to receive such
payment, an amount equal to the difference between the interest which would have
accrued on the Loans which would have been payable if such higher Applicable
Margin had been in effect and the actual accrual of interest on the Loans based
upon the incorrect Applicable Margin. Any change in the Applicable Margin shall
be effective as of the effective date of any such change in the Applicable
Margin with respect to any Loans then outstanding.
x
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"Assignment and Acceptance" means an Assignment and Acceptance attached
hereto and made a part hereof (with blanks appropriately completed) delivered to
the Administrative Agents in connection with an assignment of a Lender's
interest under this Agreement in accordance with the provisions of Section
13.01.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
xx.xx. 101 et seq.), as amended from time to time, and any successor statute.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall at all
times be equal to the higher of:
(a) the rate of interest announced publicly by the Funding
Agent in New York, New York from time to time, as the Funding Agent's
base rate; and
(b) the sum of (A) one half of one percent (0.50%) per annum
plus (B) the Federal Funds Rate in effect from time to time during such
period.
"Base Rate Loans" means all Loans which bear interest at a rate
determined by reference to the Base Rate as provided in Section 4.01(a).
"Benefit Plan" means a defined benefit plan as defined in Section 3(35)
of ERISA (other than a Multiemployer Plan) in respect of which the Borrower or
any ERISA Affiliate is, or within the immediately preceding six (6) years was,
an "employer" as defined in Section 3(5) of ERISA and which is subject to Title
IV of ERISA.
"Borrower" has the meaning assigned thereto in the preamble.
"Borrowing" means a borrowing consisting of Loans of the same type
made, continued or converted on the same day.
"Business Day" means a day, in the applicable local time, which is not
a Saturday or Sunday or a legal holiday and on which banks are not required or
permitted by law or other governmental action to close (i) in New York, New York
and (ii) in the case of LIBO Rate Loans, in London, England and (iii) in the
case of letter of credit transactions for a particular Issuing Bank, in the
place where its office for issuance or administration of the pertinent Letter of
Credit is located.
"Business Plan" means each Business Plan of the Borrower and its
Subsidiaries delivered after the Effective Date to the Administrative Agents
pursuant to Section 7.01(f).
"Capital Expenditures" means, for any period, the aggregate of all
expenditures of the Borrower or its Subsidiaries on a consolidated basis
(whether payable in cash or other Property or accrued as a liability (but
without duplication)) during such period that, in conformity with GAAP, are
required to be included in fixed asset accounts as reflected in the consolidated
balance sheets of the Borrower or its Subsidiaries; provided, however, (i)
Capital Expenditures shall include, whether or not such a designation would be
in conformity with GAAP, (A) that portion of Capital Leases which is capitalized
on the consolidated balance sheet of the Borrower and its Subsidiaries and (B)
expenditures for Equipment which is purchased simultaneously with the trade-in
of existing Equipment owned by either the Borrower or any of its Subsidiaries,
to the extent the gross purchase price of the purchased Equipment exceeds the
book value of the Equipment being traded in at such time; and (ii) Capital
Expenditures shall exclude, whether or not such a designation would be in
conformity with GAAP, expenditures made in
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connection with the replacement or restoration of Property, to the extent
reimbursed or financed from insurance or condemnation proceeds which do not
result in a permanent reduction in the Commitments pursuant to Section 3.01.
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Cash Collateral" means cash or Cash Equivalents held by the Collateral
Agent, any of the Issuing Banks or any of the Lenders as security for the
Obligations.
"Cash Collateral Account" means an interest bearing account named "CUSA
f/a/o Foamex L.P. Cash Collateral Account" Account No.: 4067-3998 maintained at
Citibank's offices in New York, New York in which Cash Collateral of any Credit
Party shall be deposited. The Cash Collateral Account shall be under the sole
dominion and control of the Collateral Agent; provided, that all amounts
deposited therein shall be held by the Collateral Agent for the benefit of the
Administrative Agents, the Lenders and the Issuing Banks and shall be subject to
the terms of Section 11.03.
"Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by a Federal Governmental Authority and backed by the
full faith and credit of the United States government; (b) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any Lender or any commercial
bank organized or licensed under the laws of the United States, any state
thereof, the District of Columbia, any foreign bank, or its branches or agencies
(fully protected against currency fluctuations), which, at the time of
acquisition, are rated A-1 (or better) by Standard & Poor's Ratings Services, a
division of the McGraw Hill Corporation, or P-1 (or better) by Xxxxx'x Investors
Service, Inc.; and (c) commercial paper, other than commercial paper issued by
the Borrower or any of its Affiliates, which is at the time of acquisition rated
A-1 (or better) by Standard & Poor's Ratings Services, a division of the McGraw
Hill Corporation, or P-1 (or better) by Xxxxx'x Investors Service, Inc.;
provided, that the maturities of such Cash Equivalents shall not exceed 90 days.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. xx.xx. 9601 et seq., any amendments
thereto, any successor statutes, and any regulations or legally enforceable
guidance promulgated thereunder.
"Change of Control" means any event pursuant to which (a) another
Person is substituted for FMXI as the managing general partner of Foamex,
whether by agreement with FMXI, as a result of bankruptcy of FMXI or otherwise,
(b) another Person in addition to FMXI becomes a general partner of Foamex, (c)
FMXI withdraws as managing general partner of Foamex pursuant to the Partnership
Agreement or otherwise, (d) Xxxxxxxx X. Xxxxx ceases (i) to control at least
fifty-one percent (51%) of the Equity Interests in TIHI entitled to elect a
majority of the board of directors or (ii) to legally and beneficially own,
directly or indirectly and of record, at least thirty percent,(30%) of the
issued and outstanding Equity Interests in TIHI,(e) TIHI and Trace Foam Sub,
Inc. cease to legally and beneficially own and control, directly or indirectly
and of record, at least thirty percent (30%) of the voting Equity Interests in
Foamex International, (f) any Person or group of Persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act) other than TIHI and its
wholly-owned Subsidiaries has acquired beneficial ownership (within the meaning
of Rule 13d-3 promulgated by the Securities and Exchange Commission under said
Act) of the Equity Interests in Foamex International in the aggregate amount in
excess of twenty percent (20%) but
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only if such Person or group owns Equity Interests in excess of the Equity
Interests owned directly or indirectly by TIHI, (g) there is a sale, transfer or
other assignment or disposition of any of the Equity Interests in Foamex by FMXI
or Foamex International, (h) Foamex ceases to own and control 100% of the issued
and outstanding Equity Interests in any Subsidiary Guarantor (except as a result
of a merger permitted under Section 9.09), (i) Foamex International ceases to
own and control 100% of the issued and outstanding Equity Interests in FMXI, or
(j) during any period of two consecutive calendar years, individuals who at the
beginning of such period constituted the Board of Directors of the Managing
General Partner (or Foamex, if Foamex is a corporation) or FCC, as the case may
be, or whose nomination for election by the shareholders of the Managing General
Partner (or Foamex, if Foamex is a corporation) or FCC, as the case may be, was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the directors of the Managing General Partner (or
Foamex, if Foamex is a corporation) or FCC, as the case may be, then in office.
"Citibank" means Citibank, N.A.
"Citicorp" is defined in the preamble.
"Claim" means any claim or demand, by any Person, of whatsoever kind or
nature for any alleged Liabilities and Costs, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil statute,
Permit, ordinance or regulation, common law or otherwise.
"Collateral" means all Property and interests in Property now owned or
hereafter acquired by any Credit Party upon which a Lien is granted to the
Collateral Agent or any Lender or Issuing Bank under any of the Loan Documents.
"Collateral Agent" is defined in the preamble.
"Commercial Letter of Credit" means any documentary letter of credit
issued by an Issuing Bank pursuant to Section 2.03 for the account of the
Borrower which is drawable upon presentation of documents evidencing the sale or
shipment of goods purchased by the Borrower in the ordinary course of its
business.
"Commitment" means, with respect to any Lender, the obligation of such
Lender to make Revolving Loans and to participate in Letters of Credit pursuant
to the terms and conditions of this Agreement, and which shall not exceed the
principal amount set forth opposite such Lender's name under the heading
"Commitment" on Annex I hereto or the signature page of the Assignment and
Acceptance by which it became (or becomes) a Lender, as modified from time to
time pursuant to the terms of this Agreement or to give effect to any applicable
Assignment and Acceptance, and "Commitments" means the aggregate principal
amount of the Commitments of all the Lenders, the maximum amount of which shall
not exceed a principal amount of $200,000,000, as reduced from time to time
pursuant to Section 3.01.
"Commitment Termination Event" means
(a) the occurrence of any Event of Default or Potential Event
of Default described in Section 11.01(f) or (g); or
(b) the occurrence and continuance of any other Event of
Default and either:
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(i) the declaration of all of the Loans to be due and
payable pursuant to Section 11.02, or
(ii) the giving of notice by the Administrative
Agents, acting at the direction of the Requisite Lenders to
the Borrower that the Commitments have been terminated; or
(c) the occurrence of the 85th day after delivery of an
Officer's Certificate described in Section 7.11 (unless the
Commitments are terminated prior to such date pursuant to Section
11.01(i)); or
(d) the effective date of any dissolution of the Borrower; or
(e) the commencement date of any action (in a proceeding, at
law, equity or otherwise) to dissolve the Borrower.
"Compliance Certificate" has the meaning ascribed to such term in
Section 7.01(d).
"Concentration Account" means, with respect to Foamex the account named
"CUSA f/a/o Foamex L.P. Concentration Account" Account No. 4058-7993 of the
Collateral Agent, or any similar account established for any other Credit Party,
in each case maintained at its office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
into which all funds from the Lockbox Accounts of such Credit Parties shall be
deposited.
"Consolidated Cash Interest Expense" means, for any period, total
interest expense, whether paid or accrued (without duplication) (including the
interest component of Capital Leases), of the Borrower and its Subsidiaries on a
consolidated basis, including, without limitation, (i) all bank fees,
commissions, discounts and other fees and charges owed with respect to letters
of credit and (ii) net costs (and reduction for net benefits) under interest
rate Hedging Obligations, but excluding, however, (a) amortization of discount,
(b) interest paid in property other than cash or (c) any other interest expense
not payable in cash, all as determined in conformity with GAAP.
"Consolidated Fixed Charges" means, for any period, the sum of the
amounts for such period of (a) Consolidated Cash Interest Expense, plus (b)
scheduled payments of principal on the Term Loans and other Indebtedness of the
Borrower and its Subsidiaries (including the principal component of Capital
Lease obligations), plus (c) charges for federal, state, local and foreign
income taxes actually paid during such period, plus (d) payments made to the
partners or any Affiliate of the Borrower permitted to be made under Sections
9.06(iii), 9.06(iv)(x) (to the extent not already included in the calculation of
EBDAIT) or 9.06(vi).
"Consolidated Interest Expense" means, for any period, total interest
expense, whether paid or accrued (without duplication) (including the interest
component of Capital Leases), of the Borrower and its Subsidiaries on a
consolidated basis, including, without limitation, all bank fees, commissions,
discounts and other fees and charges owed with respect to letters of credit and
net costs (and reduction for net benefits) under interest rate Hedging
Obligations.
"Consolidated Net Income" means, for any period, the net earnings (or
loss) after taxes of the Borrower and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined in conformity
with GAAP (excluding, however, (i) the effects of hyperinflation accounting as
set forth in FAS 52, or other similar pronouncements in effect from time to time
by the FASB or the Securities and Exchange Commission, (ii) any charges to net
income relating to (x) the Refinancing and the Delayed Purchases (as
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each such term is defined in the Existing Credit Agreement) or (y) the
Transaction in an aggregate amount not to exceed $12,000,000 and (iii) any
losses resulting from the sale of Perfect Fit Industries, Inc. and the
application of proceeds therefrom).
"Consolidated Working Capital" means, as of any date of determination,
the difference of (i) the current assets (other than cash and Cash Equivalents)
of the Borrower and its Subsidiaries on a consolidated basis minus (ii) the
current liabilities (other than (A) current maturities of Funded Debt and (B)
other Funded Debt to the extent included as a current liability of the Borrower
and its Subsidiaries) of the Borrower and its Subsidiaries on a consolidated
basis.
"Constituent Documents" means, (a) with respect to any corporation, (i)
the articles/certificate of incorporation (or the equivalent organizational
documents) of such corporation, (ii) the by-laws (or the equivalent governing
documents) of such corporation and (iii) any document setting forth the
designation, amount and/or relative rights, limitations and preferences of any
class or series of such corporation's Equity Interests, (b) with respect to any
partnership (whether limited or general), (i) the certificate of partnership (or
equivalent filings), (ii) the partnership agreement (or the equivalent
organizational documents) of such partnership and (iii) any document setting
forth the designation, amount and/or relative rights, limitation and preferences
of any of such partnership's Equity Interests and (c) with respect to a limited
liability company its articles or agreement of limited liability company,
operating or management agreement and any similar document.
"Contaminant" means any pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls (PCBs), or any hazardous
or toxic constituent thereof as these terms are defined in federal, state or
local laws or regulations.
"Contractual Obligation", as applied to any Person, means any provision
of any Securities issued by that Person or any indenture, mortgage, deed of
trust, security agreement, pledge agreement, guaranty, contract, undertaking,
agreement or instrument to which that Person is a party or by which it or any of
its properties is bound, or to which it or any of its properties is subject.
"Xxxxx Indenture Trustee" means IBJ Xxxxxxxxx Bank & Trust Company.
"Xxxxx Industries" means Xxxxx Industries, Inc., a Delaware
corporation.
"Xxxxx Restructuring" means the proposed plan of consolidation of plant
operations and administrative functions of Xxxxx Industries and the Borrower,
all as more fully described on page 12 of the financial information in the
memorandum dated December, 1997 relating to the Borrower delivered to the
Lenders as modified in Schedule 1.01.1 hereto.
"Credit Agents" means the Collateral Agent, Funding Agent,
Administrative Agent and the Intercreditor Agent.
"Credit Extensions" means all Loans and Letter of Credit Obligations.
"Credit Parties" means the Borrower and each Subsidiary Guarantor.
"Cure Loans" has the meaning ascribed to such term in Section
3.02(b)(vi)(C).
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"Customary Permitted Liens" means
(a) Liens (other than Liens in favor of the PBGC) with respect
to the payment of Taxes, assessments or governmental charges in all
cases which are not yet due or which are being contested in good faith
by appropriate proceedings and with respect to which adequate reserves
or other appropriate provisions are being maintained in accordance with
GAAP;
(b) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP;
(c) Liens (other than any Lien in favor of the PBGC) incurred
or deposits made in the ordinary course of business in connection with
worker's compensation, unemployment insurance or other types of social
security benefits or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money), surety,
appeal and performance bonds and contractual landlord liens; provided
that (i) all such Liens do not in the aggregate materially detract from
the value of the Borrower's or its Subsidiaries' assets or Property or
materially impair the use thereof in the operation of their respective
businesses, and (ii) all Liens of attachment or judgment and Liens
securing bonds to stay judgments or in connection with appeals do not
secure at any time an aggregate amount exceeding $1,000,000; and
(d) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of real property which do not materially
interfere with the ordinary conduct of the business of the Borrower or
any of its Subsidiaries.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"Dollars" and "$" mean the lawful money of the United States.
"Domestic Lending Office" means, with respect to any Lender, such
Lender's office, located in the United States, specified as the "Domestic
Lending Office" under its name on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such other United
States office of such Lender as it may from time to time specify by written
notice to the Borrower and the Funding Agent.
"EBDAIT" means, for any period, (a) the sum of the amounts for such
period of (i) Consolidated Net Income plus (ii) consolidated depreciation,
amortization expense and other non-cash charges other than those described in
clauses (ii) and (iii) of the proviso below plus (iii) Consolidated Interest
Expense plus (iv) Federal, state, local and foreign income taxes provided for by
the Borrower and its Subsidiaries plus, without duplication, (v) any losses from
the debt extinguishment and other charges incurred in connection with the
Transaction in an aggregate amount not to exceed $12,000,000; minus (b) (i)
extraordinary gains (or plus extraordinary losses) from asset sales calculated
pursuant to GAAP for such period to the extent such gains or losses were
included in the calculation of Consolidated Net Income minus (ii) interest or
investment income, provided, however, that there shall be excluded from the
computation of EBDAIT (i) gains and/or losses incurred in the fourth Fiscal
Quarter of Fiscal Year 1997 in connection with the disposition of GFI's
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Xxxxxx, Xxxxxxx Facility not to exceed $500,000, (ii) non-recurring charges
incurred in connection with the acquisition of the assets and liabilities of
Xxxxx Industries and its Subsidiaries in an aggregate amount not to exceed
$27,500,000, (iii) other non-recurring charges incurred during the fourth Fiscal
Quarter of Fiscal Year 1997 in an aggregate amount not to exceed $17,500,000 and
(iv) the redemption premium paid on the Existing Xxxxx Notes.
"Effective Date" means the first date on which all of the conditions
precedent set forth in Section 5.01 hereof shall be satisfied or waived by the
Lenders, but in no event shall such date be later than March 17, 1998.
"Eligible Assignee" means (a) a Lender or any Affiliate thereof; or (b)
a finance company, insurance company, bank, other financial institution or fund
or any Person whose investment manager or investment advisor is the investment
manager or investment advisor of such Lender, reasonably acceptable to the
Administrative Agents and the Borrower (such acceptance not to be unreasonably
withheld or delayed).
"Environmental, Health or Safety Requirements of Law" means all valid
and enforceable Requirements of Law derived from or relating to federal, state
and local laws or regulations relating to or addressing the environment, health
or safety, including but not limited to any law, regulation, or order relating
to the use, handling, or disposal of any Contaminant, any law, regulation, or
order relating to Remedial Action, and any law, regulation, or order relating to
workplace or worker safety and health, as such Requirements of Law are
promulgated by the specifically authorized agency responsible for administering
such Requirements of Law.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for any (a) liabilities under any Environmental, Health or Safety
Requirement of Law, or (b) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"Equipment" means, with respect to the Borrower, all of the Borrower's
present and future (a) equipment and fixtures, including, without limitation,
machinery, manufacturing, distribution and office equipment, assembly systems,
tools, appliances, furniture and vehicles, (b) other tangible personal Property
(other than the Borrower's inventory), and (c) any and all accessions, parts and
appurtenances attached to any of the foregoing or used in connection therewith,
and any substitutions therefor and replacements, products and proceeds thereof.
"Equity Interests", with respect to any Person, means any capital stock
issued by such Person, regardless of class or designation, or any limited or
general partnership interest in such Person, regardless of designation, or any
limited company membership interest and all warrants, options, purchase rights,
conversion or exchange rights, voting rights, calls or claims of any character
with respect thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, any
amendments thereto, any successor statutes, and any regulations or guidance
promulgated thereunder.
"ERISA Affiliate" means (a) any corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Internal Revenue Code) as the Borrower; (b) a partnership or other trade or
business (whether or not incorporated) which is under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with the Borrower; and
(c) solely for purposes of liability under Section 412(c)(11) of the Internal
Revenue Code, the Lien created under Section 412(n) of the Internal Revenue
Code, or for tax imposed for failure to meet minimum funding
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standards under Section 4971 of the Internal Revenue Code, a member of the same
affiliated service group (within the meaning of Section 414(m) of the Internal
Revenue Code) as the Borrower, any corporation described in clause (a) above or
any partnership or trade or business described in clause (b) above.
"Event of Default" means any of the occurrences set forth in Section
11.01 after the expiration of any applicable grace period and the giving of any
applicable notice, in each case as expressly provided in Section 11.01.
"Excess Cash Flow" means, for any Fiscal Year, the excess (if any),
(a) of the sum (for such Fiscal Year) of, without duplication,
(i) EBDAIT;
plus
(ii) Net Cash Proceeds of Sale to the extent required
to be applied against Term Loans under Section 3.01(b);
plus
(iii) Proceeds of Issuance of Equity Interests or
Indebtedness to the extent required to be applied against Term
Loans under Section 3.01(b);
plus
(iv) the net decrease in Consolidated Working Capital
since the last day of the immediately preceding Fiscal Year
other than balance sheet effects resulting from charges set
forth in clauses (ii) and (iii) to the proviso to the
definition of EBDAIT and other than any changes in working
capital resulting from the Transaction;
plus
(v) repayments of the Old TIHI Loan;
plus
(vi) an amount equal to the aggregate amount of (A)
payments or repayments of the New TIHI Loan, (B) amounts
repaid under the Tax Advance Agreement and (C) repayments of
loans or advances permitted under Section 9.04(v), in each
case, to the extent such amounts were subtracted from the
calculation of Excess Cash Flow pursuant to clause (b)(vi)
below in respect of such Fiscal Year or any preceding Fiscal
Year in which Excess Cash Flow has been determined;
over
(b) the sum (for such Fiscal Year) of, without duplication,
(i) Consolidated Cash Interest Expense actually paid
by such Persons;
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plus
(ii) payments, to the extent actually made, of the
principal amount of the Term Loans, scheduled and/or mandatory
payments of other Indebtedness of the Borrower and its
Subsidiaries (other than Revolving Loan Obligations) and
permanent reductions in the Commitments;
plus
(iii) all federal, state and foreign income taxes
actually paid in cash by the Borrower and its Subsidiaries;
plus
(iv) Capital Expenditures actually made by the
Borrower and its Subsidiaries in such Fiscal Year;
plus
(v) all Restricted Junior Payments paid under
Sections 9.06(iii), 9.06(iv) (to the extent not already
subtracted from the calculation of EBDAIT) and 9.06(vi);
plus
(vi) all Investments made after the Effective Date
permitted under Sections 9.04(iv), 9.04(v), 9.04(viii),
9.04(ix) and clause (y) of 9.04(x);
plus
(vii) the net increase in Consolidated Working
Capital from the last day of the immediately preceding Fiscal
Year other than balance sheet effects resulting from charges
set forth in clauses (ii) and (iii) to the proviso to the
definition of EBDAIT and other than any changes in working
capital resulting from the Transaction;
plus
(viii) ordinary gains from the sale of assets (other
than sales or other transfers described in Section 9.02(i)).
"Existing Xxxxx Indenture" means the Indenture, dated as of August 29,
1995, between Xxxxx Industries and the Xxxxx Indenture Trustee, as in effect on
December 23, 1997.
"Existing Xxxxx Notes" means the 13 1/2% Senior Subordinated Notes due
2005 issued by Xxxxx Industries and governed by the terms of the Existing Xxxxx
Indenture.
"Existing Credit Agreement" means the Credit Agreement, dated as of
June 12, 1997, as amended on December 23, 1997 and by the Amendatory Agreement,
among the Borrower, GFI, Trace Foam, FMXI, the Lenders and the Administrative
Agents.
"Fair Market Value" means, with respect to any asset of any Person, the
value of the consideration obtainable in a sale of such asset in the open
market, assuming a sale by a willing seller to a willing purchaser dealing at
arms length and arranged in an orderly manner over a reasonable period of time,
each having reasonable knowledge of the nature and characteristics of such
asset, neither being under any compulsion to act, determined (a) in good
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faith by the board of directors of such Person or (b) in an appraisal of such
asset, provided that such appraisal was performed relatively contemporaneously
with such sale by an independent third party appraiser and the basic assumptions
underlying such appraisal have not materially changed between the date thereof
and the date of such sale.
"FCC" means Foamex Capital Corporation, a Delaware corporation.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day in New York, New York, for the next preceding
Business Day) in New York, New York by the Federal Reserve Bank of New York, or
if such rate is not so published for any day which is a Business Day in New
York, New York, the average of the quotations for such day on such transactions
received by the Administrative Agents from three federal funds brokers of
recognized standing selected by the Administrative Agents.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any Governmental Authority succeeding to its functions.
"Fiscal Month" means the fiscal month of the Borrower, which shall be
the four- or five-week period (or, in some instances, six-week period at the end
of a Fiscal Year) ending on the Sunday nearest to the last day of a calendar
month during a Fiscal Year.
"Fiscal Quarter" means the fiscal quarter of the Borrower, which shall
be the thirteen or fourteen week period during a Fiscal Year ending on the
Sunday that is the thirteenth or fourteenth Sunday from the previous Fiscal
Quarter end.
"Fiscal Year" means the fiscal year of the Borrower, which shall be the
52- or 53-week period ending on the Sunday nearest to December 31 of each
calendar year.
"Fixed Charge Coverage Ratio" means, with respect to any period, the
ratio of
(a) the result (for such period) of
(i) EBDAIT
minus
(ii) Capital Expenditures of the Borrower and its
Subsidiaries
minus
(iii) Permitted Aircraft Payments (to the extent
not included in the calculation of EBDAIT).
to
(b) Consolidated Fixed Charges for such period.
"FMXI" means FMXI, Inc., a Delaware corporation and wholly-owned
Subsidiary of Foamex International.
"Foamex" has the meaning ascribed thereto in the preamble.
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"Foamex Asia Group" means any direct or indirect wholly-owned
Subsidiary of Foamex created for the purpose of facilitating a Permitted
Business.
"Foamex Canada" means Foamex Canada Inc., a corporation incorporated
under the Canada Business Corporations Act.
"Foamex/GFI Note" means the intercompany promissory note in the
principal amount of $34,000,000 having a maturity date of March 17, 2000 as
originally approved by the Requisite Lenders on the Effective Date and as such
promissory note may thereafter be amended, supplemented or modified from time to
time.
"Foamex International" means Foamex International Inc., a Delaware
corporation.
"Foamex International Guaranty" means the second amended and restated
Guaranty dated as of February 27, 1998 executed by Foamex International in favor
of the Administrative Agents, the Lenders and the Issuing Banks pursuant to
which Foamex International guarantees all of the Obligations of the Borrower, as
the same may be amended, supplemented or modified from time to time.
"Foamex International Pledge Agreement" means the Pledge Agreement
dated as of February 27, 1998 between Foamex International and the Intercreditor
Agent, as the same may be amended, supplemented or modified from time to time.
"Foamex International Supply Agreement" means the Supply Agreement
dated as of June 23, 1994 among the Borrower and Foamex International with
respect to the purchase and resale by Foamex International to the Borrower of
certain raw materials, as the same may be amended, supplemented or modified from
time to time.
"Foamex LLC" means Foamex LLC, a Delaware limited liability company,
and a wholly-owned Subsidiary of Foamex.
"Foamex Mexico Group" means, collectively (a) Grupo Foamex de Mexico,
S.A. de C.V., a Mexican corporation, (b) Foamex de Cuautitlan S.A. de C.V.,
(c) Foamex de Mexico, S.A. de C.V., a Mexican corporation, (d) Colchones y de
Todo en Espuma, S.A. de C.V., a Mexican corporation and (e) any other direct
or indirect wholly owned Subsidiary of any such Mexican Subsidiary permitted
to be created or acquired hereunder.
"Foamex Pledge Agreement" means the Foamex Pledge Agreement dated as of
June 12, 1997 between the Borrower and the Collateral Agent pursuant to which
the Borrower grants a security interest in all of the Equity Interests of each
of its now or hereafter existing Subsidiaries in favor of the Collateral Agent,
as such agreement may be amended, supplemented or modified from time to time.
"Foreign Employee Benefit Plan" means any employee benefit plan as
defined in Section 3(3) of ERISA which is maintained or contributed to for the
benefit of the employees of the Borrower or any of its Subsidiaries or any of
its ERISA Affiliates and is not covered by ERISA pursuant to ERISA Section
4(b)(4).
"Foreign Pension Plan" means any employee benefit plan as defined in
Section 3(3) of ERISA which (a) is maintained or contributed to for the benefit
of employees of the Borrower or any of its Subsidiaries or any of its ERISA
Affiliates, (b) is not covered by ERISA pursuant to Section 4(b)(4) of ERISA,
and (c) under applicable local law, is required to be funded through a trust or
other funding vehicle.
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"Foreign Subsidiary" means Foamex Canada, each member of the Foamex
Mexico Group and each member of the Foamex Asia Group and any other direct or
indirect wholly-owned subsidiary of the Borrower which is not incorporated under
the laws of any state of the United States or the District of Columbia and which
is created after the Effective Date for the purpose of facilitating a Permitted
Business.
"Funded Debt" means, to the extent the following would be reflected on
a balance sheet of the Borrower and its Subsidiaries on a consolidated basis
prepared in accordance with GAAP, the principal (or accreted) amount of all
Indebtedness of the Borrower and its Subsidiaries in respect of borrowed money,
evidenced by debt securities, debentures, acceptances, notes or other similar
instruments, in respect of Capital Lease Obligations, in respect of
Reimbursement Obligations or in respect of the deferred purchase price of
property or services, except accounts payable and accrued expenses arising in
the ordinary course of business. For purposes of calculating Funded Debt, only
the face amount of the New Foamex Notes shall be included therein.
"Funding Agent" is defined in the preamble.
"Funding Date" means, with respect to any Revolving Loan, the date of
the funding of such Revolving Loan, and with respect to any Swing Loan, the date
of the funding of such Swing Loan.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accounting Standards Board or in such other
statements by such other entity as may be in general use by significant segments
of the accounting profession as in effect on the date hereof (unless otherwise
specified herein as in effect on another date or dates).
"GFI" means General Felt, Inc., a Delaware corporation.
"Governmental Authority" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government (including the National Association of Insurance
Commissioners).
"GW Subordinated Note" means the Subordinated Promissory Note in the
principal amount of $7,014,864 made by the Borrower in favor of Xxxx Xxxxxx
dated May 6, 1993.
"GW Subordination Agreement" means the GW Subordination Agreement dated
as of December 14, 1993 between Xxxx Xxxxxx and the Collateral Agent, as such
agreement may be amended, supplemented or modified from time to time.
"Hedging Obligation" means, with respect to any Person, the obligations
of such Person under (a) interest rate or currency swap agreements, interest
rate or currency cap agreements, interest rate or currency collar agreements and
(b) other agreements or arrangements designed to protect such Person against or
expose such Person to fluctuations in interest rates and/or currency rates.
"Holder" means any Person entitled to enforce any of the Obligations,
whether or not such Person holds any evidence of Indebtedness, including,
without limitation, each Administrative Agent, each Lender and each Issuing
Bank.
"Indebtedness", as applied to any Person, means, at any time (without
duplication) (a) all indebtedness, obligations or other liabilities of such
Person (i) for borrowed money or evidenced by debt securities, debentures,
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acceptances, notes or other similar instruments, and any accrued interest, fees
and charges relating thereto, (ii) under profit payment agreements in respect of
obligations to redeem, repurchase or exchange any Securities of such Person or
to pay dividends in respect of any stock, (iii) with respect to letters of
credit issued for such Person's account, (iv) to pay the deferred purchase price
of property or services, except accounts payable and accrued expenses arising in
the ordinary course of business as presently conducted, (v) in respect of
Capital Leases, or (vi) which are Accommodation Obligations; (b) all
indebtedness, obligations or other liabilities of such Person or others secured
by a Lien (other than Customary Permitted Liens) on any property of such Person,
whether or not such indebtedness, obligations or liabilities are assumed by such
Person, all as of such time; (c) all indebtedness, obligations or other
liabilities of such Person in respect of Hedging Obligations and foreign
exchange contracts, net of liabilities owed to such Person by the counterparties
thereon; and (d) all preferred Equity Interests in such Person subject to
mandatory redemption upon the occurrence of any contingency (but only to the
extent such contingency has occurred).
"Intercompany Promissory Note" means an unsecured note in form and
substance satisfactory to the Administrative Agents, made by the Borrower or any
Subsidiary Guarantor in favor of the Borrower or any Subsidiary Guarantor, as
the case may be, the obligations under which have been subordinated to the
payment in full of the Obligations on terms and conditions satisfactory to the
Requisite Lenders.
"Intercreditor Agent" means Citicorp and its successors pursuant to
Section 12.07.
"Intercreditor Agreement" means the Intercreditor Agreement, dated as
of February 27, 1998, between the Intercreditor Agent, the intercreditor agent
for the Foamex Carpet Cushion Inc. credit facilities and acknowledged by Foamex
International as amended and restated, supplemented or otherwise modified from
time to time.
"Interest Coverage Ratio" means, with respect to any period, the ratio
of
(a) EBDAIT for such period
to
(b) Consolidated Cash Interest Expense for such period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, any successor
statute and any regulations or guidance promulgated thereunder.
"Investment" means, with respect to any Person, (a) any purchase or
other acquisition by that Person of Securities, or of a beneficial interest in
Securities, issued by any other Person, (b) any purchase by that Person of all
or substantially all of the assets of a business conducted by another Person,
and (c) any direct or indirect loan, advance (other than prepaid expenses,
accounts receivable (other than accounts receivable having a value in the
aggregate in excess of $5,000,000 (but only to the extent of such excess) owed
by a Foreign Subsidiary to the Borrower or a Subsidiary Guarantor which are not
paid within 90 days of the invoice date therefor) advances to employees and
similar items made or incurred in the ordinary course of business as presently
conducted) or capital contribution by that Person to any other Person, including
all Indebtedness to such Person arising from a sale of property by such Person
other than in the ordinary course of its business. The amount of any Investment
shall be the original cost of such Investment, plus the cost of all additions
thereto less the amount of any return of
-18-
capital or principal to the extent such return is in cash with respect to such
Investment without any adjustments for increases or decreases in value or
write-ups, write-downs or write-offs with respect to such Investment.
"IRS" means the Internal Revenue Service and any Person succeeding to
the functions thereof.
"Issuing Bank L/C Sublimit" means (a) in the case of Scotiabank (i) on
or prior to March 31, 2000, $50,000,000 and (ii) thereafter, $25,000,000 and (b)
in the case of Citibank, $25,000,000.
"Issuing Banks" means Citibank, Scotiabank and each other Lender
approved by the Administrative Agents and the Borrower who has agreed to become
an Issuing Bank for the purpose of issuing Letters of Credit pursuant to Section
2.03.
"L/C Sublimit" means, on or prior to March 31, 2000, $75,000,000, and
thereafter, $50,000,000.
"Lender" means Citicorp, Scotiabank and the other financial
institutions on the signature pages hereof together with their respective
successors and assigns (including, without limitation, any Replacement Lender)
and the Swing Bank.
"Letter of Credit" means any Commercial Letter of Credit or Standby
Letter of Credit.
"Letter of Credit Fee" has the meaning ascribed to such term in Section
4.03(b).
"Letter of Credit Obligations" means, at any particular time, the sum
of (a) all outstanding Reimbursement Obligations at such time, plus (b) the
aggregate undrawn face amount of all outstanding Letters of Credit at such time,
plus (c) the aggregate face amount of all Letters of Credit requested by the
Borrower at such time but not yet issued (unless the request for an unissued
Letter of Credit has been denied pursuant to Section 2.03(c)(i)).
"Letter of Credit Reimbursement Agreement" means, with respect to a
Letter of Credit, such form of application therefor and form of reimbursement
agreement therefor (whether in a single or several documents, taken together) as
the Issuing Bank from which such letter of credit is requested may employ in the
ordinary course of business for its own account, with such modifications thereto
as may be agreed upon by the Issuing Bank and the Borrower and as are not
materially adverse (in the judgment of the Issuing Bank) to the interests of the
Lenders; provided, however, in the event of any conflict between the terms of
any Letter of Credit Reimbursement Agreement and this Agreement, the terms of
this Agreement shall control.
"Liabilities and Costs" means all liabilities, obligations,
responsibilities, losses, damages, personal injury, death costs, punitive
damages, economic damages, consequential damages, treble damages, intentional,
willful or wanton injury or damage to the environment, natural resources or
public health or welfare, costs and expenses (including, without limitation,
attorney, expert and consulting fees and costs of investigation, feasibility or
Remedial Action studies), fines, penalties and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past, present or
future.
"LIBO Rate" means, with respect to any LIBO Rate Interest Period
applicable to a Borrowing of LIBO Rate Loans, an interest rate per annum
determined by the Funding Agent to be the average (rounded upward to the nearest
whole multiple of one-sixteenth of one percent (0.0625%) per annum if
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such average is not such a multiple) of the rates per annum at which deposits in
Dollars are offered by the principal office of each of the Reference Banks in
London, England to major banks in the London interbank market at approximately
11:00 a.m. (London time) on the LIBO Rate Interest Rate Determination Date for
such LIBO Rate Interest Period for a period equal to such LIBO Rate Interest
Period and in an amount substantially equal to the amount of such Reference
Bank's LIBO Rate Loan and for a period equal to such LIBO Rate Interest Period.
"LIBO Rate Affiliate" means, with respect to each Lender, the
Affiliate of such Lender (if any) set forth below such Lender's name under the
heading "LIBO Rate Affiliate" on the signature pages hereof or on the Assignment
and Acceptance by which it became a Lender or such Affiliate of a Lender as it
may from time to time specify by written notice to the Borrower and the Funding
Agent.
"LIBO Rate Interest Payment Date" means (a) with respect to any LIBO
Rate Loan, the last day of each LIBO Rate Interest Period applicable to such
Loan and (b) with respect to any LIBO Rate Loan having a LIBO Rate Interest
Period in excess of three (3) calendar months, the last day of each three (3)
calendar month interval during such LIBO Rate Interest Period.
"LIBO Rate Interest Period" has the meaning ascribed to such term in
Section 4.02(b).
"LIBO Rate Interest Rate Determination Date" has the meaning ascribed
to such term in Section 4.02(c).
"LIBO Rate Lending Office" means, with respect to any Lender, the
office or offices of such Lender (if any) set forth below such Lender's name
under the heading "LIBO Rate Lending Office" on the signature pages hereof or on
the Assignment and Acceptance by which it became a Lender or such office or
offices of such Lender as it may from time to time specify by written notice to
the Borrower and the Funding Agent.
"LIBO Rate Loans" means those Loans outstanding which bear interest at
a rate determined by reference to the LIBO Rate and the Applicable LIBO Rate
Margin as provided in Section 4.01(a).
"LIBO Rate Reserve Requirement" means any reserve requirement as
prescribed by the Federal Reserve Board for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve System in
New York, New York with deposits exceeding five billion Dollars in respect of
"Eurocurrency Liabilities" (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on LIBO Rate
Loans is determined or any category of extensions of credit or other assets
which includes loans by a non-United States office of any bank to United States
residents).
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, conditional sale agreement, deposit arrangement, security interest,
encumbrance, lien (statutory or other), preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever in
respect of any property of a Person, whether granted voluntarily or imposed by
law, and includes the interest of a lessor under Capital Lease or under any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement or similar notice (other
than a financing statement filed by a "true" lessor or consignor pursuant to ss.
9-408 of the UCC), naming the owner of such proper as debtor, under the UCC or
other comparable law of any jurisdiction.
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"Limited Partner" means Foamex International, in its capacity as sole
limited partner of Foamex.
"Loan Account" has the meaning ascribed to such term in Section 3.05
(b).
"Loan Documents" means this Agreement, the Notes, the Security
Agreement, the Subsidiary Security Agreements, the Subsidiary Guarantees, the
Foamex International Guaranty, the TIHI Subordination Agreement, the
Intercreditor Agreement, the GW Subordination Agreement, the Partnership
Guaranty, the Partnership Pledge Agreement, the Foamex Pledge Agreement, each
Subsidiary Pledge Agreement, the Foamex International Pledge Agreement, Hedging
Obligations to which any Lender or any Affiliate of a Lender is a party, foreign
exchange contracts to which any Lender or any Affiliate of a Lender is a party,
the fee letter referred to in Section 4.03, and all other instruments,
agreements and written Contractual Obligations between the Borrower or any
Subsidiary of the Borrower and any of the Administrative Agents, any Lender or
any Issuing Bank delivered to either of the Administrative Agents, such Lender
or such Issuing Bank pursuant to or in connection with this Agreement.
"Loan Parties" means, collectively, (a) the Borrower, the Managing
General Partner, FCC, Foamex International and any Subsidiary Guarantor and (b)
any other Subsidiary (or group of Subsidiaries) which is (or constitutes) a
Significant Subsidiary of the Borrower.
"Loans" means Term Loans, Revolving Loans, Base Rate Loans, LIBO Rate
Loans and Swing Loans.
"Lockbox Account" has the meaning ascribed to such term in Section
3.06(a).
"Lockbox Agreement" means a lockbox agreement executed by each Lockbox
Bank, the Credit Party thereto and the Collateral Agent as such agreement may be
amended, modified or supplemented from time to time.
"Lockbox Bank" means, with respect to any Credit Party, each bank that
has executed a Lockbox Agreement and has been confirmed by the Collateral Agent
not to be in uncertain financial condition, into which such Credit Party
deposits proceeds of Collateral and identified as such on Schedule 1.01.2.
"Management Agreement" means the Trace Foam Management Agreement dated
as of October 13, 1992 between Foamex and Trace Foam as the same may be amended,
supplemented or modified from time to time, including the Affirmation Agreement
dated as of December 14, 1993 among Foamex, Trace Foam and FMXI affirming the
Management Agreement, as amended on June 12, 1997.
"Managing General Partner" means FMXI.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U and Regulation G.
"Material Adverse Effect" means a material adverse effect upon (a) the
condition (financial or otherwise), business performance, properties,
operations, assets or prospects of the Borrower, or of the Borrower and its
Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform its
obligations under the Loan Documents, or (c) the ability of the Lenders, the
Issuing Banks or the Collateral Agent to enforce the Loan Documents.
"Mortgage" means any mortgage, leasehold mortgage or deed of trust
executed by a Credit Party in favor of the Collateral Agent, and substantially
in the form of Exhibit M hereto.
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"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by the Borrower or any ERISA Affiliate and which is subject
to Title IV of ERISA.
"Net Cash Proceeds of Sale" means (a) proceeds received by the Borrower
or any Subsidiary Guarantor in cash from the sale, lease, assignment or other
disposition of any Property, other than dispositions of assets permitted under
Section 9.02(i) (but including any proceeds received by the Borrower or any
Subsidiary Guarantor (by dividend, distribution or otherwise) in connection with
the issuance of Equity Interests by any of the Foreign Subsidiaries), net of (i)
the costs of sale, assignment or other disposition, (ii) any income, franchise,
transfer or other tax liability arising from such transaction (including
payments made or to be made pursuant to the Tax Sharing Agreement and after
taking into account any available tax credits or deductions arising from such
transaction) and (iii) amounts applied to the repayment of Indebtedness (other
than the Obligations) secured by a Lien permitted by Section 9.03 on the asset
disposed of, if such net proceeds arise from any individual sale, assignment or
other disposition or from any group of related sales, assignments or other
dispositions; and (b) proceeds of insurance (net of the reasonable expenses of
collection) on account of the loss of or damage to any such Property or
Properties, and payments of compensation for any such Property or Properties
taken by condemnation or eminent domain to the extent such proceeds are not
utilized to repair or replace the Property subject to such loss, damage or
condemnation within 180 days (or if consented to in writing by the
Administrative Agents, 360 days) of the date of such loss, damage or
condemnation; provided, that any such proceeds not so utilized in such 180 day
period shall immediately be deemed to be "Net Cash Proceeds of Sale". "Net Cash
Proceeds of Sale" shall not include (x) rental income arising from Foamex's
sublease of office space to Foamex International and TIHI at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, (y) rental income not in excess of $1,000,000 in any Fiscal
Year arising from the lease or sublease by the Borrower and the Subsidiary
Guarantors of real property to other Persons (to the extent such lease or
sublease is otherwise permitted hereunder) and (z) proceeds from sales, leases,
assignments or other dispositions of Property in an amount not to exceed the
first $5,000,000 in the aggregate of such proceeds received in any Fiscal Year.
"Net Worth" means, at any time, with respect to any Person (a) the sum
of (i) total consolidated assets of such Person plus (ii) non-recurring charges
incurred in connection with the acquisition of the assets and liabilities of
Xxxxx Industries and its Subsidiaries in an aggregate amount not to exceed
$27,500,000, plus (iii) the redemption premium paid on the Existing Xxxxx Notes
minus (b) total consolidated liabilities of such Person (it being understood
that Equity Interests in such Person shall not constitute liabilities except to
the extent such Equity Interests are Indebtedness). Assets and liabilities shall
be determined in accordance with GAAP, except that Investments in and moneys due
from Affiliates of the Borrower and its Subsidiaries (other than (A) Investments
in Affiliates permitted under Section 9.04(iv) and (B) other Investments
permitted under Section 9.04 (other than Section 9.04(x)) and not recorded as an
asset under GAAP, shall be added back to total consolidated assets) shall be
excluded from or added back, as applicable, to total consolidated assets of the
Borrower and its Subsidiaries (other than trade receivables due from Affiliates
incurred in the ordinary course of business less than sixty (60) days past due).
"New Foamex Indenture" means the indenture, dated as of December 23,
1997, pursuant to which the New Foamex Notes were issued, as such agreement may
be amended, supplemented or otherwise modified from time to time.
"New Foamex Notes" means the 13 1/2 % Senior Subordinated Notes due
2005 issued by the Borrower pursuant to the terms of the New Foamex Indenture,
as
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such notes may be amended, supplemented or otherwise modified from time to
time.
"New Foamex Registration Rights Agreement" means the Registration
Rights Agreement dated December 23, 1997 between the Borrower and FCC, as
issuers, entered into for the benefit of the holders of the New Foamex Notes and
providing for the registration thereof under the Securities Act.
"New Foamex Subordinated Note Indenture" means the Indenture dated as
of June 12, 1997 among the Borrower, FCC and The Bank of New York, as Trustee,
as such agreement may be amended, supplemented or modified from time to time.
"New Foamex Subordinated Note Offering Memorandum" means the Offering
Memorandum, dated May 29, 1997, relating to the New Foamex Subordinated Notes.
"New Foamex Subordinated Notes" means the Senior Subordinated Notes
issued by FCC and the Borrower in the aggregate principal amount of up to
$150,000,000 and governed by the terms of the New Foamex Subordinated Note
Indenture.
"New GFI" means Foamex Carpet Cushion Inc., a Delaware corporation.
"New TIHI Loan" means the loan, not in excess of a principal amount of
$5,000,000 outstanding at any time, made by the Borrower to TIHI and evidenced
by that certain promissory note dated June 12, 1997.
"Non Pro Rata Loan" has the meaning ascribed to such term in Section
3.02(b)(vi).
"Notes" means collectively the Revolving Loan Notes, Term Loan Notes
and the Swing Loan Notes.
"Notice of Borrowing" means a Notice of Borrowing substantially in the
form attached hereto as Exhibit B.
"Notice of Conversion/Continuation" means a Notice of
Conversion/Continuation substantially in the form attached hereto as Exhibit C
with respect to a proposed conversion or continuation of a Loan pursuant to
Section 4.01(c).
"Obligations" means all Loans, Reimbursement Obligations, advances,
debts, liabilities, obligations, covenants and duties owing by the Borrower to
either Administrative Agent, any Lender, any Issuing Bank, any Affiliate of
either Administrative Agent, any Lender or any Issuing Bank, or any Person
entitled to indemnification pursuant to Section 3.03 of this Agreement, of any
kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, arising under this Agreement, the Notes or any
other Loan Document, whether or not for the payment of money, whether arising
(i) under or in connection with any cash management services provided by the
Administrative Agents or an Affiliate of the Administrative Agents, (ii) by
reason of an extension of credit, opening or amendment of a Letter of Credit or
payment of any draft drawn thereunder, loan, guaranty, indemnification, foreign
exchange contract or Hedging Obligation or (iii) in any other manner, whether
direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limitation, all interest, charges,
expenses, fees, attorneys' fees and disbursements and any other sum chargeable
to the Borrower under this Agreement or any other Loan Document.
"Obligor" means the Borrower and any other Person (other than the
Credit Agents, the Issuing Banks or any Lender) obligated under any Loan
Document.
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"Officer's Certificate" means (a) as to a corporation, a certificate
executed on behalf of such corporation by (i) the chairman or vice-chairman of
its board of directors (if an officer of such corporation) or (ii) its
president, any of its vice-presidents, its chief financial officer, or its
treasurer, (b) as to a partnership, a certificate executed on behalf of such
partnership by (i) if a limited partnership, by its general partner (and if the
general partner is a corporation by the appropriate individual indicated in (a)
above) and (ii) if other than a limited partnership, by a partner (and if such
partner is a corporation by the appropriate individual indicated in (a) above)
and (c) as to a limited liability company, by its managing member (and if the
managing member is a corporation by the appropriate individual indicated in (a)
above).
"Old TIHI Loan" means the loan, not in excess of a principal amount of
$4,372,516 plus accrued interest, made by the Borrower to TIHI and evidenced by
that certain promissory note dated July 7, 1996, as amended on June 12, 1997, to
increase the aggregate amount which may be outstanding thereunder to $4,794,828.
"Operating Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which is not
a Capital Lease.
"OSHA" means the Occupational Safety and Health Act of 1970, any
amendments thereto, any successor statutes and any regulations or guidance
promulgated thereunder.
"Other Indebtedness" means all of the Indebtedness of the Borrower or
any of its Subsidiaries other than the Obligations.
"Partnership Agreement" means the Fourth Amended and Restated Agreement
of Limited Partnership of Foamex L.P. dated as of December 14, 1993 among Trace
Foam, Foamex International and FMXI, as amended by the First Amendment thereto
dated as of June 28, 1994, and the Second Amendment thereto dated as of June 12,
1997, as such agreement may be amended, supplemented or modified from time to
time.
"Partnership Guaranty" means the Guaranty, dated as of February 27,
1998, issued jointly and severally by FMXI and Foamex International in favor of
the Collateral Agent as such agreement may be amended, supplemental or modified
from time to time.
"Partnership Pledge Agreement" means the amended and restated
Partnership Pledge Agreement dated as of February 27, 1998, among Foamex
International, FMXI and the Collateral Agent pursuant to which the partners of
the Borrower grant a security interest in all the Equity Interests of the
Borrower in favor of the Collateral Agent as such agreement may be amended,
supplemented or modified from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"Permits" means any permit, approval, authorization license, variance,
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Aircraft Payments" means payments to Foamex International
not to exceed $2 million per Fiscal Year in respect of debt service and other
expenses actually incurred by Foamex International or its Subsidiaries relating
to their aircraft.
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"Permitted Business" means (a) the manufacture and distribution of
polyurethane and advance polymer foam and activities related thereto, (b) other
businesses engaged in by the Borrower and its Subsidiaries on December 23, 1997
and similar lines of business engaged in by the Borrower on December 23, 1997,
including, but not limited to, the manufacture and distribution of plastics and
related products and (c) the businesses engaged in by Xxxxx Industries and its
Subsidiaries on December 23, 1997 and similar lines of business engaged in by
Xxxxx Industries and its Subsidiaries on December 23, 1997.
"Permitted Existing Accommodation Obligations" means those
Accommodation Obligations of the Borrower or any of its Subsidiaries identified
as such on Schedule 1.01.3.
"Permitted Existing Indebtedness" means the Indebtedness of the
Borrower and its Subsidiaries (other than Permitted Subordinated Indebtedness)
identified as such on Schedule 1.01.4.
"Permitted Existing Investments" means those Investments of the
Borrower identified as such on Schedule 1.01.5.
"Permitted Existing Liens" means the Liens on assets of the Borrower
identified as such on Schedule 1.01.6.
"Permitted Subordinated Indebtedness" means Indebtedness evidenced by,
or in respect of, principal and interest on (a) the New Foamex Subordinated
Notes in a principal amount not exceeding $150,000,000 (including the
Accommodation Obligations of Subsidiary Guarantors party to the related
indenture as in effect on the Effective Date), (b) the GW Subordinated Note in a
principal amount not exceeding $7,014,864, (c) any Rallis Claim (as defined in
the GW Subordination Agreement), (d) any Subordinated Claim (as defined in the
TIHI Subordination Agreement), (e) the New Foamex Notes in a principal amount
not to exceed a principal amount equal to $98,000,000 (including the
Accommodation Obligations of Subsidiary Guarantors party to the related
indenture as in effect on the Effective Date), (f) other subordinated
Indebtedness of Foamex satisfying the requirements of Section 11.01(r) in an
amount not to exceed the principal amount of New Foamex Notes so refinanced,
transaction costs associated therewith and associated redemption premiums and
(g) the Foamex/GFI Note.
"Person" means any natural person, corporation, limited partnership,
general partnership, joint stock company, joint venture, association, company,
trust, bank, trust company, land trust, business trust, limited liability
company or other organization, whether or not a legal entity, and any
Governmental Authority.
"Plan" means an employee benefit plan defined in Section 3(3) of ERISA
(other than a Multiemployer Plan) in respect of which either Borrower or any
ERISA Affiliate is, or within the immediately preceding six (6) years was, an
"employer" as defined in Section 3(5) of ERISA.
"Potential Event of Default" means an event which, with the giving of
notice or the lapse of time, or both, would constitute an Event of Default.
"Proceeds of Issuance of Equity Interests or Indebtedness" means net
cash proceeds received by Foamex International, the Borrower or any of the
Subsidiary Guarantors at any time from and after the Effective Date on account
of the issuance of (a) any Equity Interest in Foamex International, the Borrower
or any Subsidiary (which proceeds do not constitute Net Cash Proceeds of Sale)
or (b) Indebtedness (other than Indebtedness permitted under Section 9.01) of
Foamex International (other than Indebtedness permitted under Sections 4.1.4(A)
through (E) and (G) and (H) of the Foamex International
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Guaranty), the Borrower and/or any of its Subsidiaries, in each case net of all
transaction costs and underwriters' discounts with respect thereto, provided,
however, that the issuance of Permitted Subordinated Indebtedness described in
clause (f) of the definition thereof, in each such case, shall not constitute
Proceeds of Issuance of Equity Interests or Indebtedness.
"Process Agent" has the meaning ascribed to such term in Section
13.17(a).
"Property" means any and all real property or personal property,
whether tangible or intangible, plant, building, facility, structure,
underground storage tank or unit, Equipment, inventory, general intangibles,
receivables, Equity Interests, Securities, account, deposit, claim, right or
other asset owned, leased or operated by the Borrower or any of its
Subsidiaries, as applicable, (including any surface water thereon or adjacent
thereto, and soil and groundwater thereunder).
"Pro Rata Share" means, with respect to any Lender (including, without
limitation, the Swing Bank), (a) with respect to Revolving Loans and Letters of
Credit, the percentage obtained by dividing (i) such Lender's Commitment by (ii)
the aggregate amount of all Commitments (in each case, as reduced from time to
time in accordance with the provisions of this Agreement), (b) with respect to
Term B Loans, the percentage obtained by dividing (i) such Lender's Term B Loans
by (ii) the aggregate amount of all Term B Loans, (c) with respect to Term C
Loans, the percentage obtained by dividing (i) such Lender's Term C Loans by
(ii) the aggregate amount of all Term C Loans and (d) with respect to Term D
Loans, the percentage obtained by dividing (i) such Lender's Term D Loans by
(ii) the aggregate amount of all Term D Loans.
"Protective Advance" has the meaning ascribed to such term in Section
12.09.
"Quarterly Payment Date" means each March 31, June 30, September 30 and
December 31.
"RCRA" means the Resource Conservation and Recovery Act of 1976, 42
U.S.C. xx.xx. 6901 et seq., any amendments thereto, any successor statutes, and
any regulations or legally enforceable guidance promulgated thereunder.
"Reference Banks" means Citicorp, Scotiabank and one other Lender
reasonably satisfactory to the Borrower, Citicorp and Scotiabank.
"Register" has the meaning ascribed to such term in Section 13.01(c).
"Regulation G" means Regulation G of the Federal Reserve Board as in
effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board as in
effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board as in
effect from time to time.
"Reimbursement Date" has the meaning ascribed to such term in Section
2.03(d)(i)(A).
"Reimbursement Obligations" means the aggregate non-contingent
reimbursement or repayment obligations of the Borrower with respect to amounts
drawn under Letters of Credit.
"Related Obligations" has the meaning ascribed to such term in Section
12.09(e).
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"Release" means release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment or into or out of any Property, including the movement of
Contaminants through or in the air, soil, surface water, groundwater or
Property.
"Remedial Action" means actions required to (a) clean up, remove, treat
or in any other way address Contaminants in the indoor or outdoor environment;
(b) prevent the Release or threat of Release or minimize the further Release of
Contaminants; or (c) investigate and determine if a remedial response is needed
and to design such a response and post-remedial investigation, monitoring,
operation and maintenance and care.
"Replacement Lender" has the meaning ascribed to such term in Section
3.07.
"Reportable Event" means any of the events described in Section 4043 of
ERISA for which notice as required thereunder has not been waived.
"Requirements of Law" means, as to any Person, the Constituent Document
or other organizational or governing documents of such Person, and any law, rule
or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, the Securities Act, the Securities Exchange Act,
Regulations G, U and X, ERISA, the Fair Labor Standards Act and any certificate
of occupancy, zoning ordinance, building or land use requirement or Permit or
labor or employment, rule or regulation and including any Environmental Health
or Safety Requirements of Law.
"Requisite Lenders" means Lenders whose Pro Rata Shares, in the
aggregate, equal or exceed fifty-one percent (51%) of the aggregate amount of
Term Loans, Revolving Credit Obligations and unutilized Commitments; provided,
however, that, in the event any of the Lenders shall have failed to fund its Pro
Rata Share of any Revolving Loan requested by the Borrower which such Lenders
are obligated to fund under the terms of this Agreement without delivering to
the Funding Agent written notice of the failure of the Borrower to satisfy the
conditions set forth in Section 5.02 and (i) any such failure to fund has not
been cured or (ii) such conditions have been satisfied, then, for so long as
such failure to fund continues, "Requisite Lenders" means Lenders (excluding all
Lenders whose failure to fund their respective Pro Rata Shares of such Loans
have not been so cured) whose Pro Rata Shares represent, equal or exceed
fifty-one percent (51%) of the aggregate Pro Rata Shares of such Lenders;
provided, further, however, that, in the event that the Commitments have been
terminated pursuant to the terms of this Agreement, "Requisite Lenders" means
Lenders (without regard to such Lenders, performance of their respective
obligations hereunder) whose aggregate ratable shares (stated as a percentage)
of the aggregate outstanding principal balance of all Loans and Letter of Credit
Obligations are greater than or equal to fifty-one percent (51%).
"Restricted Junior Payment" means (a) any dividend or distribution,
direct or indirect, on account of any Equity Interests in the Borrower or any of
its Subsidiaries now or hereafter outstanding, except in the case of such
Subsidiaries, a dividend payable solely in shares of that class of stock or in
any junior class of stock to the holders of that class, provided that the
issuance of such stock or junior class of stock is not an incurrence of
Indebtedness, (b) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any Equity
Interests in the Borrower or any of its Subsidiaries now or hereafter
outstanding, (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
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purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, any Permitted Subordinated Indebtedness, (d) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
Equity Interests in the Borrower or any of its Subsidiaries now or hereafter
outstanding and (e) any payment made by the Borrower to the Managing General
Partner or the Limited Partner or any other Affiliate pursuant to the Tax
Sharing Agreement, the Management Agreement or the Foamex International Supply
Agreement.
"Revolving Credit Obligations" means, at any particular time, the sum
of (a) the outstanding principal amount of the Revolving Loans at such time,
plus (b) the Letter of Credit Obligations at such time, plus (c) the Swing Loan
Obligations at such time.
"Revolving Loan" has the meaning ascribed to such term in Section
2.01(a).
"Revolving Loan Commitment Amount" means, as of any date of
determination, an amount equal to the Commitments in effect at such time.
"Revolving Loan Commitment Availability" means, at any time of
determination, the excess of
(a) the Commitments then in effect
over
(b) the aggregate amount of Revolving Credit Obligations then
outstanding.
"Revolving Loan Commitment Termination Date" means the earliest to
occur of
(a) June 12, 2003; and
(b) the date on which any Commitment Termination Event occurs.
"Revolving Loan Notes" has the meaning assigned thereto in Section
3.05(a)(i).
"RULPA" means the Delaware Revised Uniform Limited Partnership Act, as
amended from time to time, and any successor statute.
"Scotiabank" means The Bank of Nova Scotia, a Canadian chartered bank.
"Securities" means any limited, general or other partnership interest,
or any limited liability company interest or any stock, shares, voting trust
certificates, bonds, debentures, notes or other Equity Interests or evidences of
indebtedness, secured or unsecured, convertible, subordinated or otherwise, or
any certificates of interest, shares, or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not include any evidence of
the Obligations.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
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"Security Agreement" means the Security Agreement dated as of June 12,
1997 between the Borrower and the Collateral Agent, as such agreement may be
amended, supplemented or modified from time to time.
"Settlement Date" has the meaning ascribed to such term in Section
2.02(b).
"Significant Subsidiary" means any Subsidiary (which is not a
Subsidiary Guarantor) that would be a "significant subsidiary" as defined in
Article 1, Rule 1-02 of Regulation S-X, promulgated under the Securities Act of
1933, as amended, as such Regulation is in effect on the Effective Date.
"Solvent", when used with respect to any Person, means that at the time
of determination:
(a) the Fair Market Value of its assets is in excess of the
total amount of its liabilities (including, without limitation,
contingent liabilities); and
(b) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
(c) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments)
as they mature; and
(d) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
"Standby Letter of Credit" means any letter of credit issued by an
Issuing Bank pursuant to Section 2.03 for the account of the Borrower which is
not a Commercial Letter of Credit.
"Stock Option Plan" means the 1993 Foamex International employee stock
option plan pursuant to which both qualified and non-qualified options have been
issued, as amended, and any other stock option plan adopted by the shareholders
of Foamex International.
"Subsidiary" of a Person means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned or controlled by such Person, one
or more of the other subsidiaries of such Person or any combination thereof.
"Subsidiary Guarantor" means each of (i) FCC, (ii) Foamex Latin
America, Inc., a Delaware corporation, (iii) Foamex Mexico, Inc., a Delaware
corporation, (iv) Foamex Mexico II, Inc., a Delaware corporation, (v) Foamex
Asia, Inc. and (vi) each Person which becomes a wholly-owned domestic Subsidiary
of the Borrower after the Effective Date in accordance with Section 9.04 and has
executed a Subsidiary Guarantee, a Subsidiary Security Agreement and, as
applicable, a Subsidiary Pledge Agreement and Mortgages (subject to Section
8.14) and executed or, as applicable, delivered the other documents,
instruments, certificates and opinions required pursuant to Section 9.04.
"Subsidiary Guaranty" means each Guaranty executed by each Subsidiary
Guarantor of the Borrower in favor of the Administrative Agents, the Lenders and
the Issuing Banks pursuant to which such Subsidiary guarantees all of the
Obligations, as the same may be amended, supplemented or modified from time to
time.
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"Subsidiary Pledge Agreement" means each Pledge Agreement executed by a
Subsidiary of the Borrower and the Collateral Agent pursuant to which such
Subsidiary grants a security interest in the Equity Interests of each of its now
or hereafter existing Subsidiaries in favor of the Collateral Agent, as such
agreement may be amended, supplemented or modified from time to time.
"Subsidiary Security Agreement" means each Security Agreement executed
by each Subsidiary Guarantor and the Collateral Agent, pursuant to which each
such Subsidiary secures its Subsidiary Guaranty, as such agreement may be
amended, supplemented or modified from time to time.
"Supply Agreement" means the Supply Agreement in respect of the supply
of prime carpet cushion to GFI dated as of February 27, 1998 between the
Borrower and GFI and as assigned to New GFI, as the same may be amended,
supplemented or modified from time to time.
"Swing Bank" means, at any time, Scotiabank or such other Lender which
becomes the replacement Swing Bank at such time.
"Swing Loan" has the meaning ascribed to such term in Section 2.02(a).
"Swing Loan Notes" has the meaning ascribed to such term in Section
3.05(a)(iii).
"Swing Loan Obligations" means the aggregate principal amount of all
Swing Loans outstanding.
"Tax Advance Agreement" means the Tax Distribution Advance Agreement,
dated as of December 11, 1996, as amended on June 12, 1997 among Foamex
International and the Borrower.
"Tax Sharing Agreement" means the First Amended and Restated Tax
Sharing Agreement dated as of December 14, 1993 among the Borrower, Trace Foam,
Foamex International and FMXI, as amended on June 12, 1997.
"Taxes" has the meaning ascribed to such term in Section 3.03(a).
"TEFSA" means Foamex de Cuautitlan S.A. de C.V.
"Term B Loans" has the meaning ascribed to such term in Section 2.04
(a).
"Term B Note" means a promissory note of the Borrower payable to any
Lender, in the form of Exhibit A-3 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Term B Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.
"Term C Loans" has the meaning ascribed to such term in Section
2.04(b).
"Term C Note" means a promissory note of the Borrower payable to any
Lender, in the form of Exhibit A-4 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Term C Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.
"Term D Loans" has the meaning ascribed to such term in Section
2.04(c).
"Term D Note" means a promissory note of the Borrower payable to any
Lender, in the form of Exhibit A-5 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
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aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Term D Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.
"Term Loans" means, collectively, the Term B Loans, the Term C Loans
and the Term D Loans.
"Term Notes" means, collectively, the Term B Notes, the Term C Notes
and the Term D Notes.
"Termination Event" means (a) a Reportable Event with respect to any
Benefit Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a
Benefit Plan during a plan year in which the Borrower or such ERISA Affiliate
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or the
cessation of operations which results in the termination of employment of 20% of
Benefit Plan participants who are employees of the Borrower or any ERISA
Affiliate; (c) the imposition of an obligation on the Borrower or any ERISA
Affiliate under Section 4041 of ERISA to provide affected parties written notice
of intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (d) the institution by the PBGC or any similar foreign
Governmental Authority of proceedings to terminate a Benefit Plan or a Foreign
Pension Plan; (e) any event or condition which constitutes grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Benefit Plan; (f) a foreign Governmental Authority shall appoint
or institute proceedings to appoint a trustee to administer any Foreign Pension
Plan; or (g) the partial or complete withdrawal of the Borrower or any ERISA
Affiliate from a Multiemployer Plan or a Foreign Pension Plan.
"TIHI" means Trace International Holdings, Inc., a Delaware
corporation.
"TIHI Subordination Agreement" means the TIHI Subordination Agreement
dated as of December 14, 1993 between TIHI, Trace Foam and the Collateral Agent,
as amended on June 12, 1997, and as such agreement may be further amended,
supplemented or modified from time to time.
"Total Net Debt" means, on any date of determination, the difference of
(a) the aggregate amount of Funded Debt of the Borrower and
its Subsidiaries (on a consolidated basis) outstanding on such date
minus
(b) the aggregate amount of cash and Cash Equivalents of the
Borrower and its Subsidiaries (on a consolidated basis) which are
available on such date to be applied (without any legal or Contractual
Obligation restriction) against the Indebtedness described in clause
(a).
"Total Net Debt to EBDAIT Ratio" means, as of the last day of any
period, the ratio of
(a) Total Net Debt outstanding on the last day of such period
to
(b) EBDAIT computed for such period.
"Trace Foam" means Trace Foam Company, Inc., a Delaware corporation.
"Transfer Agreement" means the Transfer Agreement by and between TFLLC
and the Borrower, dated as of February 27, 1998.
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"Transaction" has the meaning ascribed to such term in the Amendatory
Agreement.
"Transaction Costs" means the fees, costs and expenses payable by the
Borrower in connection with the execution, delivery and performance of the Loan
Documents and the Transaction.
"Transaction Documents" means the Loan Documents, the Partnership
Agreement, the Foamex International Supply Agreement, the Foamex/GFI Note, the
Supply Agreement, the Administrative Services Agreement, the Transfer Agreement,
the Management Agreement, the Tax Sharing Agreement, the New Foamex Subordinated
Notes, the New Foamex Subordinated Note Indenture, the Intercompany Promissory
Notes, the Old TIHI Loan, the New TIHI Loan, the Tax Advance Agreement, the New
Foamex Notes, the New Foamex Indenture, the New Foamex Registration Rights
Agreement, the documents, agreements and other writings related to the
Transaction and all other agreements entered into prior to or on the Effective
Date pursuant to such agreements.
"Triggering Event" means (a) any Event of Default occurring under
Section 11.01(f) or 11.01(g) or (b) any other Event of Default (i) occurring
under Section 11.01(a), (i), (j), (m), (n) or (p) or (ii) which has occurred and
is continuing for a period of 30 days or more, in each case, which the
Administrative Agents have (either in their discretion or upon the direction of
the Requisite Lenders) designated in writing to the Borrower to be a "Triggering
Event".
"UCC" means the Uniform Commercial Code as enacted in the State of New
York, as it may be amended from time to time.
"Unused Commitment Fee" has the meaning ascribed to such term in
Section 4.03(c).
1.02 Computation of Time Periods. In this Agreement, in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding". Periods of days referred to in this Agreement shall be counted
in calendar days unless Business Days are expressly prescribed. Any period
determined hereunder by reference to a month or months or year or years shall
end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such period, provided that if such period commences on the last day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month during which such period is to end), such period
shall, unless otherwise expressly required by the other provisions of this
Agreement, end on the last day of the calendar month.
1.03 Accounting Terms. Subject to Section 13.04, for purposes of this
Agreement, all accounting terms not otherwise defined herein shall have the
meanings assigned to them in conformity with GAAP. For purposes of calculating
(a) the Total Net Debt to EBDAIT Ratio, Xxxxx Industries and its Subsidiaries
(including the results of operations of SIMCO Corporation for the full Fiscal
Year 1997) shall be deemed to have become Subsidiaries of the Borrower on the
first day of Fiscal Year 1997 and (b) the amount of Excess Cash Flow in respect
of Fiscal Year 1997 shall be calculated as if Xxxxx Industries and its
Subsidiaries had become Subsidiaries of the Borrower on the first day of fiscal
year 1998.
1.04 Other Definitional Provisions. References to "Articles",
"Sections", "subsections", "Schedules", "Exhibits" and the "preamble" shall be
to Articles, Sections, subsections, Schedules, Exhibits and the preamble,
respectively, of this Agreement unless otherwise specifically provided.
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1.05 Other Terms. All other terms contained in this Agreement shall,
unless the context indicates otherwise, have the meanings assigned to such terms
by the UCC to the extent the same are defined therein.
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01 Revolving Credit Facility.
(a) Availability. Subject to the terms and conditions set forth in this
Agreement, each Lender hereby severally and not jointly agrees to make revolving
loans (each individually, a "Revolving Loan" and, collectively, the "Revolving
Loans") to the Borrower from time to time during the period ending on the
Business Day next preceding the Revolving Loan Commitment Termination Date, in
an amount not to exceed such Lender's Pro Rata Share of the Revolving Loan
Commitment Availability at such time. All Revolving Loans comprising the same
Borrowing under this Agreement shall be made by the Lenders simultaneously and
proportionately to their then respective Pro Rata Shares, it being understood
that no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make a Revolving Loan hereunder nor shall the
Commitment of any Lender be increased or decreased as a result of any such
failure. Subject to the provisions of this Agreement (including, without
limitation, Sections 4.02(f) and 5.02), the Borrower may repay any outstanding
Revolving Loan made to it on any day which is a Business Day and any amounts so
repaid may be reborrowed in accordance with the provisions of this Section
2.01(a).
(b) Notice of Borrowing. When the Borrower desires to borrow under this
Section 2.01, it shall deliver to the Funding Agent a Notice of Borrowing,
signed by it, no later than 11:00 a.m. (New York time) (i) on the Business Day
immediately preceding the proposed Funding Date, in the case of a Borrowing of
Base Rate Loans and (ii) at least three (3) Business Days in advance of the
proposed Funding Date, in the case of a Borrowing of LIBO Rate Loans. Such
Notice of Borrowing shall specify (i) the proposed Funding Date (which shall be
a Business Day), (ii) the amount of the proposed Borrowing, (iii) whether the
proposed Borrowing will be of Base Rate Loans or LIBO Rate Loans, (iv) in the
case of LIBO Rate Loans, the requested LIBO Rate Interest Period, and (v)
instructions for the disbursement of the proceeds of the proposed Borrowing.
Revolving Loans made on any Funding Date shall be in minimum amount of $500,000,
other than Revolving Loans constituting (i) repayments of Swing Loans described
in the first and second sentences of Section 2.02(b), (ii) refundings of
Reimbursement Obligations, described in Section 2.03(e)(ii) and (iii) payments
of fees and expenses described in Section 3.02(b)(iv). In lieu of delivering
such a Notice of Borrowing, the Borrower may give the Funding Agent telephonic
notice of any proposed Bor rowing by the time required under this Section
2.01(b), if it confirms such notice by delivery of the Notice of Borrowing to
the Funding Agent promptly, but in no event later than 5:00 p.m. (New York time)
on the same day. Any Notice of Borrowing (or telephonic notice in lieu thereof)
given pursuant to this Section 2.01(b) shall be irrevocable.
(c) Making of Revolving Loans. (i) Promptly after receipt of a Notice
of Borrowing under Section 2.01(b) (or telephonic notice in lieu thereof), the
Funding Agent shall notify each Lender by telex or telecopy, or other similar
form of transmission, of the proposed Borrowing. Each Lender shall deposit an
amount equal to its Pro Rata Share of the amount requested by the Borrower
specified in such Notice of Borrowing to be made as Revolving Loans with the
Funding Agent at its office in New York, New York, in immediately available
funds, not later than 11:00 a.m. (New York time) on any Funding Date applicable
thereto. Subject to the fulfillment of the condition precedent set
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forth in Section 5.02, the Funding Agent shall, make the proceeds of such
amounts received by it available to the Borrower at the Funding Agent's office
in New York, New York on such Funding Date (or on the date received if later
than such Funding Date) and shall disburse such proceeds in accordance with the
Borrower's disbursement instructions set forth in the applicable Notice of
Borrowing. The failure of any Lender to deposit the amount described above with
the Funding Agent on the applicable Funding Date shall not relieve any other
Lender of its obligations hereunder to make its Revolving Loan on such Funding
Date.
(ii) Unless the Funding Agent shall have been notified by any Lender on
the Business Day immediately preceding the applicable Funding Date in respect of
any Borrowing of Revolving Loans that such Lender does not intend to fund its
Revolving Loan requested to be made on such Funding Date, the Funding Agent may
assume that such Lender has funded its Revolving Loan and is depositing the
proceeds thereof with the Funding Agent on the Funding Date, and the Funding
Agent in its sole discretion may, but shall not be obligated to, disburse a
corresponding amount to the Borrower specified in the applicable Notice of
Borrowing on the Funding Date. If the Revolving Loan proceeds corresponding to
that amount are advanced to the Borrower by the Funding Agent but are not in
fact deposited with the Funding Agent by such Lender on or prior to the
applicable Funding Date, such Lender agrees to pay, and in addition the Borrower
agrees to repay, to the Funding Agent forthwith on demand such corresponding
amount, together with interest thereon, for each day from the date such amount
is disbursed to or for the benefit of the Borrower until the date such amount is
paid or repaid to the Funding Agent, in the case of the Borrower or such Lender,
at the interest rate applicable to such Borrowing. If such Lender shall pay to
the Funding Agent the corresponding amount, the amount so paid shall constitute
such Lender's Revolving Loan, and if both such Lender and the Borrower shall pay
and repay such corresponding amount, the Funding Agent shall promptly pay to the
Borrower such corresponding amount. This Section 2.01(c)(ii) does not relieve
any Lender of its obligation to make its Loan on any Funding Date; nor does this
Section relieve the Borrower of its obligation to pay or repay any Lender
funding its Loan pursuant to this Section interest on such Loan from such
Funding Date until the date on which such Loan is repaid in full.
(d) Use of Proceeds of Revolving Loans and Swing Loans and Use of
Letters of Credit. The proceeds of the Revolving Loans and Swing Loans and
Letters of Credit may be used for the following purposes: (i) the general
corporate and working capital needs of the Borrower and the Subsidiary
Guarantors, (ii) Permitted Aircraft Payments, (iii) to defease certain secured
Indebtedness of the Borrower on the Effective Date in a principal amount not to
exceed $5,000,000, (iv) to pay Transaction Costs and (v) a Letter of Credit may
be issued on the Effective Date in the stated amount of up to $34,000,000 to
secure the Borrower's obligations under the Foamex/GFI Note.
(e) Revolving Loan Commitment Termination Date. The Commitments shall
terminate, and all outstanding Obligations shall be paid in full (or, in the
case of contingent Letter of Credit Obligations outstanding, payment in cash
shall be made and deposited in the Cash Collateral Account in an aggregate
principal amount equal to the then outstanding Letter of Credit Obligations to
the satisfaction of the Issuing Banks and the Requisite Lenders) on the
Revolving Loan Commitment Termination Date. Each Lender's obligation to make
Revolving Loans, the Swing Bank's obligation to make Swing Loans, and any
Issuing Bank's obligation to issue Letters of Credit shall terminate at the
close of business on the Business Day next preceding the Revolving Loan
Commitment Termination Date.
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2.02 The Swing Loan Facility.
(a) Making of Swing Loans. Upon receipt of telephonic request therefor
from the Borrower (which, if the Swing Bank so requests, shall be confirmed in
writing by delivery to the Funding Agent of a Notice of Borrowing from the
Borrower within one Business Day thereafter) no later than 11:00 a.m. (New York
time) the same day of the proposed Funding Date, the Swing Bank, in its sole
discretion, may from time to time make loans to the Borrower solely for the
Swing Bank's own account (the "Swing Loans"), up to an aggregate principal
amount at any one time outstanding which shall not exceed the lesser of (i)
$15,000,000 and (ii) the Revolving Loan Commitment Availability at such time.
The Swing Bank shall be entitled to apply any proceeds of Collateral received by
the Funding Agent as repayment of the Obligations since the Settlement Date next
preceding such Funding Date as repayment of the Swing Loans made on any Funding
Date prior to the next following Settlement Date. The Swing Bank shall make the
proceeds of such Loans available to the Borrower in New York, New York on such
Funding Date and shall disburse such funds in Dollars and in immediately
available funds to an account of the Borrower, designated in the Notice of
Borrowing. The Swing Bank shall have no duty to make or to continue to make
Swing Loans. All Swing Loans shall be Base Rate Loans payable on the next
Settlement Date with accrued interest thereon which shall be payable to the
Swing Bank solely for its own account but shall otherwise be subject to all the
terms and conditions applicable to Revolving Loans. The Swing Bank shall not
make any Swing Loan in the period commencing on the first Business Day after it
receives written notice from any Lender (i) that one or more of the conditions
precedent contained in Section 5.02 will not on such date be satisfied, ending
when such conditions are satisfied, or (ii) that an Event of Default has
occurred, and ending when such Event of Default no longer exists, and the Swing
Bank shall not otherwise be required to determine that, or take notice whether,
(A) the conditions precedent set forth in Section 5.02 hereof have been
satisfied or (B) an Event of Default has occurred.
(b) Repayment of Swing Loans. On at least a weekly or more frequent
basis, on a settlement date to be selected by the Funding Agent in its sole
discretion (the "Settlement Date"), the Borrower shall promptly borrow Revolving
Loans from all the Lenders pursuant to Section 2.01 or the following sentence
(irrespective of the satisfaction of the conditions in Section 5.02 or the
requirement to deliver a Notice of Borrowing in Section 2.01(b) which conditions
and requirement, for the purposes of the repayment of Swing Loans to the Swing
Bank, the Lenders irrevocably waive) and hereby authorizes the Funding Agent to
apply the proceeds of such Revolving Loans to the repayment of any Swing Loans
then outstanding. To the extent the Funding Agent receives any amounts in
repayment of outstanding Revolving Loans prior to such Settlement Date which it
has not paid to the Lenders pursuant to Section 3.02(a), the Funding Agent shall
be entitled to advance such amounts as additional Revolving Loans of the Lenders
(in accordance with their respective Pro Rata Shares) to repay any Swing Loans
outstanding on such Settlement Date. The failure of any Lender to make available
to the Funding Agent its Pro Rata Share of such Revolving Loans shall not
relieve any other Lender of its obligation hereunder to make available to the
Funding Agent such other Lender's Pro Rata Share of such Revolving Loans on the
day funds are to be made available to repay such Swing Loans. If the Borrower
fails to repay any Swing Loan made to the Borrower within one (1) Business Day
after demand therefor by the Swing Bank or the Funding Agent, and in any event
upon request by the Swing Bank, each other Lender shall irrevocably and
unconditionally purchase from the Swing Bank, without recourse or warranty, an
undivided interest and participation in such Swing Loan in an amount equal to
such other Lender's Pro Rata Share thereof and shall pay such amount to the
Swing Bank in New York, New York in Dollars and in immediately available funds.
If such amount is not paid to the Swing Bank by any Lender, the Swing Bank shall
be entitled to recover such amount on demand from such Lender together with
accrued interest thereon, for each day from the date of demand therefor, if
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made prior to 12:00 noon (New York time) on any Business Day, or, if made at any
other time, from the next Business Day following the date of such demand, until
the date such amount is paid to the Swing Bank by such Lender, until three (3)
Business Days have expired at the Federal Funds Rate and thereafter at the Base
Rate. If such Lender does not pay such amount forthwith on the Swing Bank's
demand therefor and until such time as such Lender makes the required payment,
the Swing Bank shall be deemed to continue to have outstanding a Swing Loan in
the amount of such unpaid participation obligation for all purposes of this
Agreement other than those provisions requiring the other Lenders to purchase a
participation therein. This Section 2.02 does not relieve any Lender of its
obligations to purchase Pro Rata participations in any Swing Loans; nor does
this Section relieve the Borrower of its obligation to pay or repay the Lender
funding its Pro Rata Share of such payment pursuant to this Section interest on
the amount of such payment from the date of the Borrower's failure to repay such
Swing Loan until the date on which such payment is repaid in full.
2.03 Letters of Credit. Subject to the terms and conditions set forth
in this Agreement, each Issuing Bank hereby severally agrees to issue for the
account of the Borrower one or more Letters of Credit, in an outstanding amount
not to exceed at any time the L/C Sublimit subject to the following provisions:
(a) Types and Amounts. An Issuing Bank shall not have any
obligation to issue, amend or extend, and shall not issue, amend or
extend, any Letter of Credit at any time:
(i) if the aggregate Letter of Credit Obligations
with respect to such Issuing Bank, after giving effect to the
issuance, amendment or extension of the Letter of Credit
requested hereunder, shall exceed any limit imposed by law or
regulation upon such Issuing Bank or its Issuing Bank L/C
Sublimit;
(ii) if the Issuing Bank receives written notice from
the Funding Agent at or before 11:00 a.m. (New York time) on
the date of the proposed issuance, amendment or extension of
such Letter of Credit that (A) immediately after giving effect
to the issuance, amendment or extension of such Letter of
Credit, (I) the Letter of Credit Obligations at such time
would exceed the L/C Sublimit, (II) the Revolving Credit
Obligations at such time would exceed the Revolving Credit
Commitment Amount at such time or (III) one or more of the
conditions precedent contained in Section 5.02 would not on
such date be satisfied, unless such conditions are thereafter
satisfied and written notice of such satisfaction is given to
the Issuing Bank by the Funding Agent (and an Issuing Bank
shall not otherwise be required to determine that, or take
notice whether, the conditions precedent set forth in Section
5.02 have been satisfied);
(iii) which has an expiration date later than the
earlier of (A) the date one (1) year after the date of
issuance (without regard to any automatic renewal provisions
thereof) or (B) the Business Day next preceding the Revolving
Loan Commitment Termination Date; or
(iv) which is in a currency other than Dollars unless
otherwise agreed to by the Issuing Bank and the Administrative
Agents.
(b) Xxxxxxxxxx.Xx addition to being subject to the
satisfaction of the conditions precedent contained in Section 5.02,
the obligation of
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an Issuing Bank to issue, amend or extend any Letter of Credit is
subject to the satisfaction in full of the following conditions:
(i) if the Issuing Bank so requests, the Borrower
requesting such issuance, amendment or extension shall have
executed and delivered to such Issuing Bank and the Funding
Agent a Letter of Credit Reimbursement Agreement and such
other documents and materials as may be required pursuant to
the terms thereof; and
(ii) the terms of the proposed Letter of Credit shall
be satisfactory to the Issuing Bank in its sole discretion.
(c) Issuance of Letters of Credit. (i) The Borrower shall give
an Issuing Bank and the Funding Agent written notice that it has
selected such Issuing Bank to issue a Letter of Credit not later than
11:00 a.m. (New York time) on the third (3rd) Business Day preceding
the requested date for issuance thereof under this Agreement, or such
shorter notice as may be acceptable to such Issuing Bank and the
Funding Agent. Such notice shall be irrevocable unless and until such
request is denied by the applicable Issuing Bank and shall specify (A)
that the requested Letter of Credit is either a Commercial Letter of
Credit or a Standby Letter of Credit, (B) the stated amount of the
Letter of Credit requested, (C) the effective date (which shall be a
Business Day) of issuance of such Letter of Credit, (D) the date on
which such Letter of Credit is to expire (which shall be a Business Day
and no later than the earlier of (x) the one year anniversary of the
date of such Letter of Credit and (y) the Business Day immediately
preceding the Revolving Loan Commitment Termination Date), (E) the
Person for whose benefit such Letter of Credit is to be issued, (F)
other relevant terms of such Letter of Credit and (G) the amount of the
then outstanding Letter of Credit Obligations. Such Issuing Bank shall
notify the Funding Agent immediately upon receipt of a written notice
from the Borrower requesting that a Letter of Credit be issued, or that
an existing Letter of Credit be extended or amended and, upon the
Funding Agent's request therefor, send a copy of such notice to the
Funding Agent.
(ii) The Issuing Bank shall give the Funding Agent written
notice, or telephonic notice confirmed promptly thereafter in writing,
of the issuance, amendment or extension of a Letter of Credit (which
notice the Funding Agent shall promptly transmit by telegram, telex,
telecopy, telephone or similar transmission to each Lender).
(d) Reimbursement Obligations; Duties of Issuing Banks. (i)
Notwithstanding any provisions to the contrary in any Letter of Credit
Reimbursement Agreement applicable to a Letter of Credit:
(A) the Borrower shall reimburse the Issuing Bank for
amounts drawn under such Letter of Credit, in Dollars, no
later than the date (the "Reimbursement Date") which is the
earlier of (I) the time specified in the applicable Letter of
Credit Reimbursement Agreement and (II) one (1) Business Day
after the Borrower receives written notice from the Issuing
Bank that payment has been made under such Letter of Credit by
the Issuing Bank; and
(B) all Reimbursement Obligations with respect to any
Letter of Credit shall bear interest at the rate applicable to
Base Rate Loans in accordance with Section 4.01(a) from the
date of the relevant drawing under such Letter of Credit until
the Reimbursement Date and thereafter at the rate applicable
to Base Rate Loans in accordance with Section 4.01(d).
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(ii) The Issuing Bank shall give the Funding Agent written
notice, or telephonic notice confirmed promptly thereafter in writing,
of all drawings under a Letter of Credit and the payment (or the
failure to pay when due) by the Borrower on account of a Reimbursement
Obligation (which notice the Funding Agent shall promptly transmit by
telegram, telex, telecopy or similar transmission to each Lender).
(iii) No action taken or omitted in good faith by an Issuing
Bank under or in connection with any Letter of Credit shall put such
Issuing Bank under any resulting liability to any Lender, the Borrower
or, so long as it is not issued in violation of Section 2.03(a),
relieve any Lender of its obligations hereunder to such Issuing Bank.
Solely as between the Issuing Banks and the Lenders, in determining
whether to pay under any Letter of Credit, the respective Issuing Bank
shall have no obligation to the Lenders other than to confirm that any
documents required to be delivered under a respective Letter of Credit
appear to have been delivered and that they appear on their face to
comply with the requirements of such Letter of Credit.
(e) Participations. (i) Immediately upon issuance by an
Issuing Bank of any Letter of Credit in accordance with the procedures
set forth in this Section 2.03, each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from that
Issuing Bank, without recourse or warranty, an undivided interest and
participation in such Letter of Credit to the extent of such Lender's
Pro Rata Share, including, without limitation, all obligations of the
Borrower with respect thereto (other than amounts owing to the Issuing
Bank under Section 2.03(g)) and any security therefor and guaranty
pertaining thereto.
(ii) If any Issuing Bank makes any payment under any Letter of
Credit issued for the account of the Borrower and the Borrower does not
repay such amount to the Issuing Bank on the Reimbursement Date, the
Issuing Bank shall promptly notify the Funding Agent, which shall
promptly notify each Lender, and each Lender shall promptly and
unconditionally pay to the Funding Agent for the account of such
Issuing Bank, in immediately available funds, the amount of such
Lender's Pro Rata Share of such payment (net of that portion of such
payment, if any, made by such Lender in its capacity as an Issuing
Bank), and the Funding Agent shall promptly pay to the Issuing Bank
such amounts received by it, and any other amounts received by the
Funding Agent for the Issuing Bank's account, pursuant to this Section
2.03(e). All such payments shall constitute Revolving Loans made to the
Borrower pursuant to Section 2.01 (irrespective of the satisfaction of
the conditions in Section 5.02 or the requirement in Section 2.01(b) to
deliver a Notice of Borrowing which conditions and requirement, for the
purpose of refunding any Reimbursement Obligation owing to any Issuing
Bank, the Lenders irrevocably waive). If a Lender does not make its Pro
Rata Share of the amount of such payment available to the Funding
Agent, such Lender agrees to pay to the Funding Agent for the account
of the Issuing Bank, forthwith on demand, such amount together with
interest thereon after the date such payment was first due at the
Federal Funds Rate. The failure of any Lender to make available to the
Funding Agent for the account of an Issuing Bank its Pro Rata Share of
any such payment shall neither relieve any other Lender of its
obligation hereunder to make available to the Funding Agent for the
account of such Issuing Bank such other Lender's Pro Rata Share of any
payment on the date such payment is to be made nor increase the
obligation of any other Lender to make such payment to the Funding
Agent. This Section does not relieve any Lender of its obligations to
purchase Pro Rata Share participations in Letters of Credit; nor does
this Section relieve the Borrower of its obligation to pay or repay any
Issuing Bank funding its Pro Rata Share of such
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payment pursuant to this Section interest on the amount of such payment
from such date such payment is to be made until the date on which
payment is repaid in full.
(iii) Whenever an Issuing Bank receives a payment on account
of a Reimbursement Obligation, including any interest thereon, as to
which the Funding Agent has previously received proceeds of Revolving
Loans from any Lender for the account of such Issuing Bank pursuant to
this Section 2.03(e), such Issuing Bank shall promptly pay to the
Funding Agent an amount equal to such Lenders Pro Rata Share thereof
and the Funding Agent shall pay such amounts over to such Lender as a
repayment of such Revolving Loan in accordance with Section 3.02.
(iv) Upon the request of any Lender, an Issuing Bank shall
furnish such Lender copies of any Letter of Credit or Letter of Credit
Reimbursement Agreement to which such Issuing Bank is party and such
other documentation as reasonably may be requested by such Lender.
(v) The obligations of a Lender to make payments to the
Funding Agent for the account of any Issuing Bank with respect to a
Letter of Credit shall be irrevocable, shall not be subject to any
qualification or exception whatsoever except willful misconduct or
gross negligence of such Issuing Bank, and shall be honored in
accordance with this Article II (irrespective of the satisfaction of
the conditions described in Section 5.02) which conditions, for the
purposes of the repayment of Letters of Credit to the Issuing Bank, the
Lenders irrevocably waive under all circumstances, including, without
limitation, any of the following circumstances:
(A) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(B) the existence of any claim, setoff, defense or
other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of a
beneficiary named in a Letter of Credit (or any Person for
whom any such transferee may be acting), the Funding Agent,
the Issuing Bank, any Lender, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the account
party and beneficiary named in any Letter of Credit);
(C) any draft, certificate or any other document
presented under the Letter of Credit having been determined to
be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any
respect;
(D) the surrender or impairment of any security for
the performance or observance of any of the terms of any of
the Loan Documents;
(E) any failure by that Issuing Bank to make any
reports required pursuant to Section 2.03(h) or the inaccuracy
of any such report; or
(F) the occurrence of any Event of Default or
Potential Event of Default.
(f) Payment of Reimbursement Obligations. (i)The Borrower
unconditionally agrees to pay to each Issuing Bank, in Dollars, the
amount of all Reimbursement Obligations, interest and other amounts
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payable to such Issuing Bank under or in connection with the related
Letter of Credit Reimbursement Agreement and the Letter of Credit
issued pursuant thereto when such amounts are due and payable,
irrespective of any claim, setoff, defense or other right which the
Borrower may have at any time against any Issuing Bank or any other
Person.
(ii) In the event any payment by the Borrower received by an
Issuing Bank with respect to a Letter of Credit and distributed by the
Funding Agent to the Lenders on account of their participations is
thereafter set aside, avoided or recovered from such Issuing Bank in
connection with any receivership, liquidation or bankruptcy proceeding,
each Lender which received such distribution shall, upon demand by such
Issuing Bank, contribute to such Issuing Bank such Lender's Pro Rata
Share of the amount set aside, avoided or recovered together with
interest at the rate required to be paid by such Issuing Bank upon the
amount required to be repaid by it.
(g) Issuing Bank Charges. With respect to each Letter of
Credit, the Borrower shall pay to each Issuing Bank, solely for its own
account, (i) a fee of one-quarter of one percent (0.25%) of the undrawn
face amount of each Letter of Credit payable quarterly in arrears (on
the Business Day closest to each calendar quarter-end after the date of
issuance thereof) and (ii) the standard charges assessed by such
Issuing Bank in connection with the issuance, administration, amendment
and payment or cancellation of letters of credit and such compensation
for the Borrower's account as may be agreed upon by the Borrower and
such Issuing Bank from time to time.
(h) Issuing Bank Reporting Requirements. Each Issuing Bank
shall, no later than the tenth (10th) Business Day following the last
day of each calendar month, provide to the Funding Agent and the
Borrower separate schedules for Commercial Letters of Credit and
Standby Letters of Credit issued as Letters of Credit, in form and
substance reasonably satisfactory to the Funding Agent, setting forth
the aggregate Letter of Credit Obligations outstanding to it at the end
of each month and any information requested by the Funding Agent or the
Borrower relating to the date of issue, account party, amount,
expiration date and reference number of each Letter of Credit issued by
it.
(i) Indemnification; Exoneration. (i) In addition to all other
amounts payable to an Issuing Bank, the Borrower hereby agrees to
defend, indemnify, and save each Administrative Agent, each Issuing
Bank and each Lender harmless from and against any and all claims,
demands, liabilities, penalties, damages, losses (other than loss of
profits), costs, charges and expenses (including reasonable attorneys'
fees but excluding taxes) which such Administrative Agent, such Issuing
Bank or such Lender may incur or be subject to as a consequence, direct
or indirect, of (A) the issuance of any Letter of Credit to the
Borrower other than as a result of the gross negligence or willful
misconduct of the Issuing Bank, as determined by a court of competent
jurisdiction, or (B) the failure of the Issuing Bank issuing a Letter
of Credit to honor a drawing under such Letter of Credit as a result of
any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or Governmental Authority.
(ii) As between the Borrower on the one hand and the
Administrative Agents, the Lenders and the Issuing Banks on the other
hand, the Borrower assumes all risks of the acts and omissions of, or
misuse of Letters of Credit by, the respective beneficiaries of the
Letters of Credit. In furtherance and not in limitation of the
foregoing, subject to the provisions of the Letter of Credit
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Reimbursement Agreements applicable to any Letter of Credit, the
Issuing Banks and the Lenders shall not be responsible for: (A) the
form, validity, legality, sufficiency, accuracy, genuineness or legal
effect of any document submitted by any party in connection with the
application for and issuance of the Letters of Credit, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity,
legality or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (C) failure of the
beneficiary of a Letter of Credit to comply duly with conditions
required in order to draw upon such Letter of Credit; (D) errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (E) errors in interpretation of technical terms; (F)
any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any Letter of Credit or of
the proceeds thereof; (G) the misapplication by the beneficiary of a
Letter Credit of the proceeds of any drawing under such Letter of
Credit; and (H) any consequences arising from causes beyond the control
of the Administrative Agents, the Issuing Banks or the Lenders.
(j) Obligations Several. The obligations of each Lender under
this Section 2.03 are several and not joint, and no Lender shall be
responsible for the obligation to issue Letters of Credit or
participation obligation hereunder, respectively, of any other Issuing
Bank or Lender.
2.04 Term Loan Facilities.
(a) The Term B Loans. As of the Effective Date the Lenders have
extended term loans to the Borrower in a maximum original aggregate principal
amount of $110,000,000 (relative to such Lender, its "Term B Loans"). On the
Effective Date (after giving effect to the Transaction), there were outstanding
Term B Loans in an aggregate principal amount of $83,553,454. Each Lender's Term
B Loans as of (and giving effect to) the Effective Date are as set forth on
Annex I hereto.
(b) The Term C Loans. As of the Effective Date the Lenders have
extended term loans to the Borrower in a maximum original aggregate principal
amount of $100,000,000 (relative to such Lender, its "Term C Loans"). On the
Effective Date (after giving effect to the Transaction), there were outstanding
Term C Loans in an aggregate principal amount of $75,957,685. Each Lender's Term
C Loans as of (and giving effect to) the Effective Date are as set forth on
Annex I hereto.
(c) Term D Loans. As of the Effective Date the Lenders have extended
term loans to the Borrower in a maximum original aggregate principal amount of
$110,000,000 (relative to such Lender, its "Term D Loans"). On the Effective
Date, there were outstanding Term D Loans in an aggregate principal amount of
$110,000,000. Each Lender's Term D Loans as of (and giving effect to) the
Effective Date are as set forth on Annex I hereto.
(d) Use of Proceeds of Term Loans. The proceeds of the Term Loans were
used solely for the purposes set forth in Section 2.04(d) of the Existing Credit
Agreement.
2.05 Authorized Officers and Administrative Agents. The Borrower shall
deliver to each Administrative Agent from time to time an Officer's Certificate
setting forth the names of the officers, employees and agents authorized to
request Loans and Letters of Credit and to request a
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conversion/continuation of any Loan and containing a specimen signature of each
such officer, employee or agent. The officers, employees and agents so
authorized shall also be authorized to act for the Borrower in respect of all
other matters relating to the Loan Documents. The Administrative Agents shall be
entitled to rely conclusively on such officer's or employee's authority to
request such Loan, Letter of Credit or such conversion/continuation until the
Administrative Agents receive written notice to the contrary. The Administrative
Agents shall have no duty to verify the authenticity of the signature appearing
on any written Notice of Borrowing or Notice of Conversion/Continuation or any
other document, and, with respect to an oral request for such a Loan, Letter of
Credit or such conversion/continuation, the Administrative Agents shall have no
duty to verify the identity of any person representing himself or herself as one
of the officers, employees or agents authorized to make such request or
otherwise to act on behalf of the Borrower. None of the Administrative Agents,
the Lenders or the Issuing Banks shall incur any liability to the Borrower or
any other Person in acting upon any telephonic notice referred to above which
any Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow behalf of the Borrower.
ARTICLE III
PAYMENTS AND PREPAYMENTS
3.01 Prepayments and Repayments; Reductions in Commitments.
(a) Voluntary Prepayments/Reductions. (i) The Borrower may, at any time
and from time to time, prepay or repay any Loan, in whole or in part; provided,
however, LIBO Rate Loans may only be prepaid (A) in whole or in part on the
expiration date of the then applicable LIBO Rate Interest Period, upon at least
three (3) Business Days' prior written notice to the Funding Agent (which the
Funding Agent shall promptly transmit to each Lender) or (B) otherwise upon
payment of the amounts described in Section 4.02(f). Any notice of prepayment
given to the Funding Agent under this Section 3.01(a)(i) shall specify the type
of Loans to be prepaid or repaid, the date (which shall be a Business Day) of
prepayment or repayment, and the aggregate principal amount of the prepayment or
repayment. Any prepayment or repayment of Term Loans shall be applied to each
remaining principal installment of such Term Loans on a pro rata basis. When
notice of prepayment is delivered as provided herein, the principal amount of
the Loans specified in the notice shall become due and payable on the prepayment
date specified in such notice.
(ii) The Borrower, upon at least three (3) Business Days' prior written
notice to the Funding Agent (which the Funding Agent shall promptly transmit to
each Lender), shall have the right, at any time and from time to time, to
terminate in whole or permanently reduce in part Commitments, provided that the
Borrower shall have made whatever payment may be required to reduce the
Revolving Credit Obligations to an amount less than or equal to the Revolving
Loan Commitment Amount as reduced or terminated on the date of such reduction.
Any notice of termination or reduction given to the Funding Agent under this
Section 3.01(a)(ii) shall specify the date (which shall be a Business Day) of
such termination or reduction and, with respect to a partial reduction, the
aggregate principal amount thereof. When notice of termination or reduction is
delivered as provided herein, the principal amount of the Revolving Loans
specified in the notice shall become due and payable on the date specified in
such notice.
(iii) The prepayments and payments in respect of reductions and
terminations described in clauses (i) and (ii) of this Section 3.01(a) may be
made without premium or penalty (except as provided in Section 4.02(f));
provided, however, that any prepayment of Term B Loans or Term C Loans (i) on or
prior to June 12, 1998 shall be subject to a prepayment fee of 1.25% of the
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principal amount of the Loans so prepaid and (ii) after June 12, 1998 and on or
prior to June 12, 1999 shall be subject to a prepayment fee of 1.0% of the
principal amount of the Loans so prepaid, and in each such case, such fees shall
be due and payable on the date of such repayment.
(b) Mandatory Payments. (i) Within one (1) Business Day after any
Credit Party's receipt of any Net Cash Proceeds of Sale, the Borrower shall make
or cause to be made a mandatory prepayment of the Obligations. Any mandatory
prepayment of the obligations required to be made pursuant to this Section
3.01(b)(i) shall be applied first, to Term Loans as set forth in Section
3.02(b)(ii), second, to the outstanding principal amount of the Swing Loans and
third, to the outstanding principal amount of the Revolving Loans.
(ii) On each Quarterly Payment Date set forth below, the Borrower shall
make a scheduled repayment of the aggregate outstanding principal amount, if
any, of all Term B Loans in an amount equal to the amount set forth below
opposite the applicable Quarterly Payment Date:
Amount of Required
Period Principal Payment
------ -----------------
March 31, 1998 $209,933
June 30, 1998 $209,933
September 30, 1998 $209,933
December 31, 1998 $209,933
March 31, 1999 $209,933
June 30, 1999 $209,933
September 30, 1999 $209,933
December 31, 1999 $209,933
March 31, 2000 $209,933
June 30, 2000 $209,933
September 30, 2000 $209,933
December 31, 2000 $209,933
March 31, 2001 $209,933
June 30, 2001 $209,933
September 30, 2001 $209,933
December 31, 2001 $209,933
March 31, 2002 $209,933
June 30, 2002 $209,933
September 30, 2002 $209,933
December 31, 2002 $209,933
March 31, 2003 $209,933
June 30, 2003 $209,933
September 30, 2003 $8,397,332
December 31, 2003 $8,397,332
March 31, 2004 $8,397,332
June 30, 2004 $8,397,332
September 30, 2004 $11,336,398
December 31, 2004 $11,336,398
March 31, 2005 $11,336,398
June 30, 2005 $11,336,406
(iii) On each Quarterly Payment Date set forth below, the Borrower
shall make a scheduled repayment of the aggregate outstanding principal amount,
if any, of all Term C Loans in an amount equal to the amount set forth below
opposite the applicable Quarterly Payment Date:
Amount of Required
Period Principal Payment
------ -----------------
March 31, 1998 $190,848
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June 30, 1998 $190,848
September 30, 1998 $190,848
December 31, 1998 $190,848
March 31, 1999 $190,848
June 30, 1999 $190,848
September 30, 1999 $190,848
December 31, 1999 $190,848
March 31, 2000 $190,848
June 30, 2000 $190,848
September 30, 2000 $190,848
December 31, 2000 $190,848
March 31, 2001 $190,848
June 30, 2001 $190,848
September 30, 2001 $190,848
December 31, 2001 $190,848
March 31, 2002 $190,848
June 30, 2002 $190,848
September 30, 2002 $190,848
December 31, 2002 $190,848
March 31, 2003 $190,848
June 30, 2003 $190,848
September 30, 2003 $190,848
December 31, 2003 $190,848
March 31, 2004 $190,848
June 30, 2004 $190,848
September 30, 2004 $6,297,999
December 31, 2004 $6,297,999
March 31, 2005 $6,297,999
June 30, 2005 $6,297,999
September 30, 2005 $11,450,907
December 31, 2005 $11,450,907
March 31, 2006 $11,450,907
June 30, 2006 $11,450,920
(iv) On each Quarterly Payment Date set forth below, the Borrower shall
make a scheduled repayment of the aggregate outstanding principal amount
(expressed as a percentage of the original principal amount of the Term D
Loans), if any, of all Term D Loans in an amount equal to the amount set forth
below opposite the applicable Quarterly Payment Date:
Amount of Required
Period Principal Payment
------ -----------------
March 31, 1998 $275,000
June 30, 1998 $275,000
September 30, 1998 $275,000
December 31, 1998 $275,000
March 31, 1999 $275,000
June 30, 1999 $275,000
September 30, 1999 $275,000
December 31, 1999 $275,000
March 31, 2000 $275,000
June 30, 2000 $275,000
September 30, 2000 $275,000
December 31, 2000 $275,000
March 31, 2001 $275,000
June 30, 2001 $275,000
September 30, 2001 $275,000
December 31, 2001 $275,000
March 31, 2002 $275,000
June 30, 2002 $275,000
September 30, 2002 $275,000
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December 31, 2002 $275,000
March 31, 2003 $275,000
June 30, 2003 $275,000
September 30, 2003 $275,000
December 31, 2003 $275,000
March 31, 2004 $275,000
June 30, 2004 $275,000
September 30, 2004 $275,000
December 31, 2004 $275,000
March 31, 2005 $275,000
June 30, 2005 $275,000
September 30, 2005 $275,000
December 31, 2005 $275,000
March 31, 2006 $25,300,000
June 30, 2006 $25,300,000
September 30, 2006 $25,300,000
December 31, 2006 $25,300,000
(v) Within 100 days after the close of each Fiscal Year (beginning with
the close of the 1997 Fiscal Year), the Borrower shall make a mandatory
prepayment of the Term Loans in an amount equal to 75% of the Excess Cash Flow
(if any) for such Fiscal Year (provided, that, with respect to any Excess Cash
Flow payment in respect of Fiscal Year 1997, EBDAIT, Consolidated Working
Capital and Capital Expenditures shall be calculated on the basis of only the
third and fourth fiscal quarters of Fiscal Year 1997 and all other items of
Excess Cash Flow shall be calculated for the period commencing on June 12, 1997
and ending on the last day of Fiscal Year 1997); provided, however, that if the
Total Net Debt to EBDAIT Ratio as of the end of any Fiscal Year is less than
3.0:1, such mandatory prepayment shall be in an amount equal to 50% of Excess
Cash Flow (if any) for such Fiscal Year.
(vi) Within one (1) Business Day after any Credit Party or Foamex
International or any agent thereof, receives any amount of Proceeds of Issuance
of Equity or Indebtedness, the Borrower shall make or cause to be made a
mandatory prepayment of the Obligations in an amount equal to (x) 80% of the
amount of such proceeds of the type described in clause (a) of the definition of
"Proceeds of Issuance of Equity or Indebtedness"; provided, however, that no
prepayment of Loans shall be required from Proceeds of Issuance of Equity or
Indebtedness due to sales of Equity Interests in Foamex International under the
Stock Option Plan until the aggregate amount of such sales equals $10,000,000
and any subsequent multiple of $10,000,000 (it being understood that no such
prepayment shall be required until such proceeds equals at least $10,000,000 and
that all such proceeds shall be subject to this clause (vi) and not just the
excess over $10,000,000) with any such prepayment being due on or prior to the
30th day following the close of the Fiscal Year in which such proceeds equaled
or exceeded such $10,000,000 or multiple thereof and (y) 100% of the amount of
such proceeds of the type described in clause (b) of the definition of "Proceeds
of Issuance of Equity or Indebtedness".
(vii) Immediately upon any acceleration of the Stated Maturity Date of
any Loans pursuant to Section 11.02, the Borrower shall repay all the Loans,
unless, pursuant to Section 11.02, only a portion of all the Loans is so
accelerated (in which case the portion so accelerated shall be so prepaid).
(viii) After the occurrence and during the continuance of a Triggering
Event, the Collateral Agent is hereby authorized by the Borrower to transfer to
the Funding Agent, and the Funding Agent is hereby authorized to apply to the
Obligations then outstanding, any and all amounts held in the Borrower's
Concentration Account, such amounts to be applied by the Funding Agent in
accordance with the provisions of Section 3.02.
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(c) Mandatory Reductions in Commitments. The Commitments shall be
permanently reduced by the amount of any payment made pursuant to Section
3.01(b) which is applied to the Revolving Credit Obligations; provided, however,
that no mandatory reduction of the Commitment required pursuant to Section
3.01(b) shall cause the Commitments to be reduced to an amount less than
$50,000,000. The Revolving Loan Commitment Amount will automatically reduce by
an amount equal to $2,500,000 on each Quarterly Payment Date commencing on
September 30, 1998.
3.02 Payments.
(a) Manner and Time of Payment. All payments of principal of and
interest on the Loans and Reimbursement Obligations and other Obligations
(including, without limitation, fees and expenses) which are payable to the
Administrative Agents, the Lenders or any Issuing Bank shall be made without
condition or reservation of right, in immediately available funds, delivered to
the Funding Agent (or, in the case of Reimbursement Obligations, to the
pertinent Issuing Bank) not later than 1:00 p.m. (New York time) on the date and
at the place due, to such account of the Funding Agent (or such Issuing Bank) as
it may designate, for the account of the Administrative Agents, the Lenders or
such Issuing Bank, as the case may be; and funds received by the Funding Agent,
including, without limitation, funds in respect of any Revolving Loans or Term
Loans to be made on that date, not later than 1:00 p.m. (New York time) on any
given Business Day shall be credited against payment to be made that day and
funds received by the Funding Agent after that time shall be deemed to have been
paid on the next succeeding Business Day.
(b) Apportionment of Payments. (i) Subject to the provisions of
Sections 3.02(b)(iii) and (v), all payments of principal and interest in respect
of outstanding Swing Loans and Revolving Loans, all payments in respect of
Reimbursement Obligations, as applicable, all payments of fees and all other
payments in respect of any other Obligations, shall be allocated among such of
the Lenders and Issuing Banks as are entitled thereto, as provided herein. All
such payments and any other amounts received by the Funding Agent from or for
the benefit of the Borrower shall be applied to the Borrower's Obligations as
follows: first to pay principal of and interest on any portion of any
outstanding Swing Loans, second to pay principal of and interest on any portion
of the Revolving Loans which the Funding Agent may have advanced on behalf of
any Lender other than Scotiabank for which the Funding Agent has not then been
reimbursed by such Lender or the Borrower, third, to pay principal of and
interest on any Protective Advance for which the Collateral Agent has not then
been paid by the Borrower or reimbursed by the Lenders, fourth, to pay principal
of and interest on all Revolving Loans which are Base Rate Loans constituting
Non Pro Rata Loans, fifth, to pay all other obligations then due and payable
other than Base Rate Loans constituting Cure Loans, sixth, to pay principal of
and interest on Base Rate Loans constituting Cure Loans, and seventh, as the
Borrower so designates. Unless otherwise designated by the Borrower, all
principal payments in respect of Loans shall be applied to the outstanding
Loans, first, to repay outstanding Base Rate Loans, and then to repay
outstanding LIBO Rate Loans with those LIBO Rate Loans which have earlier
expiring LIBO Rate Interest Periods being repaid prior to those which have later
expiring LIBO Rate Interest Periods.
(ii) Subject to the provisions of Sections 3.02(b)(iii) and (v), all
payments of principal of outstanding Term Loans shall be applied as follows: (A)
voluntary prepayments of Term Loans shall (I) be applied pro rata to all Term
Loans of the Lenders of such type of Term Loans as designated by the Borrower in
writing and (II) reduce the remaining scheduled amortization of such type of
Terms Loans pro rata among the then remaining scheduled amortizations of such
Loans and (B) mandatory payments of Term Loans shall (I) be applied pro rata
among all then outstanding Term Loans and (II) reduce
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the remaining scheduled amortization payments of such Term Loans pro rata among
all the outstanding Term Loans.
(iii) After the occurrence of an Event of Default and while the same is
continuing, the Funding Agent may, and at the direction of the Requisite Lenders
shall, apply all payments in respect of any Obligations of the Borrower against,
and the Collateral Agent may, and at the direction of the Requisite Lenders
shall, transfer to the Funding Agent all proceeds of Collateral of the Borrower
for application to, the Obligations of the Borrower in the following order:
(A) first, to pay principal or interest on any portion of the
Swing Loans of the Borrower;
(B) second, to pay principal of and interest on any portion of
the Revolving Loans of the Borrower which the Funding Agent may have
advanced on behalf of any Lender other than Scotiabank for which the
Funding Agent has not then been reimbursed by such Lender or the
Borrower;
(C) third, to pay principal of and interest on any Protective
Advance for which the Collateral Agent has not then been paid by the
Borrower or reimbursed by the Lenders;
(D) fourth, to pay Obligations in respect of any expense
reimbursements or indemnities of the Borrower then due to the
Administrative Agents;
(E) fifth, to pay Obligations in respect of any expense
reimbursements or indemnities of the Borrower then due to the Lenders
and the Issuing Banks;
(F) sixth, to pay interest and fees due in respect of Loans of
the Borrower, to the extent not already paid pursuant to clause (B) of
this Section 3.02(b)(iii);
(G) seventh, to pay or prepay (or, to the extent such
Obligations are contingent, to deposit into the Cash Collateral Account
pursuant to Section 11.02(b)) principal outstanding on the Revolving
Loans, the Term Loans, the Reimbursement Obligations of the Borrower
and all other Letter of Credit Obligations of the Borrower and Hedging
Obligations of the Borrower to which any of the Lenders or any
Affiliate of any of the Lenders is a party; and
(H) eighth, to the ratable payment of all other Obligations of
the Borrower;
provided, however, if sufficient funds are not available to fund all payments to
be made in respect of any of the Obligations described in any of the foregoing
clauses (A) through (H), the available funds being applied with respect to any
such Obligations (unless otherwise specified in such clause) shall be allocated
to the payment of such Obligations ratably, based on the proportion of each
Administrative Agent's, each Lender's or each Issuing Bank's interest in the
aggregate outstanding Obligations described in such clauses.
The order of application of funds set forth in this Section
3.02(b)(iii) and the related provisions of this Agreement are set forth solely
to determine the application of funds among the Administrative Agents, the
Lenders, the Issuing Banks and other Holders as among themselves. The order of
priority set forth in clauses (A) through (H) of this Section 3.02(b)(iii) may
at any time and from time to time be changed by the agreement of the Requisite
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Lenders without necessity of notice to or consent of or approval by the
Borrower, any Holder which is not a Lender or Issuing Bank, or any other Person;
provided that the priority listed in any of clauses (E) through (H) may not be
changed with respect to clauses (A) through (D) and provided, further that the
order of priority set forth in clauses (A) through (D) of this Section
3.02(b)(iii) may be changed only with the prior written consent of the
Administrative Agents.
(iv) The Funding Agent, in its sole discretion subject only to the
terms of this Section 3.02(b)(iv), may pay from the proceeds of Revolving Loans
(which Loans have not been requested by the Borrower pursuant to a Notice of
Borrowing) made to the Borrower hereunder, whether made following a request by
the Borrower pursuant to Section 2.01 or 2.02 or a deemed request as provided in
this Section 3.02(b)(iv), all amounts then due and payable by the Borrower
hereunder, including, without limitation, amounts payable with respect to
payments of principal, interest, Reimbursement Obligations and fees and all
reimbursements for expenses pursuant to Section 13.02. The Borrower hereby
irrevocably authorizes the Lenders to make Revolving Loans, which Revolving
Loans shall be Base Rate Loans, in each case, upon notice from the Funding Agent
as described in the following sentence for the purpose of paying principal,
interest, Reimbursement Obligations and fees due from the Borrower, reimbursing
expenses pursuant to Section 13.02 and paying any and all other amounts due and
payable by the Borrower hereunder or under the Notes, and agrees that all such
Revolving Loans so made shall be deemed to have been requested by it pursuant to
Section 2.01 or 2.02 as of the date of the aforementioned notice. The Funding
Agent shall request Revolving Loans on behalf of the Borrower as described in
the preceding sentence by notifying the Lenders by telex, telecopy, telegram or
other similar form of transmission (which notice the Funding Agent shall
thereafter promptly transmit to the Borrower), of the amount and Funding Date of
the proposed Borrowing and that such Borrowing is being requested on the
Borrower's behalf pursuant to this Section 3.02(b)(iv). On the proposed Funding
Date, the Lenders shall make the requested Loans in accordance with the
procedures and subject to the conditions specified in Section 2.01 or 2.02
(irrespective of the satisfaction of the conditions described in Section 5.02 or
the requirement to deliver a Notice of Borrowing in Section 2.01(b), which
conditions and requirement, for the purposes of the payment of Revolving Loans
at the request of the Funding Agent as described in the preceding sentence, the
Lenders irrevocably waive).
(v) Subject to Section 3.02(b)(vi), the Funding Agent shall promptly
distribute to each Lender and Issuing Bank at its primary address set forth on
the appropriate signature page hereof or the signature page to the Assignment
and Acceptance by which it became a Lender or Issuing Bank, or at such other
address as a Lender, an Issuing Bank or other Holder may request in writing,
such funds as such Person may be entitled to receive, subject to the provisions
of Article XII; provided, that the Funding Agent shall under no circumstances be
bound to inquire into or determine the validity, scope or priority of any
interest or entitlement of any Holder and may suspend all payments or seek
appropriate relief (including, without limitation, instructions from the
Requisite Lenders or an action in the nature of interpleader) in the event of
any doubt or dispute as to any apportionment or distribution contemplated
hereby.
(vi) In the event that any Lender fails to fund its Pro Rata Share of
any Revolving Loan requested by the Borrower which such Lender is obligated to
fund under the terms of this Agreement (the Pro Rata Share of each other Lender
of such Revolving Loan funded by each other Lender being hereinafter referred to
as a "Non Pro Rata Loan"), excluding any such Lender who has delivered to the
Funding Agent written notice that one or more of the conditions precedent
contained in Section 5.02 will not on the date of such request be satisfied and
until such conditions are satisfied, until the earlier of such Lender's cure of
such failure and the termination of the
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Commitments, the proceeds of all amounts thereafter repaid to the Funding Agent
by the Borrower and otherwise required to be applied to such Lender's share of
all other Obligations pursuant to the terms of this Agreement shall be advanced
to the Borrower by the Funding Agent on behalf of such Lender to cure, in full
or in part, such failure by such Lender, but shall nevertheless be deemed to
have been paid to such Lender in satisfaction of such other Obligations.
Notwithstanding anything in this Agreement to the contrary:
(A) the foregoing provisions of this Section 3.02(b)(vi) shall
apply only with respect to the proceeds of payments of Obligations and
shall not affect the conversion or continuation of Loans pursuant to
Section 4.01(c);
(B) a Lender shall be deemed to have cured its failure to fund
its Pro Rata Share of any Revolving Loan at such time as an amount
equal to such Lender's original Pro Rata Share of the requested
principal portion of such Revolving Loan is fully funded to the
Borrower, whether made by such Lender itself or by operation of the
terms of this Section 3.02(b)(vi), and whether or not the Non Pro Rata
Loan with respect thereto has been repaid, converted or continued;
(C) amounts advanced to the Borrower to cure, in full or in
part, any such Lender's failure to fund its Pro Rata Share of any
Revolving Loan ("Cure Loans") shall bear interest at the Base Rate in
effect from time to time, and for all other purposes of this Agreement
shall be treated as if they were Base Rate Loans; and
(D) regardless of whether or not an Event of Default has
occurred or is continuing, and notwithstanding the instructions of the
Borrower as to its desired application, all repayments of principal
which, in accordance with the other terms of this Section 3.02, would
be applied to the outstanding Base Rate Loans shall be applied in
accordance with the terms of the second sentence of Section 3.02(b)(i).
(c) Payments on Non-Business Days. Whenever any payment to be made by
the Borrower hereunder or under the Notes is stated to be due on a day which is
not a Business Day, the payment shall instead be due on the next succeeding
Business Day, and any such extension of time shall be included in the
computation of the payment of interest and fees hereunder.
3.03 Taxes.
(a) Payment of Taxes. Any and all payments by the Borrower hereunder or
under any Note or other document evidencing any Obligations shall be made, in
accordance with Section 3.02, free and clear of and without reduction for any
and all taxes, levies, imposts, deductions, charges, withholdings, and all stamp
or documentary taxes, excise taxes, ad valorem taxes and other taxes imposed on
the value of the Property, charges or levies which arise from the execution,
delivery or registration, or from payment or performance under, or otherwise
with respect to, any of the Loan Documents or the Commitments and all other
liabilities with respect thereto excluding, in the case of each Lender, each
Issuing Bank and each Administrative Agent, taxes imposed on its income,
capital, profits or gains and franchise taxes imposed on it by (i) the United
States, except certain withholding taxes contemplated pursuant to Section
3.03(d)(ii)(C), (ii) the Governmental Authority of the jurisdiction in which
such Lender's Applicable Lending Office is located or any political subdivision
thereof or (iii) the Governmental Authority in which such Person is organized,
managed and controlled or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to withhold or deduct any Taxes from or in respect of any sum
payable hereunder or under any such Note or document to any Lender,
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any Issuing Bank or any Administrative Agent, (x) the sum payable to such Lender
or such Administrative Agent shall be increased as may be necessary so that
after making all required withholding or deductions (including withholding or
deductions applicable to additional sums payable under this Section 3.03) such
Lender, such Issuing Bank or such Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
withholding or deductions been made, (y) the Borrower shall make such
withholding or deductions, and (z) the Borrower shall pay the full amount
withheld or deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) Indemnification. The Borrower will indemnify each Lender, each
Issuing Bank and each Administrative Agent against, and reimburse each on demand
for, the full amount of all Taxes (including, without limitation, any Taxes
imposed by any Governmental Authority on amounts payable under this Section 3.03
and any additional income or franchise taxes resulting therefrom) incurred or
paid by such Lender, such Issuing Bank or such Administrative Agent (as the case
may be) or any bank holding company parent of such Lender or Issuing Bank and
any liability (including penalties, interest, and out-of-pocket expenses paid to
third parties) arising therefrom or with respect thereto, whether or not such
Taxes were lawfully payable. A certificate as to any additional amount payable
to any Person under this Section 3.03 submitted by it to the Borrower shall,
absent manifest error, be final, conclusive and binding upon all parties hereto.
Each Lender and each Issuing Bank agrees, within a reasonable time after
receiving a written request from the Borrower, to provide the Borrower and each
Administrative Agent with such certificates as are reasonably required, and take
such other actions as are reasonably necessary to claim such exemptions as such
Lender or such Issuing Bank may be entitled to claim in respect of all or a
portion of any Taxes which are otherwise required to be paid or deducted or
withheld pursuant to this Section 3.03 in respect of any payments under this
Agreement or under the Notes.
(c) Receipts. Within thirty (30) days after the date of any payment of
Taxes by the Borrower, the Borrower will furnish to the Funding Agent, at its
address referred to in Section 13.08, the original or a certified copy of a
receipt, if any, or other documentation reasonably satisfactory to the Funding
Agent, evidencing payment thereof. The Borrower shall furnish to the Funding
Agent upon the request of the Funding Agent from time to time an Officer's
Certificate stating that all Taxes of which it is aware are due have been paid
and that no additional Taxes of which it is aware are due.
(d) Foreign Bank Certifications. (i) Each Lender that is not created or
organized under the laws of the United States or a political subdivision thereof
(each a "Non-U.S. Lender") shall deliver to the Borrower and the Funding Agent
not later than the date on which such Lender becomes a Lender, (A) a true and
accurate certificate executed in duplicate by a duly authorized officer of such
Lender to the effect that such Lender is eligible to receive payments hereunder
and under the Notes without deduction or withholding of United States federal
income tax (I) under the provisions of an applicable tax treaty concluded by the
United States (in which case the certificate shall be accompanied by two duly
completed copies of IRS Form 1001 (or any successor or substitute form or
forms)) or (II) under Section 1441(c)(1) as modified for purposes of Section
1442(a) of the Internal Revenue Code (in which case the certificate shall be
accompanied by two duly completed copies of IRS Form 4224 (or any successor or
substitute form or forms)) or (B) in the case of a Lender or Issuing Bank
claiming exemption from United State withholding tax under Section 871(h) or
881(c) of the Internal Revenue Code with respect to payments of "portfolio
interest" (a "Registered Holder"), (i) a certificate representing that such
Registered Holder is not a "bank" for purposes of Section 881(c)(3) of the
Internal Revenue Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Internal Revenue Code) of the Borrower
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and is not a controlled foreign corporation related to the Borrower (within the
meaning of Section 864(d)(4) of the Internal Revenue Code.
(ii) Each Lender further agrees to deliver to the Borrower and the
Funding Agent from time to time, a true and accurate certificate executed in
duplicate by a duly authorized officer of such Lender before or promptly upon
the occurrence of any event requiring a change in the most recent certificate
previously delivered by it to the Borrower and the Funding Agent pursuant to
this Section 3.03(d) (including, but not limited to, a change in such Lender's
lending office). Each certificate required to be delivered pursuant to this
Section 3.03(d)(ii) shall certify as to one of the following:
(A) that such Lender can continue to receive payments
hereunder and under the Notes without deduction or withholding of
United States federal income tax;
(B) that such Lender cannot continue to receive payments
hereunder and under the Notes without deduction or withholding of
United States federal income tax as specified therein but does not
require additional payments pursuant to Section 3.03(a) because it is
entitled to recover the full amount of any such deduction or
withholding from a source other than the Borrower;
(C) that such Lender is no longer capable of receiving
payments hereunder and under the Notes without deduction or withholding
of United States federal income tax as specified therein by reason of a
change in law (including the Internal Revenue Code or applicable tax
treaty) after the later of June 12, 1997 or the date on which such
Lender became a Lender and that it is not capable of recovering the
full amount of the same from a source other than the Borrower; or
(D) that such Lender is no longer capable of receiving
payments hereunder without deduction or withholding of United States
federal income tax as specified therein other than by reason of a
change in law (including the Internal Revenue Code or applicable tax
treaty) after the later of June 12, 1997 or the date on which such
Lender became a Lender.
Each Lender agrees to deliver to the Borrower and the Funding Agent further duly
completed copies of the above-mentioned IRS forms on or before the earlier of
(x) the date that any such form expires or becomes obsolete or otherwise is
required to be resubmitted as a condition to obtaining an exemption from
withholding from United States federal income tax and (y) fifteen (15) days
after the occurrence of any event requiring a change in the most recent form
previously delivered by such Lender to the Borrower and the Funding Agent,
unless any change in treaty, law, regulation, or official interpretation thereof
which would render such form inapplicable or which would prevent the Lender from
duly completing and delivering such form has occurred prior to the date on which
any such delivery would otherwise be required and the Lender promptly advises
the Borrower that it is not capable of receiving payments hereunder and under
the Notes without any deduction or withholding of United States federal income
tax.
(iii) The Borrower shall not be required to pay any additional amount
to, or to indemnify, pursuant to paragraphs (a) or (b) of this Section 3.03, any
Non-U.S. Lender or any Issuing Bank in respect of United States Federal
withholding tax to the extent imposed as a result of (A) the failure by such
Non-U.S. Lender or Issuing Bank to comply with the provisions of
paragraphs(d)(i) or (d)(ii) of this Section 3.03 or (B) a representation made
pursuant to the provisions of such paragraphs (d)(i) or (d)(ii) proving to have
been false or incorrect when made.
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3.04 Increased Capital. If after the date hereof any Lender or Issuing
Bank determines that (i) the adoption or implementation of or any change in or
in the interpretation or administration of any law or regulation or any
guideline or request from anyS central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over any
Lender, Issuing Bank or banks or financial institutions generally (whether or
not having the force of law), or compliance with any of the above affects or
would affect the amount of capital required or expected to be maintained by such
Lender or Issuing Bank or any corporation controlling such Lender or Issuing
Bank and (ii) the amount of such capital is increased by or based upon (A) the
making or maintenance by any Lender of its Loans, any Lender's participation in
or obligation to participate in the Loans, Letters of Credit or other advances
made hereunder or the existence of any Lender's obligation to make Loans or (B)
the issuance or maintenance by any Issuing Bank of, or the existence of any
Issuing Bank's obligation to issue, Letters of Credit, then, in any such case,
upon written demand by such Lender or Issuing Bank (with a copy of such demand
to the Funding Agent), the Borrower shall pay to the Funding Agent for the
account of such Lender or Issuing Bank, from time to time as specified by such
Lender or Issuing Bank, additional amounts sufficient to compensate such Lender
or Issuing Bank or such corporation therefor. Such demand shall be accompanied
by a statement as to the amount of such compensation and include a brief summary
of the basis for such demand. Such statement shall be conclusive and binding for
all purposes, absent manifest error. Such Lender or Issuing Bank shall notify
the Borrower of any event referred to in clause (i) of this Section within 180
days of obtaining actual knowledge of such event.
3.05 Promise to Repay; Evidence of Indebtedness.
(a) Promise to Repay. (i) The Borrower hereby agrees to pay when due
the principal amount of each Revolving Loan which is made to it, and further
agrees to pay all unpaid interest accrued thereon, in accordance with the terms
of this Agreement and the promissory notes evidencing the Revolving Loans owing
to the Lenders, and the Borrower shall execute and deliver to each Lender such
promissory notes as are necessary to evidence the Revolving Loans owing to the
Lenders after giving effect to any assignment thereof pursuant to Section 13.01,
all substantially in the form of Exhibit A-1 (all such promissory notes and all
amendments thereto, replacements thereof and substitutions therefor being
collectively referred to as the "Revolving Loan Notes"; and "Revolving Loan
Note" means any one of the Notes).
(ii) The Borrower hereby agrees to pay when due the principal amount of
each Term Loan, and further agrees to pay all unpaid interest accrued thereon,
in accordance with the terms of this Agreement and the Term Notes owing to the
Lenders, and the Borrower shall execute and deliver to each Lender such Term
Notes as are necessary to evidence the Term Loans owing to the Lenders after
giving effect to any assignment thereof pursuant to Section 13.01.
(iii) The Borrower hereby agrees to pay when due the principal amount
of each Swing Loan which is made to it, and further agrees to pay all unpaid
interest accrued thereon, in accordance with the terms of this Agreement and the
promissory note evidencing the Swing Loans owing to the Swing Bank, and the
Borrower shall execute and deliver to the Swing Bank such promissory note as is
necessary to evidence the Swing Loans owing to the Swing Bank, substantially in
the form of Exhibit A-2 (all such promissory notes and all amendments thereto,
replacements thereof and substitutions therefor being collectively referred to
as the "Swing Loan Notes"; and "Swing Loan Note" means any one of the Notes).
(b) Loan Account. Each Lender shall maintain in accordance with its
usual practice an account or accounts (a "Loan Account") evidencing the
Indebtedness of the Borrower to such Lender resulting from each Loan owing to
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such Lender from time to time, including the amount of principal and interest
payable and paid to such Lender from time to time hereunder and under the Notes.
(c) Control Account. The Register maintained by the Funding Agent
pursuant to Section 13.01(c) shall include a control account, and a subsidiary
account for each Lender, in which accounts (taken together) shall be recorded
(i) the date and amount of each Borrowing made hereunder, the type of Loan
comprising such Borrowing and any LIBO Rate Interest Period applicable thereto,
(ii) the effective date and amount of each Assignment and Acceptance delivered
to and accepted by it and the parties thereto, (iii) the amount of any principal
or interest due and payable or to become due and payable from the Borrower to
each Lender hereunder or under the Notes, and (iv) the amount of any sum
received by the Funding Agent from the Borrower hereunder and each Lender's
share thereof.
(d) Entries Binding. The Funding Agent will render and deliver a
statement of the Register monthly to the Borrower and each Lender. All entries
on any such statement shall, fifteen (15) days after the same is sent, be
presumed to be correct and shall constitute prima facie evidence of the
information contained in such statement. Each of the Borrower and the Lenders
shall have the express right to rebut such presumption by conclusively
demonstrating the existence of an error on the part of the Funding Agent.
3.06 Deposit Accounts. (a) Each Credit Party shall maintain lockbox
accounts (the "Lockbox Accounts") in the name of the Collateral Agent with the
Lockbox Banks of such Credit Party and shall, promptly upon receipt thereof,
deposit in its respective Lockbox Accounts, all monies that constitute checks,
notes, drafts or funds received by such Credit Party in the ordinary course of
business or otherwise and that constitute proceeds of Collateral. Any amounts
which are required to be paid to the Funding Agent hereunder which are not
proceeds of Collateral shall be paid directly to the Funding Agent and not
deposited in a Lockbox Account.
(b) Funds on deposit in a Lockbox Account of the Borrower on each
Business Day shall be transferred to the Concentration Account of such Credit
Party in accordance with the terms of the Lockbox Agreements and shall be
transferred from the Concentration Account of such Credit Party either (i) if no
Triggering Event has occurred and is continuing, as the Borrower may direct in
writing or (ii) after the occurrence and during the continuance of a Triggering
Event, to the Funding Agent to be applied to the Obligations in accordance with
Section 3.02(b). Each such Credit Party hereby grants to the Collateral Agent a
security interest in the Concentration Account of such Credit Party and all
funds from time to time deposited therein, including, without limitation, all
overnight investments.
(c) Each such Credit Party agrees to pay to the Collateral Agent any
and all reasonable fees, costs and expenses which the Collateral Agent incurs in
connection with opening and maintaining the Lockbox Accounts, the Concentration
Accounts or any other similar payment collection mechanism for the Borrower and
depositing for collection any check or item of payment received by and/or
delivered to the Lockbox Banks or the Collateral Agent on account of the
Obligations of such Credit Party. The Borrower agrees to reimburse the
Collateral Agent for any amounts paid to any Lockbox Bank arising out of any
required indemnification by the Collateral Agent of such Lockbox Bank against
damages incurred by the Lockbox Bank in the operation of a Lockbox Account for
such Credit Party.
(d) The Borrower shall enter into Lockbox Agreements on terms
satisfactory to the Administrative Agents on or prior to the 90th day following
the Effective Date.
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3.07 Replacement of Lender. If (i) the Borrower becomes obligated to
pay additional amounts to any Lender pursuant to Section 3.03, 3.04 or 4.01(f)
(other than with respect to a LIBO Rate Reserve Requirement) as a result of any
condition described in such Sections which is not generally applicable to all
Lenders, then, unless such Lender has theretofore taken steps to remove or cure,
and has removed or cured, the conditions creating the cause for such obligation
to pay such additional amounts, within fifteen (15) days of being on
notification of such condition, (ii) a Lender refuses in writing to give its
written consent to any amendment which requires the consent of all Lenders which
amendment has received the written consent of at least the Requisite Lenders
pursuant to clause (ii) of the second sentence of Section 13.07 or (iii) a
Lender invokes the provisions of Section 4.02(e), in each case, the Borrower may
designate another bank which is reasonably acceptable to the Administrative
Agents (such bank being herein called a "Replacement Lender") to purchase for
cash all of the Notes of such Lender and all of such Lender's rights hereunder,
without recourse to or warranty (other than title) by, or expense to, such
Lender for a purchase price equal to the outstanding principal amount of the
Notes payable to such Lender plus any accrued but unpaid interest on such Notes
and accrued but unpaid commitment and other fees, expense reimbursements and
indemnities in respect of that Lender's Commitments. Such Lender shall
consummate such sale in accordance with such terms (and, if such Lender is an
Issuing Bank, such other terms as may be necessary to compensate fully such
Lender) within a reasonable time not exceeding 60 days from the date the
Borrower designated a Replacement Lender, and thereupon such Lender shall no
longer be a party hereto or have any obligations or rights hereunder (except
rights which, pursuant to the provisions of this Agreement, survive the
termination of this Agreement and the repayment of the Notes), and the
Replacement Lender shall succeed to such obligations and rights.
ARTICLE IV
INTEREST AND FEES
4.01 Interest on the Loans and other Obligations.
(a) Rate of Interest. All Loans and the outstanding principal balance
of all other Obligations shall bear interest on the unpaid principal amount
thereof from the date such Loans are made and such other Obligations are due and
payable until paid in full, except as otherwise provided in Section 4.01(d), as
follows:
(i) If a Base Rate Loan or such other Obligation, at a rate
per annum equal to the sum of (A) the Base Rate, as in effect from time
to time as interest accrues plus (B) the Applicable Margin in effect
from time to time; and
(ii) If a LIBO Rate Loan, at a rate per annum equal to the sum
of (A) the LIBO Rate determined for the applicable LIBO Rate Interest
Period plus (B) the Applicable Margin in effect from time to time
during such LIBO Rate Interest Period.
Subject to Section 4.01(c)(i), the applicable basis for determining the rate of
interest on the Loans shall be selected at the time a Notice of Borrowing or a
Notice of Conversion/Continuation is delivered by the Borrower to the Funding
Agent; provided, however, the Borrower may not select the LIBO Rate as the
applicable basis for determining the rate of interest on such a Loan if at the
time of such selection an Event of Default or a Potential Event of Default would
occur or has occurred and is continuing. If on any day any Loan is outstanding
with respect to which notice has not been timely delivered to the Funding Agent
in accordance with the terms of this Agreement specifying the
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basis for determining the rate of interest on that day, then for that day
interest on that Loan shall be determined by reference to the Base Rate.
(b) Interest Payments. (i) Interest accrued on each Base Rate Loan
shall be payable in arrears (A) on each Quarterly Payment Date, commencing on
the first such day following the making of such Base Rate Loan, (B) upon the
prepayment thereof in full or in part when made in connection with a prepayment
of the Term Loans or a permanent reduction in the Commitments, and (C) if not
theretofore paid in full, at maturity (whether by acceleration or otherwise) of
such Base Rate Loan.
(ii) Interest accrued on each LIBO Rate Loan shall be payable in
arrears (A) on each LIBO Rate Interest Payment Date applicable to such Loan, (B)
upon the payment or prepayment thereof in full or in part, and (C) if not
theretofore paid in full, at maturity (whether by acceleration or otherwise) of
such LIBO Rate Loan.
(iii) Interest accrued on the principal balance of all other
Obligations shall be payable in arrears (A) on each Quarterly Payment Date,
commencing on the first such day following the incurrence of such Obligation,
(B) upon repayment thereof in full or in part, and (C) if not theretofore paid
in full, at the time such other Obligation becomes due and payable (whether by
acceleration or otherwise).
(c) Conversion or Continuation. (i) The Borrower shall have the option
(A) to convert at any time all or any part of outstanding Base Rate Loans to
LIBO Rate Loans; or (B) to continue all or any part of outstanding LIBO Rate
Loans, in accordance with the terms of Section 4.01(a), having LIBO Rate
Interest Periods which expire on the same date as LIBO Rate Loans, and the
succeeding LIBO Rate Interest Period of such continued Loans shall commence on
such expiration date; provided, however, (I) no portion of any outstanding Loan
may be continued as (and shall be immediately converted into a Base Rate Loan),
or be converted into, a LIBO Rate Loan (x) if the continuation of, or the
conversion into, would violate any of the provisions of Section 4.02 or (y) if
an Event of Default or a Potential Event of Default would occur or has occurred
and is continuing and (II) if the option set forth in clause (B) of this Section
is not exercised, in accordance with the terms of Section 4.01(c)(ii), in
respect of a LIBO Rate Loan, such LIBO Rate Loan shall convert automatically
into a Base Rate Loan on the final date of the applicable LIBO Rate Interest
Period.
(ii) To convert or continue a Loan under Section 4.01(c)(i), the
Borrower shall deliver a Notice of Conversion/Continuation to the Funding Agent
no later than 11:00 a.m. (New York time) at least three (3) Business Days in
advance of the proposed conversion/continuation date. A Notice of
Conversion/Continuation shall specify (A) the proposed conversion/continuation
date (which shall be a Business Day), (B) the principal amount of the Loan to be
converted/continued, (C) whether such Loan shall be converted and/or continued,
and (D) in the case of a conversion to, or continuation of, a LIBO Rate Loan,
the requested LIBO Rate Interest Period. In lieu of delivering a Notice of
Conversion/Continuation, the Borrower may give the Funding Agent telephonic
notice of any proposed conversion/continuation by the time required under this
Section 4.01(c)(ii), and such notice shall be confirmed in writing delivered to
the Funding Agent promptly (but in no event later than 5:00 p.m. (New York time)
on the same day). Promptly after receipt of a Notice of Conversion/Continuation
under this Section 4.01(c)(ii) (or telephonic notice in lieu thereof), the
Funding Agent shall notify each Lender by telex or telecopy, or other similar
form of transmission, of the proposed conversion/continuation. Any Notice of
Conversion/Continuation for conversion to, or continuation of, a Loan (or
telephonic notice in lieu thereof) shall be irrevocable, and the Borrower shall
be bound to convert or continue in accordance therewith.
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(d) Default Interest. Notwithstanding the rates of interest specified
in Section 4.01(a) or elsewhere in this Agreement, effective immediately upon
(i) the occurrence of an Event of Default described in Section 11.01(a) or (ii)
the occurrence of any other Event of Default and notice from the Requisite
Lenders of the effectiveness of this Section 4.01(d), and for as long thereafter
as such Event of Default shall be continuing, the principal balance of all Base
Rate Loans, and the principal balance of all other Obligations (other than LIBO
Rate Loans), shall bear interest at a rate which is two percent (2%) per annum
in excess of the Base Rate plus the Applicable Margin, and the principal balance
of all LIBO Rate Loans shall bear interest at a rate which is two percent (2%)
per annum in excess of the LIBO Rate plus the Applicable Margin.
(e) Computation of Interest. Interest on all Obligations shall be
computed on the basis of the actual number of days elapsed in the period during
which interest accrues and a year of 360 days or, in the case of Base Rate
Loans, a year of 365 or 366 days, as the case may be. In computing interest on
any Loan, the date of the making of the Loan or the first day of a LIBO Rate
Interest Period, as the case may be, shall be included and the date of payment
or the expiration date of a LIBO Rate Interest Period, as the case may be, shall
be excluded; provided, however, if a Loan is repaid on the same day on which it
is made, one (1) day's interest shall be paid on such Loan.
(f) Changes; Legal Restrictions. If after the date hereof any Lender or
Issuing Bank determines that the adoption or implementation of or any change in
or in the interpretation or administration of any law or regulation or any
guideline or request from any central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over any
Lender, Issuing Bank or over banks or financial institutions generally (whether
or not having the force of law), compliance with which:
(A) does or will subject a Lender or an Issuing Bank (or its
Applicable Lending Office or LIBO Rate Affiliate) to charges (other
than Taxes) of any kind which such Lender or Issuing Bank reasonably
determines to be applicable to the Commitments of the Lenders and/or
the Issuing Banks to make LIBO Rate Loans or issue and/or participate
in Letters of Credit or change the basis of taxation of payments to
that Lender or Issuing Bank of principal, fees, interest, or any other
amount payable hereunder with respect to LIBO Rate Loans or Letters of
Credit; or
(B) does or will impose, modify, or hold applicable, in the
determination of a Lender or an Issuing Bank, any reserve (including
the actual imposition of any LIBO Rate Reserve Requirement), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities (including those
pertaining to Letters of Credit) in or for the account of, advances or
loans by, commitments made, or other credit extended by, or any other
acquisition of funds by, a Lender or an Issuing Bank or any Applicable
Lending Office or LIBO Rate Affiliate of that Lender or Issuing Bank;
and the result of any of the foregoing is to increase the cost to that Lender or
Issuing Bank of making, renewing or maintaining the Loans or its Commitments or
issuing or participating in the Letters of Credit or to reduce any amount
receivable thereunder; then, in any such case, upon written demand by such
Lender or Issuing Bank (with a copy of such demand to the Funding Agent), the
Borrower shall immediately pay to the Funding Agent for the account of such
Lender or Issuing Bank, from time to time as specified by such Lender or Issuing
Bank, such amount or amounts as may be necessary to compensate such Lender or
Issuing Bank or its LIBO Rate Affiliate for any such additional cost incurred or
reduced amount received. Such demand shall be accompanied by a statement as to
the amount of such compensation and include a
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brief summary of the basis for such demand. Such statement shall be conclusive
and binding for all purposes, absent manifest error. If such increased costs are
incurred as a result of a Lender's or Issuing Bank's selection of a particular
Applicable Lending Office, such Lender or Issuing Bank shall take reasonable
efforts to make, fund and maintain its Loans and to make, fund and maintain its
obligations under the Letters of Credit through another Applicable Lending
Office of such Lender or Issuing Bank in another jurisdiction, if the making,
funding or maintaining of such Loans or obligations in respect of Letters of
Credit through such other office of such Lender or Issuing Bank does not, in the
judgment of such Lender or Issuing Bank, otherwise materially adversely affect
such Lender or Issuing Bank or such Loans or obligations in respect of Letters
of Credit of such Lender or Issuing Bank.
4.02 Special Provisions Governing LIBO Rate Loans. With respect to
LIBO Rate Loans:
(a) Amount of LIBO Rate Loans. Each LIBO Rate Loan shall be
for a minimum amount of $5,000,000 and in integral multiples of
$1,000,000 in excess of that amount.
(b) Determination of LIBO Rate Interest Period. By giving
notice as set forth in Section 2.01(b) (with respect to any Borrowing
of LIBO Rate Loans) or Section 4.01(c) (with respect to a conversion
into or continuation of LIBO Rate Loans), the Borrower shall have the
option, subject to the other provisions of this Section 4.02, to select
an interest period (each, a "LIBO Rate Interest Period") to apply to
the Loans described in such notice, subject to the following
provisions:
(i) The Borrower may only select, as to a particular
Borrowing of LIBO Rate Loans, a LIBO Rate Interest Period of
either one, two, three or six months in duration;
(ii) In the case of immediately successive LIBO Rate
Interest Periods applicable to a Borrowing of LIBO Rate Loans,
each successive LIBO Rate Interest Period shall commence on
the day on which the next preceding LIBO Rate Interest Period
expires;
(iii) If any LIBO Rate Interest Period would
otherwise expire on a day which is not a Business Day, such
LIBO Rate Interest Period shall be extended to expire on the
next succeeding Business Day if the next succeeding Business
Day occurs in the same calendar month, and if there will be no
succeeding Business Day in such calendar month, the LIBO Rate
Interest Period shall expire on the immediately preceding
Business Day;
(iv) The Borrower may not select a LIBO Rate Interest
Period as to any Loan if such LIBO Rate Interest Period
terminates later than the Commitment Termination Date;
(v) The Borrower may not select a LIBO Rate Interest
Period with respect to any portion of principal of a Loan
which extends beyond a date on which such Borrower is required
to make a scheduled payment of such portion of principal; and
(vi) There shall be no more than fifteen (15) LIBO
Rate Interest Periods in effect at any one time.
(c) Determination of Interest Rate. As soon as practicable on the
second Business Day prior to the first day of each LIBO Rate Interest Period
(the "LIBO Rate Interest Rate Determination Date"), the Funding Agent shall
determine (pursuant to the procedures set forth in the definition of "LIBO
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Rate") the interest rate which shall apply to the LIBO Rate Loans for which an
interest rate is then being determined for the applicable LIBO Rate Interest
Period and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to the Borrower and to each Lender. The Funding Agent's
determination shall be presumed to be correct, absent manifest error, and shall
be binding upon the Borrower.
(d) Interest Rate Unascertainable, Inadequate or Unfair. In the event
that at least one (1) Business Day before the LIBO Rate Interest Rate
Determination Date:
(i) the Funding Agent is advised by any Reference Bank that
deposits in Dollars (in the applicable amounts) are not being offered
by such Reference Bank in the London interbank market for such LIBO
Rate Interest Period; or
(ii) the Administrative Agents determine that adequate and
fair means do not exist for ascertaining the applicable interest rates
by reference to which the LIBO Rate then being determined is to be
fixed; or
(iii) the Requisite Lenders advise the Funding Agent that the
LIBO Rate for LIBO Rate Loans comprising such Borrowing will not
adequately reflect the cost to such Requisite Lenders of obtaining
funds in Dollars in the London interbank market in the amount
substantially equal to such Lenders' LIBO Rate Loans in Dollars and for
a period equal to such LIBO Rate Interest Period;
then the Funding Agent shall forthwith give notice thereof to the
Borrower, whereupon (until the Funding Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist) the
right of the Borrower to elect to have Loans bear interest based upon
the LIBO Rate shall be suspended and each outstanding LIBO Rate Loan
shall be converted into a Base Rate Loan on the last day of the then
current LIBO Rate Interest Period therefor, notwithstanding any prior
election by the Borrower to the contrary.
(e) Illegality. (i) If at any time any Lender determines (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties) that the making or continuation of any LIBO Rate Loan has
become unlawful or impermissible by compliance by that Lender with any law,
governmental rule, regulation or order of any Governmental Authority (whether or
not having the force of law and whether or not failure to comply therewith would
be unlawful or would result in costs or penalties), then, and in any such event,
such Lender may give notice of that determination, in writing, to the Borrower
and the Funding Agent, and the Funding Agent shall promptly transmit the notice
to each other Lender.
(ii) When notice is given by a Lender under Section 4.02(e)(i), (A) the
Borrower's right to request from any Lender and each Lender's obligation, if
any, to make LIBO Rate Loans shall be immediately suspended, and each Lender
shall make a Base Rate Loan as part of any requested Borrowing of LIBO Rate
Loans and (B) if LIBO Rate Loans are then outstanding, the Borrower shall
immediately, or if permitted by applicable law, no later than the date permitted
thereby, upon at least one (1) Business Day's prior written notice to the
Funding Agent and the Lenders, convert each Loan into a Base Rate Loan.
(iii) If at any time after a Lender gives notice under Section
4.02(e)(i) such Lender determines that it may lawfully make LIBO Rate Loans,
such Lender shall promptly give notice of that determination, in writing, to the
Borrower and the Funding Agent, and the Funding Agent shall promptly transmit
the notice to each other Lender. The Borrower's right to request,
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and such Lender's obligation, if any, to make LIBO Rate Loans shall thereupon be
restored.
(f) Compensation. In addition to all amounts required to be paid by the
Borrower pursuant to Section 4.01, the Borrower shall compensate each Lender,
upon demand, for all losses, expenses and liabilities (including, without
limitation, any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Lender's LIBO Rate Loans to the Borrower but excluding any loss of
Applicable Margin on the relevant Loans) which that Lender may sustain (i) if
for any reason a Borrowing, conversion into or continuation of LIBO Rate Loans
does not occur on a date specified therefor in a Notice of Borrowing or a Notice
of Conversion/Continuation given by the Borrower or in a telephonic request by
it for borrowing or conversion/continuation or a successive LIBO Rate Interest
Period does not commence after notice therefor is given pursuant to Section
4.01(c), including, without limitation, pursuant to Section 4.02(d), (ii) if for
any reason any LIBO Rate Loan is prepaid (including, without limitation,
mandatorily pursuant to Section 3.01(b)) on a date which is not the last day of
the applicable LIBO Rate Interest Period, (iii) as a consequence of a required
conversion of a LIBO Rate Loan to a Base Rate Loan as a result of any of the
events indicated in Section 4.02(d) or 4.02(e), or (iv) as a consequence of any
failure by the Borrower to repay LIBO Rate Loans when required by the terms of
this Agreement. The Lender making demand for such compensation shall deliver to
the Borrower concurrently with such demand a written statement in reasonable
detail as to such losses, expenses and liabilities, and this statement shall be
conclusive as to the amount of compensation due to that Lender, absent manifest
error.
(g) Booking of LIBO Rate Loans. Any Lender may make, carry or transfer
LIBO Rate Loans at, to, or for the account of, its LIBO Rate Lending Office or
LIBO Rate Affiliate or its other offices or Affiliates. No Lender shall be
entitled, however, to receive any greater amount under Section 3.03, 3.04,
4.01(f) or 4.02(f) as a result of the transfer of any such LIBO Rate Loan to any
office (other than such LIBO Rate Lending Office) or any Affiliate (other than
such LIBO Rate Affiliate) than such Lender would have been entitled to receive
immediately prior thereto, unless (i) the transfer occurred at a time when
circumstances giving rise to the claim for such greater amount did not exist and
(ii) such claim would have arisen even if such transfer had not occurred.
(h) Affiliates Not Obligated. No LIBO Rate Affiliate or other Affiliate
of any Lender shall be deemed a party to this Agreement or shall have any
liability or obligation under this Agreement.
4.03 Fees.
(a) Administrative Agents' Fees. The Borrower shall pay to the
Administrative Agents, solely for the account of the Administrative Agents, the
fees set forth in (i) the letter from Citicorp and Scotiabank addressed to the
Borrower and GFI dated May 12, 1997 and (ii) the letter from Citicorp and
Scotiabank addressed to the Borrower, GFI, Foamex International and Trace Foam
dated February 9, 1998, in each case, payable in accordance with the terms of
such letters.
(b) Letter of Credit Fee. In addition to any charges paid pursuant to
Section 2.03(g), the Borrower shall pay to the Funding Agent, for the account of
the Lenders entitled thereto, based on their respective Pro Rata Shares, a fee
accruing at a per annum rate equal to the then Applicable Margin for LIBO Rate
Loans less 1/8 of 1% on the undrawn face amount of each outstanding Letter of
Credit for the period of time such Letter of Credit is outstanding, payable on
each Quarterly Payment Date, in arrears (the "Letter of Credit Fees"); provided,
however, upon: (A) the occurrence of an Event of Default described
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in Section 11.1(a) or (B) the occurrence of any other Event of Default and
notice from the Requisite Lenders of the effectiveness of Section 4.01(d), and
for so long thereafter as such Event of Default shall be continuing, the rate at
which the Letter of Credit Fees shall accrue and be payable shall be equal to
the then Applicable Margin for LIBO Rate Loans (less 1/8 of 1%) plus two percent
(2.0%) per annum.
(c) Unused Commitment Fee. The Borrower shall pay to the Funding Agent,
for the account of the Lenders entitled thereto, in accordance with their
respective Pro Rata Shares, a fee (the "Unused Commitment Fee"), accruing at the
rate of the Applicable Commitment Fee Margin on the amount from time to time by
which the Commitments exceed the sum of (i) the outstanding principal amount of
the Revolving Loans, plus (ii) the outstanding Reimbursement Obligations, plus
(iii) the aggregate undrawn face amount of all outstanding Letters of Credit,
for the period commencing on the Effective Date and ending on the Revolving Loan
Commitment Termination Date, such portion of the fee being payable quarterly, in
arrears, commencing with the first Quarterly Payment Date following the
Effective Date. Notwithstanding the foregoing, in the event that any Lender
fails to fund its Pro Rata Share of any Loan requested by the Borrower which
such Lender is obligated to fund under the terms of this Agreement, (I) such
Lender shall not be entitled to any Unused Commitment Fees with respect to its
Commitment until such failure has been cured in accordance with Section
3.02(b)(vi)(B) and (II) until such time, the Unused Commitment Fee shall accrue
in favor of the Lenders which have funded their respective Pro Rata Shares of
such requested Loan, shall be allocated among such performing Lenders ratably
based upon their relative Commitments, and shall be calculated based upon the
average amount by which the aggregate applicable Commitments of such performing
Lenders exceeds the sum of (1) the outstanding principal amount of the Loans
owing to such performing Lenders, plus (2) the outstanding Reimbursement
Obligations owing to such performing Lenders, plus (3) the aggregate
participation interests of such performing Lenders arising pursuant to Section
2.03(e) with respect to undrawn and outstanding Letters of Credit.
(d) Calculation and Payment of Fees. All of the above fees payable on a
per annum percentage basis shall be calculated on the basis of the actual number
of days elapsed in a 360-day year. All such fees shall be payable in addition
to, and not in lieu of, interest, compensation, expense reimbursements,
indemnification and other Obligations. Fees shall be payable to the Funding
Agent at its office in New York, New York in immediately available funds. All
fees shall be fully earned and nonrefundable when paid. All fees specified or
referred to in this Agreement due to any Administrative Agent, any Issuing Bank
or any Lender, including, without limitation, those referred to in this Section
4.03, shall bear interest, if not paid when due, at the interest rate for Base
Rate Loans in accordance with Section 4.01(d), shall constitute Obligations and
shall be secured by all of the Collateral.
ARTICLE V
CONDITIONS TO LOANS AND LETTERS OF CREDIT
5.01 Conditions Precedent to the Effectiveness of this Agreement. This
Agreement shall become effective on the date (the "Effective Date") when each of
the conditions precedent set forth in the Amendatory Agreement have been
satisfied (unless waived by the Lenders or unless the deadline for delivery has
been extended by the Administrative Agents).
5.02 Conditions Precedent to All Loans and Letters of Credit. The
obligation of each Lender to make any Loan and of the Swing Bank to make any
Swing Loan, requested to be made by it on the Effective Date or any date after
the Effective Date and the agreement of each Issuing Bank to issue any Letter
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of Credit on the Effective Date or any date after the Effective Date is subject
to the following conditions precedent as of each such date:
(a) Representations and Warranties. As of such date, both
before and after giving effect to the Loans to be made or the Letter of
Credit to be issued on such date, all of the representations and
warranties of the Borrower and the Managing General Partner contained
in Section 6.01 and in any other Loan Document (other than
representations and warranties which expressly speak as of a different
date) shall be true and correct in all material respects.
(b) No Defaults. No Event of Default shall have occurred and
be continuing or would result from the making of the requested Loan or
issuance of the requested Letter of Credit.
(c) No Legal Impediments. No law, regulation, order, judgment
or decree of any Governmental Authority shall, and neither
Administrative Agent shall have received from any Lender or Issuing
Bank notice that, in the judgment of such Lender or Issuing Bank,
litigation is pending or threatened which is likely to enjoin, prohibit
or restrain, or impose or result in the imposition of any material
adverse condition upon, (i) such Lender's making of the requested Loan
or participation in the requested Letter of Credit, (ii) the Swing
Bank's making of the requested Swing Loan or (iii) such Issuing Bank's
issuance of the requested Letter of Credit.
(d) No Material Adverse Effect. No change in the condition
(financial or otherwise), business, performance, properties, assets,
operations or prospects of the Borrower or any of its Subsidiaries
shall have occurred since December 29, 1996, which has had or is
reasonably likely to have a Material Adverse Effect.
Each submission by the Borrower to the Funding Agent of a Notice of Borrowing
with respect to a Loan or a Notice of Conversion/Continuation with respect to
any Loan (excluding any automatic conversion to Base Rate Loans pursuant to the
proviso at the end of Section 4.01(c)) and each acceptance by the Borrower of
the proceeds of each Loan made, converted or continued hereunder, each
submission by the Borrower to an Issuing Bank of a request for issuance of a
Letter of Credit and the issuance of such Letter of Credit, shall constitute a
representation and warranty by the Borrower and, in the case of a submission by
the Borrower, the Managing General Partner, individually, and as the managing
general partner of the Borrower, as of the Funding Date in respect of such
Revolving Loan or Swing Loan, the date of conversion or continuation and the
date of issuance of such Letter of Credit, that all the conditions contained in
this Section 5.02 have been satisfied or waived in accordance with Section
13.07.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of the Borrower. In order to induce
the Lenders and the Issuing Banks to enter into this Agreement and to make
and/or maintain the Loans and the other financial accommodations to the Borrower
and to issue the Letters of Credit described herein, the Borrower, individually,
and the Managing General Partner, individually and as the managing general
partner of the Borrower, as the case may be, hereby represents and warrants to
each Lender, each Issuing Bank and the Administrative Agents as of the Effective
Date and as of each date thereafter on which such representations and warranties
shall be made or deemed to be made that the following statements are true,
correct and complete:
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(a) Organization; Partnership Powers; Corporate Powers. (i)
The Borrower (A) is a limited partnership duly formed and
organized, validly existing and in good standing under the
laws of the State of Delaware and is a valid limited
partnership under RULPA, (B) is duly qualified to operate as a
foreign limited partnership and is in good standing under the
laws of each jurisdiction in which failure to be so qualified
and in good standing will have or is reasonably likely to have
a Material Adverse Effect, and (C) has all requisite
partnership power and authority to own, operate and encumber
its Property and to conduct its business as presently
conducted and as proposed to be conducted pursuant to the
Business Plan of the Borrower in connection with and following
the consummation of the transactions contemplated by this
Agreement.
(ii) FMXI, in its capacity as managing general
partner, is the Person who has executed this Agreement and the
other Loan Documents executed on the Effective Date to which
the Borrower is a party on behalf of the Borrower. After the
Effective Date, FMXI will execute any other Loan Documents to
which the Borrower is a party on behalf of the Borrower. FMXI
is the managing general partner of the Borrower and FMXI has
full authority to execute alone, and on behalf of the
Borrower, the Loan Documents.
(iii) The Managing General Partner (A) is a
corporation duly formed and organized, validly existing and in
good standing under the laws of the State of Delaware, (B) is
duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction in which
the failure to be so qualified and in good standing will have
or is reasonably likely to have a Material Adverse Effect and
(C) has all requisite corporate power and authority to own,
operate and encumber its Property and to conduct its business
as presently conducted and as proposed to be conducted in
connection with and following the consummation of the
transactions contemplated by this Agreement and the other
Transaction Documents.
(iv) Each of the Subsidiaries of the Borrower (A)
other than the Foreign Subsidiaries is a corporation or, in
the case of any such Subsidiary that is a limited liability
company, a limited liability company, duly formed and
organized, validly existing and in good standing under the
laws of the State of Delaware, (B) is duly qualified to do
business as a foreign corporation or, in the case of any such
Subsidiary that is a limited liability company, a foreign
limited liability company, and is in good standing under the
laws of each jurisdiction in which the failure to be so
qualified and in good standing will have or is reasonably
likely to have a Material Adverse Effect, and (C) has all
requisite corporate power or, in the case of any such
Subsidiary that is a limited liability company, limited
liability company authority and authority to own, operate and
encumber its Property and to conduct its business as presently
conducted and as proposed to be conducted in connection with
and following the consummation of the transactions
contemplated by this Agreement and the other Transaction
Documents to which it is party.
(v) The performance of the Partnership Agreement by
the Managing General Partner and the Borrower are within their
respective corporate powers or partnership powers, as the case
may be, have each been duly authorized by all necessary
corporate power or partnership power, as the case may be, and
do not contravene any Requirement of Law applicable to such
Person.
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(vi) The Managing General Partner does not conduct
any business other than the business of acting as the managing
general partner of the Borrower and owning Equity Interests in
the Borrower.
(b) Authority. (i) The Managing General Partner and each
Subsidiary of the Borrower party to a Transaction Document has
the requisite corporate power, or, in the case of any such
Subsidiary that is a limited liability company (or any other
limited liability company), limited liability company power,
and authority to execute, deliver and perform each of the
Transaction Documents to which it is a party.
(ii) The Borrower has the requisite partnership
power, and authority to execute, deliver and perform each of
the Transaction Documents to which it is a party.
(iii) The execution, delivery and performance as the
case may be, of each of the Transaction Documents which have
been executed and to which the Borrower and/or the Managing
General Partner or any Subsidiary of the Borrower is party and
the consummation of the transactions contemplated thereby,
have been duly approved by the Managing General Partner (on
behalf of the Borrower), the board of directors of the
Managing General Partner and each such Subsidiary and the
shareholders of such Subsidiary, as the case may be, and such
approvals have not been rescinded, revoked or modified in any
manner. No other partnership action or proceedings on the part
of the Borrower or other corporate or shareholder action or
proceedings on the part of the Managing General Partner or its
Subsidiaries are necessary to consummate such transactions.
(iv) Each of the Transaction Documents to which the
Borrower or the Managing General Partner or any Subsidiary of
the Borrower is a party has been duly executed, or delivered,
on behalf of the Borrower or the Managing General Partner or
Subsidiary, as the case may be, and constitutes its legal,
valid and binding obligation, enforceable against such Person
in accordance with its terms, is in full force and effect and
all parties thereto have performed and complied with all the
terms, provisions, agreements and conditions set forth therein
and required to be performed or complied with by such parties
on or before the Effective Date, and, as of the Effective
Date, no default (or event that with the passing of time or
giving of notice or both would constitute an event of default)
or breach of any covenant by any such party exists thereunder.
(c) Subsidiaries; Ownership of Equity Interests. Schedule
6.01-C (i) contains a diagram indicating the partnership and/or
corporate structure of the Borrower and its Subsidiaries, and any other
Person which the Borrower or any of its Subsidiaries holds an Equity
Interest and each direct and indirect parent of the Managing General
Partner and each Limited Partner as of the Effective Date; and (ii)
accurately sets forth as of the Effective Date (A) the correct legal
name and the jurisdiction of incorporation of the Persons listed on
such Schedule, and (B) the authorized, issued and outstanding shares of
each class of Equity Interests in the Borrower and its Subsidiaries and
the record and, to the knowledge of the Borrower and the Managing
General Partner, beneficial owner, of such Equity Interests. As of the
Effective Date, none of the partnership interests of the Borrower (to
the Borrower's and the Managing General Partner's best knowledge in
respect of such interests constituting limited partnership interests)
is subject to any vesting, redemption, or repurchase agreement, and, to
the Borrower's and the
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Managing General Partner's best knowledge as of the Effective Date,
there are no warrants or options outstanding with respect to such
Equity Interests, except in each case as contemplated in the
Transaction Documents. The outstanding Equity Interests in each of the
Borrower's Subsidiaries are duly authorized, validly issued, fully paid
and nonassessable and do not constitute Margin Stock.
(d) No Conflict. The execution, delivery and performance of
each of the Transaction Documents to which the Borrower or any of its
Subsidiaries or the Managing General Partner is a party do not and will
not (i) conflict with the Constituent Documents of the Borrower, any
such Subsidiary, the Managing General Partner, or to the best knowledge
of the Borrower and the Managing General Partner, any Person listed on
Schedule 6.01-C, (ii) to the Borrower's or the Managing General
Partner's best knowledge, constitute a tortious interference with any
Contractual Obligation of any Person (other than a Lender) or (iii)
except as set forth on Schedule 6.01-D, conflict with, result in a
breach of or constitute (with or without notice or lapse of time or
both) a default under (A) any Transaction Document, (B) any Requirement
of Law (including, without limitation, any requirement under RULPA in
order for the Borrower to remain a valid limited partnership under
RULPA) or (C) any Contractual Obligation of the Borrower, any such
Subsidiary, the Managing General Partner or, to the best knowledge of
the Borrower or the Managing General Partner, any Person listed on
Schedule 6.01-C, or require termination of any Contractual Obligation,
the consequences of which violation, breach, default or termination,
will have or is reasonably likely to have a Material Adverse Effect or
may subject either Administrative Agent, any of the Lenders or any of
the Issuing Banks to any liability, (iv) result in or require the
creation or imposition of any Lien whatsoever upon any of the Property
or assets of the Borrower or any such Subsidiary, other than Liens
contemplated by the Loan Documents, or (v) require any approval of the
Borrower's, any such Subsidiary's, or to the Borrower's or the Managing
General Partner's best knowledge, the Managing General Partner's,
direct or indirect, Equity Interest holders (which has not been
obtained).
(e) Governmental Consents. Except as set forth on Schedule
6.01- E, the execution, delivery and performance of each of the
Transaction Documents to which the Borrower or any of its Subsidiaries
or the Managing General Partner is a party do not and will not require
any registration with, consent or approval of, or notice to, or other
action to, with or by any Governmental Authority, except (i) filings,
consents or notices which have been made, obtained or given, or, in a
timely manner, will be made, obtained or given, and registrations with,
filings, approvals and consents required under the Securities Act, the
Securities Exchange Act and state securities and "Blue Sky" laws in
connection with the transactions contemplated by the Transaction
Documents, and (ii) filings necessary to create or perfect security
interests in the Collateral, and (iii) routine corporate and
partnership filings to maintain good standing in each state in which
the Borrower and its Subsidiaries conducts its business.
(f) Governmental Regulation. None of the Borrower, any of its
Subsidiaries or the Managing General Partner is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power
Act, the Interstate Commerce Act, or the Investment Company Act of
1940, or any other federal or state statute or regulation which limits
its ability to incur indebtedness or its ability to consummate the
transactions contemplated in the Transaction Documents.
(g) Financial Position. All financial projections and related
materials and documents delivered to the Administrative Agents pursuant
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to this Agreement are based upon facts and assumptions that the
Managing General Partner and the Borrower believe to be reasonable in
light of the then current and foreseeable business conditions. All
monthly, quarterly and annual financial statements of the Borrower and
any of its Subsidiaries delivered to the Administrative Agents were
prepared in conformity with GAAP and fairly present the financial
position of the Borrower or the consolidated and consolidating
financial position of the Borrower and such Subsidiaries, as the case
may be, as at the respective dates thereof and the results of
operations and changes in financial position for each of the periods
covered thereby, subject, in the case of unaudited interim financials,
to changes resulting from the audit and normal year-end adjustments
and, with respect to all financial statements delivered prior to the
Effective Date, such statements were in conformity with GAAP as
interpreted by the Borrower at such time (it being understood that
actual results may differ from the projections). As of the date of
delivery, none of the Borrower or any of its Subsidiaries has any
Accommodation Obligation, contingent liability or liability for any
Taxes, long-term leases or commitments, not reflected in any of its
audited financial statements delivered to the Administrative Agents
pursuant to this Agreement or otherwise disclosed to the Administrative
Agents and the Lenders in writing, which will have or is reasonably
likely to have a Material Adverse Effect.
(h) Pro Forma Financials. The estimated consolidated pro forma
balance sheets of the Borrower and its Subsidiaries as of December 28,
1997 (giving pro forma effect as of such date to the Transaction and
the other transactions contemplated by the Transaction Documents and
this Agreement and on a historical basis giving effect to the
transactions contemplated by the Transaction Documents) delivered on
the Effective Date, copies of each of which have been, or will be,
furnished to the Lenders on such dates, present on a pro forma basis
the estimated financial condition of the Borrower and such Subsidiaries
as of December 28, 1997 and reflect on a pro forma basis those
liabilities reflected in the notes thereto and resulting from
consummation of the transactions contemplated in the Transaction
Documents and this Agreement, and the payment or accrual of all
Transaction Costs paid or to be payable on the Effective Date with
respect to any of the foregoing. The estimations, projections and
assumptions expressed in the pro forma financials furnished pursuant to
this Section 6.01(h) are reasonable based on facts and on assumptions
that the Managing General Partner and the Borrower believes to be
reasonable in light of the then current and foreseeable business
conditions (it being understood that actual results may differ from the
projections).
(i) Business Plan. The Business Plan of the Borrower and its
Subsidiaries most recently delivered to the Administrative Agents after
the Effective Date pursuant to Section 7.01(f), represents the Managing
General Partner's and the Borrower's reasonable and good faith plan and
estimate as of the date of delivery to the Administrative Agents of the
Borrower's future business and financial activities for the periods set
forth therein. Such Business Plan has been based on facts and on
assumptions that the Managing General Partner and the Borrower believe
to be reasonable in light of the then current and foreseeable business
conditions.
(j) Litigation; Adverse Effects. Except as set forth in
Schedule 6.01-J, there is no action, suit, proceeding, investigation or
arbitration or series of related actions, suits, proceedings,
investigations or arbitrations before or by any Governmental Authority
or private arbitrator pending or, to the knowledge of the Borrower, any
of its Subsidiaries or the Managing General Partner, threatened against
the Borrower or any such Subsidiaries or any Property of any of them
(i)
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challenging the validity or the enforceability of any of the
Transaction Documents or (ii) which will or is reasonably likely to
result in any Material Adverse Effect. Neither the Borrower nor any of
its Subsidiaries is (A) in violation of any applicable Requirements of
Law which violation will have or is reasonably likely to have a
Material Adverse Effect, or (B) subject to or in default with respect
to any final judgment, writ, injunction, restraining order or order of
any nature, decree, rule or regulation of any court or Governmental
Authority which will have or is reasonably likely to have a Material
Adverse Effect.
(k) No Material Adverse Change. Since December 29, 1996, there
has occurred no event which has had or is reasonably likely to have a
Material Adverse Effect.
(l) Payment of Taxes. Except as set forth on Schedule 6.01-L,
all tax returns and reports of the Borrower and its Subsidiaries
required to be filed have been timely filed, and all taxes,
assessments, fees and other governmental charges thereupon and upon
their respective Property, assets, income and franchises which are
shown in such returns or reports to be due and payable have been paid
prior to any penalty being imposed unless the terms of Section 8.04
permit non-payment thereof. The Borrower has no knowledge of any
proposed tax assessment against the Borrower or any of its Subsidiaries
that will have or is reasonably likely to have a Material Adverse
Effect.
(m) Partnership Tax Status. The Borrower since its
organization has been treated as a partnership within the meaning of
Section 761(a) of the Internal Revenue Code for Federal income tax
purposes and has not been and is not an entity subject to Federal or
state income tax (other than state income taxes generally imposed on
partnerships). Neither the Managing General Partner nor the Borrower
has any knowledge of any inquiry or investigation by any Person
(including, without limitation, the IRS) as to whether or not the
Borrower is, or any claim or assertion by any Person (including,
without limitation, the IRS) that the Borrower is not, a partnership
for Federal or state income tax purposes or an entity subject to
Federal or state income taxes (other than state income taxes generally
imposed on partnerships).
(n) Performance. None of the Borrower, any of its Subsidiaries
or the Managing General Partner has received notice or has actual
knowledge that it is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions
contained in any Contractual Obligation applicable to the Borrower or
such Subsidiaries, except where such default or defaults, if any, will
not have or is not reasonably likely to have a Material Adverse Effect.
(o) Disclosure. The representations and warranties of each of
the Borrower, its Subsidiaries and the Managing General Partner
contained in the Transaction Documents to which it is a party and all
certificates and other documents delivered to the Administrative Agents
pursuant to the terms thereof did not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements contained herein or therein, in light of the
circumstances under which and the time at which they were made, not
misleading. None of the Borrower and the Managing General Partner has
intentionally withheld any fact from the Administrative Agents, the
Issuing Banks or the Lenders in regard to any matter which will have or
is reasonably likely to have a Material Adverse Effect.
(p) Requirements of Law. Except as otherwise stated in
Schedules 6.01-J and 6.01-Q, and with respect to environmental and
related violations of law concerning the Borrower's Morristown,
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Tennessee, and Fort Xxxxx, Indiana facilities, the Borrower and its
Subsidiaries are in compliance with all Requirements of Law applicable
to them and their respective businesses, in each case where the failure
to so comply individually or in the aggregate will have or is
reasonably likely to have a Material Adverse Effect.
(q) Environmental Matters. (i) Except as disclosed on Schedule
6.01-Q, to the knowledge of the Borrower and the Borrower's employees,
consultants or agents:
(A) the operations of the Borrower and its
Subsidiaries comply in all material respects with all applicable
Environmental, Health or Safety Requirements of Law;
(B) the Borrower and its Subsidiaries have obtained
or have taken appropriate steps, as required by Environmental Health or
Safety Requirements of Law, to obtain all environmental, health and
safety Permits necessary for their respective operations, and all such
Permits are in good standing and each of the Borrower and its
Subsidiaries are currently in material compliance with all terms and
conditions of such Permits;
(C) none of the Borrower and its Subsidiaries or any
of their respective present or past Property or operations is subject
to or the subject of any investigation respecting (I) any violation of
any Environmental, Health or Safety Requirements of Law or (II) any
Remedial Action or has received any notice of any Claims or Liabilities
and Costs arising from the Release or threatened Release of a
Contaminant into the environment;
(D) none of the operations of the Borrower or its
Subsidiaries is subject to any judicial or administrative proceeding,
order, judgment, decree or settlement alleging or addressing a
violation of or a liability under any Environmental, Health or Safety
Requirement of Law;
(E) none of the Borrower and its Subsidiaries:
(1) has experienced any Release of a
Contaminant in amounts sufficient to require reporting under
any applicable Requirement of Law without having submitted the
required report;
(2) has treated, stored or disposed of a
hazardous waste on-site, as that term is defined under 40
C.F.R. Part 261 or any state equivalent except in compliance
with applicable Requirements of Law; or
(3) has reported any material violation of
any applicable Environmental, Health or Safety Requirement of
Law;
(F) none of the Borrower's and its Subsidiaries'
present or past Property is listed or proposed for listing on the
National Priorities List ("NPL") pursuant to CERCLA or on the
Comprehensive Environmental Response Compensation Liability Information
System List ("CERCLIS") or any similar state list of sites requiring
Remedial Action and the Borrower is unaware of any conditions on such
Property which if known to a Governmental Authority, would qualify such
Property for inclusion on any such list;
(G) none of the Borrower and its Subsidiaries has
sent or directly arranged for the transport of any waste to any site
listed on
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the NPL or proposed for listing on the NPL or to a site included on the
CERCLIS list, or any similar state list;
(H) there is not now, nor has there ever been on or
in the Property:
(1) any generation, treatment, recycling,
storage or disposal of any hazardous waste, as that term is
defined under 40 C.F.R. Part 261 or any state equivalent
except in compliance with applicable Requirements of Law;
(2) any landfill, waste pile, underground
storage tank or surface impoundment;
(3) any asbestos-containing material; or
(4) a Release of any polychlorinated
biphenyls (PCB) used in hydraulic oils, electrical
transformers or other Equipment;
(I) none of the Borrower and its Subsidiaries has
received any notice or Claim to the effect that any of such Persons is
or may be liable to any Person as a result of the Release or threatened
Release of a Contaminant into the environment;
(J) there have been no Releases of any Contaminants
in reportable or significant quantities to the environment from any
Property;
(K) none of the Borrower and its Subsidiaries has any
known contingent liability in connection with any Release or threatened
Release of any Contaminants into the environment;
(L) no Environmental Lien has attached to any
Property of the Borrower or its Subsidiaries; and
(M) none of the Borrower and its Subsidiaries has
entered into any agreements with any Person relating to any Remedial
Action or environmentally related Claim.
(ii) the Borrower and its Subsidiaries are conducting and will
continue to conduct their respective businesses and operations in an
environmentally responsible manner, and the Borrower and such
Subsidiaries, taken as a whole have not been, and have no reason to
believe that they shall be, subject to Liabilities and Costs arising
out of or relating to environmental, health or safety matters that have
or will result in cash expenditures by the Borrower and such
Subsidiaries in excess of $10,000,000 (excluding matters described in
item V.O. and V.P. of Schedule 6.01-Q with respect to the Borrower's
facilities in Morristown, Tennessee and Fort Xxxxx, Indiana), in the
aggregate for any calendar year ending after June 12, 1997.
(r) ERISA. None of Borrower, its Subsidiaries or any ERISA
Affiliate currently maintains or contributes to any Benefit Plan,
Multiemployer Plan or Foreign Pension Plan other than those listed on
Schedule 6.01-R hereto. Except as disclosed in Schedule 6.01(R) hereto,
each Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code as currently in effect has been determined by the
IRS to be so qualified. Except as disclosed in Schedule 6.01-R, none of
the Borrower or any ERISA Affiliate maintains or contributes to any
employee welfare benefit plan within the meaning of Section 3(l) of
ERISA which provides benefits to employees after termination of
employment other than as required by Section 601 of ERISA or applicable
law. The
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Borrower and its Subsidiaries and the ERISA Affiliates are in
compliance in all material respects with the responsibilities,
obligations and duties imposed on them by ERISA and the Internal
Revenue Code with respect to all Plans. No Benefit Plan has incurred
any accumulated funding deficiency (as defined in Section 302(a)(2) of
ERISA and 412(a) of the Internal Revenue Code) whether or not waived.
None of the Borrower or any ERISA Affiliates nor, to the knowledge of
the Borrower, any fiduciary of any Plan (i) has engaged in a nonexempt
prohibited transaction described in Sections 406 of ERISA or 4975 of
the Internal Revenue Code or (ii) has taken or failed to take any
action which would constitute or result in a Termination Event. None of
the Borrower or any ERISA Affiliate is subject to any liability under
Section 4063, 4064, 4069, 4204 or 4212(c) of ERISA. None of the
Borrower or any ERISA Affiliate has incurred any liability to the PBGC
which remains outstanding other than the payment of premiums, and there
are no premium payments which have become due which are unpaid.
Schedule B to the most recent annual report filed with the IRS with
respect to each Benefit Plan and furnished to the Administrative Agents
is complete and accurate. Since the date of the latest Schedule B,
there has been no material adverse change in the funding status or
financial condition of the Benefit Plan relating to such Schedule B.
None of the Borrower or any ERISA Affiliate has (i) failed to make a
required contribution or payment to a Multiemployer Plan or (ii) made a
complete or partial withdrawal under Section 4203 or 4205 of ERISA from
a Multiemployer Plan. None of the Borrower or any such ERISA Affiliate
has failed to make a required installment or any other required payment
under Section 412 of the Internal Revenue Code on or before the due
date for such installment or other payment. None of the Borrower or any
such ERISA Affiliate is required to provide security to a Benefit Plan
under Section 401(a)(29) of the Internal Revenue Code due to a Plan
amendment that results in an increase in current liability for the plan
year. Except as disclosed on Schedule 6.01-R, none of the Borrower or
its Subsidiaries has, by reason of the transactions contemplated
hereby, any obligation to make any payment to any employee pursuant to
any Plan or existing contract or arrangement. The Borrower has given or
made available to the Administrative Agents copies of all of the
following: each Benefit Plan and related trust agreement (including all
amendments to such Plan and trust) in existence as of the Effective
Date and the most recent summary plan description, actuarial report,
determination letter issued by the IRS and Form 5500 filed in respect
of each such Benefit Plan in existence; a listing of all of the
Multiemployer Plans currently contributed to by the Borrower or any
ERISA Affiliate with the aggregate amount of the most recent annual
contributions required to be made by the Borrower and each ERISA
Affiliate to each such Multiemployer Plan, any information which has
been provided to the Borrower or any ERISA Affiliate regarding
withdrawal liability under any Multiemployer Plan and the collective
bargaining agreement pursuant to which such contribution is required to
be made; each employee welfare benefit plan within the meaning of
Section 3(1) of ERISA which provides benefits to employees of the
Borrower or any of such ERISA Affiliates after termination of
employment other than as required by Section 601 of ERISA, the most
recent summary plan description for such plan and the aggregate amount
of the most recent annual payments made to terminated employees under
each such plan.
(s) Foreign Employee Benefit Matters. Each Foreign Employee
Benefit Plan is in compliance in all material respects with all laws,
regulations and rules applicable thereto and the respective
requirements of the governing documents for such Plan. Except as set
forth on Schedule 6.01-S, the aggregate of the liabilities to provide
all of the accrued benefits under any Foreign Pension Plan does not
exceed the current Fair Market Value of the assets held in the trust or
other
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funding vehicle, if any, for such Plan. With respect to any Foreign
Employee Benefit Plan maintained or contributed to by the Borrower or
any of its Subsidiaries (other than a Foreign Pension Plan), reasonable
reserves have been established in accordance with prudent business
practice or where required by ordinary accounting practices in the
jurisdiction in which such Plan is maintained. The aggregate unfunded
liabilities, after giving effect to any reserves for such liabilities,
with respect to such Plans does not exceed the current Fair Market
Value of the assets held in the trust or other funding vehicle, if any,
for such Plan. To the best knowledge of the Borrower and its
Subsidiaries, there are no actions, suits or claims (other than routine
claims for benefits) pending or threatened against the Borrower or any
of such its Subsidiaries or with respect to any Foreign Employee
Benefit Plan.
(t) Labor Matters. Schedule 6.01-T accurately sets forth all
labor contracts to which the Borrower or any of its Subsidiaries is a
party on the Effective Date and the expiration date of each such
contract. There are no strikes, lockouts or other disputes relating to
any collective bargaining or similar agreement to which the Borrower or
any of such Subsidiaries is a party which have or is reasonably likely
to have a Material Adverse Effect.
(u) Securities Activities. None of the Borrower or any of its
Subsidiaries is engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock.
(v) Solvency. After giving effect to the transactions
contemplated in the Transaction Documents and the Loans to be made on
such date as Loans requested hereunder are made, and the disbursement
of the proceeds of such Loans pursuant to the Borrower's instructions,
the Borrower and each of the other Loan Parties is Solvent.
(w) Patents, Trademarks, Permits, Etc.; Government Approvals.
(i) The Borrower and its Subsidiaries own, are licensed or otherwise
have the lawful right to use, or have all permits and other
governmental approvals, patents, trademarks, trade names, copyrights,
technology, know-how and processes used in or necessary for the conduct
of their businesses as currently conducted which are material to their
condition (financial or otherwise), operations, performance and
prospects, taken as a whole. Except as set forth on Schedule 6.01-W, no
claims are pending or, to the best of the Borrower's knowledge
following diligent inquiry, threatened that the Borrower or any of its
Subsidiaries is infringing or otherwise adversely affecting the rights
of any Person with respect to such permits and other governmental
approvals, patents, trademarks, trade names, copyrights, technology,
know-how and processes, except for such claims and infringements as do
not, in the aggregate, give rise to any liability on the part of the
Borrower or any of its Subsidiaries which has or is reasonably likely
to have a Material Adverse Effect.
(ii) The consummation of the transactions contemplated by the
Transaction Documents will not impair the ownership of or rights under
(or the license or other right to use, as the case may be) any permits
and governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how or processes by the Borrower and each
of its Subsidiaries in any manner which has or is reasonably likely to
have a Material Adverse Effect.
(x) Assets and Properties. The Borrower and each of its
Subsidiaries has good and marketable (or indefeasible as to Texas real
property) title (except Liens securing the Obligations and Liens
permitted under Section 9.03 and except with Liens on assets of the
Foreign Subsidiaries) to all the Collateral and all of its other assets
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and Property (tangible and intangible) owned by it, except insofar as
marketability may be limited by any laws or regulations of any
Governmental Authority affecting such assets, and all such assets and
Property are free and clear of all Liens except Liens securing the
Obligations and Liens permitted under Section 9.03. Substantially all
of the assets and Property owned by, leased to or used by the Borrower
and/or each such Subsidiary are in adequate operating condition and
repair, ordinary wear and tear excepted, are free and clear of any
known defects except such defects as do not substantially interfere
with the continued use thereof in the conduct of normal operations, and
are able to serve the function for which they are currently being used,
except in each case where the failure of such asset to meet such
requirements would not have or is not reasonably likely to have a
Material Adverse Effect. Neither this Agreement nor any other
Transaction Document, nor any transaction contemplated under any such
agreement, will affect any right, title or interest of the Borrower or
such Subsidiary in and to any of such assets in a manner that would
have or is reasonably likely to have a Material Adverse Effect.
(y) Insurance. Schedule 6.01-Y accurately sets forth as of the
Effective Date all insurance policies and programs currently in effect
with respect to the respective Property and assets and business of the
Borrower and its Subsidiaries, specifying for each such policy and
program, (i) the amount thereof, (ii) the risks insured against
thereby, (iii) the name of the insurer and each insured party
thereunder, (iv) the policy or other identification number thereof, (v)
the expiration date thereof and (vi) the annual premium with respect
thereto. Such insurance policies and programs are in amounts sufficient
to cover the replacement value of the respective Property and assets of
the Borrower and such Subsidiaries subject to customary deductibles.
(z) Transaction with Affiliates. Schedule 6.01-Z lists each
and every existing agreement and arrangement as of the Effective Date
that (i) the Borrower has entered into with the Managing General
Partner, any Limited Partner or any Affiliate of the Borrower, the
Managing General Partner or Limited Partner or (ii) the Managing
General Partner or Limited Partner or any Affiliate of the Borrower,
the Managing General Partner or Limited Partner is subject to or has
entered into with respect to any of the Borrower's Properties,
including, in the case of each of clauses (i) and (ii), any management
or similar agreement. The Administrative Agents have been provided a
true, accurate and complete copy of each existing written agreement or
arrangement set forth on Schedule 6.01-Z and a true, accurate and
complete description of each existing or proposed agreement or
arrangement set forth in Schedule 6.01- Z that is not in writing.
(aa) New Foamex Subordinated Notes and New Foamex Notes. The
subordination provisions of the New Foamex Subordinated Note Indenture
and the New Foamex Indenture are enforceable against the holders of the
New Foamex Subordinated Notes and the New Foamex Notes, respectively.
The Obligations constitute "Obligations" related to the "New Credit
Facility" and "Senior Debt" (as each term is defined in the New Foamex
Subordinated Note Indenture and the New Foamex Indenture).
(bb) Senior Indebtedness. Each of the parties hereto
acknowledges that the Obligations constitute "Obligations" owing under
the "Credit Agreement" (as each such term is defined in the New Foamex
Subordinated Note Indenture and the New Foamex Indenture), and "Senior
Indebtedness" or "Senior Debt" (as each term is defined in the New
Foamex Subordinated Note Indenture and the New Foamex Indenture).
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ARTICLE VII
REPORTING COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until all of the Obligations (other than indemnities
not yet due) are paid in full (or in the case of contingent Obligations (other
than indemnities not yet due), Cash Collateral has been deposited in the Cash
Collateral Account in the full amount of such Obligations on terms satisfactory
to the Lenders), unless the Requisite Lenders shall otherwise give prior written
consent thereto:
7.01 Financial Statements. The Borrower shall maintain, and cause each
of its Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to permit preparation
of consolidated and consolidating financial statements in conformity with GAAP,
and each of the financial statements described below (except as otherwise
expressly provided) shall be prepared from such system and records. The Borrower
shall deliver or cause to be delivered to the Administrative Agents and the
Lenders:
(a) Monthly Reports. As soon as practicable, and in any event
within forty-five (45) days after the end of each calendar month in
each Fiscal Year (or within sixty (60) days after the end of each
calendar month which corresponds to the end of a fiscal quarter), the
consolidated balance sheets and results of operations of the Borrower
and its Subsidiaries as at the end of such period, and the related
consolidated statements of income and cash flow of the Borrower and its
Subsidiaries for such fiscal month and for the period from the
beginning of the then current Fiscal Year to the end of such fiscal
month, setting forth in each case in comparative form the corresponding
figures for the corresponding calendar month of the previous Fiscal
Year and the corresponding figures from the consolidated financial
forecast for the current Fiscal Year delivered pursuant to Section
7.01(f), certified by the chief financial officer of the Borrower as
fairly presenting the consolidated financial position of the Borrower
and such Subsidiaries as at the dates indicated and the results of
their operations and cash flow for the periods indicated in accordance
with GAAP, subject to normal year end adjustments (but excluding GAAP
footnotes).
(b) Quarterly Reports. As soon as practicable, and in any
event within fifty (50) days after the end of each fiscal quarter
(other than the last fiscal quarter) in each Fiscal Year, the Form
10-Q, if any, filed by the Borrower with the Securities and Exchange
Commission with respect to such fiscal quarter.
(c) Annual Reports. As soon as practicable, and in any event
within ninety-five (95) days after the end of each Fiscal Year, (i) the
Form 10-K, if any, filed by the Borrower with the Securities and
Exchange Commission with respect to such Fiscal Year, (ii) the
consolidated and consolidating financial statements of the Borrower and
its Subsidiaries (which shall be audited with respect to consolidated
financial statements by Coopers & Xxxxxxx or any other independent
certified public accountants) as at the end of such Fiscal Year which
shall be prepared in conformity with GAAP applied on a basis consistent
with prior years (except for changes with which Coopers & Xxxxxxx or
any such other independent certified public accountants, if applicable,
shall concur and which shall have been disclosed in the notes to the
financial statements), and which shall set forth in each case in
comparative form the corresponding figures for the previous Fiscal Year
and the corresponding figures from the consolidated and consolidating
financial forecast for the Fiscal Year being reported or delivered
pursuant to
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Section 7.01(f), and (iii) an opinion on such consolidated financial
statements by Coopers & Xxxxxxx or such other independent certified
public accountants acceptable to the Administrative Agents, which
opinion shall be unqualified.
(d) Officer's Certificate. Together with each delivery of any
financial statement pursuant to paragraphs (a) (with respect to the
last monthly report for each Fiscal Year), (b) and (c) of this Section
7.01, (i) an Officers' Certificate of the Borrower substantially in the
form of Exhibit E attached hereto and made a part hereof, stating that
the executive officers signatory thereto have reviewed the terms of the
Loan Documents, and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
consolidated and consolidating (in the case of such certification for
statements delivered pursuant to Section 7.01(c)) financial condition
of the Borrower and its Subsidiaries during the accounting period
covered by such financial statements, that such review has not
disclosed the existence during or at the end of such accounting period,
and that such officers do not have knowledge of the existence as at the
date of such Officers' Certificate, of any condition or event which
constitutes an Event of Default or Potential Event of Default, or, if
any such condition or event existed or exists, specifying the nature
and period of existence thereof and what action the Borrower or any of
its Subsidiaries have taken, are taking and proposes to take with
respect thereto; and (ii) a certificate substantially in the form of
Exhibit F attached hereto (the "Compliance Certificate"), signed by the
Borrower's chief financial officer, setting forth calculations (with
such specificity as the Administrative Agents may reasonably request)
for the period then ended which demonstrate compliance, when
applicable, with the provisions of Article X.
(e) Accountant's Statement and Privity Letter. Together with
each delivery of the financial statements referred to in Section
7.01(c), a written statement of the firm of independent certified
public accountants giving the report thereon (i) stating that their
audit examination has included a review of the terms of this Agreement
as it relates to accounting matters and (ii) stating whether, in
connection with their audit examination, any condition or event which
constitutes an Event of Default or Potential Event of Default has come
to their attention, and if such condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided, that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such condition or event that would
not be disclosed in the course of their audit examination. The
statement referred to above shall, at the request of either of the
Administrative Agents, be accompanied by (x) a copy of the management
letter or any similar report delivered to the Borrower or to any
officer or employee thereof by such accountants in connection with such
financial statements and (y) a letter in substantially the form of
Exhibit G attached hereto and made a part hereof from the Borrower to
such accountants informing such accountants that the Lenders are
relying upon the financial statements audited by such accountants and
delivered to the Administrative Agents and the Lenders pursuant to
Section 7.01(c) and that a primary intent of the Borrower in having
such financial statements audited is to induce the Lenders to continue
to make Loans to the Borrower under this Agreement. Either
Administrative Agent and each Lender may, with the consent of the
Borrower (which consent shall not be unreasonably withheld),
communicate directly with such accountants.
(f) Business Plans; Financial Projections. No later than the
last day of each Fiscal Year beginning with Fiscal Year 1998, (i) an
annual business plan for the next Fiscal Year for each of the Borrower
and its Subsidiaries, substantially in the form of the business plan
heretofore
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delivered to the Administrative Agents and the Lenders; and (ii) a
consolidated and consolidating plan and financial forecast consisting
of balance sheets, income statements and cash flow statements on a
monthly basis for the next 12 months and on an annual basis, based upon
facts and assumptions that the Managing General Partner and the
Borrower believe to be reasonable in light of the then current and
foreseeable business conditions, for the next three succeeding Fiscal
Years of the Borrower and its Subsidiaries (it being understood that
actual results may differ from the projections).
(g) Consolidated Balance Sheet. On or before ninety (90) days
after the Effective Date, a consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as of March 29, 1998 (after
giving effect to all transactions contemplated by the Transaction
Documents and the payment of all Transaction Costs), certified as
fairly presenting the financial position of the Borrower and its
Subsidiaries by the chief financial officer of the Borrower, together
with the Borrower's reconciliation, in form and substance satisfactory
to the Requisite Lenders, of all changes from the estimated pro forma
balance sheet of the Borrower referred to in Section 6.01(h).
7.02 Events of Default. Promptly upon the Borrower obtaining knowledge
(i) of any condition or event which constitutes an Event of Default or Potential
Event of Default, (ii) that any Person has given any written notice to the
Borrower or any Subsidiary of the Borrower or taken any other action with
respect to a claimed default or event or condition of the type referred to in
Section 11.01(e), or (iii) of any condition or event which has or is reasonably
likely to have a Material Adverse Effect or adversely affect the value of, or
the Collateral Agent's interest in, the Collateral (taken as a whole) in any
material respect, the Borrower shall deliver to the Administrative Agents and
the Lenders an Officer's Certificate specifying (A) the nature and period of
existence of any such claimed default, Event of Default, Potential Event of
Default, condition or event, (B) the notice given or action taken by such Person
in connection therewith, and (C) what action the Borrower has taken, is taking
and proposes to take with respect thereto.
7.03 Lawsuits. (i) Promptly upon the Borrower obtaining knowledge of
the institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting the Borrower or
any of its Subsidiaries or any Property of the Borrower or any of such
Subsidiaries not previously disclosed pursuant to Section 6.01(j), which action,
suit, proceeding, governmental investigation or arbitration exposes, or in the
case of multiple actions, suits, proceedings, governmental investigations or
arbitrations arising out of the same general allegations or circumstances which
expose, in the Borrower's reasonable judgment, the Borrower or any of such
Subsidiaries to liability in an amount aggregating $500,000 or more (exclusive
of claims covered by insurance policies of the Borrower or any of such
Subsidiaries unless the insurers of such claims have disclaimed coverage or
reserved the right to disclaim coverage on such claims), the Borrower shall give
written notice thereof to the Administrative Agents and the Lenders and provide,
if requested, such other information as may be reasonably available to enable
each Lender and either Administrative Agent and its counsel to evaluate such
matters; and (ii) in addition to the requirements set forth in clause (i) of
this Section 7.03, the Borrower upon request of either Administrative Agent or
of the Requisite Lenders shall promptly give written notice of the status of any
action, suit, proceeding, governmental investigation or arbitration covered by a
report delivered pursuant to clause (i) above and provide such other information
as may be reasonably available to it to enable each Lender and each
Administrative Agent and its counsel to evaluate such matters.
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7.04 Insurance. As soon as practicable and in any event by the last day
of each Fiscal Year, the Borrower shall deliver to the Administrative Agents and
the Lenders (i) a report in form and substance reasonably satisfactory to the
Administrative Agents and the Lenders outlining all material insurance coverage
maintained as of the date of such report by the Borrower and its Subsidiaries
and the duration of such coverage and (ii) if requested by the Administrative
Agents, evidence that all premiums with respect to such coverage have been paid
when due.
7.05 ERISA Notices. The Borrower shall deliver or cause to be
delivered, within the time limits set forth below, to the Administrative Agents
and the Lenders, at the Borrower's expense, the following information and
notices as soon as reasonably possible, and in any event:
(i) within ten (10) Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know that a Termination Event
has occurred, a written statement of the chief financial officer of the
Borrower describing such Termination Event and the action, if any,
which the Borrower or any ERISA Affiliate has taken, is taking or
proposes to take with respect thereto, and when known, any action taken
or threatened by the IRS, DOL or PBGC with respect thereto;
(ii) within ten (10) Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know that a prohibited
transaction (defined in Section 406 of ERISA and Section 4975 of the
Internal Revenue Code) has occurred with respect to any Plan, a
statement of the chief financial officer of the Borrower describing
such transaction and the action which the Borrower or any ERISA
Affiliate has taken, is taking or proposes to take with respect
thereto;
(iii) within ten (10) Business Days or such longer period as
may be reasonably agreed to by either Administrative Agent after the
Borrower or ERISA Affiliate receives written notice from such
Administrative Agent requesting same, copies of each annual report
(form 5500 series), including Schedule B thereto, filed with respect to
each Benefit Plan;
(iv) within ten (10) Business Days after the request of either
Administrative Agent, copies of each actuarial report for any Benefit
Plan if received by the Borrower or Multiemployer Plan and each annual
report for any Multiemployer Plan;
(v) within ten (10) Business Days after the filing of the same
with the IRS, a copy of each funding waiver request filed with respect
to any Benefit Plan and all communications received by the Borrower or
any ERISA Affiliate with respect to such request;
(vi) within ten (10) Business Days after the request of either
Administrative Agent regarding the occurrence of any material increase
in the benefits of any existing Benefit Plan or the establishment of
any new Benefit Plan or the commencement of contributions to any
Benefit Plan to which the Borrower or any ERISA Affiliate was not
previously contributing, notification of such increase, establishment
or commencement;
(vii) within ten (10) Business Days after the Borrower or any
ERISA Affiliate receives notice of any unfavorable determination letter
from the IRS regarding the qualification of a Plan under Section 401(a)
of the Internal Revenue Code, copies of each such letter;
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(viii) within ten (10) Business Days after the Borrower or any
ERISA Affiliate fails to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code on or
before the due date for such installment or payment, a notification of
such failure;
(ix) within ten (10) Business Days after the Borrower or any
ERISA Affiliate knows or has reason to know (A) a Multiemployer Plan
has been terminated, (B) the administrator or plan sponsor of a
Multiemployer Plan has provided the Borrower or any ERISA Affiliate
with notice of an intention to terminate a Multiemployer Plan, or (C)
the PBGC has instituted or will institute proceedings under Section
4042 of ERISA to terminate a Multiemployer Plan; and
(x) within ten (10) Business Days or such longer period as may
be reasonably agreed to by either Administrative Agent after the
Borrower or any of its Subsidiaries or any ERISA Affiliate receives
written notice from such Administrative Agent requesting the same,
copies of any Foreign Employee Benefit Plan and related documents,
reports and correspondence specified in such notice.
For purposes of this Section 7.05, the Borrower and any Subsidiary and any ERISA
Affiliate shall be deemed to know all facts known by the administrator of any
Plan of which the Borrower, any Subsidiary or ERISA Affiliate is the plan
sponsor. Section 7.05 shall only apply with respect to a Plan for which the
Borrower or any Subsidiary or any ERISA Affiliate is an "employer" as defined in
Section 3(5) of ERISA.
7.06 Environmental Notices. (a) The Borrower shall notify the
Administrative Agents and the Lenders in writing, promptly upon the
Borrower's learning thereof, of any:
(i) notice or claim to the effect that the Borrower or any of
its Subsidiaries is or may be liable to any Person as a result of the
Release or threatened Release of any Contaminant into the environment;
(ii) notice that the Borrower or any of its Subsidiaries is
subject to investigation by any Governmental Authority evaluating
whether any Remedial Action is needed to respond to the Release or
threatened Release of any Contaminant into the environment;
(iii) notice that any Property of the Borrower or any of its
Subsidiaries is subject to an Environmental Lien;
(iv) notice of violation to the Borrower or any of its
Subsidiaries of any Environmental, Health or Safety Requirement of
Law;
(v) condition which might reasonably constitute or result in a
material violation of any Environmental, Health or Safety Requirement
of Law;
(vi) commencement or threat of any judicial or administrative
proceeding alleging a material violation by the Borrower or any of its
Subsidiaries of any Environmental, Health or Safety Requirement of Law;
(vii) new or proposed changes to any existing Environmental,
Health or Safety Requirement of Law that could result in a Material
Adverse Effect; or
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(viii) any proposed acquisition of stock, assets, real estate,
or leasing of property, or any other action by the Borrower or any of
its Subsidiaries that could subject the Borrower or any of its
Subsidiaries to environmental, health or safety Liabilities and Costs.
(b) Within forty-five (45) days after the end of each Fiscal Year, the
Borrower shall submit to the Administrative Agents and the Lenders a report
summarizing the status of environmental, health or safety compliance, hazard or
liability issues identified in notices required pursuant to Section 7.06(a),
disclosed on Schedule 6.01-Q or identified in any notice or report required
herein.
7.07 Labor Matters. The Borrower shall notify the Administrative Agents
and the Lenders in writing, promptly upon the Borrower's learning thereof, of
(i) any material labor dispute to which the Borrower or any of its Subsidiaries
may become a party, including, without limitation, any strikes, lockouts or
other disputes relating to such Persons' plants and other facilities and (ii)
any material liability incurred with respect to the closing of any plant or
other facility of the Borrower or any of its Subsidiaries.
7.08 Permitted Subordinated Indebtedness. Upon its receipt of any of
the following, the Borrower shall deliver promptly thereafter a copy thereof to
the Administrative Agents and the Lenders: (a) any notice or other communication
delivered by or on behalf of the Borrower to any Person in connection with the
Permitted Subordinated Indebtedness; and (b) any material notice or other
material communication received by the Borrower from any Person in connection
with any agreement or other document relating to Permitted Subordinated
Indebtedness promptly after such notice or other communication is received by
the Borrower.
7.09 Other Reports. The Borrower shall deliver or cause to be delivered
to the Administrative Agents and the Lenders copies of all financial statements,
reports and notices, if any, sent or made available generally by the Borrower to
its Securities holders or filed with the Securities and Exchange Commission, all
press releases made available generally by the Borrower or any of its
Subsidiaries to the public concerning material developments in the business of
the Borrower or any such Subsidiary and all notifications received by the
Borrower or its Subsidiaries pursuant to the Securities Exchange Act and the
rules promulgated thereunder.
7.10 Change of Control. Promptly upon, and in any event within three
(3) Business Days of, the Managing General Partner or the Borrower obtaining
knowledge of the occurrence or potential occurrence of a Change of Control, the
Managing General Partner or the Borrower shall deliver to the Administrative
Agents an Officer's Certificate specifying, with respect to a Change of Control,
(i) the cause and nature of such Change of Control and (ii) the estimated date
on which the Change of Control will become effective.
7.11 Dissolution Notice. At least ninety (90) days prior to the
commencement of any action by the Managing General Partner or any Limited
Partner to dissolve the Borrower pursuant to the Partnership Agreement or
otherwise, the Managing General Partner or the Borrower shall deliver an
Officer's Certificate to the Administrative Agents specifying (i) the cause of
such dissolution and (ii) the date on which such dissolution will occur.
7.12 Government Contracts. Promptly upon, and in any event within ten
(10) Business Days of, any Credit Party becoming a party to a Federal, state or
local government contract having a value in excess of $500,000, the Borrower
shall notify the Collateral Agent of such contract and shall
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provide the Collateral Agent with any information related to such contract that
the Collateral Agent may reasonably request.
7.13 Other Information. Promptly upon receiving a request therefor from
either Administrative Agent or from the Requisite Lenders, the Borrower shall
prepare and deliver to the Administrative Agents and the Lenders such other
information with respect to the Borrower, any of its Subsidiaries, or the
Collateral, including, without limitation, schedules identifying and describing
the Collateral and any dispositions thereof and financial information, as from
time to time may be reasonably requested by either Administrative Agent or by
the Requisite Lenders.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Borrower and the Managing General Partner covenant and agree that
so long as any Commitments are outstanding and thereafter until all of the
Obligations (other than indemnities not yet due) are paid in full (or, in the
case of contingent Obligations (other than indemnities not yet due), cash
collateral has been deposited in the Cash Collateral Account in the full amount
of such Obligations on terms satisfactory to the Lenders), unless the Requisite
Lenders shall otherwise give prior written consent thereto:
8.01 Partnership/Corporate Existence, etc. The Managing General Partner
shall cause the Borrower to, and the Borrower shall, at all times, maintain its
partnership existence, and the Borrower shall cause its Subsidiaries to, and the
Managing General Partner shall, at all times, maintain its corporate existence
or, in the case of any such Subsidiary that is a limited liability company,
limited liability company existence, and preserve and keep, or cause to be
preserved and kept, in full force and effect its rights and franchises material
to its businesses, except where the loss or termination of such rights and
franchises is not likely to have a Material Adverse Effect.
8.02 Partnership Powers; Conduct of Business. The Managing General
Partner shall, and shall cause the Borrower to, and the Borrower shall, and
shall cause each of its Subsidiaries to, qualify and remain qualified to do
business in each jurisdiction in which the nature of its business requires it to
be so qualified except in such jurisdictions where the failure so to qualify
would not cause or be likely to cause a Material Adverse Effect.
8.03 Compliance with Laws, etc. The Managing General Partner shall, and
shall cause the Borrower to, and the Borrower shall, and shall cause each of its
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, Property, assets or operations
of such Person, and (b) obtain as needed all Permits necessary for its
operations and maintain such Permits in good standing, except in the case where
noncompliance with either clause (a) or (b) above is not reasonably likely to
have a Material Adverse Effect.
8.04 Payment of Taxes and Claims; Tax Consolidation. The Borrower shall
pay, and cause each of its Subsidiaries to pay, (a) all taxes, assessments and
other governmental charges imposed upon it or on any of its Property or assets
or in respect of any of its franchises, business, income or Property before any
penalty accrues thereon, and (b) all claims (including, without limitation,
claims for labor, services, materials and supplies) for sums which have become
due and payable and which by law have or may become a Lien (other than a Lien
permitted by Section 9.03) upon any of the Borrower's or such Subsidiary's
Property or assets, prior to the time
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when any penalty or fine shall be incurred with respect thereto; provided,
however, that no such taxes, assessments and governmental charges referred to in
clause (a) above or claims referred to in clause (b) above need be paid if being
contested in good faith by appropriate proceedings diligently instituted and
conducted and if such reserve or other appropriate provision, if any, as shall
be required in conformity with GAAP shall have been made therefor. The Borrower
will not, nor will it permit any of its Subsidiaries to, file or consent to the
filing of any consolidated income tax return with any Person (except as required
by law and other than the Borrower or its Subsidiaries).
8.05 Insurance. The Borrower shall maintain for itself and for its
Subsidiaries, or shall cause each of such Subsidiaries to maintain, in full
force and effect the insurance policies and programs listed on Schedule 6.01-Y
or substantially similar policies and programs or other policies and programs as
are reasonably acceptable to the Administrative Agents. All such policies and
programs shall be maintained with insurers reasonably acceptable to the
Administrative Agents. Each certificate and policy relating to coverages (other
than Property in which the Collateral Agent does not have an insurable interest)
shall contain an endorsement naming the Collateral Agent as an additional
insured or loss payee, as applicable, under such policy. Such endorsement or an
independent instrument furnished to the Collateral Agent shall provide that the
insurance companies will give the Collateral Agent at least thirty (30) days'
written notice before any such policy or policies of insurance shall be canceled
or altered adversely to the interests of the Administrative Agents, the Issuing
Banks and the Lenders or canceled and that no act, whether willful or negligent,
or default of the Borrower, any of its Subsidiaries or any other Person shall
affect the right of the Collateral Agent to recover under such policy or
policies of insurance in case of loss or damage. In the event the Borrower or
any such Subsidiary, at any time or times hereafter shall fail to obtain or
maintain any of the policies or insurance required herein or to pay any premium
in whole or in part relating thereto, then the Collateral Agent, without waiving
or releasing any obligations or resulting Event of Default hereunder, may at any
time or times thereafter (but shall be under no obligation to do so) obtain and
maintain such policies of insurance and pay such premiums and take any other
action with respect thereto which the Collateral Agent deems advisable. All sums
so disbursed by the Collateral Agent shall constitute Protective Advances
hereunder and be part of the Obligations, payable as provided in this Agreement.
8.06 Inspection of Property. The Borrower shall permit, and cause its
Subsidiaries to permit, any authorized representative(s) designated by either
Administrative Agent or by any Lender to visit and inspect any of the Properties
of the Borrower or such Subsidiaries, to examine, audit, check and make copies
of their respective financial and accounting records, books, journals, orders,
receipts and any correspondence and other data relating to their respective
businesses or the transactions contemplated hereby and by the Transaction
Documents (including, without limitation, in connection with environmental
compliance, hazard or liability), and to discuss their affairs, finances and
accounts with their officers and independent certified public accountants, all
upon reasonable notice and at such reasonable times during normal business
hours, as often as may be reasonably requested. Each such visitation and
inspection (i) by or on behalf of any Lender shall be at such Lender's expense
and (ii) by or on behalf of either Administrative Agent shall be at the
Borrower's expense.
8.07 Books and Records; Discussions. The Borrower shall keep and
maintain, and cause its Subsidiaries to keep and maintain, in all material
respects proper books of record and account in which entries in conformity with
GAAP shall be made of all dealings and transactions in relation to their
respective businesses and activities, including, without limitation,
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transactions and other dealings with respect to the Collateral. Such books and
records shall include true and complete records of all Indebtedness of the
Borrower to each Subsidiary Guarantor. Each Officer's Certificate delivered
pursuant to Section 7.01(d) shall set forth in reasonable detail the amount,
date of incurrence, interest rate and amortization schedule for such
Indebtedness.
8.08 Insurance and Condemnation Proceeds. The Borrower hereby directs
(and, if applicable, shall cause its Subsidiaries to direct) all insurers under
policies insuring any loss of Collateral and payors of any condemnation claim or
award relating to the Collateral to pay all proceeds relating to Collateral and
payable under such policies or with respect to such claim or award directly to
the Collateral Agent, for the benefit of the Administrative Agents, the Issuing
Banks and the Lenders, and in no case to the Borrower or one or more of its
Subsidiaries. The Collateral Agent shall, upon receipt of such proceeds, apply
the same to either the repair or replacement of such Collateral or the repayment
of Loans in accordance with Section 3.01(b).
8.09 ERISA Compliance. The Borrower shall, and shall cause each of its
Subsidiaries and ERISA Affiliates to, establish, maintain and operate all Plans
to comply in all material respects with the provisions of ERISA, the Internal
Revenue Code, all other applicable laws, and the regulations and interpretations
thereunder and the respective requirements of the governing documents for such
Plans.
8.10 Foreign Employee Benefit Plan Compliance. The Borrower shall, and
shall cause each of its Subsidiaries and ERISA Affiliates to, establish,
maintain and operate all Foreign Employee Benefit Plans to comply in all
material respects with all laws, regulations and rules applicable thereto and
the respective requirements of the governing documents for such Plans.
8.11 Maintenance of Property. The Borrower shall, and shall cause each
of its Subsidiaries to, maintain in all material respects all of the owned and
leased Property of the Borrower or such Subsidiary used and necessary in the
business of the Borrower or such Subsidiary in adequate, working condition and
repair, ordinary wear and tear excepted, and not permit, commit or suffer any
waste or abandonment of any such Property and from time to time shall make or
cause to be made all material repairs, renewal and replacements thereof,
including, without limitation, any capital improvements which may be required;
provided, however, that such Property may be altered or renovated in the
ordinary course of business and disposed of in accordance with the provisions in
Section 9.02.
8.12 Condemnation. Immediately upon learning of the institution of any
proceeding for the condemnation or other taking of any of the owned or leased
real property of the Borrower or any of its Subsidiaries, the Borrower shall
notify the Administrative Agents of the pendency of such proceeding, and permit
the Administrative Agents to participate in any such proceeding, and from time
to time will deliver to the Administrative Agents all instruments reasonably
requested by the Administrative Agents to permit such participation.
8.13 Environmental Matters. The Borrower shall (i) maintain an
environmental health and safety plan for all manufacturing facilities which, at
a minimum, addresses measures for response to catastrophic releases of
Contaminants into the environment or workplace, a copy of which plan shall be
delivered to the Administrative Agents; and (ii) maintain a health and safety
management system, which includes a corporate environmental health and safety
management structure, environmental health and safety personnel at each
facility, and a periodic facility audit program directed by the corporate
environmental health and safety management unit.
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8.14 Future Mortgages. The Borrower and each Subsidiary Guarantor
shall, prior to the acquisition of any fee interest or material leasehold
interest in real property, notify the Collateral Agent and provide the
Collateral Agent with the opportunity reasonably to request a Mortgage with
respect to such interest upon its acquisition, which Mortgage shall be
substantially in the form of the Mortgages delivered on the Effective Date.
The Borrower or relevant Subsidiary Guarantor shall, with respect to
any leasehold Mortgage, exercise good-xxxxx xxxx fide efforts to obtain consent
to such leasehold Mortgage, provided, however, such entity shall not be required
(i) to make any payments to the landlord or to incur any additional costs (other
than reasonable customary costs) or (ii) to make any changes adverse to such
entity with respect to such lease and provided, further, that the failure to
obtain such consent and therefore the failure to provide such leasehold Mortgage
shall not be a default hereunder.
ARTICLE IX
NEGATIVE COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until all of the Obligations (other than indemnities
not yet due) are paid in full (or, in the case of contingent Obligations (other
than indemnities not yet due), Cash Collateral has been deposited in the Cash
Collateral Account in the full amount of such Obligations on terms satisfactory
to the Lenders), unless the Requisite Lenders shall otherwise give prior written
consent thereto:
9.01 Indebtedness. None of the Borrower nor any of its Subsidiaries
(other than Foreign Subsidiaries or as permitted in the Amendatory Agreement)
shall directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:
(i) the Obligations;
(ii) to the extent otherwise permitted to be made pursuant to
this Agreement or the Amendatory Agreement, the Transaction Costs;
(iii) the Permitted Existing Indebtedness and any extensions,
renewals, refundings or replacements of Permitted Existing
Indebtedness, provided that any such extension, renewal, refunding or
replacement is in an aggregate principal amount not greater than the
principal amount of, and, is on terms no less favorable to such
Borrower or such Subsidiary than the terms of, the Permitted Existing
Indebtedness so extended, renewed, refunded or replaced;
(iv) to the extent permitted by Article X and in any event in
an aggregate amount not to exceed $10,000,000 in any twelve (12) month
period but in no event more than an aggregate of $25,000,000 at any
time, Capital Leases and purchase money Indebtedness incurred to
finance the acquisition of fixed assets, and Indebtedness incurred to
refinance such Capital Leases and purchase money Indebtedness;
provided, however, that for purposes of this Section 9.1(iv) any
Capital Leases and/or purchase money Indebtedness of any Person which
becomes a Subsidiary Guarantor after the Effective Date, which such
Capital Leases and/or purchase money Indebtedness existed at the time
of such Person becoming a Subsidiary Guarantor, shall be deemed to have
been incurred on the date such Person became a Subsidiary Guarantor;
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(v) Indebtedness constituting Accommodation Obligations
permitted by Section 9.05;
(vi) Permitted Subordinated Indebtedness (except for such
Indebtedness referred to in clause (vii) of this Section 9.01);
(vii) intercompany Indebtedness (x) owing from the Borrower or
any Subsidiary Guarantor to the Borrower or any other Subsidiary
Guarantor to the extent permitted by Section 9.04(vi) or (y) owing by
the Borrower or any Subsidiary Guarantor to a Foreign Subsidiary, but
only so long as, in each case, such Indebtedness is subordinated to the
Obligations on terms satisfactory to the Requisite Lenders and not
repayable by its terms before one (1) year after the payment in full of
all Obligations and the termination in full of the Commitments; and
(viii) Indebtedness in respect of Hedging Obligations
(including any amendments, supplements or modifications thereto) so
long as the Indebtedness thereunder receives "hedge accounting"
treatment in accordance with regulations promulgated by the Securities
and Exchange Commission and staff interpretations thereof and such
Hedging Obligations were not entered into for speculative purposes; and
(ix) Indebtedness in a principal amount not in excess of
$34,000,000 evidenced by the Foamex/GFI Note.
9.02 Sales of Assets. None of the Borrower nor any of its Subsidiaries
(other than Foreign Subsidiaries or as part of the Transaction) shall 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) (x) sales of inventory, (y) the licensing of intellectual
property or (z) the sale of services, in each case, in the ordinary
course of business; provided, that sales of inventory to Foreign
Subsidiaries shall only be permitted if made on an arm's length basis
in the ordinary course of business on customary trade terms and so long
as the aggregate amount of Receivables created in connection with such
sales shall not exceed at any time 20% of the sum of (x) the
consolidated Receivables of the Borrower and its Subsidiaries plus (y)
the Receivables of all Foreign Subsidiaries owing to a Credit Party at
such time;
(ii) sales of assets outside of the ordinary course of
business (except as contemplated in clause (v) below) not in excess of
$5,000,000 in a single transaction or series of related transactions,
nor in excess of $10,000,000 in the aggregate in any Fiscal Year;
(iii) sales of assets by any Credit Party to any other Credit
Party, provided, that, the aggregate amount of all such sales (valued
at the Fair Market Value thereof), plus the amount of all loans and/or
advances outstanding under Section 9.01(vii) plus the amount of all
Investments outstanding under Section 9.04(vi) (computed as set forth
in Section 9.04) shall not exceed $50,000,000;
(iv) the sublease of office space made by the Borrower to
Foamex International and TIHI at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
and the lease or sublease by the Borrower and its Subsidiaries of Real
Property to other Persons (but only to the extent such lease or
sublease is not prohibited by Section 9.08);
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(v) sales or contributions of assets made by any Credit Party
to a Foreign Subsidiary to the extent permitted pursuant to Section
9.04(iv) and 9.04(viii);
(vi) the sale or lease of assets comprising the Borrower's
plants at Mesquite, Texas or LaPorte, Indiana;
(vii) the license by the Borrower of its patented surface
modification technology to JPS Automotive L.P. and the lease of
certain equipment not in excess of a net book value of $500,000 to JPS
Automotive L.P. associated with the use of such license;
(viii) leases or subleases of Property set forth on
Schedule 9.02(viii) hereto;
(ix) leases or subleases of Property which in the aggregate do
not provide for rental payments in excess of $1,000,000 per Fiscal
Year; and
(x) sales or other dispositions of assets in connection with
the Xxxxx Restructuring;
provided, that (A) no sales or other dispositions (other than sales of obsolete
or used Equipment and assets sold or contributed to Foreign Subsidiaries
pursuant to clause (v) above) shall be permitted if they are to be made for less
than 90% of net book value of such properties or assets, and (B) any Net Cash
Proceeds of Sale in respect of such sales or other dispositions shall be
remitted to the Funding Agent and applied to the repayment of the Loans in
accordance with Section 3.01(b).
9.03 Liens. None of the Managing General Partner, the Borrower nor any
of its Subsidiaries (other than Foreign Subsidiaries) shall directly or
indirectly create, incur, assume or permit to exist any Lien on or with respect
to any of their respective Property or assets except:
(i) Liens created by the Loan Documents;
(ii) Permitted Existing Liens;
(iii) Customary Permitted Liens;
(iv) purchase money Liens (including the interest of a lessor
under a Capital Lease and Liens to which any Property is subject at the
time of the Borrower's or any of its Subsidiaries purchase thereof)
securing Indebtedness of the Borrower or its Subsidiaries permitted
under Section 9.01(iv); and
(v) to the extent Indebtedness secured thereby is permitted to
be extended, renewed, refunded or refinanced pursuant to Section
9.01(iii), a future Lien on any Property which is subject to a Lien
described in clauses (ii) and (iv) above, if such future Lien attaches
only to the same Property and secures only such permitted extensions.
9.04 Investments. None of the Borrower nor any of its Subsidiaries
(other than Foreign Subsidiaries) shall directly or indirectly make or own any
Investment except:
(i) Permitted Existing Investments in an amount not greater
than the amount thereof on the Effective Date;
(ii) Investments in Cash Equivalents;
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(iii) Investments received in connection with the bankruptcy
or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(iv) so long as no Event of Default or Potential Event of
Default has occurred and is continuing (or would result therefrom)
Investments by the Borrower in Persons in an amount not to exceed
$25,000,000 in the aggregate at any time outstanding; provided, that
(i) Investments in Persons which are not Subsidiary Guarantors or
Foreign Subsidiaries shall not exceed $15,000,000 in the aggregate at
any time outstanding and (ii) Investments in Persons not engaged in a
Permitted Business shall not exceed $5,000,000 in the aggregate at any
time outstanding;
(v) so long as no Event of Default or Potential Event of
Default has occurred and is continuing (or would result therefrom),
Investments by the Borrower in Foamex International and the Managing
General Partner in an aggregate amount not to exceed (a) $2,500,000 in
any Fiscal Year and (b) $5,000,000 in the aggregate for the period
beginning on the Effective Date and ending on the Commitment
Termination Date;
(vi) Investments by any Credit Party in any other Credit Party
so long as the aggregate amount of Investments made by the Borrower in
the Subsidiary Guarantors pursuant to this Section plus the aggregate
amount of sales or other transfers of assets (valued at the Fair Market
Value thereof) to such Subsidiary Guarantors permitted under Section
9.02(iii) and (without duplications) loans and/or advances permitted
under Section 9.01(vii) shall not exceed $50,000,000 in the aggregate
at any time outstanding;
(vii) Investments by the Borrower in no more than 10,000
shares of common stock of Foamex International received by the Borrower
in connection with the compromise of certain employee loans in the
aggregate principal amount not in excess of $1,000,000;
(viii) Investments by any Credit Party in Foreign Subsidiaries
so long as the aggregate amount of Investments made pursuant to this
Section 9.04(viii), together with the aggregate amount of sales or
other transfers of assets (valued at the Fair Market Value thereof) to
such Foreign Subsidiaries pursuant to Section 9.02(v) and (without
duplication) the amount of Accommodation Obligations permitted under
Section 9.05(v) shall not exceed $25,000,000 in the aggregate at any
time outstanding;
(ix) Investments consisting of loans or advances by the
Borrower to Foamex International under the Tax Advance Agreement in an
amount not to exceed $25,000,000 for the purpose (x) of paying the
fees, expenses and other costs associated with the sale of general and
limited partnership interests in JPS Automotive L.P. and (y) of making
payments in satisfaction of any outstanding obligation it may have as a
prior owner of JPS Automotive L.P.;
(x) Investments made on or after June 12, 1997 in an amount
not to exceed $5,000,000 in the aggregate at any time outstanding in
(x) the Trace Global Opportunities Fund and (y) the New TIHI Loan; and
(xi) Investments in Hedging Obligations permitted under
Section 9.01(viii);
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provided, however, that no Person shall become a Subsidiary (other than a
Foreign Subsidiary or a less than wholly-owned Subsidiary pursuant to Section
9.04(iv)) after the Effective Date unless (i) such Person is a wholly-owned
Subsidiary of the Borrower or any Subsidiary Guarantor and (ii) such Person has
executed and delivered to the Administrative Agents a Subsidiary Guarantee, a
Subsidiary Security Agreement and, as applicable, a Subsidiary Pledge Agreement
and Mortgages (but subject to Section 8.14), and such other documents, including
opinions of counsel, as the Administrative Agents may request, in each case in
form and substance acceptable to the Administrative Agents; provided, further,
however, that any Investment described in clauses (iv), (vi) and (viii) above
shall be calculated on a net basis, giving effect to the payment by the Person
in which an Investment was made of any dividends or returns of capital by way of
redemption of its Equity Interests to any Credit Party or payments to any Credit
Party of loans or advances or interest thereon made to such Person by such
Credit Party.
9.05 Accommodation Obligations. None of the Borrower nor any of its
Subsidiaries (other than Foreign Subsidiaries) shall directly or indirectly
create or become or be liable with respect to any Accommodation Obligation,
except:
(i) Permitted Existing Accommodation Obligations;
(ii) Accommodation Obligations arising under the Loan
Documents;
(iii) Accommodation Obligations of the Subsidiary Guarantors
in connection with their guaranty of (A) the New Foamex Subordinated
Notes, but only to the extent set forth in the New Foamex Subordinated
Note Indenture and (B) the New Foamex Notes, but only to the extent set
forth in the New Foamex Indenture;
(iv) Accommodation Obligations of the Borrower in respect of
Indebtedness permitted by Section 9.01 of any Subsidiary Guarantor;
(v) Accommodation Obligations of Credit Parties in respect of
liabilities of Foreign Subsidiaries, provided, that, the aggregate
outstanding amount of such Accommodation Obligations plus the aggregate
sales or other transfers of assets (valued at the Fair Market Value
thereof) to such Foreign Subsidiaries permitted under Section 9.02(v)
plus the amount of all Investments outstanding under Section 9.04(viii)
shall not exceed $25,000,000 (computed as set forth in Section 9.04);
and
(vi) the Foamex/GFI Note;
provided that, except as contemplated in clause (v) above, in no event shall any
of the Borrower or FMXI, nor any of their respective Subsidiaries (other than
Foreign Subsidiaries) directly or indirectly create or become or be liable with
respect to any Accommodation Obligation with respect to any liabilities of any
Foreign Subsidiary.
9.06 Restricted Junior Payments. None of the Borrower nor any of its
Subsidiaries (other than Foreign Subsidiaries) shall declare or make any
Restricted Junior Payment, except (without duplication):
(i) dividends or distributions to the Borrower in respect of
its Equity Interests in any of its wholly-owned Subsidiaries or to any
of the Borrower's wholly-owned Subsidiaries from any Subsidiary of the
Borrower;
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(ii) regularly scheduled interest payments in respect of the
Foamex/GFI Note, the New Foamex Subordinated Notes and the New Foamex
Notes if such interest payments are permitted to be made pursuant to
the terms of the New Foamex Subordinated Notes and the New Foamex
Subordinated Note Indenture, or the New Foamex Notes and the New
Foamex Indenture, as the case may be;
(iii) distributions to the Managing General Partner and the
Limited Partner in respect of the Borrower's obligations (and not in
excess of such obligations) under the Tax Sharing Agreement to which it
is a party (A) in an amount necessary to permit Foamex International to
service its debt obligations referred to in Section 9.04(v) (but only
if such distributions are immediately repaid to the Borrower); (B) in
an amount necessary to permit Foamex International to service its debt
obligations referred to in Section 9.04(ix) (but only if such
distributions are immediately repaid to the Borrower) and (C) to the
extent the proceeds of such distributions shall be used to pay an
actual tax liability of a partner or its beneficial owners; provided,
however, if a payment otherwise required by the Tax Sharing Agreement
not described in the foregoing clauses (A) and (B) is reduced because
the distribution would not be used to pay an actual tax liability, the
obligation of the Borrower to make such payment shall not be discharged
but shall be suspended and made upon termination of this Agreement or
subject to the terms of any refinancing of the Obligations;
(iv) so long as no Event of Default or Potential Event of
Default has occurred and is continuing (or would result therefrom) and
all payments due and payable by the Borrower under the Tax Sharing
Agreement permitted under clause (iii)(C) above have been made, (x)
distributions to the Managing General Partner not in excess of
$3,000,000 in the aggregate in each Fiscal Year pursuant to the
Management Agreement and (y) Permitted Aircraft Payments; provided,
however, that no such payment or other distribution in this clause (iv)
may be made unless the Borrower shall have delivered a Compliance
Certificate in respect of the Fiscal Quarter ended just prior to the
date of the proposed dividend or distribution demonstrating compliance
with Article X on a pro forma basis (after giving effect to all
distributions permitted under this clause (iv));
(v) so long as no Event of Default or Potential Event of
Default has occurred and is continuing (or would result therefrom),
regularly scheduled interest payments in respect of the GW Subordinated
Note if such interest payments are permitted to be made pursuant to the
terms of the GW Subordinated Note and the GW Subordination Agreement;
(vi) so long as no Event of Default or Potential Event of
Default has occurred and is continuing (or would result therefrom),
dividends or distributions by the Borrower to its partners (A) in
respect of each four fiscal quarter period in which the Total Net Debt
to EBDAIT Ratio is less than 4.25:1.00 but greater than or equal to
3.50:1.00, an amount not to exceed the lesser of (I) 50% of the excess
of Consolidated Net Income of the Borrower and its Subsidiaries
(excluding, however, those Subsidiaries which are not Subsidiary
Guarantors) for such four fiscal quarter period over any Permitted
Aircraft Payments in respect of such four fiscal quarter period (to the
extent not subtracted from such Consolidated Net Income) and (II)
$15,000,000 and (B) in respect of each four fiscal quarter period in
which the Total Net Debt to EBDAIT Ratio is less than 3.50:1.00, an
amount not to exceed to the lesser of (I) 50% of the excess of
Consolidated Net Income of the Borrower and its Subsidiaries
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(excluding, however, those Subsidiaries which are not the Subsidiary
Guarantors) for such four fiscal quarter period over any Permitted
Aircraft Payments (to the extent not subtracted from such Consolidated
Net Income) and (II) $20,000,000; provided, however, that no such
dividend or other distribution may be made unless (A) the Borrower
shall have delivered to the Administrative Agents a certificate in form
and substance acceptable to the Administrative Agents signed by the
chief financial officer of the Borrower that the Borrower had a pro
forma Fixed Charge Coverage Ratio for the four fiscal quarter period
ended just prior to the proposed dividend or distribution of at least
1.15:1.00 (after giving effect to such proposed dividend or
distribution), (B) the Borrower shall have delivered a Compliance
Certificate in respect of the four fiscal quarter period ended just
prior to the date of the proposed dividend or distribution
demonstrating compliance with Article X on a pro forma basis (after
giving effect to such proposed dividend or distribution), (C) the
aggregate amount of dividends or other distributions pursuant to this
clause (vi) made during the preceding 365-day period just ended prior
to the date of the payment of the proposed dividend or distribution
shall not exceed the aggregate amount of payments of Term Loans made in
respect of such preceding 365-day period just ended pursuant to
Sections 3.01(a), (b)(ii), (b)(iii), (b)(iv) and (b)(v) and (D) the
Borrower has delivered the financial statements and Compliance
Certificate required by Sections 7.01(a), 7.01(c) and 7.01(d)(ii) in
respect of such fiscal period;
(vii) payments made to Foamex International to purchase
materials pursuant to, and as defined in, the Foamex International
Supply Agreement, provided that (a) the Borrower shall not make any
payment to Foamex International to purchase any materials prior to
receipt by the Borrower of title to such materials, and (B) any amounts
paid to Foamex International in excess of the purchase price and
reasonable expenses which the Borrower would have paid had it purchased
such materials directly from the supplier of such materials shall be
deemed to be a Restricted Junior Payment made pursuant to Section
9.06(vi); and
(viii) (A) as permitted by the Amendatory Agreement and (B) so
long as no Event of Default or Potential Event of Default has occurred
and is continuing (or would result therefrom) the Borrower may pay a
dividend on its Equity Interests in an aggregate amount not to exceed
$3,000,000 on or prior to the 90th day following the Effective Date.
9.07 Conduct of Business. None of the Borrower nor any of its
Subsidiaries shall engage in any business other than a Permitted Business. The
Managing General Partner shall not engage in any business other than acting as
the managing general partner to the Borrower and holding its general partnership
interest in the Borrower. The Borrower shall cause FCC not to engage in any
business activity except the issuance of the New Foamex Subordinated Notes and
the New Foamex Notes, and the performance of FCC's obligations thereunder, under
the New Foamex Indenture, the New Foamex Subordinated Note Indenture and the
Loan Documents to which it is a party.
9.08 Transactions with Shareholders and Affiliates. None of the
Borrower nor any of its Subsidiaries shall directly or indirectly enter into any
transaction (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
Managing General Partner or its corporate parents and their Affiliates (other
than the Borrower or a Subsidiary of the Borrower). Nothing contained in this
Section 9.08 shall prohibit (i) any transaction expressly permitted by Section
9.02(vii), Section 9.04(i), Section 9.04(iv)
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(to the extent of Investments in joint ventures where the other joint venture
parties are not Affiliates of the Borrower), Section 9.04(v), Section 9.04(vii),
Section 9.04(ix), Section 9.04(x), Section 9.05 and Section 9.06; (ii) increases
in compensation and benefits for officers and employees of the Borrower or any
of the Borrower's predecessors in interest or any of their respective
Subsidiaries which are customary in the industry or consistent with the past
business practice of the Borrower or such Subsidiary or consistent with market
conditions; (iii) payment of customary directors' fees and indemnities; (iv)
performance of any obligations arising under the Transaction Documents; (v)
transactions listed on Schedule 6.01-Z; (vi) sales and purchases of Inventory
between the Borrower and its Subsidiaries on the one hand and TIHI and its
Subsidiaries on the other hand, on an arms length basis in the ordinary course
of business; and (vii) the sublease of office space by the Borrower to Foamex
International and TIHI at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
9.09 Restriction on Fundamental Changes. None of the Managing General
Partner, the Borrower nor any of its Subsidiaries (other than Foreign
Subsidiaries) shall enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution), or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of the Managing General Partner's, the
Borrower's or any such Subsidiary's business or Property, whether now or
hereafter acquired, except (i) transactions permitted under Section 9.02 or
transactions contemplated by the Transaction Documents or (ii) so long as no
Event of Default or Potential Event of Default has occurred and is continuing
(or would result therefrom) any Subsidiary Guarantor may merge into the Borrower
or another Subsidiary Guarantor so long as if such merger is with or into the
Borrower, the Borrower shall be the surviving Person. The Borrower shall not
change its partnership status to a corporate status.
9.10 Sales and Leasebacks. None of the Borrower nor any of its
Subsidiaries (other than Foreign Subsidiaries) shall become liable, directly, by
assumption or by Accommodation Obligation, with respect to any lease, whether an
Operating Lease or a Capital Lease, of any Property (whether real or personal or
mixed) (i) which it or one of its Subsidiaries sold or transferred or is to sell
or transfer to any other Person or (ii) which it or one of its Subsidiaries
intends to use for substantially the same purposes as any other Property which
has been or is to be sold or transferred by it or one of its Subsidiaries to any
other Person in connection with such lease.
9.11 Margin Regulations; Securities Laws. None of the Borrower nor any
of its Subsidiaries (other than Foreign Subsidiaries) shall use all or any
portion of the proceeds of any credit extended under this Agreement to purchase
or carry Margin Stock.
9.12 ERISA. The Borrower shall not:
(i) engage, or permit any of its ERISA Affiliates to engage,
in any prohibited transaction described in Sections 406 of ERISA or
4975 of the Internal Revenue Code for which a statutory or class
exemption is not available or a private exemption has not been
previously obtained from the DOL;
(ii) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Internal Revenue Code),
with respect to any Benefit Plan, whether or not waived;
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(iii) terminate, or permit any ERISA Affiliate to terminate,
any Benefit Plan which would result in any liability of the Borrower or
any ERISA Affiliate under Title IV of ERISA;
(iv) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto;
(v) fail, or permit any ERISA Affiliate to fail, to pay any
required installment or any other payment required under Section 412 of
the Internal Revenue Code on or before the due date for such
installment or other payment;
(vi) amend, or permit any ERISA Affiliate to amend, a Benefit
Plan resulting in an increase in current liability for the plan year
such that the Borrower or any ERISA Affiliate is required to provide
security to such Plan under Section 401(a)(29) of the Internal Revenue
Code;
(vii) permit any unfunded liabilities with respect to any
Foreign Pension Plan if the existence of such liabilities or the
absence of full funding would be contrary to applicable law for such
Foreign Pension Plan or subject to a penalty under such law with
respect to such Foreign Pension Plan; or
(viii) fail, or permit any of its Subsidiaries or ERISA
Affiliates to fail, to pay any required contributions or payments to a
Foreign Pension Plan on or before the due date for such required
installment or payment.
9.13 Issuance of Equity Interests. None of the Borrower nor any of
the Subsidiary Guarantors shall issue any Equity Interests except to the
existing holders of its Equity Interests.
9.14 Constituent Documents. None of the Managing General Partner, the
Borrower nor any of its Subsidiaries (other than Foreign Subsidiaries) shall
amend, modify or otherwise change any of the terms or provisions in any of their
respective Constituent Documents as in effect on the Effective Date except as
provided for in Section 9.09(ii) or for such amendments or modifications deemed
immaterial by the Administrative Agents.
9.15 Amendments to Permitted Subordinated Indebtedness. None of the
Borrower nor any of its Subsidiaries (other than Foreign Subsidiaries) shall
amend, modify or otherwise change any of the terms or provisions of the
Permitted Subordinated Indebtedness.
9.16 Cancellation of Debt; Prepayment. None of the Borrower nor any of
its Subsidiaries (other than Foreign Subsidiaries) shall cancel any material
claim or debt, except in the ordinary course of its business, or prepay, redeem,
purchase, repurchase or retire any long-term Indebtedness (including, without
limitation, the Indebtedness evidenced by the New Foamex Subordinated Notes, and
New Foamex Notes), other than (i) Indebtedness in respect of the Obligations,
(ii) repayments of the New Foamex Subordinated Notes and the New Foamex Notes to
the extent required to be made pursuant to the terms of the New Foamex
Subordinated Note Indenture and the New Foamex Indenture, respectively, (v) as
permitted (and in accordance with terms of) Section 9.06(ii), (vi) repayments of
Indebtedness incurred pursuant to the provisions of Section 9.01(vii)(x), (vii)
repayments of the Foamex/GFI Note and (viii) as permitted by and in accordance
with the terms of the Amendatory Agreement.
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9.17 Fiscal Year. None of the Borrower nor any of its Subsidiaries
(other than Foreign Subsidiaries) shall change its Fiscal Year for accounting or
tax purposes from a period consisting of the 12 month period ending on Sunday
nearest December 31 in each calendar year.
9.18 Transaction Documents. None of the Credit Parties shall amend,
supplement or otherwise modify the Transaction Documents or cause the
Transaction Documents to be amended, supplemented or otherwise modified without
the prior written consent of the Requisite Lenders except for such amendments,
supplements or modifications deemed immaterial by the Administrative Agents.
9.19 Environmental Matters. None of the Borrower nor any of its
Subsidiaries (other than Foreign Subsidiaries) shall:
(i) become subject to any Liabilities and Costs which would
have a Material Adverse Effect arising out of or related to (a) the
Release or threatened Release at any location of any Contaminant into
the environment, or any Remedial Action in response thereto, or (b) any
violation of any environmental, health and safety Requirements of Law;
or
(ii) either directly or indirectly, create, incur, assume or
permit to exist any Environmental Lien on or with respect to any of its
Property.
ARTICLE X
FINANCIAL COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until all of the Obligations are paid in full (or, in
the case of contingent Obligations (other than indemnities not yet due), Cash
Collateral has been deposited in the Cash Collateral Account in the full amount
of such Obligations on terms satisfactory to the Lenders), unless the Requisite
Lenders shall otherwise give prior written consent thereto:
10.01 Minimum Net Worth. The Net Worth of the Borrower and its
Subsidiaries on a consolidated basis at all times during any period from the
last day of the fiscal quarter in each Fiscal Year of the Borrower set forth
below to the next to last day of the next succeeding fiscal quarter shall not be
less than the minimum amount set forth opposite the first such fiscal quarter:
||
Fiscal Quarter Minimum Net Worth
-------------- -----------------
(in millions)
Fourth fiscal quarter of 1997 $(146.4)
First fiscal quarter of 1998 (150.0)
Second fiscal quarter of 1998 (142.5)
Third fiscal quarter of 1998 (135.0)
Fourth fiscal quarter of 1998 (121.4)
First fiscal quarter of 1999 (117.2)
Second fiscal quarter of 1999 (111.9)
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Fiscal Quarter Minimum Net Worth
-------------- -----------------
(in millions)
Third fiscal quarter of 1999 (104.8)
Fourth fiscal quarter of 1999 (97.62)
First fiscal quarter of 2000 (92.8)
Second fiscal quarter of 2000 (86.7)
Third fiscal quarter of 2000 (78.4)
Fourth fiscal quarter of 2000 (70.2)
First fiscal quarter of 2001 (64.8)
Second fiscal quarter of 2001 (57.9)
Third fiscal quarter of 2001 (48.6)
Fourth fiscal quarter of 2001 (39.4)
First fiscal quarter of 2002 (33.4)
Second fiscal quarter of 2002 (25.7)
Third fiscal quarter of 2002 (15.5)
Fourth fiscal quarter of 2002 (5.3)
First fiscal quarter of 2003 1.2
Second fiscal quarter of 2003 9.6
Third fiscal quarter of 2003 20.7
Fourth fiscal quarter of 2003 31.9
First fiscal quarter of 2004 38.9
Second fiscal quarter of 2004 47.8
Third fiscal quarter of 2004 59.7
Fourth fiscal quarter of 2004 71.6
First fiscal quarter of 2005 79.5
Second fiscal quarter of 2005 89.7
Third fiscal quarter of 2005 103.2
Fourth fiscal quarter of 2005 116.8
First fiscal quarter of 2006 123.8
Second fiscal quarter of 2006 131.8
Third fiscal quarter of 2006 136.8
Fourth fiscal quarter of 2006 141.8
and thereafter
||
10.02 Minimum Interest Coverage Ratio. The Interest Coverage Ratio of
the Borrower and its Subsidiaries on a consolidated basis, as determined as of
the last day of each fiscal quarter of the Borrower set forth below for the four
fiscal quarter period ending on such date, shall not be less than the minimum
ratio set forth opposite such fiscal quarter:
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||
Fiscal Quarter Minimum Ratio
-------------- -------------
Fourth fiscal quarter of 1997 2.50:1.00
First fiscal quarter of 1998 2.00:1.00
Second fiscal quarter of 1998 2.00:1.00
Third fiscal quarter of 1998 2.00:1.00
Fourth fiscal quarter of 1998 2.10:1.00
First fiscal quarter of 1999 2.10:1.00
Second fiscal quarter of 1999 2.10:1.00
Third fiscal quarter of 1999 2.10:1.00
Fourth fiscal quarter of 1999 2.25:1.00
First fiscal quarter of 2000 2.25:1.00
Second fiscal quarter of 2000 2.25:1.00
Third fiscal quarter of 2000 2.25:1.00
Fourth fiscal quarter of 2000 2.50:1.00
First fiscal quarter of 2001 2.50:1.00
Second fiscal quarter of 2001 2.50:1.00
Third fiscal quarter of 2001 2.50:1.00
Fourth fiscal quarter of 2001 2.75:1.00
First fiscal quarter of 2002 2.75:1.00
Second fiscal quarter of 2002 2.75:1.00
Third fiscal quarter of 2002 2.75:1.00
Fourth fiscal quarter of 2002 3.00:1.00
First fiscal quarter of 2003 3.00:1.00
Second fiscal quarter of 2003 3.00:1.00
Third fiscal quarter of 2003 3.00:1.00
Fourth fiscal quarter of 2003 3.00:1.00
First fiscal quarter of 2004 3.00:1.00
Second fiscal quarter of 2004 3.00:1.00
Third fiscal quarter of 2004 3.00:1.00
Fourth fiscal quarter of 2004 3.00:1.00
First fiscal quarter of 2005 3.00:1.00
Second fiscal quarter of 2005 3.00:1.00
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Fiscal Quarter Minimum Ratio
-------------- -------------
Third fiscal quarter of 2005 3.00:1.00
Fourth fiscal quarter of 2005 3.00:1.00
First fiscal quarter of 2006 3.00:1.00
Second fiscal quarter of 2006 3.00:1.00
and thereafter
||
10.03 Minimum Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio of the Borrower and its Subsidiaries on a consolidated basis, as
determined as of the last day of each fiscal quarter of the Borrower set forth
below for the four fiscal quarter period ending on such date, shall not be less
than the minimum ratio set forth opposite such fiscal quarter:
||
Fiscal Quarter Minimum Ratio
-------------- -------------
Fourth fiscal quarter of 1997 1.10:1.00
First fiscal quarter of 1998 1.10:1.00
Second fiscal quarter of 1998 1.10:1.00
Third fiscal quarter of 1998 1.10:1.00
Fourth fiscal quarter of 1998 1.25:1.00
First fiscal quarter of 1999 1.25:1.00
Second fiscal quarter of 1999 1.25:1.00
Third fiscal quarter of 1999 1.25:1.00
Fourth fiscal quarter of 1999 1.25:1.00
First fiscal quarter of 2000 1.00:1.00
Second fiscal quarter of 2000 1.00:1.00
Third fiscal quarter of 2000 1.00:1.00
Fourth fiscal quarter of 2000 1.00:1.00
First fiscal quarter of 2001 1.25:1.00
Second fiscal quarter of 2001 1.25:1.00
Third fiscal quarter of 2001 1.25:1.00
Fourth fiscal quarter of 2001 1.25:1.00
First fiscal quarter of 2002 1.25:1.00
Second fiscal quarter of 2002 1.25:1.00
Third fiscal quarter of 2002 1.25:1.00
Fourth fiscal quarter of 2002 1.25:1.00
First fiscal quarter of 2003 1.25:1.00
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Fiscal Quarter Minimum Ratio
-------------- -------------
Second fiscal quarter of 2003 1.25:1.00
Third fiscal quarter of 2003 1.25:1.00
Fourth fiscal quarter of 2003 1.25:1.00
First fiscal quarter of 2004 1.00:1.00
Second fiscal quarter of 2004 1.00:1.00
Third fiscal quarter of 2004 1.00:1.00
Fourth fiscal quarter of 2004 1.00:1.00
First fiscal quarter of 2005 1.00:1.00
Second fiscal quarter of 2005 1.00:1.00
Third fiscal quarter of 2005 1.00:1.00
Fourth fiscal quarter of 2005 1.00:1.00
First fiscal quarter of 2006 1.00:1.00
Second fiscal quarter of 2006 1.00:1.00
and thereafter
||
10.04 Maximum Leverage Ratio. The Total Net Debt to EBDAIT Ratio of the
Borrower and its Subsidiaries on a consolidated bases, as determined as of the
last day of each fiscal quarter of the Borrower set forth below for the four
fiscal quarter period ending on such date, shall not exceed the maximum ratio
set forth below:
||
Fiscal Quarter Maximum Ratio
-------------- -------------
Fourth fiscal quarter of 1997 5.75:1.00
First fiscal quarter of 1998 5.50:1.00
Second fiscal quarter of 1998 5.50:1.00
Third fiscal quarter of 1998 5.25:1.00
Fourth fiscal quarter of 1998 5.00:1.00
First fiscal quarter of 1999 5.00:1.00
Second fiscal quarter of 1999 5.00:1.00
Third fiscal quarter of 1999 5.00:1.00
Fourth fiscal quarter of 1999 4.00:1.00
First fiscal quarter of 2000 4.00:1.00
Second fiscal quarter of 2000 4.00:1.00
Third fiscal quarter of 2000 4.00:1.00
Fourth fiscal quarter of 2000 3.50:1.00
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Fiscal Quarter Maximum Ratio
-------------- -------------
First fiscal quarter of 2001 3.50:1.00
Second fiscal quarter of 2001 3.50:1.00
Third fiscal quarter of 2001 3.50:1.00
Fourth fiscal quarter of 2001 3.00:1.00
First fiscal quarter of 2002 3.00:1.00
Second fiscal quarter of 2002 3.00:1.00
Third fiscal quarter of 2002 3.00:1.00
Fourth fiscal quarter of 2002 3.00:1.00
First fiscal quarter of 2003 3.00:1.00
Second fiscal quarter of 2003 3.00:1.00
Third fiscal quarter of 2003 3.00:1.00
Fourth fiscal quarter of 2003 3.00:1.00
First fiscal quarter of 2004 3.00:1.00
Second fiscal quarter of 2004 3.00:1.00
Third fiscal quarter of 2004 3.00:1.00
Fourth fiscal quarter of 2004 3.00:1.00
First fiscal quarter of 2005 3.00:1.00
Second fiscal quarter of 2005 3.00:1.00
Third fiscal quarter of 2005 3.00:1.00
Fourth fiscal quarter of 2005 3.00:1.00
First fiscal quarter of 2006 3.00:1.00
Second fiscal quarter of 2006 3.00:1.00
and thereafter
||
ARTICLE XI
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.01 Events of Default. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. The Borrower shall fail
to pay when due any of the Obligations and if such non-payment relates
to interest on the Loans or fees, such non-payment continues for a
period of more than five (5) days.
(b) Breach of Certain Covenants. The Borrower or the Managing
General Partner shall fail duly and punctually to perform or observe
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any agreement, covenant or obligation binding on such Person under
Sections 3.05, 3.06, 7.10, 7.11, 8.01, 8.02 and 8.06, Article IX or
Article X.
(c) Breach of Representation or Warranty. Any representation
or warranty made or deemed made by the Borrower or the Managing General
Partner to either Administrative Agent, any Lender or any Issuing Bank
herein or by the Borrower or any of its Subsidiaries or the Managing
General Partner in any of the other Loan Documents or in any statement
or certificate at any time given by any such Person pursuant to any of
the Loan Documents shall be false or misleading in any material respect
on the date as of which made (or deemed made).
(d) Other Defaults. The Borrower or the Managing General
Partner shall default in the performance of or compliance with any term
contained in this Agreement (other than as covered by clause (a), (b)
or (c) of this Section 11.01) or any default or event of default shall
occur under any of the other Loan Documents, and such default or event
of default shall continue for thirty (30) days after the occurrence
thereof.
(e) Default as to Other Indebtedness. The Borrower or any of
its Subsidiaries shall fail to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise) with respect to Permitted Subordinated Indebtedness or any
other Indebtedness (other than an Obligation) in excess of $1,000,000;
or any breach, default or event of default shall occur, or any other
condition shall exist under any instrument, agreement or indenture
pertaining to any such Indebtedness, if the effect thereof is to cause
an acceleration, mandatory redemption or other required repurchase of
such Indebtedness, or during the continuance of such breach, default or
event of default, permit the holder(s) of such Indebtedness to
accelerate the maturity of any such Indebtedness or require a
redemption or other repurchase of such Indebtedness; or any such
Indebtedness shall be otherwise declared to be due and payable (by
acceleration or otherwise) or required to be prepaid, redeemed or
otherwise repurchased by the Borrower or any of its Subsidiaries (other
than by a regularly scheduled required prepayment) prior to the stated
maturity thereof; in each case such accelerated, repurchased or other
Indebtedness to exceed, in the aggregate, $1,000,000.
(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i)
An involuntary case shall be commenced against any Loan Party and the
petition shall not be dismissed, stayed, bonded or discharged within
forty-five (45) days after commencement of the case; or a court having
jurisdiction in the premises shall enter a decree or order for relief
in respect of any Loan Party in an involuntary case, under any
applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect; or any other similar relief shall be granted
under any applicable federal, state, local or foreign law; or the board
of directors (or other governing body) of any Loan Party (or any
committee thereof) adopts any resolution or otherwise authorizes any
action to approve any of the foregoing.
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over any Loan
Party or over all or a substantial part of the Property of any Loan
Party shall be entered; or an interim receiver, trustee or other
custodian of any Loan Party or of all or a substantial part of the
Property of any Loan Party shall be appointed or a warrant of
attachment, execution or similar process against any substantial part
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of the Property of any Loan Party shall be issued and any such event
shall not be stayed, dismissed, bonded or discharged within forty-five
(45) days after entry, appointment or issuance; or the board of
directors of any Loan Party (or any committee thereof) adopts any
resolution or otherwise authorizes any action to approve any of the
foregoing.
(g) Voluntary Bankruptcy; Appointment of Receiver, etc. Any
Loan Party shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case,
under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a
substantial part of its Property; or any Loan Party shall make any
assignment for the benefit of creditors or shall be unable or fail, or
admit in writing its inability, to pay its debts as such debts become
due.
(h) Judgments and Attachments. Any money judgment (other than
a money judgment covered by insurance as to which the insurance company
has acknowledged coverage), writ or warrant of attachment, or similar
process against any Loan Party or any of their respective assets
involving in any case an amount in excess of $1,000,000 is entered and
shall remain undischarged, unvacated, unbonded or unstayed for a period
of sixty (60) days or in any event later than five (5) days prior to
the date of any proposed sale thereunder.
(i) Dissolution. (i) Either Administrative Agent shall have
received an Officer's Certificate described in Section 7.11, (ii) any
order, judgment or decree shall be entered against any Loan Party or
any of the Borrower's Subsidiaries decreeing its involuntary
dissolution or split up and such order shall remain undischarged and
unstayed for a period in excess of sixty (60) days, (iii) the Managing
General Partner or any Limited Partner shall commence any action to
dissolve the Borrower pursuant to the Partnership Agreement or
otherwise or (iv) the Borrower or any of its Subsidiaries shall
otherwise dissolve or cease to exist except as specifically permitted
by this Agreement.
(j) Loan Documents; Failure of Security. At any time, for any
reason, (i) any Loan Document ceases to be in full force and effect or
any Loan Party or any of the Borrower's Subsidiaries party thereto
seeks to repudiate its obligations thereunder and the Liens intended to
be created thereby are, or any Loan Party or any such Subsidiary seeks
to render such Liens, invalid and unperfected, or (ii) Liens in favor
of the Administrative Agents, the Collateral Agent, the Issuing Banks
and/or the Lenders contemplated by the Loan Documents shall, at any
time, for any reason, be invalidated or otherwise cease to be in full
force and effect, or such Liens shall be subordinated or shall not have
the priority contemplated by this Agreement, the Loan Documents or the
other Transaction Documents.
(k) Termination Event. Any Termination Event occurs which
could reasonably subject the Borrower or any ERISA Affiliate to
liability in excess of $1,000,000.
(l) Waiver Application. The plan administrator of any Benefit
Plan for which the Borrower or an ERISA Affiliate is an "employer" as
defined in Section 3(5) of ERISA applies under Section 412(d) of the
Internal Revenue Code for a waiver of the minimum funding standards of
Section 412(a) of the Internal Revenue Code and the substantial
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business hardship upon which the application for the waiver is based
could reasonably subject the Borrower or any ERISA Affiliate to
liability in excess of $1,000,000.
(m) Change of Control. Any Change of Control occurs.
(n) Material Adverse Change. An event shall exist or occur
which would materially and adversely impair (i) the ability of any
Credit Party to perform its obligations under the Loan Documents or
(ii) the ability of the Lenders, the Issuing Banks or the Collateral
Agent to enforce the Loan Documents.
(o) Tax Status. If the Borrower is taxed as a corporate entity
by any federal or state taxing authority and such taxation causes a
Material Adverse Effect.
(p) New Foamex Subordinated Notes, Foamex/GFI Note or New
Foamex Notes. Any "Event of Default" (or any event or occurrence or
circumstance which would become an "Event of Default" with the passage
of time or the giving of notice or both) as defined in the New Foamex
Subordinated Note Indenture or the New Foamex Indenture or the
Foamex/GFI Note shall have occurred and be continuing. Any of the terms
of the New Foamex Subordinated Notes, the Foamex/GFI Note or New Foamex
Notes shall be amended, supplemented or otherwise modified without the
prior written consent of the Requisite Lenders (except for such
amendments, supplements or modifications deemed immaterial by the
Administrative Agents).
(q) Liens on Equity Interests. Any Lien shall be granted in
favor of any Person on the Equity Interests of the Borrower or of the
Managing General Partner other than the Liens on Foamex Equity
Interests securing the Partnership Pledge Agreement and the Foamex
International Pledge Agreement.
(r) Refinancing of the New Foamex Notes. The Borrower shall
have failed to refinance in full the aggregate amount of New Foamex
Notes on or prior to March 1, 2005 pursuant to the issuance of new
subordinated indebtedness of the Borrower having terms, conditions,
covenants, subordination, maturity and redemption provisions and all
other material agreements no more disadvantageous to the Borrower or to
the Lenders or Agents as those contained in the New Foamex Subordinated
Notes and issued pursuant to documentation in form and substance
satisfactory to the Requisite Lenders.
An Event of Default shall be deemed "continuing" until cured or waived
in writing in accordance with Section 13.07.
11.02 Rights and Remedies.
(a) Acceleration and Termination. Upon the occurrence of any Event of
Default described in Section 11.01(f) or 11.01(g), the Commitments shall
automatically and immediately terminate and the unpaid principal amount of, and
any and all accrued interest on, the Obligations and all accrued fees shall
automatically become immediately due and payable, without presentment, demand,
or protest or other requirements of any kind (including, without limitation,
valuation and appraisement, diligence, presentment, notice of intent to demand
or accelerate and of acceleration), all of which are hereby expressly waived by
the Borrower and the Managing General Partner; and upon the occurrence and
during the continuance of any other Event of Default, the Collateral Agent shall
at the request, or may with the consent, of the Requisite Lenders, by written
notice to the Borrower, (A) declare that the Commitments are terminated,
whereupon the Commitments and the obligation of
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each Lender to make any Loan hereunder and of each Lender or Issuing Bank to
issue or participate in any Letter of Credit not then issued shall immediately
terminate, and/or (B) declare the unpaid principal amount of and any and all
accrued and unpaid interest on the Obligations to be, and the same shall
thereupon be, immediately due and payable, without presentment, demand, or
protest or other requirements of any kind (including, without limitation,
valuation and appraisement, diligence, presentment, notice of intent to demand
or accelerate and of acceleration), all of which are hereby expressly waived by
the Borrower.
(b) Deposit for Letters of Credit. In addition, after the occurrence
and during the continuance of an Event of Default, the Borrower shall, promptly
upon demand by the Collateral Agent, deliver to the Collateral Agent, Cash
Collateral in such form as requested by the Collateral Agent for deposit into
the Cash Collateral Account, together with such endorsements, and execution and
delivery of such documents and instruments as the Collateral Agent may request
in order to perfect or protect the Collateral Agent's Lien with respect thereto,
in an aggregate principal amount equal to the then outstanding Letter of Credit
Obligations.
(c) Rescission. If at any time after termination of the Commitments
and/or acceleration of the maturity of the Loans, the Borrower shall pay all
arrears of interest and all payments on account of principal of the Loans and
Reimbursement Obligations which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Events of
Default and Potential Events of Default (other than nonpayment of principal of
and accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 13.07, then upon
the written consent of the Requisite Lenders and written notice to the Borrower,
the termination of the Commitments and/or the acceleration and their
consequences may be rescinded and annulled; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right or
remedy consequent thereon. The provisions of the preceding sentence are intended
merely to bind the Lenders and the Issuing Banks to a decision which may be made
at the election of the Requisite Lenders; they are not intended to benefit the
Borrower and do not give the Borrower the right to require the Lenders to
rescind or annul any acceleration hereunder, even if the conditions set forth
herein are met.
(d) Enforcement. The Borrower acknowledges that in the event the
Borrower or any of its Subsidiaries fails to perform, observe or discharge any
of their respective obligations or liabilities under this Agreement or any other
Loan Document, any remedy of law may prove to be inadequate relief to the
Administrative Agents, the Issuing Banks and the Lenders; therefore, the
Borrower agrees that the Administrative Agents, the Issuing Banks and the
Lenders shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
11.03 The Cash Collateral Account. (a) If requested by the Borrower and
subject to the right of the Collateral Agent to withdraw funds from the Cash
Collateral Account as provided below, the Collateral Agent shall, so long as no
Event of Default shall have occurred and be continuing, from time to time invest
funds on deposit in the Cash Collateral Account and accrued interest thereon,
reinvest proceeds of any such investments which may mature or be sold, and
invest interest or other income received from any such Investments, in each case
in such Cash Equivalents as the Borrower may select. After an Event of Default,
the Collateral Agent shall invest any funds held in the Cash Collateral Account
which are not applied to the payment of the Obligations in overnight Cash
Equivalents. Such funds, interest, proceeds or income which are not so invested
or reinvested in Cash Equivalents shall, except as otherwise provided in this
Section 11.03, be
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deposited and held by the Collateral Agent in the Cash Collateral Account. None
of either Administrative Agent, any Lender or any Issuing Bank shall be liable
to the Borrower for, or with respect to, any decline in value of amounts on
deposit in the Cash Collateral Account which shall have been invested pursuant
to this Section 11.03(a) at the direction of the Borrower. Cash Equivalents from
time to time purchased and held pursuant to this Section 11.03(a) shall
constitute Cash Collateral and shall, for purposes of this Agreement, be deemed
to be part of the funds held in the Cash Collateral Account in amounts equal to
their respective outstanding principal amounts.
(b) The Collateral Agent may, at any time after an Event of Default has
occurred and is continuing, sell or cause to be sold any Cash Equivalents held
by the Collateral Agent as Cash Collateral at any broker's board or at public or
private sale, in one or more sales or lots, at such price as the Collateral
Agent may deem best, without assumption of any credit risk, and the purchaser of
any or all such Cash Equivalents so sold shall thereafter own the same,
absolutely free from any claim, encumbrance or right of any kind whatsoever.
Either Administrative Agent, any of the Lenders and any of the Issuing Banks
may, in its own name or in the name of a designee or nominee, buy such Cash
Equivalents at any public sale and, if permitted by applicable law, buy such
Cash Equivalents at any private sale. The Collateral Agent shall apply the
proceeds of any such sale, net of any expenses incurred in connection therewith,
and any other funds deposited in the Cash Collateral Account to the payment of
the Obligations in accordance with this Agreement. The Borrower agrees that (i)
any sale of Cash Equivalents conducted in conformity with reasonable commercial
practices of banks, commercial finance companies, insurance companies or other
financial institutions disposing of property similar to such Cash Equivalents
shall be deemed to be commercially reasonable and (ii) any requirements of
reasonable notice shall be met if such notice is received by the Borrower at its
notice address on the signature pages hereto at least ten (10) Business Days
before the time of the sale or disposition. Any other requirement of notice,
demand or advertisement for sale is waived to the extent permitted by law. 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 sale may, without
further notice, be made at the time and place to which it was so adjourned.
(c) If at any time the Collateral Agent determines that any funds held
in the Cash Collateral Account are subject to any interest, right, claim or Lien
of any Person other than the Collateral Agent, the Borrower will, forthwith upon
demand by the Collateral Agent, pay to the Collateral Agent, as additional funds
to be deposited and held in the Cash Collateral Account an amount equal to the
amount of funds subject to such interest, right, claim or Lien.
(d) The Collateral Agent shall exercise reasonable care in the custody
and preservation of any funds held in the Cash Collateral Account and shall be
deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Collateral Agent accords its own like
property, it being understood that the Collateral Agent shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any such funds but may do so at its option. All expenses
incurred in connection therewith shall be for the sole account of the Borrower
and shall constitute Obligations hereunder.
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ARTICLE XII
THE CREDIT AGENTS
12.01 Appointment. (a) Each Lender and each Issuing Bank hereby
designates and appoints Citicorp as the Collateral Agent and Intercreditor
Agent, and as an Administrative Agent and Scotiabank as the Funding Agent, and
as an Administrative Agent of such Lender or such Issuing Bank under this
Agreement, and each Lender and each Issuing Bank hereby irrevocably authorizes
the Credit Agents to take such action on its behalf under the provisions of this
Agreement and the Loan Documents and to exercise such powers as are set forth
herein or therein together with such other powers as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of the Notes or any
amount payable under any provision of Article III when due) or the other Loan
Documents, no Credit Agent shall be required to exercise any discretion or take
any action. Notwithstanding the foregoing, the Credit Agents shall be required
to act or refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Requisite Lenders and such
instructions shall be binding upon all Lenders, Issuing Banks and Holders of
Notes; provided, however, no Credit Agent shall be required to take any action
which (i) such Credit Agent reasonably believes will expose it to personal
liability unless such Credit Agent receives an indemnification satisfactory to
it from the Lenders with respect to such action or (ii) is contrary to this
Agreement, the other Loan Documents or applicable law. The Credit Agents agree
to act as such on the express conditions contained in this Article XII.
(b) The provisions of this Article XII are solely for the benefit of
the Credit Agents, the Lenders and Issuing Banks, and none of the Borrower or
any Subsidiary of the Borrower shall have any rights to rely on or enforce any
of the provisions hereof (other than as expressly set forth in Section 12.07).
In performing its functions and duties under this Agreement, each Credit Agent
shall act solely as agent of the Lenders and the Issuing Banks and does not
assume and shall not be deemed to have assumed any obligation or relationship of
agency, trustee or fiduciary with or for the Borrower or any Subsidiary of the
Borrower. Each Credit Agent may perform any of its duties hereunder, or under
the Loan Documents, by or through its agents or employees.
12.02 Nature of Duties. The Credit Agents shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of the Credit Agents shall be mechanical and
administrative in nature. The Credit Agents shall not have by reason of this
Agreement a fiduciary relationship in respect of any Holder. Nothing in this
Agreement or any of the Loan Documents, expressed or implied, is intended to or
shall be construed to impose upon the Credit Agents any obligations in respect
of this Agreement or any of the Loan Documents except as expressly set forth
herein or therein. Each Lender and each Issuing Bank shall make its own
independent investigation of the financial condition and affairs of the Borrower
and its Subsidiaries in connection with the making and the continuance of the
Loans hereunder and with the issuance of the Letters of Credit and shall make
its own appraisal of the creditworthiness of the Borrower and its Subsidiaries
initially and on a continuing basis, and the Credit Agents shall not have any
duty or responsibility, either initially or on a continuing basis, to provide
any Holder with any credit or other information with respect thereto (except for
reports required to be delivered by any Credit Agent under the terms of this
Agreement). If any Credit Agent seeks the consent or approval of the Lenders to
the taking or refraining from taking of any action hereunder, such Credit Agent
shall send notice thereof to each Lender. The Collateral Agent shall promptly
notify
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each Lender at any time that the Lenders so required hereunder have instructed
any Credit Agent to act or refrain from acting pursuant hereto.
12.03 Rights, Exculpation, etc.
(a) Liabilities; Responsibilities. None of the Credit Agents, any
Affiliate of any Credit Agent, or any of their respective officers, directors,
employees or agents shall be liable to any Holder for any action taken or
omitted by them hereunder or under any of the Loan Documents, or in connection
therewith, except that no Person shall be relieved of any liability for gross
negligence or willful misconduct as determined by a court of competent
jurisdiction. The Credit Agents shall not be liable for any apportionment or
distribution of payments made by it in good faith pursuant to Section 3.02(b),
and if any such apportionment or distribution is subsequently determined to have
been made in error the sole recourse of any Holder to whom payment was due, but
not made, shall be to recover from other Holders any payment in excess of the
amount to which they are determined to have been entitled. The Credit Agents
shall not be responsible to any Holder for any recitals, statements,
representations or warranties herein or for the execution, effectiveness,
genuineness, validity, legality, enforceability, collectibility, or sufficiency
of this Agreement or any of the other Transaction Documents or the transactions
contemplated thereby, or for the financial condition of the Borrower or any of
its Subsidiaries. No Credit Agent shall be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any of the Loan Documents or the financial
condition of the Borrower or any of its Subsidiaries, or the existence or
possible existence of any Potential Event of Default or Event of Default.
(b) Right to Request Instructions. Any Credit Agent may at any time
request instructions from the Lenders with respect to any actions or approvals
which by the terms of any of the Loan Documents such Credit Agent is permitted
or required to take or to grant, and such Credit Agent shall be absolutely
entitled to refrain from taking any action or to withhold any approval and shall
not be under any liability whatsoever to any Person for refraining from any
action or withholding any approval under any of the Loan Documents until it
shall have received such instructions from those Lenders from whom such Credit
Agent is required to obtain such instructions for the pertinent matter in
accordance with the Loan Documents. Without limiting the generality of the
foregoing, no Holder shall have any right of action whatsoever against any
Credit Agent as a result of such Credit Agent acting or refraining from acting
under the Loan Documents in accordance with the instructions of the Requisite
Lenders or, where required by the express terms of this Agreement, a greater
proportion of the Lenders.
12.04 Reliance. The Credit Agents shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it.
12.05 Indemnification. To the extent that the Credit Agents are not
reimbursed and indemnified by the Borrower, the Lenders will reimburse and
indemnify the Credit Agents for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against it in any way relating to or arising out of
the Loan Documents or any action taken or omitted by the
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Credit Agents under the Loan Documents, in proportion to each Lender's Pro Rata
Share; provided, however, the Lenders shall have no obligation to reimburse and
indemnify the Credit Agents hereunder with respect to matters caused by or
resulting from the willful misconduct or gross negligence of the Credit Agents,
as determined by a court of competent jurisdiction. The obligations of the
Lenders under this Section 12.05 shall survive the payment in full of the Loans,
the Reimbursement Obligations and all other Obligations and the termination of
this Agreement.
12.06 Citicorp and Scotiabank Individually. With respect to its Pro
Rata Shares of the Commitments hereunder, if any, and the Loans made by it, if
any, Citicorp and Scotiabank shall have and may exercise the same rights and
powers hereunder and are subject to the same obligations and liabilities as and
to the extent set forth herein for any other Lender. The terms "Lenders" or
"Requisite Lenders" or any similar terms shall, unless the context clearly
otherwise indicates, include each of Citicorp and Scotiabank in its individual
capacity as a Lender or one of the Requisite Lenders. Citicorp and Scotiabank
and their respective Affiliates may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with the
Borrower or any of its Subsidiaries as if they were not acting as Credit Agents
pursuant hereto.
12.07 Successor Administrative Agent.
(a) Resignation. The Administrative Agents may resign from the
performance of all their functions and duties hereunder at any time by giving at
least thirty (30) Business Days' prior written notice to the Borrower and the
Lenders. Such resignation shall take effect upon the acceptance by a successor
Administrative Agent of appointment pursuant to this Section 12.07.
(b) Remaining Administrative Agent. Upon any such notice of resignation
by an Administrative Agent, the remaining Administrative Agent may in its
discretion, appoint itself to the resigning Administrative Agent's functions and
duties. The remaining Administrative Agent shall give the Lenders notice at
least 15 days prior to the effectiveness of such resignation.
(c) Appointment by Requisite Lenders. Upon any such notice of
resignation and if the remaining Administrative Agent has not notified the
Lenders that it has assumed the functions and duties of the resigning
Administrative Agent, the Requisite Lenders shall have the right to appoint a
successor Administrative Agent selected from among the Lenders which appointment
shall be subject to the prior written approval of the Borrower (which may not be
unreasonably withheld, and shall not be required upon the occurrence and during
the continuance of an Event of Default).
(d) Appointment by Retiring Administrative Agent. If a successor
Administrative Agent shall not have been appointed within the thirty (30)
Business Day period provided in paragraph (a) of this Section 12.07, the
retiring Administrative Agent, with the consent of the Borrower (which may not
be unreasonably withheld, and shall not be required upon the occurrence and
during the continuance of an Event of Default), shall then appoint a successor
Administrative Agent who shall serve as Administrative Agent until such time, if
any, as the Requisite Lenders appoint a successor Administrative Agent as
provided above.
(e) Rights of the Successor and Retiring Administrative Agents. Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring
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Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's resignation hereunder
as an Administrative Agent, the provisions of this Article XII shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was an
Administrative Agent under this Agreement.
12.08 Relations Among Lenders. Each Lender and each Issuing Bank agrees
that it will not take any legal action, nor institute any actions or
proceedings, against the Borrower or any other obligor hereunder or with respect
to any Collateral, without the prior written consent of the Requisite Lenders.
Without limiting the generality of the foregoing, no Lender may accelerate or
otherwise enforce its portion of the Obligations, or unilaterally terminate its
Commitments except in accordance with Section 11.02(a).
12.09 Concerning the Collateral and the Loan Documents.
(a) Protective Advances. The Collateral Agent may from time to time,
before or after the occurrence of an Event of Default, make such disbursements
and advances pursuant to the Loan Documents which the Collateral Agent, in its
sole discretion, deems necessary or desirable to preserve or protect the
Collateral or any portion thereof or to enhance the likelihood or maximize the
amount of repayment of the Loans and other Obligations; provided, however, such
disbursements and advances shall not exceed $10,000,000 in the aggregate
(collectively, "Protective Advances"). The Collateral Agent shall notify the
Borrower and each Lender in writing of each such Protective Advance, which
notice shall include a description of the purpose of such Protective Advance.
The Borrower agree to pay the Collateral Agent, upon demand, the principal
amount of all outstanding Protective Advances, together with interest thereon at
the rate from time to time applicable to Base Rate Loans from the date of such
Protective Advance until the outstanding principal balance thereof is paid in
full. If the Borrower fails to make payment in respect of any Protective Advance
within one (1) Business Day after the date the Borrower receives written demand
therefor from the Collateral Agent, the Collateral Agent shall promptly notify
each Lender having a Commitment and each such Lender agrees that it shall
thereupon make available to the Collateral Agent, in Dollars in immediately
available funds, the amount equal to such Lender's Pro Rata Share of such
Protective Advance. If such funds are not made available to the Collateral Agent
by such Lender within one (1) Business Day after the Collateral Agent's demand
therefor, the Collateral Agent will be entitled to recover any such amount from
such Lender together with interest thereon at the Federal Funds Rate for each
day during the period commencing on the date of such demand and ending on the
date such amount is received. The failure of any Lender to make available to the
Collateral Agent its Revolving Loan Commitment Pro Rata Share of any such
Protective Advance shall neither relieve any other Lender of its obligation
hereunder to make available to the Collateral Agent such other Lender's
Revolving Loan Commitment Pro Rata Share of such Protective Advance on the date
such payment is to be made nor increase the obligation of any other Lender to
make such payment to the Collateral Agent. All outstanding principal of, and
interest on, Protective Advances shall constitute obligations secured by the
Collateral until paid in full by the Borrower. Notwithstanding the foregoing, no
Lender shall be required to fund any Protective Advance in an amount exceeding
such Lender's then remaining Commitment.
(b) Authority. Each Lender and each Issuing Bank authorizes and directs
the Collateral Agent to enter into the Loan Documents relating to the Collateral
for the benefit of the Lenders and the Issuing Banks. Each Lender and each
Issuing Bank agrees that any action taken by the Collateral Agent or the
Requisite Lenders (or, where required by the express terms of this Agreement, a
greater proportion of the Lenders) in accordance with the
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provisions of this Agreement or the other Loan Documents, and the exercise by
the Collateral Agent or the Requisite Lenders (or, where so required, such
greater proportion) of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders and Issuing Banks. Without limiting the
generality of the foregoing, the Collateral Agent shall have the sole and
exclusive right and authority to (i) act as the disbursing and collecting agent
for the Lenders and the Issuing Banks with respect to all proceeds of
Collateral; (ii) execute and deliver each Loan Document relating to the
Collateral and accept delivery of each such agreement delivered by the Borrower
or any of its Subsidiaries; (iii) act as collateral agent for the Lenders and
the Issuing Banks for purposes of the perfection of all security interests and
Liens created by such agreements and all other purposes stated therein,
provided, however, the Collateral Agent hereby appoints, authorizes and directs
the Lenders and the Issuing Banks to act as collateral sub-agent for the
Administrative Agents, the Lenders and the Issuing Banks for purposes of the
perfection of all security interests and Liens with respect to the Borrower's
and its Subsidiaries, respective deposit accounts maintained with, and cash and
Cash Equivalents held by, such Lender or such Issuing Bank; (iv) manage,
supervise and otherwise deal with the Collateral; (v) take such action as is
necessary or desirable to maintain the perfection and priority of the security
interests and liens created or purported to be created by the Loan Documents;
and (vi) except as may be otherwise specifically restricted by the terms of this
Agreement or any other Loan Document, exercise all remedies given to the
Administrative Agents, the Lenders or the Issuing Banks with respect to the
Collateral under the Loan Documents relating thereto, applicable law or
otherwise.
(c) Release of Collateral. (i) Each Lender hereby directs, in
accordance with the terms of this Agreement, the Collateral Agent to release any
Lien held by the Collateral Agent for the benefit of the Administrative Agents,
the Lenders and the Issuing Banks:
(A) against all of the Collateral, upon payment in full of the
Obligations and termination of this Agreement (or, to the extent
certain Obligations remain contingent (other than in respect of
indemnities), sufficient Cash Collateral has been deposited with the
Collateral Agent in the amount of such contingent obligations on terms
satisfactory to the Lenders);
(B) against any part of the Collateral sold or disposed of by
the Borrower or any of its Subsidiaries, as certified to the Collateral
Agent by the Borrower in an Officer's Certificate if such sale or
disposition is permitted by Section 9.02 or is otherwise consented to
by the Requisite Lenders.
(ii) Each Lender and each Issuing Bank hereby directs the Collateral
Agent to execute and deliver or file such termination and partial release
statements and do such other things as are necessary to release Liens to be
released pursuant to this Section 12.09(c) promptly upon the effectiveness of
any such release.
(d) Additional Collateral Matters. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it pursuant to this Agreement, the Collateral Agent shall have no obligation
whatsoever to the Lenders or to any other Person to assure that the Collateral
exists or is owned by the Borrower or is cared for, protected or insured or has
been encumbered or that the Liens granted to the Collateral Agent pursuant to
the Loan Documents have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to
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continue exercising, any of the rights, authorities and powers granted or
available to the Collateral Agent in this Section 12.09 or in any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or
in any act, omission or event related thereto, the Collateral Agent may act in
any manner it may deem appropriate, in its sole discretion, given its own
interest in the Collateral as one of the Lenders and that the Collateral Agent
shall have no duty or liability whatsoever to any Lender.
(e) Collateral Matters Relating to Related Obligations. The benefit of
the Loan Documents and of the provisions of this Agreement relating to the
Collateral shall extend to and be available in respect of any Obligations
("Related Obligations") which arise under any Hedging Obligations or which are
otherwise owed to Persons other than the Administrative Agents, the Lenders and
the Issuing Banks, solely on the condition and understanding, as among the
Administrative Agents and all Holders, that (i) the Related Obligations shall be
entitled to the benefit of the Collateral to the extent expressly set forth in
this Agreement and the Loan Documents, and to such extent the Collateral Agent
shall hold and have the right and power to act with respect to, the Collateral
on behalf of and as agent for the holders of the Related Obligations; but the
Administrative Agents are otherwise acting solely as agents for the Lenders and
the Issuing Banks and shall have no separate fiduciary duty, duty of loyalty,
duty of care, duty of disclosure or other obligations whatsoever to any holder
of Related Obligations; and (ii) all matters, acts and omissions relating in any
manner to the Collateral, or the omission, creation, perfection, priority,
abandonment or release of any Lien, shall be governed solely by the provisions
of this Agreement and the Loan Documents and no separate Lien, right, power or
remedy shall arise or exist in favor of any Holder under any separate instrument
or agreement or in respect of any Related Obligations; and (iii) each Holder
shall be bound by all actions taken or omitted, in accordance with the
provisions of this Agreement and the Loan Documents, by the Administrative
Agents and the Requisite Lenders, each of whom shall be entitled to act at its
sole discretion and exclusively in its own interest given its own Commitments
and its own interest in the Loans, Letter of Credit Obligations and other
obligations to it arising under this Agreement or the other Loan Documents,
without any duty or liability to any other Holder or as to any Related
Obligations and without regard to whether any Related Obligations remain
outstanding or are deprived of the benefit of the Collateral or become unsecured
or are otherwise affected or put in jeopardy thereby; and (iv) no holder of
Related Obligations and no other Holder (except the Administrative Agents and
the Lenders, to the extent set forth in this Agreement) shall have any right to
be notified of, or to direct, require or be heard with respect to, any action
taken or omitted in respect of the Collateral or under this Agreement or the
Loan Documents; and (v) no holder of any Related Obligations shall exercise any
right of set-off, banker's lien or similar right except as expressly provided in
Section 13.05.
ARTICLE XIII
MISCELLANEOUS
13.01 Assignments and Participations.
(a) Assignments. No assignments or participations of any Lender's
rights or obligations under this Agreement shall be made except in accordance
with this Section 13.01. Each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all of its rights and obligations with respect to the Term Loans, the
Revolving Loans and/or the Letters of Credit) in accordance with the provisions
of this Section 13.01.
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(b) Limitations on Assignments. Each assignment shall be subject to the
following conditions: (i) each assignment shall be in a minimum principal amount
of $5,000,000 or the remaining portion of the assigning Lender's rights and
obligations hereunder, if less (provided, however, such minimum shall not apply
in the case of any such assignment between Lenders), (ii) each such assignment
shall be to an Eligible Assignee, and (iii) the parties to each such assignment
shall execute and deliver to the Funding Agent, for its acceptance and recording
in the Register, an Assignment and Acceptance. Upon such execution, delivery,
acceptance and recording in the Register, from and after the effective date
specified in each Assignment and Acceptance and agreed to by the Funding Agent,
(x) the assignee thereunder shall, in addition to any rights and obligations
hereunder held by it immediately prior to such effective date, if any, have the
rights and obligations hereunder that have been assigned to it pursuant to such
Assignment and Acceptance and shall, to the fullest extent permitted by law,
have the same rights and benefits hereunder as if it were an original Lender
hereunder and (y) the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of such assigning Lender's rights and obligations under
this Agreement, the assigning Lender shall cease to be a party hereto).
(c) The Register. The Funding Agent shall maintain at its address
referred to in Section 13.08 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register (the "Register") for the recordation of the
names and addresses of the Lenders and the Commitment under each Loan of, and
principal amount of the Loans and Letter of Credit Obligations under each
facility owing to, each Lender from time to time and whether such Lender is an
original Lender or the assignee of another Lender pursuant to an Assignment and
Acceptance. The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower and each of its Subsidiaries,
the Administrative Agents and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
written notice.
(d) Fee. Upon its receipt of an Assignment and Acceptance executed by
the assigning Lender and an Eligible Assignee and a processing and recordation
fee of $3,500 (payable by the assigning Lender or the assignee, as shall be
agreed between them), the Funding Agent shall, if such Assignment and Acceptance
has been completed and is in compliance with this Agreement and in substantially
the form of Exhibit H hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Borrower and the Collateral Agent.
(e) Participations. Each Lender may sell participations to one or more
banks, finance companies, insurance companies, other financial institutions or
funds in or to all or a portion of its rights and obligations under and in
respect of any and all facilities under this Agreement (including, without
limitation, all or a portion of any or all of its Commitments hereunder and the
Loans owing to it and its undivided interest in the Letters of Credit);
provided, however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitments hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the Borrower, the
Administrative Agents and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement
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and (iv) such participant's rights to agree or to restrict such Lender's ability
to agree to the modification, waiver or release of any of the terms of the Loan
Documents or to the release of any Collateral covered by the Loan Documents, to
consent to any action or failure to act by any party to any of the Loan
Documents or any of their respective Affiliates, or to exercise or refrain from
exercising any powers or rights which any Lender may have under or in respect of
the Loan Documents or any Collateral, shall be limited to the right to consent
to (A) increase in the Commitment of the Lender from whom such participant
purchased a participation, (B) reduction of the principal of, or rate or amount
of interest on the Loan(s) subject to such participation (other than by the
payment or prepayment thereof), (C) postponement of any date fixed for any
payment of principal of, or interest on, the Loan(s) subject to such
participation, (D) release of any guarantor of the Obligations or all or a
substantial portion of the Collateral except as provided in Section 12.09(c),
(E) any decrease in the amounts payable to the Lenders resulting from a failure
of the Borrower to comply with the terms of Section 3.03, (F) any increase in
the amounts Lenders are required or expected to reserve in respect of the Loans
resulting from a failure of the Borrower to comply with the terms of Section
3.04, or (G) any decrease in the amount of fees payable to Lenders under Article
IV hereof.
(f) Information Regarding the Borrower. Any Lender may, in connection
with any assignment or participation or proposed assignment or participation
pursuant to this Section 13.01, disclose to the assignee or participant or
proposed assignee or participant, any information relating to the Borrower or
its Subsidiaries furnished to such Lender by the Administrative Agents or by or
on behalf of the Borrower; provided that, prior to any such disclosure, such
assignee or participant, or proposed assignee or participant, shall agree to
preserve in accordance with Section 13.20 the confidentiality of any
confidential information described therein.
(g) Payment to Participants. Anything in this Agreement to the contrary
notwithstanding, in the case of any participation, all amounts payable by the
Borrower under the Loan Documents shall be calculated and made in the manner and
to the parties required hereby as if no such participation had been sold.
(h) Lenders' Creation of Security Interests. Notwithstanding any other
provision set forth in this Agreement, any Lender may at any time create a
security interest in all or any portion of its rights under this Agreement
(including, without limitation, Obligations owing to it and Notes held by it) in
favor of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Board.
(i) Assignments by Issuing Banks. If any Issuing Bank ceases to be a
Lender under this Agreement by virtue of any assignment made pursuant to this
Section 13.01, then, as of the effective date of such cessation, such Issuing
Bank's obligations to issue Letters of Credit pursuant to Section 2.03 shall
terminate and such Issuing Bank shall be an Issuing Bank hereunder only with
respect to outstanding Letters of Credit issued prior to such date.
13.02 Expenses.
(a) Generally (the Administrative Agents). The Borrower agrees upon
demand to pay, or reimburse each Administrative Agent for all of such
Administrative Agent's reasonable internal and external audit, legal, appraisal,
valuation, filing, document duplication and reproduction and investigation
expenses and for all other out-of-pocket costs and expenses of every type and
nature (including, without limitation, the reasonable fees, expenses and
disbursements of Sidley & Austin and Xxxxx, Xxxxx & Xxxxx, local legal counsel,
auditors, accountants, appraisers, printers, insurance
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and environmental advisers, and other consultants and agents) incurred by such
Administrative Agent in connection with (A) such Administrative Agent's audit
and investigation of the Borrower and its Subsidiaries in connection with the
preparation, negotiation, and execution of the Loan Documents and such
Administrative Agent's periodic audits of the Borrower; (B) the preparation,
negotiation, execution and interpretation of this Agreement (including, without
limitation, the satisfaction or attempted satisfaction of any of the conditions
set forth in Article V), the Loan Documents and the making of the Loans
hereunder; (C) the creation, perfection or protection of the Liens under the
Loan Documents (including, without limitation, any reasonable fees and expenses
for local counsel in various jurisdictions); (D) the ongoing administration of
this Agreement and the Loans, including consultation with attorneys in
connection therewith and with respect to such Administrative Agent's rights and
responsibilities under this Agreement and the other Loan Documents; (E) the
protection, collection or enforcement of any of the Obligations or the
enforcement of any of the Loan Documents; (F) the commencement, defense or
intervention in any court proceeding relating to the Obligations, the Property,
the Borrower, any of its Subsidiaries, this Agreement or any of the other Loan
Documents; (G) the response to, and preparation for, any subpoena or request for
document production with which such Administrative Agent is served or deposition
or other proceeding in which such Administrative Agent is called to testify, in
each case, relating in any way to the Obligations, the Property, the Borrower,
any of its Subsidiaries, this Agreement or any of the other Loan Documents; and
(H) any amendments, consents, waivers, assignments, restatements, or supplements
to any of the Loan Documents and the preparation, negotiation, and execution of
the same.
(b) After Default. The Borrower further agrees to pay or reimburse the
Administrative Agents, the Issuing Banks and the Lenders upon demand for all
out-of-pocket costs and expenses, including, without limitation, reasonable
attorneys' fees (including allocated costs of internal counsel and costs of
settlement) incurred by either Administrative Agent, any Issuing Bank or any
Lender after the occurrence of an Event of Default (i) in enforcing any Loan
Document or Obligation or any security therefor or exercising or enforcing any
other right or remedy available by reason of such Event of Default; (ii) in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or in any insolvency
or bankruptcy proceeding; (iii) in commencing, defending or intervening in any
litigation or in filing a petition, complaint, answer, motion or other pleadings
in any legal proceeding relating to the Obligations, the Property, the Borrower
or any of its Subsidiaries and related to or arising out of the transactions
contemplated hereby or by any of the other Transaction Documents; and (iv) in
taking any other action in or with respect to any suit or proceeding (bankruptcy
or otherwise) described in clauses (i) through (iii) above.
13.03 Indemnity. The Borrower further agrees to defend, protect,
indemnify, and hold harmless each Credit Agent, each and all of the Lenders and
Issuing Banks and each of their Affiliates, and each of their respective
officers, directors, employees, attorneys and agents (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth in Article V) (collectively, the
"Indemnitees") from and against any and all liabilities, obligations, losses
(other than loss of profits), damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature what soever
(excluding any taxes and including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees in any manner relating to or arising out of
(a) this Agreement, the Existing Credit
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Agreement, any prior iterations of the Existing Credit Agreement (or any matter
indemnified against or for as set forth therein), executed by each of the
parties thereto prior to the date hereof, including, without limitation, the
Transaction Documents or the other Loan Documents, or any act, event or
transaction related or attendant thereto, the making of the Loans and the
issuance of and participation in Letters of Credit hereunder, the management of
such Loans and Letters of Credit, the use or intended use of the proceeds of the
Loans or Letters of Credit hereunder, or any of the other transactions
contemplated by the Transaction Documents, (b) any Liabilities and Costs under
federal, state or local environmental, health or safety laws, regulations or
common law principles arising from or in connection with the past, present or
future operations of the Borrower, its Subsidiaries or any of their respective
predecessors in interest, or the past, present or future environmental condition
of any respective Property of the Borrower or such Subsidiaries or any of their
respective predecessors in interest (relating to the period during which the
Borrower, such Subsidiaries, any of their respective predecessors in interest,
or the Lenders, in such capacity, owned or operated such Property), the presence
of asbestos-containing materials at any respective Property of the Borrower or
such Subsidiaries or the Release or threatened Release of any Contaminant into
the environment from any respective Property of the Borrower or such
Subsidiaries or (c) the Foamex International Warrants and Equity Interests in
the Borrower, the New Foamex Subordinated Notes, the New Foamex Notes, the use
or intended use of the proceeds of issuance of the New Foamex Subordinated
Notes, the New Foamex Notes or any other transaction contemplated in the
Transaction Documents (collectively, the "Indemnified Matters"); provided,
however, the Borrower shall not have any obligation to an Indemnitee hereunder
with respect to Indemnified Matters with respect to costs caused by or resulting
from the willful misconduct or gross negligence of such Indemnitee, as
determined by a court of competent jurisdiction. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Borrower shall contribute the maximum portion which it is permitted
to pay and satisfy under applicable law, to the payment and satisfaction of all
Indemnified Matters incurred by the Indemnitees.
13.04 Change in Accounting Principles. If any change in the accounting
principles used in the preparation of the most recent financial statements
referred to in Section 7.01 are hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the Borrower with
the agreement of their independent certified public accountants and such changes
result in a change in the method of calculation of any of the covenants,
standards or terms found in Article IX and Article X, the parties hereto agree
to enter into negotiations in order to amend such provisions so as to equitably
reflect such changes with the desired result that the criteria for evaluating
compliance with such covenants, standards and terms by the Borrower shall be the
same after such changes as if such changes had not been made; provided, however,
no change in GAAP that would affect the method of calculation of any of the
covenants, standards or terms shall be given effect in such calculations until
such provisions are amended, in a manner satisfactory to the Requisite Lenders
and the Borrower, to so reflect such change in accounting principles.
13.05 Set-off. In addition to any Liens granted under the Loan
Documents and any rights now or hereafter granted under applicable law, upon the
occurrence and during the continuance of any Event of Default, each Lender, each
Issuing Bank and any Affiliate of any Lender or Issuing Bank and each purchaser
of a participation pursuant to Section 13.01(e) is hereby
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authorized by the Borrower at any time or from time to time, without notice to
any Person (any such notice being hereby expressly waived) to set-off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured (but not including trust accounts)) and any other
Indebtedness at any time held by or owing to such Lender, Issuing Bank, any of
their Affiliates or any such purchaser to or for the credit or the account of
the Borrower against and on account of the obligations of the Borrower to such
Lender, Issuing Bank, any of their Affiliates or any such purchaser, including,
but not limited to, all Loans and Letters of Credit and all claims of any nature
or description arising out of or in connection with this Agreement, irrespective
of whether or not (i) such Lender, Issuing Bank or such purchaser shall have
made any demand hereunder or (ii) the Collateral Agent, at the request or with
the consent of the Requisite Lenders, shall have declared the principal of and
interest on the Loans and other amounts due hereunder to be due and payable as
permitted by Article XI and even though such Obligations may be contingent or
unmatured. Each Lender, each Issuing Bank and each such purchaser agrees that it
shall not, without the express consent of the Requisite Lenders, and that it
shall, to the extent it is lawfully entitled to do so, upon the request of the
Requisite Lenders, exercise its set-off rights hereunder against any accounts of
the Borrower or its Subsidiaries now or hereafter maintained with such Lender,
Issuing Bank or any Affiliate of either of them or such purchaser.
13.06 Ratable Sharing. The Lenders agree among themselves that (i) with
respect to all amounts received by them which are applicable to the payment of
the Obligations (excluding the fees described in Sections 2.03(g), 3.03, 3.04,
4.01(f), 4.02(f) and 4.03), equitable adjustment will be made so that, in
effect, all such amounts will be shared among them ratably in accordance with
their applicable Pro Rata Shares, whether received by voluntary payment, by the
exercise of the right of set-off or banker's lien, by counterclaim or
cross-action or by the enforcement of any or all of the Obligations (excluding
the fees described in Sections 2.03(g), 3.03, 3.04, 4.01(f), 4.02(f) and 4.03 or
the Collateral), (ii) if any of them shall by voluntary payment or by the
exercise of any right of counterclaim, set-off, banker's lien or otherwise,
receive payment of a proportion of the aggregate amount of the Obligations held
by it, which is greater than the amount which such Lender is entitled to receive
hereunder, the Lender receiving such excess payment shall purchase, without
recourse or warranty, an undivided interest and participation (which it shall be
deemed to have done simultaneously upon the receipt of such payment) in such
Obligations owed to the others so that all such recoveries with respect to such
Obligations shall be applied ratably in accordance with their Pro Rata Shares;
provided, however, that if all or part of such excess payment received by the
purchasing party is thereafter recovered from it, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such party to the extent necessary to adjust for such recovery, but without
interest except to the extent the purchasing party is required to pay interest
in connection with such recovery. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 13.06
may, to the fullest extent permitted by law, exercise all its rights of payment
(including, subject to Section 13.05, the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
13.07 Amendments and Waivers. Unless otherwise provided in this
Agreement, no amendment or modification of any provision of this Agreement shall
be effective without the written agreement of the Requisite Lenders and the
Borrower, and no termination or waiver of any provision of this Agreement, or
consent to any departure by the Borrower therefrom, shall be
-111-
effective without the written concurrence of the Requisite Lenders, which the
Requisite Lenders shall have the right to grant or withhold in their sole
discretion. Notwithstanding the foregoing, any amendment, modification,
termination, waiver or consent with respect to (i) any provision in Article X
shall be effective by a written agreement of the Requisite Lenders and the
Borrower and (ii) any of the following provisions of this Agreement shall be
effective only by a written agreement, signed by each Lender affected thereby:
(a) waiver of any of the conditions specified in Sections 5.01 and 5.02 (except
with respect to a condition based upon another provision of this Agreement, the
waiver of which requires only the concurrence of the Requisite Lenders and
express waiver of such conditions set forth in this Agreement), (b) increase in
the aggregate amount of the Commitments of such Lender, (c) reduction of the
principal of, rate or amount of interest on the Loans, the Reimbursement
Obligations or any fees or other amounts payable to such Lender (other than by
the payment or prepayment thereof), (d) postponement of the Revolving Loan
Commitment Termination Date or any other date fixed for any payment of principal
of, or interest on, the Loans, the Reimbursement Obligations or any fees or
other amounts payable to such Lender (except with respect to Section 3.01(b)),
(e) release of any guarantor of the Obligations (except in connection with the
sale of a guarantor permitted by Section 9.02 or a transaction permitted by
Section 12.09(c)) or of all or any substantial portion of the Collateral (except
as provided in Section 12.09(c)), (f) change in the aggregate Pro Rata Share of
the Lenders which shall be required for the Lenders or any of them to take
action hereunder (including, without limitation, the definition of "Requisite
Lenders") or (g) amendment of Sections 3.03, 3.04, 13.02, 13.03 13.05 and 13.06
or this Section 13.07. The Collateral Agent may, but shall have no obligation
to, with the written concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances. Notwithstanding anything to the contrary
contained in this Section 13.07, no amendment, modification, waiver or consent
shall affect the rights or duties of either Administrative Agent under this
Agreement or the other Loan Documents, unless made in writing and signed by such
Administrative Agent in addition to the Lenders required above to take such
action.
13.08 Notices. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given 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. Notices to either Administrative Agent
pursuant to Article II, III or XII shall not be effective until received by such
Administrative Agent. For the purposes hereof, the addresses of the parties
hereto (until notice of a change thereof is delivered as provided in this
Section 13.08) shall be as set forth below each party's name on the signature
pages hereof or the signature page of any applicable Assignment and Acceptance,
or, as to each party, at such other address as may be designated by such party
in a written notice to all of the other parties to this Agreement.
13.09 Survival of Warranties and Agreements. All representations and
warranties made herein, and in any iteration of this Agreement executed by each
of the parties thereto prior to the date hereof, including, without limitation,
the Existing Credit Agreement and the Amendatory Agreement (it being understood
that the Borrower shall have no obligation to restate or update any
representation or warranty made in any such iteration from and after the
effectiveness of any amendment, modification, supplement or
-112-
restatement to such iteration except to the extent set forth in such amendment,
modification, supplement or restatement), and all obligations of the Borrower in
respect of taxes, indemnification and expense reimbursement shall survive the
execution and delivery of this Agreement and the other Loan Documents, the
making and repayment of the Loans, the issuance and discharge of Letters of
Credit hereunder and the termination of this Agreement and shall not be limited
in any way by the passage of time or occurrence of any event and shall expressly
cover time periods when either Administrative Agent, any of the Issuing Banks or
any of the Lenders may have come into possession or control of any of the
Borrower's or its Subsidiaries' Property, except as limited by applicable
statutes of limitation.
13.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of either Administrative Agent, any Lender or any Issuing
Bank in the exercise of any power, right or privilege under any of the Loan
Documents shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing under the Loan Documents are cumulative to and not exclusive
of any rights or remedies otherwise available.
13.11 Marshaling; Payments Set Aside. No Credit Agent, any Lender or
any Issuing Bank shall be under any obligation to xxxxxxxx any assets in favor
of the Borrower or any other party or against or in payment of any or all of the
Obligations. To the extent that the Borrower makes a payment or payments to the
Credit Agents, the Lenders or the Issuing Banks or any of such Persons receives
payment from the proceeds of the Collateral or exercise their rights of set-off,
and such payment or payments or the proceeds of such enforcement or set-off or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or any
other party, then to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or set-off had not occurred.
13.12 Severability. In case any provision in or obligation under this
Agreement or the other Loan Documents shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
13.13 Headings. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement or be given any substantive effect.
13.14 Governing Law. THIS AGREEMENT SHALL BE INTERPRETED, AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
13.15 Limitation of Liability. No claim may be made by the Borrower,
any Lender, any Issuing Bank, any Credit Agent or any other Person against any
Credit Agent, any other Issuing Bank or any other Lender or the Affiliates,
directors, officers, employees, attorneys or agents of any of them for any
special, consequential or punitive damages in respect of any claim for breach of
contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and the Borrower, each
-113-
Lender, each Issuing Bank and each Credit Agent hereby waives, releases and
agrees not to xxx upon any such claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
13.16 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and permitted assigns of the Lenders and the Issuing Banks. The
rights hereunder of the Borrower, or any interest therein, may not be assigned
without the written consent of all Lenders.
13.17 Certain Consents and Waivers of the Borrower.
(a) Personal Jurisdiction. EACH OF THE ADMINISTRATIVE AGENTS, THE
LENDERS, THE ISSUING BANKS, THE BORROWER AND THE MANAGING GENERAL PARTNER
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 AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY LOAN DOCUMENT, WHETHER ARISING IN
CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO 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 BORROWER AND THE MANAGING GENERAL PARTNER EACH IRREVOCABLY
DESIGNATES AND APPOINTS CORPORATION SERVICE COMPANY, 00 XXXXXXXX XXXXXX, XXX
XXXX, XXX XXXX 00000 AS THEIR AGENT (THE "PROCESS AGENT") FOR SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. EACH OF THE
ADMINISTRATIVE AGENTS, THE LENDERS, THE ISSUING BANKS, THE BORROWER AND THE
MANAGING GENERAL PARTNER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE BORROWER AND
THE MANAGING GENERAL PARTNER EACH WAIVES IN ALL DISPUTES ANY OBJECTION THAT THEY
MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
THE BORROWER 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 REALIZE
ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER 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.
(b) Service of Process. THE BORROWER AND THE MANAGING GENERAL PARTNER
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
BORROWER'S OR THE MANAGING GENERAL PARTNER'S NOTICE ADDRESS SPECIFIED BELOW,
SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. EACH OF THE
BORROWER AND THE MANAGING GENERAL PARTNER 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 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 ADMINISTRATIVE AGENTS, THE LENDERS AND ISSUING BANKS
-114-
TO BRING PROCEEDINGS AGAINST THE BORROWER OR THE MANAGING GENERAL PARTNER IN THE
COURTS OF ANY OTHER JURISDICTION.
(c) Waiver of Jury Trial. EACH OF THE ADMINISTRATIVE AGENTS, THE
BORROWER AND THE MANAGING GENERAL PARTNER IRREVOCABLY WAIVES TRIAL BY JURY
IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT.
13.18 Counterparts; Effectiveness; Inconsistencies. This Agreement and
any amendments, waivers, consents, or supplements hereto may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement and each of the other Loan Documents shall be
construed to the extent reasonable to be consistent one with the other, but to
the extent that the terms and conditions of this Agreement are actually
inconsistent with the terms and conditions of any other Loan Document, this
Agreement shall govern.
13.19 Limitation on Agreements. All agreements between the Borrower,
the Credit Agents, each Lender and each Issuing Bank in the Loan Documents are
hereby expressly limited so that in no event shall any of the Loans or other
amounts payable by the Borrower under any of the Loan Documents be directly or
indirectly secured (within the meaning of Regulation U) by Margin Stock.
13.20 Confidentiality. Subject to Section 13.01(f), the Lenders and the
Issuing Banks shall hold all nonpublic information obtained pursuant to the
requirements of this Agreement and identified as such by the Borrower in
accordance with such Lender's or such Issuing Bank's customary procedures for
handling confidential information of this nature and in accordance with safe and
sound lending practices and in any event may make disclosure to any of its legal
or financial advisors or as reasonably required by a bona fide offeree,
transferee or participant in connection with the contemplated transfer or
participation or any recipient reasonably acceptable to the Borrower or as
required or requested by any Governmental Authority or representative thereof or
pursuant to legal process and shall require any such legal or financial advisor,
offeree, transferee or participant or other approved recipient to agree (and
require any of its offerees, transferees or participants or other approved
recipient to agree) to comply with this Section 13.20. In no event shall any
Lender or any Issuing Bank be obligated or required to return any materials
furnished by the Borrower; provided, however, each offeree shall be required to
agree that if it does not become a transferee or participant it shall return all
materials furnished to it by the Borrower in connection with this Agreement. Any
and all confidentiality agreements entered into between any Lender or any
Issuing Bank and the Borrower shall survive the execution of this Agreement.
13.21 Entire Agreement. This Agreement, taken together with all of the
other Loan Documents, embodies the entire agreement and understanding among the
parties hereto and all prior agreements and understandings, written and oral,
relating to the subject matter hereof.
-115-
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first above written.
BORROWER: FOAMEX L.P.
By FMXI, Inc.
its Managing General Partner
By /s/ Xxxxxx Xxxxxxxxx
------------------------------
Title: Vice President
Notice Address:
Foamex L.P.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxx
Telecopier No. (000) 000-0000
with copies to:
Trace Foam Company, Inc.
c/o Trace International Holdings Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxxxx X. Xxxxx, Xx., Esq.
Telecopier No. (000) 000-0000
FMXI, Inc.
c/o Foamex International Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxx
Telecopier No. (000) 000-0000
-116-
FMXI, INC.
By /s/ Xxxxxx Xxxxxxxxx
------------------------------
Title: Vice President
Notice Address:
c/o Foamex International Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxx
Telecopier No. (000) 000-0000
with a copy to:
Trace International Holdings, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxxxx X. Xxxxx, Xx., Esq.,
and Xxxxxx X. Xxxxxx
Telecopier No. (000) 000-0000
-117-
CITICORP USA, INC., as
Administrative Agent,
Collateral Agent, individually
as a Lender, and as
Intercreditor Collateral Agent
By /s/ Xxx Xxxxxx
------------------------------
Title: Attorney-in-Fact
LIBO Rate Lending Office or
LIBO Rate Affiliate:
Citicorp USA, INC.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.:
Telecopier No. (000) 000-0000
Notice Address:
Citicorp USA, INC.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.:
Telecopier No. (000) 000-0000
-118-
CITIBANK, N.A., as Issuing Bank
By /s/ Xxx Xxxxxx
------------------------------
Title: Attorney-in-Fact
Notice Address:
Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.:
Telecopier No. (000) 000-0000
-119-
THE BANK OF NOVA SCOTIA, as
Administrative Agent, Funding
Agent, Issuing Bank,
individually as a Lender, and
as Intercreditor Agent
By /s/ Xxxxx Xxxxx
------------------------------
Title: Senior Relationship Manager
LIBO Rate Lending Office or
LIBO Rate Affiliate:
The Bank of Nova Scotia-New York
Agency
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Loan Accounting -
[Xxxxxx Xxxxxxx]
Telecopier No. (000) 000-0000
Notice Address:
The Bank of Nova Scotia-New York
Agency
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxx Xxxxxxxx
Telecopier No. (000) 000-0000
with a copy to:
Xxxxx Xxxxx
The Bank of Nova Scotia
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No. (000) 000-0000
-120-
Annex I
to Foamex L.P.
Credit Agreement
-----------------------------------------------------------------------------------------------------------------------
Name of Lender Commitments ($)
-------------- ---------------
-----------------------------------------------------------------------------------------------------------------------
Term B loan Term C Loan Term D Loan Revolving Loan
----------- ----------- ----------- --------------
($) ($) ($) ($)
--- --- --- ---
-----------------------------------------------------------------------------------------------------------------------
CITICORP USA, INC. 4,376,609.50 3,978,733.80 0.00 17,722,222.47
-----------------------------------------------------------------------------------------------------------------------
THE BANK OF NOVA SCOTIA 4,376,609.47 3,978,737.92 5,000,000.00 17,722,222.47
-----------------------------------------------------------------------------------------------------------------------
AERIES FINANCE LTD. 1,193,620.76 1,085,109.78 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------
ARCHIMEDES FUNDING, 0.00 0.00 4,000,000.00 0.00
L.L.C.
-----------------------------------------------------------------------------------------------------------------------
ALLSTATE INSURANCE 3,580,862.32 3,255,329.36 4,000,000.00 0.00
COMPANY
-----------------------------------------------------------------------------------------------------------------------
BALANCED HIGH-YIELD FUND 0.00 0.00 5,000,000.00 0.00
I LTD.
-----------------------------------------------------------------------------------------------------------------------
BANKBOSTON, N.A. 0.00 0.00 2,000,000.00 10,555,555.55
-----------------------------------------------------------------------------------------------------------------------
THE BANK OF NEW YORK 0.00 0.00 0.00 10,555,555.55
-----------------------------------------------------------------------------------------------------------------------
BHF-BANK 0.00 0.00 0.00 5,555,555.55
AKTIENGESELLSCHAFT
-----------------------------------------------------------------------------------------------------------------------
CANADIAN IMPERIAL BANK OF 0.00 0.00 0.00 2,777,777.76
COMMERCE
-----------------------------------------------------------------------------------------------------------------------
CAPTIVA FINANCE LTD. 1,193,620.77 1,085,109.78 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------
CERES FINANCE LTD. 0.00 0.00 2,000,000.00 0.00
-----------------------------------------------------------------------------------------------------------------------
COMMERCIAL LOAN FUNDING 0.00 0.00 0.00 13,055,555.56
TRUST I
-----------------------------------------------------------------------------------------------------------------------
COMPAGNIE FINANCIERE DE 0.00 0.00 4,000,000.00 8,055,555.56
CIC ET DE L'UNION
EUROPEENNE
-----------------------------------------------------------------------------------------------------------------------
CORESTATES BANK, N.A. 0.00 0.00 0.00 10,555,555.55
-----------------------------------------------------------------------------------------------------------------------
CREDIT LYONNAIS NEW YORK 0.00 0.00 0.00 5,555,555.55
BRANCH
-----------------------------------------------------------------------------------------------------------------------
CRESCENT/MACH I PARTNERS, 1,591,494.36 0.00 0.00 0.00
L.P.
-----------------------------------------------------------------------------------------------------------------------
CYPRESS TREE INVESTMENT 3,580,862.32 3,255,329.36 0.00 0.00
MANAGEMENT COMPANY, INC.
-----------------------------------------------------------------------------------------------------------------------
DEBT STRATEGIES FUND, INC 1,989,367.95 1,808,516.31 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------
DEEPROCK & COMPANY 795,747.18 723,406.53 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------
DLJ CAPITAL FUNDING, INC. 3,580,862.32 3,255,329.36 5,000,000.00 5,000,000.00
-----------------------------------------------------------------------------------------------------------------------
I-1
-----------------------------------------------------------------------------------------------------------------------
Name of Lender Commitments ($)
-------------- ---------------
-----------------------------------------------------------------------------------------------------------------------
Term B loan Term C Loan Term D Loan Revolving Loan
----------- ----------- ----------- --------------
($) ($) ($) ($)
--- --- --- ---
-----------------------------------------------------------------------------------------------------------------------
FLEET NATIONAL BANK 0.00 0.00 0.00 10,555,555.55
-----------------------------------------------------------------------------------------------------------------------
THE FUJI BANK, LIMITED, 0.00 0.00 0.00 5,277,777.78
NEW YORK BRANCH
-----------------------------------------------------------------------------------------------------------------------
GENERAL ELECTRIC CAPITAL 0.00 0.00 2,000,000.00 19,342,473.25
CORPORATION
-----------------------------------------------------------------------------------------------------------------------
XXXXXX FINANCIAL, INC. 0.00 0.00 0.00 5,555,555.55
-----------------------------------------------------------------------------------------------------------------------
INCOME STRATEGIES 0.00 0.00 11,000,000.00 0.00
PORTFOLIO
-----------------------------------------------------------------------------------------------------------------------
KZH-CRESCENT CORPORATION 1,591,494.37 2,893,626.10 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------
KZH-CRESCENT-2 0.00 0.00 4,000,000.00 0.00
CORPORATION
-----------------------------------------------------------------------------------------------------------------------
KZH-SOLEIL CORPORATION 3,580,862.32 3,255,329.36 4,000,000.00 0.00
-----------------------------------------------------------------------------------------------------------------------
KZH-ING-1 CORPORATION 3,580,862.32 3,255,329.36 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------
KZH HOLDING CORPORATION 0.00 0.00 4,000,000.00 0.00
III
-----------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS MUTUAL LIFE 3,580,862.32 3,255,329.36 4,000,000.00 0.00
INSURANCE COMPANY
-----------------------------------------------------------------------------------------------------------------------
METROPOLITAN LIFE 3,580,862.32 3,255,329.36 9,000,000.00 0.00
INSURANCE COMPANY
-----------------------------------------------------------------------------------------------------------------------
THE MITSUBISHI TRUST AND 0.00 0.00 2,000,000.00 5,555,555.55
BANKING CORPORATION
-----------------------------------------------------------------------------------------------------------------------
ML CBO IV (CAYMAN) LTD. 0.00 0.00 7,000,000.00 0.00
-----------------------------------------------------------------------------------------------------------------------
XXXXXX GUARANTY TRUST 3,580,862.32 3,255,329.36 0.00 0.00
COMPANY OF NEW YORK
-----------------------------------------------------------------------------------------------------------------------
XXXXXX XXXXXXX SENIOR 0.00 0.00 5,000,000.00 6,559,064.81
FUNDING, INC.
-----------------------------------------------------------------------------------------------------------------------
NATEXIS BANQUE (formerly 0.00 0.00 0.00 9,555,555.55
Banque Francaise du
Commerce Exterieur)
-----------------------------------------------------------------------------------------------------------------------
NATIONSBANK, N.A. 0.00 0.00 0.00 5,555,555.58
-----------------------------------------------------------------------------------------------------------------------
THE NORTHWESTERN MUTUAL 3,580,862.32 3,255,329.36 4,000,000.00 0.00
-----------------------------------------------------------------------------------------------------------------------
LIFE INSURANCE COMPANY
-----------------------------------------------------------------------------------------------------------------------
OCTAGON CREDIT INVESTORS 3,580,862.32 3,255,329.36 4,000,000.00 0.00
LOAN PORTFOLIO (a unit
of The Chase Manhattan
Bank)
-----------------------------------------------------------------------------------------------------------------------
ORIX USA CORPORATION 2,785,115.13 2,531,922.83 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------
I-2
-----------------------------------------------------------------------------------------------------------------------
Name of Lender Commitments ($)
-------------- ---------------
-----------------------------------------------------------------------------------------------------------------------
Term B loan Term C Loan Term D Loan Revolving Loan
----------- ----------- ----------- --------------
($) ($) ($) ($)
--- --- --- ---
-----------------------------------------------------------------------------------------------------------------------
PAMCO CAYMAN LTD. 3,580,862.31 3,255,329.37 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------
PILGRIM AMERICA PRIME 3,580,862.32 3,255,329.36 5,000,000.00 0.00
-----------------------------------------------------------------------------------------------------------------------
RATE TRUST
-----------------------------------------------------------------------------------------------------------------------
ROYALTON COMPANY 3,580,862.32 3,255,329.36 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------
SENIOR DEBT PORTFOLIO 6,365,977.45 5,787,252.19 7,000,000.00 8,055,555.55
-----------------------------------------------------------------------------------------------------------------------
SENIOR FLOATING RATE 0.00 0.00 0.00 5,555,555.55
FUND, INC.
-----------------------------------------------------------------------------------------------------------------------
SENIOR HIGH INCOME 3,580,862.32 3,255,329.36 0.00 0.00
PORTFOLIO, INC.
-----------------------------------------------------------------------------------------------------------------------
STRATA FUNDING LTD. 1,193,620.77 1,085,109.78 0.00 0.00
-----------------------------------------------------------------------------------------------------------------------
TCW LEVERAGED INCOME 397,873.59 361,703.26 0.00 0.00
TRUST, L.P.
-----------------------------------------------------------------------------------------------------------------------
XXX XXXXXX AMERICAN 5,570,230.27 5,063,845.67 0.00 8,055,555.56
-----------------------------------------------------------------------------------------------------------------------
CAPITAL PRIME RATE
INCOME TRUST
-----------------------------------------------------------------------------------------------------------------------
XXX XXXXXX CLO I, LIMITED 0.00 0.00 7,000,000.00 3,265,128.42
---------------------------------======================================================================================
Total 83,553,454.00 75,957,685.00 110,000,000.00 200,000,000.30
-----------------------------------------------------------------------------------------------------------------------
I-3
TABLE OF CONTENTS
Page||
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms........................................................................................1
1.02 Computation of Time Periods.................................................................................32
1.03 Accounting Terms............................................................................................32
1.04 Other Definitional Provisions...............................................................................33
1.05 Other Terms.................................................................................................33
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01 Revolving Credit Facility...................................................................................33
2.02 The Swing Loan Facility.....................................................................................35
2.03 Letters of Credit...........................................................................................36
2.04 Term Loan Facilities........................................................................................41
2.05 Authorized Officers and Administrative Agents...............................................................42
ARTICLE III
PAYMENTS AND PREPAYMENTS
3.01 Prepayments and Repayments; Reductions in Commitments.......................................................42
3.02 Payments....................................................................................................46
3.03 Taxes.......................................................................................................49
3.04 Increased Capital...........................................................................................52
3.05 Promise to Repay; Evidence of Indebtedness..................................................................52
3.06 Deposit Accounts............................................................................................53
3.07 Replacement of Lender.......................................................................................54
ARTICLE IV
INTEREST AND FEES
4.01 Interest on the Loans and other Obligations.................................................................54
4.02 Special Provisions Governing LIBO Rate Loans................................................................57
4.03 Fees........................................................................................................59
ARTICLE V
CONDITIONS TO LOANS AND LETTERS OF CREDIT
5.01 Conditions Precedent to the Effectiveness of this Agreement.................................................60
5.02 Conditions Precedent to All Loans and Letters of Credit.....................................................61
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties of the Borrower..............................................................61
-i-
TABLE OF CONTENTS
(continued)
Page
ARTICLE VII
REPORTING COVENANTS
7.01 Financial Statements........................................................................................72
7.02 Events of Default...........................................................................................74
7.03 Lawsuits....................................................................................................74
7.04 Insurance...................................................................................................75
7.05 ERISA Notices...............................................................................................75
7.06 Environmental Notices.......................................................................................76
7.07 Labor Matters...............................................................................................77
7.08 Permitted Subordinated Indebtedness.........................................................................77
7.09 Other Reports...............................................................................................77
7.10 Change of Control...........................................................................................77
7.11 Dissolution Notice..........................................................................................77
7.12 Government Contracts........................................................................................78
7.13 Other Information...........................................................................................78
ARTICLE VIII
AFFIRMATIVE COVENANTS
8.01 Partnership/Corporate Existence, etc........................................................................78
8.02 Partnership Powers; Conduct of Business.....................................................................78
8.03 Compliance with Laws, etc...................................................................................78
8.04 Payment of Taxes and Claims; Tax Consolidation..............................................................78
8.05 Insurance...................................................................................................79
8.06 Inspection of Property......................................................................................79
8.07 Books and Records; Discussions..............................................................................80
8.08 Insurance and Condemnation Proceeds.........................................................................80
8.09 ERISA Compliance............................................................................................80
8.10 Foreign Employee Benefit Plan Compliance....................................................................80
8.11 Maintenance of Property.....................................................................................80
8.12 Condemnation................................................................................................80
8.13 Environmental Matters.......................................................................................80
8.14 Future Mortgages............................................................................................81
ARTICLE IX
NEGATIVE COVENANTS
9.01 Indebtedness................................................................................................81
9.02 Sales of Assets.............................................................................................82
9.03 Liens.......................................................................................................83
9.04 Investments.................................................................................................83
9.05 Accommodation Obligations...................................................................................85
9.06 Restricted Junior Payments..................................................................................85
9.07 Conduct of Business.........................................................................................87
9.08 Transactions with Shareholders and Affiliates...............................................................87
9.09 Restriction on Fundamental Changes..........................................................................88
9.10 Sales and Leasebacks........................................................................................88
9.11 Margin Regulations; Securities Laws.........................................................................88
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(continued)
Page
9.12 ERISA.......................................................................................................88
9.13 Issuance of Equity Interests................................................................................89
9.14 Constituent Documents.......................................................................................89
9.15 Amendments to Permitted Subordinated Indebtedness...........................................................89
9.16 Cancellation of Debt; Prepayment............................................................................89
9.17 Fiscal Year.................................................................................................90
9.18 Transaction Documents.......................................................................................90
9.19 Environmental Matters.......................................................................................90
ARTICLE X
FINANCIAL COVENANTS
10.01 Minimum Net Worth..........................................................................................90
10.02 Minimum Interest Coverage Ratio............................................................................91
10.03 Minimum Fixed Charge Coverage Ratio........................................................................93
10.04 Maximum Leverage Ratio.....................................................................................94
ARTICLE XI
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.01 Events of Default..........................................................................................95
11.02 Rights and Remedies........................................................................................98
11.03 The Cash Collateral Account................................................................................99
ARTICLE XII
THE CREDIT AGENTS
12.01 Appointment...............................................................................................100
12.02 Nature of Duties..........................................................................................101
12.03 Rights, Exculpation, etc..................................................................................101
12.04 Reliance..................................................................................................102
12.05 Indemnification...........................................................................................102
12.06 Citicorp and Scotiabank Individually......................................................................103
12.07 Successor Administrative Agent............................................................................103
12.08 Relations Among Lenders...................................................................................103
12.09 Concerning the Collateral and the Loan Documents..........................................................104
ARTICLE XIII
MISCELLANEOUS
13.01 Assignments and Participations............................................................................106
13.02 Expenses..................................................................................................108
13.03 Indemnity.................................................................................................109
13.04 Change in Accounting Principles...........................................................................110
13.05 Set-off...................................................................................................110
13.06 Ratable Sharing...........................................................................................111
13.07 Amendments and Waivers....................................................................................111
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13.08 Notices...................................................................................................112
13.09 Survival of Warranties and Agreements.....................................................................112
13.10 Failure or Indulgence Not Waiver; Remedies Cumulative.....................................................113
13.11 Marshaling; Payments Set Aside............................................................................113
13.12 Severability..............................................................................................113
13.13 Headings..................................................................................................113
13.14 Governing Law.............................................................................................113
13.15 Limitation of Liability...................................................................................113
13.16 Successors and Assigns....................................................................................113
13.17 Certain Consents and Waivers of the Borrower..............................................................114
13.18 Counterparts; Effectiveness; Inconsistencies..............................................................115
13.19 Limitation on Agreements..................................................................................115
13.20 Confidentiality...........................................................................................115
13.21 Entire Agreement..........................................................................................115
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EXHIBITS
Exhibit A-1 -- Form of Revolving Note
Exhibit A-2 -- Form of Swing Loan Note
Exhibit A-3 -- Form of Term B Note
Exhibit A-4 -- Form of Term C Note
Exhibit A-5 -- Form of Term D Note
Exhibit B -- Form of Notice of Borrowing
Exhibit C -- Form of Notice of Conversion/Continuation
Exhibit D -- List of Closing Documents
Exhibit E -- Form of Officer's Certificate to Accompany Reports
Exhibit F -- Compliance Certificate
Exhibit G -- Form of Privity Letter from Borrower to Accountants
Exhibit H -- Form of Assignment and Acceptance
Exhibit I -- Form of Foamex International Guaranty
Exhibit J-1 -- Form of Partnership Guaranty
Exhibit J-2 -- Form of Subsidiary Guaranty
Exhibit K-1 -- Form of Partnership Pledge Agreement
Exhibit K-2 -- Form of Foamex Pledge Agreement
Exhibit K-3 -- Form of Subsidiary Pledge Agreement
Exhibit K-4 -- Form of Xxxxxx Xxxxxxxxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxx X-0 -- Xxxxxx Security Agreement
Exhibit L-2 -- Form of Subsidiary Security Agreement
Exhibit M -- Form of Mortgage
Exhibit N -- Form of Closing Date Certificate
SCHEDULES
Schedule 1.01.1 -- Xxxxx Restructuring
Schedule 1.01.2 -- Lockbox Banks
Schedule 1.01.3 -- Permitted Existing Accommodation Obligations
Schedule 1.01.4 -- Permitted Existing Indebtedness
Schedule 1.01.5 -- Permitted Existing Investments
Schedule 1.01.6 -- Permitted Existing Liens
Schedule 6.01-C -- Authorized, Issued and Outstanding Equity Interests;
Subsidiaries
Schedule 6.01-D -- Conflicts with Contractual Obligations and
Requirements of Law
Schedule 6.01-E -- Governmental Consents
Schedule 6.01-J -- Pending Actions
Schedule 6.01-L -- Taxes
Schedule 6.01-Q -- Existing Environmental Matters
Schedule 6.01-R -- ERISA Matters
Schedule 6.01-S -- Foreign Employee Benefit Matters
Schedule 6.01-T -- Labor Contracts
Schedule 6.01-W -- Patent, Trademark & Permit Claims Pending
Schedule 6.01-Y -- Insurance Policies
Schedule 6.01-Z -- Related Party Contracts
Schedule 9.02(viii) -- Related Party Contracts
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