AMENDED AND RESTATED OPERATING AGREEMENT
OF
FOAMEX LLC
A DELAWARE LIMITED LIABILITY COMPANY
AMENDED AND RESTATED OPERATING AGREEMENT of FOAMEX LLC, a Delaware
limited liability company (the "Company"), dated as of December 23, 1997, by
and among the persons and entities listed on Exhibit A hereto (the "Members").
W I T N E S S E T H:
WHEREAS, Xxxxx Industries, Inc. previously formed a limited
liability company pursuant to the provisions of the Limited Liability Company
Act of the State of Delaware, as amended from time to time (the "Act");
WHEREAS, Xxxxx Industries, Inc. has assigned all of its right, title
and interest as a member to Foamex L.P., and Foamex L.P. desires to amend and
restate the Operating Agreement to reflect such assignement.
NOW, THEREFORE, in consideration of the premises, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I.
INTRODUCTORY PROVISIONS
Section 1.1. Certain Definitions. As used herein:
"Act" shall have the meaning set forth in the recitals hereto.
"Affiliate" shall mean, with respect to any Person, any other Person
who controls, is controlled by or is under common control with such Person.
"Book Value" shall have the meaning given to it in Section 2.2.
"Capital Account" has the meaning specified in Section 4.1.
"Capital Contribution" means a contribution by a Member to the
capital of the Company pursuant to this Agreement.
"Certificate" means the Certificate of Formation of the Company as
filed with the Secretary of State of Delaware, as it shall be amended from time
to time.
"Code" means the Internal Revenue Code of 1986, as amended. Any
reference to a section of the Code shall include a reference to any amendatory
or successor provision thereto.
"Contribution Percentage" means the percentage that is equal to the
Capital Contribution made by a Member expressed as a percentage of all the
Capital Contributions made by the Members, or such percentages as specified in
Exhibit A hereto, as such Exhibit may be amended from time to time.
"Fiscal Year" has the meaning specified in Section 4.4.
"Indemnified Persons" has the meaning specified in Section 3.3.
"Interest" means the proportionate interest of a Member in the
Company based on such Member's Capital Account relative to the Capital Accounts
of all Members.
"Majority-in-Interest of the Members" means any one or more Members
having more than fifty percent (50%) in the aggregate of the Interests of all
Members.
"Net Profits" and "Net Losses" means the income and loss of the
Company as determined in accordance with the accounting methods followed by the
Company for Federal income tax purposes including income exempt from tax and
described in Code Section 705(a)(1)(B), treating as deductions items of
expenditure described in, or under Treasury Regulations deemed described in,
Code Section 705(a)(2)(B) and treating as an item of gain (or loss) the excess
(deficit), if any, of the fair market value of distributed property over (under)
its Book Value. Depreciation, depletion, amortization, income and gain (or loss)
with respect to Company assets shall be computed with reference to their Book
Value rather than to their adjusted bases.
"Notices" has the meaning specified in Section 8.2(a).
"Person" means an individual, corporation, association, limited
liability company, limited liability partnership, partnership, estate, trust,
unincorporated organization or a government or any agency or political
subdivision thereof.
"Transfer" means any direct or indirect sale, assignment, gift,
hypothecation, pledge or other disposition, whether voluntary or by operation of
law, by sale of stock or partnership interests, or otherwise, of an Interest or
of any entity which directly or indirectly through one or more intermediaries
holds an Interest.
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"Treasury Regulations" means the regulations promulgated by the U.S.
Department of the Treasury under the Code.
Section 1.2. Name. The name of the Company shall be "FOAMEX LLC"
Section 1.3. Principal Place of Business. The Company's principal
place of business shall be at such place as a Majority-In-Interest of the
Members shall designate from time to time.
Section 1.4. Purposes. The purposes of the Company shall be to
conduct any lawful business, purpose or activity; provided, however, the Company
shall not engage in any act or activity requiring the consent or approval of any
state official, department, board, agency or other body, without such consent or
approval first being obtained. The Company shall have the power to do any and
all acts and things necessary, appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment of such purposes, and for the
protection and benefit of its business.
Section 1.5. Duration. The Company shall be formed upon the filing
of the Certificate with the Office of the Secretary of State of Delaware
pursuant to the Act and shall continue until dissolved pursuant to Section 7.1.
Section 1.6. Limitation of Liability. The liability of each Member
and each employee of the Company to third parties for obligations of the Company
shall be limited to the fullest extent provided in the Act and other applicable
law.
ARTICLE II.
CAPITAL CONTRIBUTIONS; OTHER FINANCING;
INTERESTS IN THE COMPANY
Section 2.1. Capital Contributions. Each Member has made a Capital
Contribution as of the date hereof in the respective amount specified opposite
its name on Exhibit A and shall have Contribution Percentages as set forth in
such Exhibit A, which Contribution Percentages shall be adjusted in Exhibit A
from time to time to properly reflect the admission of new Members or any other
event having an effect on a Member's Contribution Percentage. Subsequent
contributions, if any, to the Company by the Members shall be made in accordance
with the Members' Contribution Percentages.
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Section 2.2. Determination of Book Value of Company Assets.
(a) Book Value. Except as set forth below, Book Value of any
Company asset is its adjusted basis for federal income tax purposes.
(b) Initial Book Value. The initial Book Value of any assets
contributed by a Member to the Company shall be the gross fair market
value of such assets at the time of such contribution.
(c) Adjustments. The Book Values of all of the Company's assets
may be adjusted by the Company to equal their respective gross fair market
values, as determined by the Members, as of the following times: (a) the
admission of a new Member to the Company or the acquisition by an existing
Member of an additional interest in the Company from the Company; (b) the
distribution by the Company of money or property to a retiring or
continuing Member in consideration for the retirement of all or a portion
of such Member's interest in the Company; (c) the termination of the
Company for Federal income tax purposes pursuant to Section 708(b)(1)(B)
of the Code; and (d) such other times as determined by the Members.
(d) Depreciation and Amortization. The Book Value of a Company
asset shall be adjusted for the depreciation and amortization of such
asset taken into account in computing Net Profits and Net Losses and for
Company expenditures and transactions that increase or decrease the
asset's Federal income tax basis.
Section 2.3. Withdrawal of Capital; Limitation on Distributions. No
Member shall be entitled to withdraw any part of its Capital Contributions to,
or to receive any distributions from, the Company except as provided in Section
6.1 and Section 7.2. No Member shall be entitled to demand or receive (i)
interest on its Capital Contributions or (ii) any property from the Company
other than cash except as provided in Section 7.2 (a)
Section 2.4. Allocation of Net Profits and Net Losses.
(a) (i) Net Profits shall first be allocated in proportion, to and
to the extent of, the excess of prior allocations of Net Losses under
Section 2.4 (b) (ii) below over prior allocations of Net Profits under
this Section 2.4(a) (i) and, then, (ii) among the Members in proportion to
their Contribution Percentages.
(b) (i) Net Losses shall first be allocated among the members in
proportion to their Contribution Percentages until the Capital Account
of any Member is reduced to zero, then (ii) among the Members in
proportion to, and to the
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extent of, their positive Capital Account balances and, finally, (iii) to
the Members in proportion to their Contribution Percentages.
(c) Tax credits shall be allocated among the Members in proportion
to their Contribution Percentages.
(d) When the Book Value of a Company asset differs from its basis
for Federal or other income tax purposes, solely for purposes of the
relevant tax and not for purposes of computing Capital Account balances,
income, gain, loss, deduction and credit shall be allocated among the
Members under the traditional method with curative allocations under
Treasury Regulation Section 1.704-3(c).
Section 2.5. Restrictions on Transfers. No Member may Transfer any
Interest without the prior written consent of all Members (excluding the
proposed Transferor and Transferee). Upon any approved transfer, Exhibit A
hereto shall be amended accordingly.
ARTICLE III.
MANAGEMENT
Section 3.1. Management by the Members.
(a) General Provisions. The management of the Company shall be
vested in its Members. The decision of a Majority-In-Interest of the
Members shall be controlling. The Members shall have all authority, rights
and powers in the management of the Company business to do any and all
acts and things necessary, proper, appropriate, advisable, incidental or
convenient to effectuate the purposes of this Agreement. Any action taken
by the Members on behalf of the Company in accordance with the foregoing
provisions shall constitute the act of and shall serve to bind the
Company.
(b) Delegation of Powers. The Members may by instrument in writing
delegate their powers, but not their responsibilities, to officers or
agents or employees of the Company or of any Member or to any other
Person.
(c) Bank Accounts. The Members shall cause the Company to open and
maintain bank accounts, and all funds of every kind and nature received by
the Company shall be deposited in such accounts. Signatories for such
accounts shall be authorized from time to time by the Members.
Section 3.2. Admission of New Members. New or additional Members may
be admitted to the Company at any time upon the affirmative vote or consent of
all the Members. In the event of the admission of new or additional Members,
Exhibit A hereto shall be amended accordingly.
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Section 3.3. Indemnification. Any Person made, or threatened to be
made, a party to any action or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such Person is or
was (i) a Member, or (ii) an employee, officer, director, shareholder or partner
of a Member, or (iii) such other Persons (including employees of the Company) as
the Majority-in-Interest Members may designate from time to time, in their sole
and absolute discretion (collectively, the "Indemnified Persons"), shall be
indemnified by the Company for any losses or damage sustained with respect to
such action or proceeding, and the Company shall advance such Indemnified
Person's reasonable related expenses to the fullest extent permitted by law. The
Company shall have the power to purchase and maintain insurance on behalf of the
Indemnified Persons against any liability asserted against or incurred by them.
The duty of the Company to indemnify the Indemnified Persons under this Section
3.3 shall not extend to actions or omissions of any Indemnified Person which are
grossly negligent or which involve fraud, misrepresentation, bad faith, or other
willful misconduct by such Indemnified Person or which are in material breach or
violation by such Indemnified Person of this Agreement or which are in
derogation of the fiduciary duties owed by such Indemnified Person to the
Company and the Members, in each case as determined by a court of competent
jurisdiction. No Indemnified Person shall be liable to the Company or any other
Member for actions taken in good faith. The duty of the Company to indemnify the
Indemnified Persons under this Section 3.3 shall be limited to the assets of the
Company, and no recourse shall be available against any Member for satisfaction
of such indemnification obligations of the Company.
ARTICLE IV.
BOOKS; ELECTIONS; BUDGETS; FISCAL YEAR
Section 4.1. Administrative Services, Books, Records and Reports.
The Members shall cause to be performed all general and administrative services
on behalf of the Company in order to assure that complete and accurate books and
records of the Company are maintained at the Company's principal place of
business showing the names, addresses and Interests of each of the Members, all
receipts and expenditures, assets and liabilities, profits and losses, and all
other records necessary for recording the Company's business and affairs,
including a capital account for each Member (a "Capital Account").
Section 4.2. Adjustment of Capital Accounts.
(a) Each Member's Capital Account shall be increased by:
(i) the amount of any money contributed by the Member to the
Company;
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(ii) the fair market value of any property contributed by the
Member to the Company;
(iii) the amount of Net Profits allocated to the Member; and
(iv) the amount of any Company liabilities assumed by such
Member (or taken subject to) if property is distributed to the
Member by the Company.
(b) Each Member's Capital Account shall be decreased by:
(i) the amount of any money distributed to the Member by the
Company;
(ii) the fair market value of any property distributed to the
Member by the Company;
(iii) the amount of Net Losses allocated to the Member; and
(iv) the amount of any Member liabilities assumed by the
Company (or taken subject to) if property is contributed to the
Company by the Member.
(c) The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to
comply with Treasury Regulations under Section 704(b) of the Code and, to
the extent not inconsistent with the provisions of this Agreement, shall
be interpreted and applied in a manner consistent with such Treasury
Regulations.
Section 4.3. Federal Income Tax Elections; Method of Depreciation.
The Members shall determine the method of depreciation to be utilized by the
Company for tax purposes and all elections to be made by the Company for tax
purposes. The Members shall designate one Member to be the "tax matters partner"
for all purposes of the Code.
Section 4.4. Fiscal Year. The fiscal year of the Company (the
"Fiscal Year") shall end on Sunday closest to December 31.
ARTICLE V.
EMPLOYMENT OF AFFILIATES
Section 5.1. Parties Employed. Subject to the approval of a
Majority-in-Interest of the Members, the Company may contract for services to be
performed for the Company by Members or Affiliates of any Member. In the case of
the employment of a Member or of Affiliates of a Member, the
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compensation to be paid by the Company to such Member or Affiliates shall be not
greater than the compensation generally paid to third parties for comparable
services in comparable locations.
ARTICLE VI.
DISTRIBUTIONS
Section 6.1. Distributions. Distributions shall be made at such time and in
such amounts as determined by a Majority-In-Interest of the Members and shall be
made among the Members in cash or other property (a) first, in proportion to,
and to the extent of, the excess of each Member's Capital Contributions over
prior distributions to that Member under this Section 6.1(a) and, then, (b) in
proportion to their Contribution Percentages.
Section 6.2. Restoration of Funds. Except as otherwise provided by law, no
Member shall be required to restore to the Company any funds properly
distributed to it pursuant to Section 6.1.
ARTICLE VII.
DISSOLUTION AND LIQUIDATION
Section 7.1. Dissolution. The Company shall be dissolved upon the
occurrence of any of the following:
(a) The unanimous decision of the Members to dissolve the Company;
(b) the bankruptcy, death, dissolution, expulsion, incapacity, or
withdrawal of any Member, unless within ninety (90) days after such event
the Company is continued by the vote or written consent of a majority in
Interest of the Members; or
(c) the entry of a decree of judicial dissolution under Section
18-802 of the Act.
Section 7.2. Winding up Affairs and Distribution of Assets.
(a) Upon dissolution of the Company, and in the absence of an
election to continue the business of the Company pursuant to Section
7.1(b), one or more Members elected by a Majority-in-Interest of the
Members shall be the liquidating Member(s) (the "Liquidating Member") and
shall proceed to wind up the affairs of the Company, liquidate the
remaining property and assets of the Company and wind-up and terminate the
business of the Company. The Liquidating Member shall cause a full
accounting of the
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assets and liabilities of the Company to be taken and shall cause the
assets to be liquidated and the business to be wound up as promptly as
possible by either or both of the following methods: (1) selling the
Company assets and distributing the net proceeds therefrom (after the
payment of Company liabilities) to each Member in satisfaction of its
Capital Account; or (2) if all Members shall agree, distributing the
Company assets to the Members in kind and debiting the Capital Account of
each Member with the fair market value of such assets, each Member
accepting an undivided interest in the Company assets (subject to their
liabilities) in proportion to and to the extent of each Member's positive
Capital Account balance after allocating and crediting to the Capital
Accounts the unrealized gain or loss to the Members as if such gain or
loss had been recognized and allocated pursuant to Section 2.4.
(b) If the Company shall employ method (1) as set forth in Section
7.2(a) in whole or part as a means of liquidation, then the proceeds of
such liquidation shall be applied in the following order of priority: (i)
first, to the expenses of such liquidation; (ii) second, to the debts and
liabilities of the Company (including debts of the Company to the Members
or their Affiliates and any fees and reimbursements payable under this
Agreement), in the order of priority provided by law; (iii) third, a
reasonable reserve shall be set up to provide for any contingent or
unforeseen liabilities or obligations of the Company to third parties (to
be held and disbursed, at the discretion of the Liquidating Member or
Members, by an escrow agent selected by the Liquidating Member or Members)
and at the expiration of such period as the Liquidating Member or Members
may deem advisable, the balance remaining in such reserve shall be
distributed as provided herein; (iv) fourth, to the Members in accordance
with Section 6.1.
(c) In connection with the liquidation of the Company, the Members
severally, jointly, or in any combination upon which they may agree, shall
have the first opportunity to make bids or tenders for all or any portion
of the assets of the Company, and such assets shall not be sold to an
outsider except only for a price higher than the highest and best bid of a
single Member, the Members jointly, or a combination of Members.
ARTICLE VIII.
MISCELLANEOUS
Section 8.1. Certificate Requirements. From time to time the Members
shall sign and acknowledge all such writings as are required to amend the
Certificate or for the carrying out of the terms of this Agreement or, upon
dissolution of the Company, to cancel such Certificate. Each Member is hereby
designated as
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an authorized person to sign the Company's Certificate and any other documents
that are appropriate and necessary to effectuate the purpose of this Agreement.
Section 8.2. Notices.
(a) All Notices, consents, approvals, reports, designations,
requests, waivers, elections and other communications (collectively,
"Notices") authorized or required to be given pursuant to this Agreement
shall be given in writing and either personally delivered to the Member to
whom it is given or delivered by an established delivery service by which
receipts are given or mailed by registered or certified mail, postage
prepaid, or sent by telex or telegram or electronic telecopier, addressed
to the Member at its address listed on Exhibit A hereto.
(b) All Notices shall be deemed given (i) when delivered personally
to the recipient, (ii) when sent to the recipient (with receipt confirmed
by sender's machine) by telecopy if during normal business hours of the
recipient, otherwise on the next business day, or (iii) one (1) business
day after the date sent to the recipient (three (3) business days in the
case of international delivery) by reputable express courier service
(charges prepaid). Any Member may change its address for the receipt of
Notices at any time by giving Notice thereof to all of the other Members,
in which event Exhibit A hereto shall be amended accordingly.
Notwithstanding the requirement in Section 8.2(a) as to the use of
registered or certified mail, any routine reports required by this
Agreement to be submitted to Members at specified times may be sent by
first-class mail.
Section 8.3. Parties in Interest; Third-Party Beneficiaries.
(a) Neither this Agreement nor any of the rights, duties, or
obligations of any party hereunder may be transferred or assigned by a
party hereto, except in connection with a Transfer of Interests as
specified in Section 2.5 Subject to the foregoing, this Agreement shall be
binding upon, and inure to the benefit of the parties hereto and their
respective successors and assigns.
(b) This Agreement shall not confer any rights or remedies upon
any person or entity other than the parties hereto, the Indemnified
Persons, and their respective permitted successors and assigns.
Section 8.4. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof,
and supersedes all prior
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agreements and understandings among the Members with respect to the subject
matter hereof.
Section 8.5. Modification. No change or modification of this
Agreement shall be of any force unless such change or modification is in writing
and has been signed by all of the Members. No waiver of any breach of any of the
terms of this Agreement shall be effective unless such waiver is in writing and
signed by the Member against whom such waiver is claimed. No waiver of any
breach shall be deemed to be a waiver of any other or subsequent breach.
Section 8.6. Severability. If any provision of this Agreement shall
be held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby. Furthermore, in lieu of any such invalid, illegal or
unenforceable term or provision, the parties hereto intend that there shall be
added as a part of this Agreement a provision as similar in terms to such
invalid, illegal or unenforceable provision as may be possible and be valid,
legal and enforceable.
Section 8.7. Further Assurances. Each Member shall execute such
deeds, assignments, endorsements, evidences of Transfer and other instruments
and documents and shall give such further assurances as shall be necessary to
perform its obligations hereunder.
Section 8.8. Governing Law. This Agreement shall be governed by and
be construed in accordance with the laws of the State of Delaware.
Section 8.9. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
Section 8.10. Waiver of Partition. Each Member hereby waives its
right to bring an action for partition of any of the property owned by the
Company.
Section 8.11. Certificated Interest. The Interest of the Member in
the Company shall be represented by a certificate setting forth the name of the
Company, its state and year of organization and the percentage of the Interests
in the Company owned by the Member. The certificate shall be signed by the
Member or a duly authorized officer of the Company. The certificate shall be in
such form as shall be approved by the Member. The Interest shall be a "security"
governed by Article 8 of the New York Uniform Commercial Code.
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IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as of the day and date first set forth above.
FOAMEX L.P.
By: FMXI, Inc.
Its: Managing General Partner
BY: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
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EXHIBIT A
Members Contribution Contribution
Percentage
Foamex L.P. Transferred Assets 100%
0000 Xxxxxxxx Xxxxxx pursuant to the
Xxxxxxx, XX 00000 Assignment and
Assumption Agreement,
of Xxxxx Industries,
Inc., dated December
23, 1997
