[Execution Copy]
FOAMEX INTERNATIONAL GUARANTY
This FOAMEX INTERNATIONAL GUARANTY (as amended, supplemented, amended
and restated or otherwise modified from time to time, this "Guaranty"), dated as
of February 27, 1998, is made by Foamex International Inc., a Delaware
corporation (the "Guarantor"), in favor of Citicorp USA, Inc., as intercreditor
collateral agent under the New GFI Intercreditor Agreement (together with any
successor(s) thereto in such capacity, the "Collateral Agent") for each of the
Secured Parties, for the benefit of the Secured Parties.
W I T N E S S E T H:
WHEREAS pursuant to the New GFI Credit Agreement dated as of February
27, 1998 (as amended, amended and restated, supplemented or modified from time
to time, the "New GFI Credit Agreement") entered into among Foamex Carpet
Cushion Inc., a Delaware corporation ("New GFI"), the institutions from time to
time a party thereto as Lenders, the institutions from time to time a party
thereto as Issuing Banks, Citicorp USA, Inc., a Delaware corporation
("Citicorp"), in its capacity as the collateral agent for the Lenders and the
Issuing Banks thereunder and The Bank of Nova Scotia, in its capacity as funding
agent for the Lenders and Issuing Banks, the Lenders and the Issuing Banks have
extended Commitments to make Credit Extensions to New GFI;.
WHEREAS, Trace Foam LLC has, pursuant to the Lease made as of the 27th
day of February, 1998, by and between Trace Foam LLC and New GFI (the "New GFI
Lease"), leased to New GFI the real property described therein and located in
California;
WHEREAS, pursuant to the Asset Purchase Agreement dated February 27,
1998, between General Felt Industries, Inc. (including its successors and
assignors being "GFI"), as seller and New GFI as purchaser (the "New GFI
Purchase Agreement"), New GFI has purchased from GFI all of its assets other
than assets of GFI that are subject to the New GFI Lease and the "Foamex/GFI
Note";
WHEREAS, in consideration of the transactions under the New GFI
Purchase Agreement, New GFI has issued a promissory note to
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the order of GFI in the principal amount of $70,200,000 having a maturity date
of February 25, 2004 (the "New GFI Note");
WHEREAS, as a condition precedent to (i) the effectiveness of the New
GFI Credit Agreement, (ii) the lease of the real property pursuant to the New
GFI Lease and (iii) the sale of the assets of GFI pursuant to the New GFI
Purchase Agreement, the Guarantor is required to execute and deliver this
Guaranty;
WHEREAS, the Guarantor has duly authorized the execution, delivery and
performance of this Guaranty; and
WHEREAS, it is in the best interests of the Guarantor to execute this
Guaranty inasmuch as the Guarantor will derive substantial direct and indirect
benefits from the Credit Extensions made and to be made from time to time to New
GFI by the Lenders and the Issuing Banks pursuant to the New GFI Credit
Agreement from the New GFI Lease, and from the consummation of the transaction
contemplated by the new GFI Transfer Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce (i) the Lenders and the Issuing
Banks to make Credit Extensions to New GFI pursuant to the New GFI Credit
Agreement, (ii) GFI to lease the real property pursuant to the New GFI Lease and
(iii) GFI to sell its other assets to New GFI pursuant to the New GFI Purchase
Agreement in exchange for the New GFI Note, the Guarantor agrees, for the
benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"Administrative Agents" is defined in the New GFI Credit Agreement.
"Collateral Agent" is defined in the preamble.
"Credit Extensions" means the Loans and the Letters of
Credit.
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"Foamex Credit Agreement" means the Credit Agreement, dated as of June
12, 1997, as amended and restated on February 25, 1998, among Foamex, FMXI, the
Lenders and the Administrative Agents, as such agreement may be amended, amended
and restated, modified or otherwise changed from time to time.
"Guarantor" is defined in the preamble.
"Guaranty" is defined in the preamble.
"Holder" is defined in the definition of Secured Party.
"New GFI Credit Agreement" is defined in the first recital.
"New GFI Lease" is defined in the second recital.
"New GFI Note" is defined in the fourth recital.
"New GFI Purchase Agreement" is defined in the third recital.
"Obligations" means (i) all Obligations (as defined in the New GFI
Credit Agreement) of New GFI and all obligations (monetary or otherwise) arising
under or in connection with the New GFI Credit Agreement or any other Loan
Document, (ii) all Basic Rent (iii) all Additional Rent,(iv) all Late Charges
(in each case, as defined in the New GFI Lease), (v) all other obligations
(monetary or otherwise) of New GFI arising under or in connection with the New
GFI Lease, (vi) the Obligations (as defined in the New GFI Note) and (vii) all
obligations (monetary or otherwise) of New GFI under the New GFI Note.
"Process Agent" is defined in Section 6.9.1.
"Secured Parties" means, collectively, the Lenders, the Issuing Banks,
the Collateral Agent, the Funding Agent and the Administrative Agents, any
Lender in its capacity as a counterparty to a Hedging Obligation, the lessor
under the New GFI Lease and the holder from time to time of the New GFI Note
(including, without limitation, Citicorp USA Inc., as holder of the GFI Note
pursuant to the TFLLC Contract Assignment and Security Agreement) (the
"Holder").
"TFLLC Contract Assignment" means the TFLLC Contract Assignment and
Security Agreement dated as of February 25, 1998, between Trace Foam LLC and
Citicorp USA Inc., as collateral agent, as such agreement may be amended,
supplemented or modified from time to time.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms
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used in this Guaranty, including its preamble and recitals, have the meanings
provided in the New GFI Credit Agreement.
ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. The Guarantor hereby absolutely,
unconditionally and irrevocably
(a) guarantees the full and punctual payment when due, whether
at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise, of all Obligations of New GFI under the New GFI
Credit Agreement, the Notes and the other Loan Documents to which it is
a party, the New GFI Lease, the New GFI Note and all other Obligations
thereunder, whether now or hereafter existing, whether for principal,
interest, fees, expenses or otherwise (including all such amounts which
would become due but for the operation of the automatic stay under
Section 362(a) of the United States Bankruptcy Code, 11 U.S.C.
ss.362(a), and the operation of Sections 502(b) and 506(b) of the
United States Bankruptcy Code, 11 U.S.C. ss.502(b) and ss.506(b)), and
(b) indemnifies and holds harmless each Secured Party and each
holder of a Note, the New GFI Note or the New GFI Lease for any and all
costs and expenses (including reasonable attorney's fees and expenses)
incurred by such Secured Party or such holder, as the case may be, in
enforcing any rights under this Guaranty;
This Guaranty constitutes a guaranty of payment when due and not of collection,
and the Guarantor specifically agrees that it shall not be necessary or required
that any Secured Party or any holder of any Note, the New GFI Note or the New
GFI Lease exercise any right, assert any claim or demand or enforce any remedy
whatsoever against New GFI (or any other Person) before or as a condition to the
obligations of the Guarantor hereunder.
SECTION 2.2. Acceleration of Guaranty. The Guarantor agrees that, in
the event of the dissolution or insolvency of New GFI or the Guarantor, or the
inability or failure of New GFI or the Guarantor to pay debts as they become
due, or an assignment by New GFI or the Guarantor for the benefit of creditors,
or the commencement of any case or proceeding in respect of New GFI or the
Guarantor under any bankruptcy, insolvency or similar laws, and if such event
shall occur at a time when any of the Obligations of New GFI may not then be due
and payable, the Guarantor agrees that it will pay to the Lenders, the holder of
the New GFI Lease and the Holder of the New GFI Note forthwith
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the full amount which would be payable hereunder by the Guarantor if all such
Obligations were then due and payable.
SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in all
respects be a continuing, absolute, unconditional and irrevocable guaranty of
payment, and shall remain in full force and effect until all Obligations of New
GFI have been paid in full in cash, all obligations of the Guarantor hereunder
shall have been paid in full in cash, all Letters of Credit have been terminated
or expired and all Commitments shall have terminated. The Guarantor guarantees
that the Obligations of New GFI will be paid strictly in accordance with the
terms of the New GFI Credit Agreement and each other Loan Document under which
they arise, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Secured Party or any holder of any Note, the New GFI Lease or the New GFI Note
with respect thereto. The liability of the Guarantor under this Guaranty shall
be absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of the
New GFI Credit Agreement, any Note or any other Loan Document, the New
GFI Lease, the New GFI Purchase Agreement or the New GFI Note;
(b) the failure of any Secured Party or any holder of
any Note, the New GFI Lease or the New GFI Note
(i) to assert any claim or demand or to enforce any
right or remedy against New GFI or any other Person (including
any other guarantor (including the Guarantor)) under the
provisions of the New GFI Credit Agreement, any Note, any
other Loan Document or otherwise, the New GFI Lease, the New
GFI Purchase Agreement or the New GFI Note, or
(ii) to exercise any right or remedy against any
other guarantor (including the Guarantor) of, or collateral
securing, any Obligations of New GFI;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of New GFI, or any
other extension, compromise or renewal of any Obligation of New GFI;
(d) any reduction, limitation, impairment or termination of
any Obligations of New GFI for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be
subject to (and the Guarantor hereby waives any right to or claim of)
any defense or setoff, counterclaim, recoupment or termination
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whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or
occurrence affecting, any Obligations of New GFI or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
the New GFI Credit Agreement, any Note or any other Loan Document, the
New GFI Lease or the New GFI Note;
(f) any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver or
release or addition of, or consent to departure from, any other
guaranty, held by any Secured Party or any holder of any Note securing
any of the Obligations of New GFI; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, New GFI,
any surety or any guarantor.
SECTION 2.4. Reinstatement, etc. The Guarantor agrees that this
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment (in whole or in part) of any of the Obligations is
rescinded or must otherwise be restored by any Secured Party or any holder of
any Note, the New GFI Lease or the New GFI Note, upon the insolvency, bankruptcy
or reorganization of New GFI or otherwise, all as though such payment had not
been made.
SECTION 2.5. Waiver, etc. The Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations of New GFI and this Guaranty and any requirement that the Collateral
Agent, any other Secured Party or any holder of any Note, the New GFI Lease or
the New GFI Note protect, secure, perfect or insure any security interest or
Lien, or any property subject thereto, or exhaust any right or take any action
against New GFI or any other Person (including any other guarantor) or entity or
any collateral securing the Obligations of New GFI.
SECTION 2.6. Postponement of Subrogation, etc. The Guarantor agrees
that it will not exercise any rights which it may acquire by way of rights of
subrogation under this Guaranty, by any payment made hereunder or otherwise,
until the prior payment in full in cash of all Obligations of New GFI, the
termination or expiration of all Letters of Credit and the termination of all
Commitments. Any amount paid to the Guarantor on account of any such subrogation
rights prior to the payment in full in cash of all Obligations of New GFI shall
be held in trust for the benefit of the Secured Parties and each holder of a
Note, the New GFI Lease and the New GFI Note and shall immediately be
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paid to the Collateral Agent for the benefit of the Secured Parties and each
holder of a Note, the New GFI Lease or the New GFI Note and credited and applied
against the Obligations of New GFI, whether matured or unmatured, in accordance
with the terms of the New GFI Credit Agreement, the New GFI Lease, the New GFI
Purchase Agreement and the New GFI Note; provided, however, that if
(a) the Guarantor has made payment to the Secured Parties and
each holder of a Note, the New GFI Lease and the New GFI Note of all or
any part of the Obligations of New GFI, and
(b) all Obligations of New GFI have been paid in full in cash,
all Letters of Credit have been terminated or expired and all
Commitments have been permanently terminated,
each Secured Party and each holder of a Note, the New GFI Lease and the New GFI
Note agrees that, at the Guarantor's request, the Collateral Agent, on behalf of
the Secured Parties and the holders of the Notes, the New GFI Lease and the New
GFI Note, will execute and deliver to the Guarantor appropriate documents
(without recourse and without representation or warranty) necessary to evidence
the transfer by subrogation to the Guarantor of an interest in the Obligations
of New GFI resulting from such payment by the Guarantor. In furtherance of the
foregoing, for so long as any Obligations or Commitments remain outstanding, the
Guarantor shall refrain from taking any action or commencing any proceeding
against New GFI (or its successors or assigns, whether in connection with a
bankruptcy proceeding or otherwise) to recover any amounts in the respect of
payments made under this Guaranty to any Secured Party or any holder of a Note,
the New GFI Lease or the New GFI Note.
SECTION 2.7. Successors, Transferees and Assigns; Transfers
of Notes, etc. This Guaranty shall:
(a) be binding upon the Guarantor, and its successors,
transferees and assigns; and
(b) inure to the benefit of and be enforceable by the
Collateral Agent and each other Secured Party.
Without limiting the generality of the foregoing clause (b), (i) any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it, (ii) GFI may assign or otherwise transfer its rights under the New
GFI Lease and (iii) GFI may assign the New GFI Note, in each case, to any other
Person or entity (including the Holder), and such other Person or entity shall
thereupon become vested with all rights and benefits
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in respect thereof granted to such Lender under any Loan Document or, as the
case may be, GFI under the New GFI Lease or the New
GFI Note (including this Guaranty) or otherwise, subject, however, to any
contrary provisions in such assignment or transfer, and to the provisions of
Article XII of the New GFI Credit Agreement and Section __ or the New GFI Note.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. The Guarantor hereby
represents and warrants unto the Collateral Agent as set forth in this Article
III acknowledging that the Collateral Agent is relying thereon without
independent inquiry.
SECTION 3.1.1. Corporate Existence; Compliance with Law. The Guarantor
(i) is a corporation duly organized, validly existing and in good standing under
the laws of the state of Delaware; (ii) has the requisite corporate power and
authority and the legal right to own, pledge, mortgage or otherwise encumber its
properties and to conduct its business as now and heretofore conducted; (iii) is
in compliance with its Constituent Documents; and (iv) is in compliance with all
material Requirements of Law.
SECTION 3.1.2. Corporate Power; Authorization. The execution and
delivery by the Guarantor of the Loan Documents and the Transaction Documents to
which it is a party and all instruments and documents to be delivered by the
Guarantor thereunder, and the performance of its obligations thereunder: (i) are
within the Guarantor's corporate power; (ii) have been duly authorized by all
necessary or proper corporate action; (iii) are not in contravention of any
provision of the Guarantor's Constituent Documents; (iv) will not violate any
law or regulation, or any order or decree of any court or Governmental
Authority; (v) will not conflict with or result in the breach or termination of,
constitute a default under (with or without the giving of notice, the lapse of
time or both) or a tortious interference with or accelerate any performance
required by, any material indenture, mortgage, deed of trust, lease, agreement
or other instrument to which the Guarantor is a party or by which the Guarantor
or any of its property is bound; (vi) will not result in the creation or
imposition of any Lien upon any of the property of the Guarantor, other than
Liens created pursuant to the terms of the Loan Documents and the Transaction
Documents; and (vii) do not require the consent or approval of any Governmental
Authority, or any other Person which has not been obtained.
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SECTION 3.1.3. No Adverse Condition. No action has been taken by any
competent authority which restrains, prevents or imposes material adverse
conditions upon, or seeks to restrain, prevent or impose material adverse
conditions upon, the consummation of any of the transactions contemplated by the
Loan Documents or the Transaction Documents.
Section 3.1.4. Enforceability. The obligations of the Guarantor under
this Guaranty are enforceable against the Guarantor in accordance with their
terms.
ARTICLE IV
COVENANTS, ETC.
SECTION 4.1. Covenants. The Guarantor covenants and agrees that the
Guarantor will perform the obligations set forth in this Article IV until all
Obligations of New GFI have been paid in full in cash, all obligations of the
Guarantor hereunder shall have been paid in full in cash, all Letters of Credit
have been terminated or expired and all Commitments shall have terminated. The
Guarantor shall comply with the following covenants unless the holders of a
majority of the outstanding principal amount of Obligations shall otherwise give
their prior written consent thereto.
SECTION 4.1.1. Sale of Assets; Liens. The Guarantor shall not (A) sell,
assign, transfer, lease, convey or otherwise dispose of any Property, whether
now owned or hereafter acquired, or any income or profits therefrom, or enter
into any agreement to do so, except(i) as contemplated in the Foamex
International Supply Agreement, (ii) sales of assets for Fair Market Value,
(iii) that certain Canadair Challenger Model CL600-2B16, or any replacement
thereof (the "Aircraft"), which Aircraft is currently leased to the Guarantor
pursuant to that certain Aircraft Lease and Operating Agreement, dated August
17, 1995, by and between Foamex Aviation, Inc. and Jet Solutions LLC, the
proceeds of which shall be retained by the Guarantor and (iv) in connection with
the Transaction and the transactions contemplated by the Transaction Documents
or (B) directly or indirectly create, incur, assume or permit to exist any Lien
on or with respect to any of its Property except (i) Liens securing the
Obligations, (ii) Liens permitted by the Foamex Credit Agreement, (iii) Liens
securing the Aircraft and (iv) Liens created pursuant to the Foamex
International Pledge Agreement securing the Foamex Credit Agreement and the New
GFI Guaranty and the Partnership Pledge Agreement securing the Foamex Credit
Agreement, the New GFI Credit Agreement and the New GFI Guaranty.
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SECTION 4.1.2. Conduct of Business. The Guarantor shall not engage in
any business other than acting as a holding company and holding the Investments
of the Guarantor permitted under Section 4.1.6 hereto.
SECTION 4.1.3. Transactions with Affiliates. Except in respect of
transactions (i) described in Schedule 6.01-J of the Foamex Credit Agreement and
(ii) contemplated by the Transaction Documents, the Guarantor shall not directly
or indirectly enter into any transactions (including, without limitation, the
purchase, sale, lease or exchange of any property or the rendering of any
service), with any holder or holders of more than five percent (5%) of any class
of Equity Interests in the Guarantor or with any of the Guarantor's Affiliates
(other than Foamex and its Subsidiaries and New GFI) on terms that are less
favorable to it than terms that could be obtained in an arm's length transaction
with an unrelated party at that time.
SECTION 4.1.4. Indebtedness. Neither the Guarantor nor any of its
Subsidiaries (other than New GFI and its Subsidiaries or Foamex and its
Subsidiaries) shall directly or indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except (A) Indebtedness in respect of the Guaranty or the
Obligations, (B) Indebtedness in respect of Transaction Costs, (C) Indebtedness
in respect of the Foamex Credit Agreement, (D) Indebtedness in respect of loans
constituting Investments of Foamex permitted under Section 9.04 of the Foamex
Credit Agreement, (E) Indebtedness in respect of loans to the Guarantor from
Persons other than Foamex and its Subsidiaries for the purposes of funding taxes
and ordinary operating and general administrative expenses of the Guarantor and
funding loan commitments to DLJ Funding, Inc. under the DLJ Loan Commitment
Agreement dated as of December 14, 1993 between the Guarantor and DLJ Funding,
Inc. and to Marely I s.a. under the Marely Loan Commitment Agreement dated as of
December 14, 1993 between the Guarantor and Marely I s.a., (F) other unsecured
Indebtedness of the Guarantor in an aggregate principal amount not to exceed
$50,000,000 at any time,(G) Accommodation Obligations under the New GFI Purchase
Agreement and (H) Indebtedness of the Guarantor to The CIT Group Equipment
Financing, Inc. with respect to the Aircraft.
SECTION 4.1.5. Restriction on Fundamental Changes. The Guarantor shall
not enter into any merger or consolidation, or liquidate, wind-up or dissolve
(or suffer any liquidation or dissolution), purchase or otherwise acquire, in
one transaction or series of transactions, all or substantially all of the
Equity Interests in, or other evidence of beneficial ownership of, or the
business, property or assets of, any Person except in connection with the
Transaction and the transactions contemplated by the Transaction Documents.
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SECTION 4.1.6. Investments. The Guarantor shall not directly or
indirectly make or own any Investment, except (i) Investments in cash and Cash
Equivalents, (ii) Investments held by the Guarantor set forth on Schedule I
hereto, (iii) other Investments in existence on the date hereof in an aggregate
amount not to exceed $1 million, (iv) direct cash Investments in Foamex or New
GFI,(v) other Investments in any Fiscal Year not in excess of $25,000,000 and
(vi) Investments contemplated by the Transaction and the Transaction Documents.
SECTION 4.1.7. Constituent Documents. Neither the Guarantor nor any of
its Subsidiaries (other than New GFI and its Subsidiaries or Foamex and its
Subsidiaries) shall amend, modify or otherwise change any of the terms or
provisions in any of its Constituent Documents as in effect on the date hereof
other than amendments or modifications deemed immaterial by the Administrative
Agents.
SECTION 4.1.8. Transaction Documents. Neither the Guarantor nor any of
its Subsidiaries (other than New GFI and its Subsidiaries or Foamex and its
Subsidiaries) shall amend, supplement or otherwise modify any of the terms or
provisions in any of the Transaction Documents to which it is a party other than
amendments, supplements or modifications deemed immaterial by the Administrative
Agents.
ARTICLE V
SUBORDINATION
The Guarantor hereby agrees that any Indebtedness of New GFI now or
hereafter owing to the Guarantor (the "Guarantor Subordinated Debt") is hereby
subordinated to all of the Obligations. In addition, the Guarantor Subordinated
Debt is subordinated on the following terms: The Guarantor Subordinated Debt
shall not be paid in whole or in part except as otherwise permitted under the
terms of the New GFI Credit Agreement. The Guarantor will not accept any payment
of or on account of any Guarantor Subordinated Debt at any time in contravention
of the foregoing. The Guarantor agrees to file all claims against New GFI in any
bankruptcy or other proceeding in which the filing of claims is required by law
in respect of any Guarantor Subordinated Debt, and the Collateral Agent shall be
entitled to all of the Guarantor's rights thereunder. If for any reason the
Guarantor fails to file such claim at least thirty (30) days prior to the last
date on which such claim should be filed, the Collateral Agent, as the
Guarantor's attorney-in-fact, is hereby authorized to do so in the Guarantor's
name or, in the Collateral Agent's discretion, to assign such claim to and cause
proof of claim to be filed in the name of the Collateral Agent or its
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nominee. In all such cases, whether in administration, bankruptcy or otherwise,
the person or persons authorized to pay such claim shall pay to the Collateral
Agent the full amount payable on the claim in the proceeding, and, to the full
extent necessary for that purpose, the Guarantor hereby assigns to the
Collateral Agent all the Guarantor's rights to any payments or distributions to
which the Guarantor otherwise would be entitled. If the amount so paid is
greater than the Guarantor's liability hereunder, the Collateral Agent will pay
the excess amount to the party entitled thereto. In addition, the Guarantor
hereby appoints the Collateral Agent as its attorney-in-fact to exercise all of
the Guarantor's voting rights with respect to the Guarantor Subordinated Debt in
connection with any bankruptcy proceeding or any plan for the reorganization of
New GFI.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1. Loan Document. This Guaranty is a Loan Document executed
pursuant to the New GFI Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article XIII thereof.
SECTION 6.2. Binding on Successors, Transferees and Assigns;
Assignment. In addition to, and not in limitation of, Section 2.7, this Guaranty
shall be binding upon the Guarantor and the Guarantor's successors, transferees
and assigns and shall inure to the benefit of and be enforceable by each Secured
Party and each holder of a Note and their respective successors, transferees and
assigns (to the full extent provided pursuant to Section 2.7); provided,
however, that the Guarantor may not assign any of its obligations hereunder
without the prior written consent of all Lenders.
SECTION 6.3. Amendments, etc. No amendment to or waiver of any
provision of this Guaranty, nor consent to any departure by the Guarantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Collateral Agent (on behalf of the Secured Parties) and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
SECTION 6.4. Notices. All notices and other communications provided for
hereunder shall be in writing and may be personally served, telecopied, telexed
or sent by courier service or United States certified mail and shall be deemed
to have been given when delivered in person or by courier service, upon receipt
of a telecopy or telex or four (4) Business Days after deposit in the
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Xxxxxx Xxxxxx mail with postage prepaid and properly addressed. For the purposes
hereof, the address of the Guarantor shall be the address specified on the
signature page hereof, or at such other address as may be designated by the
Guarantor in a written notice to the Collateral Agent.
SECTION 6.5. No Waiver; Remedies. In addition to, and not in limitation
of, Section 2.3 and Section 2.5, no failure on the part of any Secured Party or
any holder of a Note to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
SECTION 6.6. Captions. Section captions used in this Guaranty are for
convenience of reference only, and shall not affect the construction of this
Guaranty.
SECTION 6.7. Setoff. In addition to, and not in limitation of, any
rights of any Secured Party or any holder of a Note under applicable law, each
Secured Party and each such holder shall, upon the occurrence of any Default
described in any Section 11.01(f) or 11.01(g) of the New GFI Credit Agreement or
with the consent of the Requisite Lenders, any Event of Default, have the right
to appropriate and apply to the payment of the obligations of the Guarantor
owing to it hereunder, whether or not then due, and the Guarantor hereby grants
to each Secured Party and each such holder a continuing security interest in,
any and all balances, credits, deposits, accounts or moneys of the Guarantor
then or thereafter maintained with such Secured Party, or such holder or any
agent or bailee for such Secured Party or such holder; provided, however, that
any such appropriation and application shall be subject to the provisions of
Section 13.06 of the New GFI Credit Agreement.
SECTION 6.8. Severability. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION 6.9. Certain Consents and Waivers of the Guarantor.
SECTION 6.9.1. Personal Jurisdiction. (i) THE GUARANTOR IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING IN NEW YORK,
NEW YORK, AND ANY
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COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY
ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED IN CONNECTION WITH THIS GUARANTY, WHETHER ARISING
IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
AGREEMENT, AND THE GUARANTOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.
THE GUARANTOR IRREVOCABLY DESIGNATES AND APPOINTS CORPORATION SERVICE COMPANY,
00 XXXXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000, AS ITS AGENT (THE "PROCESS AGENT")
FOR SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT, SUCH
SERVICE BEING ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.
THE GUARANTOR AGREES THAT A FINAL JUDGEMENT ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGEMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW. THE GUARANTOR WAIVES IN ALL DISPUTES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(ii) THE GUARANTOR AGREES THAT THE COLLATERAL AGENT SHALL HAVE THE
RIGHT TO PROCEED AGAINST New GFI OR ITS PROPERTY IN A COURT IN ANY LOCATION TO
ENABLE THE ADMINISTRATIVE AGENTS, THE LENDERS AND THE ISSUING BANKS TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE ADMINISTRATIVE AGENTS, ANY
LENDER OR ANY ISSUING BANK. NEW GFI WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT IN WHICH THE ADMINISTRATIVE AGENTS, ANY LENDER OR ANY
ISSUING BANK MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
SECTION 6.9.2. Service of Process. THE GUARANTOR IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION
OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE PROCESS AGENT OR THE GUARANTOR'S NOTICE ADDRESS
SPECIFIED BELOW, SUCH SERVICE TO BECOME EFFECTIVE (5) FIVE DAYS AFTER SUCH
MAILING. THE GUARANTOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING WITHOUT
LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY IN ANY JURISDICTION SET FORTH ABOVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR SHALL LIMIT THE RIGHT OF THE COLLATERAL AGENT TO BRING PROCEEDINGS
AGAINST THE GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 6.10. Governing Law, Entire Agreement, etc. THIS GUARANTY SHALL
BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH
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PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK). EXCEPT AS SET FORTH IN SECTION 6.9.2, THIS GUARANTY AND THE OTHER
LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN
OR ORAL, WITH RESPECT THERETO.
SECTION 6.11. Waiver of Jury Trial. THE GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE SECURED PARTIES OR SUCH GUARANTOR. THE GUARANTOR ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS ENTERING INTO THE
NEW GFI CREDIT AGREEMENT AND FOR GFI ENTERING INTO THE NEW GFI LEASE AND THE NEW
GFI PURCHASE AGREEMENT.
SECTION 6.12. Counterparts. This Guaranty may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
Foamex International Inc.
By /s/ Xxxxxx X. Xxxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
Notice address:
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telecopier No.: 000-000-0000
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SCHEDULE I
to
Foamex International Inc. Guaranty
1,000 shares (100% of the outstanding common stock) of Foamex
Delaware, Inc., a Delaware corporation
1,000 shares (100% of the outstanding common stock) of FMXI,
Inc., a Delaware corporation
1,000 shares (100% of the outstanding common stock) of Foamex
Aviation, Inc., a Delaware corporation
1,000 shares (100% of the outstanding common stock) of Foamex
Carpet Cushion Inc., a Delaware corporation
Investment in Trace Global Opportunities Fund, L.P. in the amount
of $2,000,000
98% limited partner Equity Interest in Foamex
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