Exhibit 4.15.5
AMENDMENT NO. 3
TO CREDIT AGREEMENT
AMENDMENT NO. 3 TO CREDIT AGREEMENT ("this Amendment"), dated as of
November 3, 2004, among FOAMEX L.P., a Delaware limited partnership (the
"Borrower"), the affiliates of the Borrower party hereto, the lending
institutions party hereto and BANK OF AMERICA, N.A., as Administrative Agent
(the "Administrative Agent").
WHEREAS, the Borrower, certain of its affiliates as guarantors, the lenders
party thereto, the Administrative Agent, Banc of America Securities LLC ("BAS")
and GECC Capital Markets Group, Inc., as co-lead arrangers, BAS, as sole book
manager, General Electric Capital Corporation, as syndication agent, and
Congress Financial Corporation (Central) and Bank One, NA (Main Office Chicago),
as co-documentation agents, entered into a certain Credit Agreement, dated as of
August 18, 2003 (as amended, restated, supplemented or otherwise modified from
time to time, the "Credit Agreement"), pursuant to which such lenders have
agreed, subject to certain terms and conditions, to make revolving advances and
term loans to the Borrower and to issue or to cause the issuance of letters of
credit for the account of the Borrower;
WHEREAS, the Borrower, the Guarantors, the Lenders and the Administrative
Agent desire to amend certain provisions of the Credit Agreement;
NOW, THEREFORE, subject to the conditions precedent set forth in Section 3
hereof, the Borrower, the Guarantors, the Lenders and the Administrative Agent
hereby agree as follows:
SECTION 1. CAPITALIZED TERMS. Capitalized terms used but not defined herein
shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. AMENDMENTS TO CREDIT AGREEMENT.
2.1. Annex A to the Credit Agreement is hereby amended by adding the
following defined terms in the correct alphabetical order:
"Additional B Term Loans" means the additional term loans being funded in
one or more drawings under the Term Loan B Agreement on or prior to the
Junior Term Loan Funding Date in an aggregate amount not to exceed
$39,000,000, the proceeds of which will be utilized by Foamex solely to
repurchase on the open market at par or a discount or pay at scheduled
maturity a portion of the Foamex 13 1/2% Subordinated Notes to the extent
permitted herein and to pay fees and expenses incurred in connection
therewith and which loans shall be made pursuant to an amendment to the
Term Loan B Agreement in form and substance satisfactory to the
Administrative Agent and the Majority Lenders. The Additional B Term
loans shall, together with the B Term Loans made on the Closing Date,
constitute the "B Term Loans".
"Combined Loan Fixed Assets Value" means, at any time, the sum of (i) 65%
of the fair market value of the Real Estate of each Borrower and Foamex
Canada in which the Administrative Agent has a first priority perfected
Lien (after giving effect to the Senior Secured Note Intercreditor
Agreement), as such fair market value is set forth in the then most recent
Real Estate Appraisal delivered to the Administrative Agent and (ii) 80% of
the orderly liquidation value of the Equipment of each Borrower and Foamex
Canada in which the Administrative Agent has a first priority perfected
Lien (after giving effect to the Senior Secured Note Intercreditor
Agreement), as such orderly liquidation value is set forth in the then most
recent Equipment Appraisal delivered to the Administrative Agent.
"Designated Agreements" means, collectively, one or more agreements of the
type described in that certain letter dated November 3, 2004 from Foamex to
the Administrative Agent and the Lenders that are now or hereafter
disclosed in writing by Foamex to the Administrative Agent and the Lenders,
which agreements (and any material amendments, modifications, supplements
or waivers with respect to any of such agreements) shall be reasonably
acceptable to the Administrative Agent.
"Designated Assets" means the assets of the Loan Parties disclosed in
writing by Foamex to the Administrative Agent and the Lenders and consented
to in writing by the Administrative Agent and the Majority Lenders.
"Junior Term Lender" means each Lender that has a Junior Term Loan
Commitment or that holds Junior Term Loans.
"Junior Term Loan" has the meaning specified in Section 1.3A(a).
"Junior Term Loan Commitment" means, as to any Lender, the obligation of
such Lender, if any, to make a Junior Term Loan to the Borrowers hereunder
on the Junior Term Loan Funding Date in an aggregate principal amount not
to exceed the amount set forth under the heading "Junior Term Loan
Commitment" opposite such Lender's name on Schedule 1.2, as such amount may
be reduced pursuant to Section 1.3A(a)(i), or, as the case may be, in the
Assignment and Acceptance pursuant to which such Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof. Effective immediately after the making of the Junior Term Loans on
the Junior Term Loan Funding Date, the Junior Term Loan Commitment of each
Lender shall be permanently reduced to zero.
"Junior Term Loan Funding Conditions" means the following conditions
precedent to the obligation of the Junior Term Lenders to make the Junior
Term Loans on the Junior Term Loan Funding Date (in addition to those
conditions precedent set forth in Section 8.2(a)), the satisfaction of
which shall be in a manner satisfactory to the
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Administrative Agent: (i) the average aggregate Availability for all
Borrowers for the thirty consecutive day period ending on the Business Day
immediately preceding the Junior Term Loan Funding Date shall be greater
than the sum of (x) $10,000,000 plus (y) the Availability Required Amount
in effect on the Business Day immediately preceding the Junior Term Loan
Funding Date, (ii) immediately after giving effect to the funding of the
Junior Term Loans, the aggregate Availability of all the Borrowers shall be
greater than the sum of (x) $10,000,000 plus (y) the Availability Required
Amount in effect on the Junior Term Loan Funding Date, (iii) at the time of
the funding of the Junior Term Loans, there shall exist no Default or Event
of Default (and no Default or Event of Default would result therefrom),
(iv) the Administrative Agent shall have received the Junior Term Loan
Notes executed by the Borrowers, (v) all proceeds or amounts received by
Foamex prior to the Junior Term Loan Funding Date in respect of or under
the Additional B Term Loans, the Designated Agreements or from the
disposition of Designated Assets (to the extent permitted for such purpose)
shall have been used by Foamex to repurchase on the open market at par or a
discount or pay at scheduled maturity Foamex 13 1/2% Subordinated Notes and
pay fees and expenses incurred in connection therewith, (vi) Foamex shall
have received the proceeds of the Additional B Term Loans to be made on the
Junior Term Loan Funding Date and after giving effect to the satisfaction
of clause (v) above, the amount of such Additional B Term Loans to be made
on the Junior Term Loan Funding Date, together with the amount of the
Junior Term Loans, shall be sufficient to repay in full the Foamex 13 1/2%
Subordinated Notes, (vii) all resolutions of Foamex and governmental and
third-party consents and approvals, in each instance, necessary to
authorize or permit the making of the Junior Term Loans shall have been
obtained and be in full force and effect, (viii) the Administrative Agent
shall have received a certificate from a Responsible Officer of Foamex
certifying to the Administrative Agent and the Lenders that the Obligations
constitute (A) "Credit Agreement Obligations" under and as defined in the
Senior Secured Note Indenture, (B) "Senior Lender Claims" under the Senior
Secured Note Intercreditor Agreement, (C) "Senior Debt", "Designated Senior
Debt" and "Permitted Debt" under and as defined in each of the Foamex
9-7/8% Subordinated Note Indenture and the Foamex 13-1/2% Subordinated Note
Indenture, and (D) permitted "Debt" as "Working Capital Obligations" under
the Term Loan B Agreement and (ix) the Loan Parties shall have executed and
delivered, or caused to be executed and delivered, such amendments to the
Mortgages and such other documents, agreements, opinions and certificates,
in each instance as the Administrative Agent may reasonably request with
respect to securing the Junior Term Loans by the various Mortgages executed
by one or more of the Loan Parties and the Loan Parties shall have paid all
applicable recording taxes with respect to recording any such amendments.
"Junior Term Loan Funding Date" means August 15, 2005.
"Junior Term Loan Interest Period" means, as to any Junior Term Loan, (i)
initially, the period commencing on the Junior Term Loan Funding Date and
ending on the last day of the month immediately following the month in
which the Junior Term
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Loan Funding Date occurs and (ii) thereafter, each period commencing on the
day following the last day of the immediately preceding Junior Term Loan
Interest Period and ending one month thereafter, provided that:
(a) if any Junior Term Loan Interest Period would otherwise end on a day
that is not a Business Day, that Junior Term Loan Interest Period shall be
extended to the following Business Day unless the result of such extension
would be to carry such Junior Term Loan Interest Period into another
calendar month, in which event such Junior Term Loan Interest Period shall
end on the preceding Business Day;
(b) any Junior Term Loan Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Junior Term Loan
Interest Period) shall end on the last Business Day of the calendar month
at the end of such Junior Term Loan Interest Period; and
(c) any Junior Term Loan Interest Period that would otherwise extend beyond
the Stated Termination Date shall end on the Stated Termination Date.
"Junior Term Loan Rate" means, with respect to the Junior Term Loans for
any Junior Term Loan Interest Period, a per annum rate equal to the LIBOR
Rate for such Junior Term Loan Interest Period plus six percent (6%);
provided, that to extent required under Section 4.2 or 4.5(b), the Junior
Term Loan Rate shall be a fluctuating per annum rate equal to the Base Rate
in effect from time to time plus four percent (4%).
"Junior Term Note" has the meaning specified in Section 1.3A(c).
"Majority Junior Term Lenders" means at any time Junior Term Lenders whose
Pro Rata Shares aggregate more than 50%.
2.2 The definition of "Aggregate Combined Facility Outstandings" in Annex A
to the Credit Agreement is hereby amended by adding ", plus (d) the aggregate
unpaid principal balance of all Junior Term Loans" at the end thereof
immediately before the period.
2.3 The definition of "Applicable Margin" in Annex A to the Credit
Agreement is hereby amended by adding the words ", Junior Term Loans" in the
parenthetical in clause (a) of such definition after the words "other than the
Term Loans".
2.4 The definition of "B Term Loans" in Annex A to the Credit Agreement is
hereby amended by adding the phrase "and shall in any event include the
Additional B Term Loans made under the Term Loan B Agreement" after the words
"Term Loan B Agreement".
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2.5 The definition of "Borrowing" in Annex A to the Credit Agreement is
hereby amended by adding the words ", Junior Term Loans" immediately following
the words "Revolving Loans" appearing in the first line thereof.
2.6 The definition of "Borrowing Cutoff Amount" in Annex A to the Credit
Agreement is hereby amended by replacing the table set forth therein with the
following table:
Relevant EBITDA Fiscal Month Amount
Fiscal month of Foamex ending
October 26, 2003 and each fiscal month
of Foamex ending thereafter through
and including the fiscal month of
Foamex ending March 28, 2004 3.50
Fiscal month of Foamex ending
April 25, 2004 and each fiscal month of
Foamex ending thereafter through and
including the fiscal month of Foamex
ending August 22, 2004 3.25
Fiscal month of Foamex ending
September 26, 2004 and each fiscal
month of Foamex ending thereafter
through and including the fiscal month
of Foamex ending July 31, 2005 3.50
Fiscal month of Foamex ending
August 28, 2005 and each fiscal month
of Foamex ending thereafter through
and including the fiscal month of
Foamex ending October 2, 2005 3.65
Fiscal month of Foamex ending
October 30, 2005 3.55
Fiscal month of Foamex ending
November 27, 2005 and each fiscal
month of Foamex ending thereafter
through and including the fiscal month
of Foamex ending July 2, 2006 3.50
Fiscal month of Foamex ending July 30,
2006 and each fiscal month of Foamex
ending thereafter 3.25
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2.7 The definition of "Business Day" in Annex A to the Credit Agreement is
hereby amended by adding the words ", Junior Term Loans (to the extent Junior
Term Loans are bearing interest based upon the LIBOR Rate)" after the words "in
connection with the LIBOR Rate" in clause (b) of such definition.
2.8 The definition of "Commitment" in Annex A to the Credit Agreement is
hereby amended by adding the words ", the Junior Term Loan Commitment"
immediately following the words "Term Loan Commitment".
2.9 The definition of "EBITDA" in Annex A to the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
"EBITDA" means, with respect to any fiscal period of Foamex, Adjusted Net
Earnings from Operations, plus, to the extent deducted in the determination
of Adjusted Net Earnings from Operations for that fiscal period, (i)
interest expense, (ii) Federal, state, local and foreign income taxes,
(iii) restructuring charges incurred after the Closing Date, (iv)
depreciation and amortization expense, (v) other non-cash charges, (vi) the
charge in an amount equal to $3,700,000 applicable to the fiscal quarter of
Foamex ended March 28, 2004, as disclosed in writing by Foamex to the
Administrative Agent and the Lenders in that certain letter dated November
3, 2004 and (vii) the charge in an amount equal to $1,000,000 applicable to
the fiscal quarter of Foamex ended June 27, 2004, as disclosed in writing
by Foamex to the Administrative Agent and the Lenders in that certain
letter dated November 3, 2004.
2.10 The definition of "Eurodollar Reserve Percentage" in Annex A to the
Credit Agreement is hereby amended by adding the words "and Junior Term Loan"
immediately after the words "LIBOR Rate Loan" in the last sentence of such
definition.
2.11 The definition of "Fixed Charges" in Annex A to the Credit Agreement
is hereby amended by adding the following proviso at the end of clause (ii)
thereof:
; provided, that with respect to any fiscal quarter in any Fiscal Year of
Foamex in which two scheduled principal payments are required to be made on
the Term Loans during such fiscal quarter, only the first of such scheduled
principal payments shall be included as a Fixed Charge in such fiscal
quarter and the second of such scheduled principal payments shall be
included as a Fixed Charge in the first subsequent fiscal quarter of Foamex
in which no scheduled principal payments are required to be made on the
Term Loans and in no event shall more than one principal payment on the
Term Loans carried forward pursuant to this proviso be included in any
fiscal quarter of Foamex
2.12 The definition of "Foamex 13 1/2% Subordinated Notes Shortfall Event"
in Annex A to the Credit Agreement is hereby deleted in its entirety.
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2.13 The definition of "LIBOR Interest Payment Date" in Annex A to the
Credit Agreement is hereby amended by deleting the word "first" where it appears
therein and substituting the word "last" therefor.
2.14 The definition of "LIBOR Rate" in Annex A to the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
"LIBOR Rate" means, for any Interest Period or Junior Term Loan Interest
Period, with respect to LIBOR Rate Loans or Junior Term Loans, as the case
may be, the rate of interest per annum determined pursuant to the following
formula:
LIBOR Rate = Offshore Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Offshore Base Rate" means the rate per annum appearing on Telerate
Page 3750 (or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period or Junior Term Loan
Interest Period, as applicable, for a term comparable to such Interest
Period or Junior Term Loan Interest Period. If for any reason such rate is
not available, the Offshore Base Rate shall be, for any Interest Period or
Junior Term Loan Interest Period, as applicable, the rate per annum
appearing on Reuters Screen LIBO Page as the London interbank offered rate
for deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period or Junior Term
Loan Interest Period, as the case may be, for a term comparable to such
Interest Period or Junior Term Loan Interest Period; provided, however, if
more than one such rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates. If for any
reason none of the foregoing rates is available, the Offshore Base Rate
shall be, for any Interest Period or Junior Term Loan Interest Period (as
applicable), the rate per annum determined by the Administrative Agent as
the rate of interest at which dollar deposits in the approximate amount of
the LIBOR Rate Loan or Junior Term Loan, as applicable, comprising part of
such Borrowing would be offered by the Bank's London Branch to major banks
in the offshore dollar market at their request at or about 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest
Period or Junior Term Loan Interest Period, as the case may be, for a term
comparable to such Interest Period or Junior Term Loan Interest Period.
2.15 The definition of "Loan Documents" in Annex A to the Credit Agreement
is hereby amended by adding the words ", the Junior Term Notes (once issued)"
immediately after the words "the Term Notes".
2.16 The definition of "Obligations" in Annex A to the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
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"Obligations" means all present and future loans, advances, liabilities,
obligations, covenants, duties, and debts owing by the Loan Parties to the
Administrative Agent and/or any Lender, arising under or pursuant to this
Agreement or any of the other Loan Documents, whether or not evidenced by
any note, or other instrument or document, whether arising from an
extension of credit, opening of a letter of credit, acceptance, loan,
guaranty, indemnification or otherwise, whether direct or indirect,
absolute or contingent, due or to become due, primary or secondary, as
principal or guarantor, and including all principal, interest (including,
but not limited to, any interest accruing after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding relating to any Loan Party, whether or not a claim for
post-filing or post-petition interest is allowed or allowable in whole or
in part in any such proceeding), charges, expenses, fees, attorneys' fees,
filing fees (including, but not limited to, any fees or expenses accruing
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding relating to any Loan Party,
whether or not allowed or allowable in whole or in part as a claim in any
such proceeding) and any other sums chargeable to any of the Loan Parties
hereunder or under any of the other Loan Documents. "Obligations" includes,
without limitation, (a) all debts, liabilities, and obligations now or
hereafter arising from or in connection with the Letters of Credit and (b)
all debts, liabilities and obligations now or hereafter arising from or in
connection with Bank Products.
2.17 The definition of "Prepayment Calculation Amount" in Annex A to the
Credit Agreement is hereby amended by adding ", plus (iv) the aggregate
outstanding principal amount of Junior Term Loans on such date of termination
(immediately prior to such termination)" at the end thereof immediately before
the period.
2.18 The definition of "Pro Rata Share" in Annex A to the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
"Pro Rata Share" means, with respect to a Lender at any time, a fraction
(expressed as a percentage), the numerator of which is the sum of (x) the
amount of such Lender's Commitment at such time plus (y) the aggregate
unpaid principal balance of the Term Loans owing to such Lender at such
time plus (z) the aggregate unpaid principal balance of the Junior Term
Loans owing to such Lender at such time and the denominator of which is the
sum of (x) the amounts of all of the Lenders' Commitments at such time plus
(y) the aggregate unpaid principal balance of the Term Loans owing to all
of the Lenders at such time plus (z) the aggregate unpaid principal balance
of the Junior Term Loans owing to all of the Lenders at such time (or if no
Commitments are outstanding at such time, a fraction (expressed as a
percentage), the numerator of which is the amount of Obligations owed to
such Lender at such time (after giving effect to such Lender's
participation in Non-Ratable Loans, Agent Advances, Letters of Credit and
Credit Support) and the denominator of which is the aggregate amount of the
Obligations owed to all Lenders at such time (after giving effect to each
Lenders' participation in Non-Ratable Loans, Agent
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Advances, Letters of Credit and Credit Support)); provided, that references
to Pro Rata Share in the context solely of the revolving line of credit
provided hereunder (including, without limitation, with respect to
Revolving Loans and participations in Revolving Loans, Letters of Credit
and Credit Support) means, with respect to a Lender at any time, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Revolving Credit Commitment at such time and the denominator of
which is the sum of the amounts of all of the Lenders' Revolving Credit
Commitments at such time, or if no Revolving Credit Commitments are
outstanding at such time, a fraction (expressed as a percentage), the
numerator of which is the amount of Obligations owed to such Lender at such
time with respect to the revolving line of credit provided hereunder (after
giving effect to such Lender's participation in Non-Ratable Loans, Agent
Advances, Letters of Credit and Credit Support) and the denominator of
which is the aggregate amount of the Obligations owed to all Lenders at
such time with respect to the revolving line of credit provided hereunder
(after giving effect to each Lenders' participation in Non-Ratable Loans,
Agent Advances, Letters of Credit and Credit Support); provided, further,
that references to Pro Rata Share in the context solely of the Term Loans
means, with respect to a Lender at any time, a fraction (expressed as a
percentage), the numerator of which is the aggregate unpaid principal
balance of the Term Loans owing to such Lender at such time and the
denominator of which is the aggregate unpaid principal balance of the Term
Loans owing to all of the Lenders at such time; and provided, even further,
that references to Pro Rata Share in the context solely of the Junior Term
Loans means, with respect to a Lender at any time, (i) prior to the funding
of the Junior Term Loans on the Junior Term Loan Funding Date, a fraction
(expressed as a percentage), the numerator of which is the Junior Term Loan
Commitment of such Lender at such time and the denominator of which is the
sum of the amounts of all of the Lenders' Junior Term Loan Commitments at
such time and (ii) following the funding of the Junior Term Loans on the
Junior Term Loan Funding Date, a fraction (expressed as a percentage), the
numerator of which is the aggregate unpaid principal balance of the Junior
Term Loans owing to such Lender at such time and the denominator of which
is the aggregate unpaid principal balance of the Junior Term Loans owing to
all of the Lenders at such time.
2.19 The definition of "Reserves" in Annex A to the Credit Agreement is
hereby amended by deleting the last sentence thereof in its entirety.
2.20 The definition of "Specified Asset Disposition" in Annex A to the
Credit Agreement is hereby amended by deleting clause (iv) thereof in its
entirety and renumbering clause (v) thereof as clause (iv).
2.21 The first WHEREAS clause of the Credit Agreement is hereby amended by
adding the words ", the Junior Term Lenders to make term loans to the Borrowers
in the aggregate principal amount of $15,000,000" immediately after the amount
"190,000,000" appearing in the third line thereof.
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2.22 Section 1.1 of the Credit Agreement is hereby amended by (i) deleting
the amount "240,000,000" where it appears therein and substituting the amount
"$255,000,000" therefor and (ii) adding the words "and Junior Term Loans"
immediately after the words "Term Loans" used in the second sentence of such
Section.
2.23 Article 1 of the Credit Agreement is hereby amended by adding a new
Section 1.3A immediately following Section 1.3 thereof which reads as follows:
1.3A Junior Term Loans.
(a) Amounts of Junior Term Loans. (i) The Borrowers may, by irrevocable
written notice to the Administrative Agent given no less than ten (10) Business
Days prior to the Junior Term Loan Funding Date, request that the Junior Term
Lenders decrease their aggregate Junior Term Loan Commitments; provided, that
the Borrowers shall not be permitted to reduce the aggregate Junior Term Loan
Commitments to an amount less than the aggregate amount necessary (together with
(i) the amount of the Additional B Term Loans, (ii) funds received or to be
received by Foamex under the Designated Agreements on or prior to the Junior
Term Loan Funding Date and (iii) proceeds received from asset sales permitted
under Section 7.11(xv)(to the extent such proceeds are permitted to be used for
such purpose pursuant to clause "second" of the fifth sentence of Section 3.4(f)
and are not required to be applied to the Term Loans in accordance with clause
"first" of the fifth sentence of Section 3.4(f)), in each case to the extent not
used to repurchase Foamex 13 1/2% Subordinated Notes on the open market in
accordance with Section 7.12(E)), to repay in full the outstanding Foamex 13
1/2% Subordinated Notes at the scheduled maturity thereof and pay fees and
expenses incurred in connection therewith. Effective upon the Administrative
Agent's receipt of such notice, the Junior Term Loan Commitment of each Junior
Term Lender shall be permanently reduced by an amount equal to its Pro Rata
Share of such requested reduction. The Administrative Agent shall promptly (but
in any event within five (5) Business Days of the Junior Term Loan Funding Date)
notify the Junior Term Lenders, by telecopier or e-mail, of the occurrence of
any reductions in the Junior Term Loan Commitments to be effected and any
changes to the amount of the Junior Term Loan Commitment of each Junior Term
Lender resulting therefrom.
(ii) Each Junior Term Lender severally agrees to make a term loan (any
such term loan being referred to as a "Junior Term Loan" and such term loans
being referred to collectively as the "Junior Term Loans") to the Borrowers on
the Junior Term Loan Funding Date, upon the satisfaction of the conditions
precedent set forth in Section 8.2 and the Junior Term Loan Funding Conditions,
in an amount equal to such Junior Term Lender's Junior Term Loan Commitment.
(b) Making of Junior Term Loans. Each Junior Term Lender shall make the
amount of such Junior Term Lender's Junior Term Loan available to the
Administrative Agent in same day funds, to the Administrative Agent's designated
account, not later than 12:00 noon (New York time) on the Business Day
immediately preceding the Junior Term Loan Funding Date (and on the Junior Term
Loan Funding Date the Borrowers shall pay to the Administrative Agent, for the
ratable benefit of the Junior Term Lenders who have made their Junior Term Loans
available to the Administrative Agent on or prior to such time, interest on such
Junior Term Loans at a per annum
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rate equal to the LIBOR Rate plus 6% for the period commencing on the Business
Day immediately preceding the Junior Term Loan Funding Date and ending on the
Junior Term Loan Funding Date). After the Administrative Agent's receipt of the
proceeds of such Junior Term Loans, upon satisfaction of the conditions
precedent set forth in Section 8.2 and the Junior Term Loan Funding Conditions,
the Administrative Agent shall make the proceeds of such Junior Term Loans
available to the Borrowers on the Junior Term Loan Funding Date by transferring
same day funds equal to the proceeds of such Junior Term Loans received by the
Administrative Agent to an account of the Borrowers designated in writing by the
Borrowers or as the Borrowers shall otherwise instruct in writing.
(c) Junior Term Notes. The Borrowers shall execute and deliver to the
Administrative Agent on behalf of each Junior Term Lender, on the Junior Term
Loan Funding Date, a promissory note, substantially in the form of Exhibit A-1
attached hereto and made a part hereof (such promissory notes, together with any
new notes issued pursuant to Section 11.2 upon the assignment of any portion of
any Junior Term Lender's Junior Term Loan, being hereinafter referred to
collectively as the "Junior Term Notes" and each of such promissory notes being
hereinafter referred to individually as a "Junior Term Note"). The Junior Term
Notes shall evidence each Junior Term Lender's Junior Term Loan, in an original
principal amount equal to that Junior Term Lender's Junior Term Loan Commitment
and with other appropriate insertions. Each Junior Term Note shall be dated the
Junior Term Loan Funding Date and stated to mature on the Stated Termination
Date. The Junior Term Loans shall be payable in full on the Termination Date.
Payments or prepayments of the Junior Term Loans may not be reborrowed. The
liability of the Borrowers with respect to the Junior Term Loans shall be joint
and several.
2.24 Section 2.1(a) of the Credit Agreement is hereby amended by (a) adding
the phrase "(or, in the case of the Junior Term Loans, at the Junior Term Loan
Rate)" immediately after the words "as set forth below" appearing in the first
sentence thereof and (b) adding the parenthetical "(other than the Junior Term
Loans)" immediately after the word "Loans" where it first appears in the second
sentence thereof.
2.25 The third sentence of Section 2.1(a) of the Credit Agreement is hereby
amended by (a) adding "(w) the Junior Term Loans," immediately following the
words "other than" in the parenthetical appearing in clause (iii) thereof, (b)
deleting the word "and" at the end of such clause (iii), (c) deleting the period
at the end of clause (iv) thereof and substituting "; and" therefor and (d)
adding a new clause (v) after such clause (iv) which reads as "(v) For all
Junior Term Loans, at a per annum rate equal to the Junior Term Loan Rate.".
2.26 Section 2.1(b) of the Credit Agreement is hereby amended by adding a
new clause (v) at the end of clause (iv) thereof which reads as follows:
(v) The Borrowers shall pay to the Administrative Agent, for the ratable
benefit of the Junior Term Lenders, interest on all Junior Term Loans in
arrears on the last day of each month occurring after the Junior Term Loan
Funding Date, commencing with September 30, 2005, and on the Termination
Date.
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2.27 Section 3.2(a) of the Credit Agreement is hereby amended by adding the
words "and Junior Term Loans" after the words "Term Loans" appearing in clause
(b) thereof and after the words "LIBOR Rate Loans" appearing in clause (e)
thereof.
2.28 The last paragraph of Section 3.2(a) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
Such early termination fee shall be allocated among the Revolving
Lenders, the Term Lenders and the Junior Term Lenders based upon the
relative amounts from each of the revolving credit facility, the term loan
facility and the junior term loan facility included in the Prepayment
Calculation Amount used to determine such early termination fee, with such
allocated portions to be divided among the Revolving Lenders, the Term
Lenders or the Junior Term Lenders, as appropriate, based upon each such
Lender's Pro Rata Share thereof.
2.29 Article 3 of the Credit Agreement is hereby amended by adding a new
Section 3.3A immediately following Section 3.3 thereof which reads as follows:
3.3A Repayment and Prepayment of Junior Term Loans. The Borrowers
agree, jointly and severally, to repay the principal of the Junior Term
Loans to the Administrative Agent, for the account of the Junior Term
Lenders, on the Termination Date. Notwithstanding anything in this
Agreement, unless and until all principal of the Term Loans owing to the
Term Lenders has been paid in full, the Borrowers shall not be permitted to
make any voluntary prepayments on account of principal of the Junior Term
Loans. Following the payment in full of all principal of the Term Loans,
the Borrowers may prepay the principal of the Junior Term Loans in whole or
in part, at any time and from time to time upon at least three (3) Business
Days' prior written notice to the Administrative Agent and the Junior Term
Lenders. All voluntary prepayments of the principal of the Junior Term
Loans shall be accompanied by the payment of all accrued but unpaid
interest on the Junior Term Loans to the date of prepayment and prepayment
fees in accordance with Section 3.2(a), if applicable, and payment of
amounts due under Section 4.4, if any. Amounts prepaid in respect of the
Junior Term Loans may not be reborrowed.
2.30 Section 3.4(a) of the Credit Agreement is hereby amended by deleting
each reference to "expressly permitted in clause third of the second sentence of
Section 3.4(f)" appearing in the proviso to the last sentence thereof and
substituting "expressly permitted in clause fifth of the second sentence of
Section 3.4(f) and in clause seventh of the fifth sentence of Section 3.4(f)"
therefor.
2.31 Section 3.4(b) of the Credit Agreement is hereby amended by adding the
following two sentences at the end thereof:
Promptly (but in any event no later than one (1) Business Day) following
the delivery to the Administrative Agent of each Equipment Appraisal and/or
Real Estate Appraisal required pursuant to Section 5.2(p), the Borrowers,
jointly and severally, shall pay to the Administrative Agent, for the
account of the Term Lenders and/or Junior Term Lenders (as
12
appropriate), the amount, without duplication, by which (i) the sum of (x)
the aggregate outstanding principal balance of the Term Loans (after giving
effect to any concurrent repayment of the Term Loans required by the first
sentence of this Section 3.4(b)) plus (y) the aggregate outstanding
principal balance of the Junior Term Loans exceeds (ii) the Combined Loan
Fixed Assets Value at such time. Any such prepayment shall be applied
first, to the then outstanding principal owing on the Term Loans (to be
applied to installments of principal thereof in inverse order of maturity),
together with accrued interest, and second, to the then outstanding
principal owing on the Junior Term Loans, together with accrued interest.
2.32 Section 3.4(f) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
(f) Repayments or prepayments from proceeds of the disposition of
Accounts and Inventory in accordance with Section 3.4(a) (other than
proceeds from the disposition of Accounts and Inventory of any of the
Mexican Subsidiaries included in a disposition, individually or as a series
of related transactions, of all or substantially all of the assets of the
Mexican Subsidiaries taken as a whole, which proceeds shall be applied in
accordance with the second sentence of this clause (f); provided that to
the extent that such assets of any of the Mexican Subsidiaries constitute
Designated Assets, the proceeds thereof shall be applied in accordance with
the fifth sentence of this clause (f)) shall be applied as follows: the
actual proceeds of sale or other disposition of Accounts and Inventory or
an amount equal to the gross book value of Accounts and Inventory sold as
part of a sale of a division or by means of the sale of the stock or other
equity interests of a Subsidiary shall be applied, first, to accrued
interest then due with respect to the Revolving Loans, second, to pay the
principal of the Revolving Loans (subject to the proviso in the last
sentence of Section 3.4(a), without reduction of the Maximum Revolver
Amount or the establishment of a Permanent Reserve), third, to cash
collateralize outstanding Letters of Credit, fourth, to accrued interest
with respect to the Term Loans, fifth, to scheduled installments of
principal of the Term Loans in inverse order of maturity, sixth, to accrued
interest with respect to the Junior Term Loans, seventh, to the principal
of the Junior Term Loans and eighth, to the payment of any other
Obligations in the order set forth in Section 3.8; provided, that unless an
Event of Default has occurred and is continuing and except as provided in
the first parenthetical of this sentence, proceeds from the disposition of
Accounts and Inventory shall not be applied to the payment or prepayment of
principal of the Term Loans or Junior Term Loans. Repayments or prepayments
from Net Proceeds of all asset dispositions (other than sales or other
dispositions of (i) Accounts and Inventory of a Loan Party and (ii)
Designated Assets) and of all sales or issuances of stock or other equity
interests in accordance with Section 3.4(a), including Net Proceeds from
the sale or other disposition of a division or a Subsidiary in excess of
the gross book value of Accounts and Inventory sold or disposed of as part
of the sale or other disposition of that division or Subsidiary, shall be
applied as follows: first, to accrued interest with respect to the Term
Loans, second, to scheduled installments of principal of the Term Loans in
inverse order of maturity, third, to accrued interest with respect to the
Junior Term Loans, fourth, to the principal of the Junior Term Loans,
fifth, at the option of Foamex, in the event (and only such event) that (x)
the average aggregate
13
Availability for all Borrowers is greater than $50,000,000 for the thirty
consecutive day period ending on the date of such payment, (y) immediately
after giving effect to such payment the aggregate Availability of all the
Borrowers is greater than $50,000,000 and (z) at the time of such payment
there exists no Default or Event of Default (and no Default or Event of
Default would result therefrom), to principal of (but not interest on) the
Term Loan B Obligations in an aggregate amount under this clause fifth,
together with the aggregate amount of payments made on the Term Loan B
Obligations under clause seventh of the fifth sentence of this clause (f),
not to exceed $10,000,000 during the term of this Agreement, sixth, to pay
the principal of the Revolving Loans (subject to the proviso in the last
sentence of Section 3.4(a) and the two immediately succeeding sentences of
this Section 3.4(f), without reduction of the Maximum Revolver Amount or
the establishment of a Permanent Reserve), seventh, to cash collateralize
outstanding Letters of Credit, and eighth, to the payment of any other
Obligations in the order set forth in Section 3.8; provided, that unless an
Event of Default has occurred and is continuing, only Net Proceeds of
Specified Asset Dispositions shall be applied to the payment or prepayment
of principal of the Term Loans, Junior Term Loans or of the Term Loan B
Obligations. Any repayment or prepayment of principal of the Revolving
Loans from Net Proceeds of any Specified Asset Disposition (other than
dispositions of Designated Assets) as provided in the immediately preceding
sentence shall result in a permanent reduction of the Revolving Credit
Commitments and the Maximum Revolver Amount and the establishment of a
Permanent Reserve, in each instance, in the amount of any such application
to the Revolving Loans (such permanent reduction and the establishment of
such Permanent Reserve to be made concurrently with such application to the
Revolving Loans and such reduction to result in each Revolving Lender's
Revolving Credit Commitment to be permanently reduced by its Pro Rata Share
of such reduction). Any such Permanent Reserve shall be established in the
following manner: (i) if such Permanent Reserve results from a Specified
Asset Disposition by a Borrower, such Permanent Reserve shall be
established against the Borrowing Base of such Borrower, (ii) if such
Permanent Reserve results from a Specified Asset Disposition by Foamex
Canada or any of its Subsidiaries, such Permanent Reserve shall be
established against the Borrowing Base of Foamex Canada and (iii) if such
Permanent Reserve results from any other Specified Asset Disposition, such
Permanent Reserve shall be established against the Borrowing Base of
Foamex; provided, that, Foamex may, by written notice to the Administrative
Agent received prior to the establishment of a particular Permanent
Reserve, elect that such particular Permanent Reserve be established
against the Borrowing Base of another Borrower or Foamex Canada instead of
the manner provided in clauses (i), (ii) or (iii), as applicable, of this
sentence. Repayments or prepayments from Net Proceeds (proceeds, in the
case of clause second below) of the disposition of Designated Assets shall
be applied as follows: first, to the extent such Designated Assets disposed
of consist of (x) Real Estate of a Borrower or Foamex Canada in which the
Administrative Agent has a perfected Lien, Net Proceeds from such
disposition in an amount equal to 50% of the fair market value of such Real
Estate, as such fair market value is set forth in the then most recent Real
Estate Appraisal delivered to the Administrative Agent, shall be applied to
accrued interest with respect to the Term Loans, and then to scheduled
installments of principal of the Term Loans in inverse order of maturity or
(y) Equipment of a Borrower or Foamex Canada in which the Administrative
Agent has a perfected Lien, Net Proceeds from such disposition in an amount
14
equal to 80% of the orderly liquidation value of such Equipment, as such
orderly liquidation value is set forth in the then most recent Equipment
Appraisal delivered to the Administrative Agent, shall be applied to
accrued interest with respect to the Term Loans, and then to scheduled
installments of principal of the Term Loans in inverse order of maturity,
second, at the option of Foamex, in the event (and only such event) that
(x) the average aggregate Availability for all Borrowers for the thirty
consecutive day period ending on the Business Day immediately preceding the
date of such repurchase or repayment is greater than the sum of (i)
$10,000,000 plus (ii) the Availability Required Amount in effect on the
Business Day immediately preceding the date of such repurchase or
repayment, (y) immediately after giving effect to such repurchase or
repayment, the aggregate Availability of all the Borrowers is greater than
the sum of (i) $10,000,000 plus (ii) the Availability Required Amount in
effect on the date of such repurchase or repayment, and (z) at the time of
such repurchase or repayment there exists no Default or Event of Default
(and no Default or Event of Default would result therefrom), to repurchase
at par or a discount on the open market or repay at maturity Foamex 13 1/2%
Subordinated Notes, third, to accrued interest with respect to the Term
Loans, fourth, to scheduled installments of principal of the Term Loans in
inverse order of maturity, fifth, to accrued interest with respect to the
Junior Term Loans, sixth, to the principal of the Junior Term Loans,
seventh, at the option of Foamex, in the event (and only such event) that
(x) the average aggregate Availability for all Borrowers is greater than
$50,000,000 for the thirty consecutive day period ending on the date of
such payment, (y) immediately after giving effect to such payment the
aggregate Availability of all the Borrowers is greater than $50,000,000 and
(z) at the time of such payment there exists no Default or Event of Default
(and no Default or Event of Default would result therefrom), to principal
of (but not interest on) the Term Loan B Obligations in an aggregate amount
under this clause seventh, together with the aggregate amount of payments
made on the Term Loan B Obligations under clause fifth of the second
sentence of this clause (f), not to exceed $10,000,000 during the term of
this Agreement, eighth, to pay the principal of the Revolving Loans
(subject to the proviso in the last sentence of Section 3.4(a) and the last
two sentences of this Section 3.4(f), without reduction of the Maximum
Revolver Amount or the establishment of a Permanent Reserve), ninth, to
cash collateralize outstanding Letters of Credit, and tenth, to the payment
of any other Obligations in the order set forth in Section 3.8. If Foamex
elects pursuant to clause "second" of the previous sentence to repurchase
or repay Foamex 13 1/2% Subordinated Notes with proceeds from the
disposition of Designated Assets, following the application of Net Proceeds
from the disposition of such Designated Assets in accordance with clause
"first" of the previous sentence and pending such repurchase or repayment,
the remaining proceeds of such disposition shall be applied to repay or
prepay Revolving Loans to the extent outstanding (subject to the proviso in
the last sentence of Section 3.4(a), without reduction of the Maximum
Revolver Amount or the establishment of a Permanent Reserve) and the
Administrative Agent shall implement a Reserve of the type specified in
clause (ii) of the definition thereof in the amount of such proceeds so
applied to repay or prepay Revolving Loans (which Reserve shall (x) be
implemented to permit Foamex to borrow Revolving Loans against such Reserve
(provided, that the aggregate amount of such Revolving Loans borrowed may
not exceed the original amount of such Reserve) to repurchase or repay
Foamex 13 1/2% Subordinated Notes in accordance with Section 7.12(E), so
long as on the
15
date of such borrowing and repurchase or repayment the conditions precedent
to the borrowing of such Revolving Loans specified in Section 8.2 are
satisfied, and (y) be reduced dollar for dollar by the amount of the
Revolving Loans so made and used for such purpose). Any repayment or
prepayment of principal of the Revolving Loans from Net Proceeds of any
disposition of Designated Assets as provided in clause "eighth" of the
second preceding sentence shall result in a permanent reduction of the
Revolving Credit Commitments and the Maximum Revolver Amount and the
establishment of a Permanent Reserve, in each instance, in the amount of
any such application to the Revolving Loans (such permanent reduction and
the establishment of such Permanent Reserve to be made concurrently with
such application to the Revolving Loans and such reduction to result in
each Revolving Lender's Revolving Credit Commitment to be permanently
reduced by its Pro Rata Share of such reduction). Any such Permanent
Reserve shall be established in the following manner: (i) if such Permanent
Reserve results from a disposition of Designated Assets by a Borrower, such
Permanent Reserve shall be established against the Borrowing Base of such
Borrower, (ii) if such Permanent Reserve results from a disposition of
Designated Assets by Foamex Canada or any of its Subsidiaries, such
Permanent Reserve shall be established against the Borrowing Base of Foamex
Canada and (iii) if such Permanent Reserve results from any other
disposition of Designated Assets, such Permanent Reserve shall be
established against the Borrowing Base of Foamex; provided, that, Foamex
may, by written notice to the Administrative Agent received prior to the
establishment of a particular Permanent Reserve, elect that such particular
Permanent Reserve be established against the Borrowing Base of another
Borrower or Foamex Canada instead of the manner provided in clauses (i),
(ii) or (iii), as applicable, of this sentence.
2.33 Section 3.4(g) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
(g) The Borrowers, jointly and severally, shall pay to the
Administrative Agent, for the account of the Lenders, the amount, without
duplication, by which the Aggregate Combined Facility Outstandings exceeds
the Borrowing Cutoff Amount then in effect. Any payment required to be made
by a Borrower pursuant to this Section 3.4(g) shall be applied as follows:
first, to the principal of the then outstanding Revolving Loans (without
reduction of the Maximum Revolver Amount), together with accrued interest,
second, to cash collateralize outstanding Letters of Credit, third, to the
then outstanding principal owing on the Term Loans (to be applied to
installments of principal thereof in inverse order of maturity), together
with accrued interest and fourth, to the then outstanding principal owing
on the Junior Term Loans, together with accrued interest.
2.34 Section 3.5 of the Credit Agreement is hereby amended by adding a new
paragraph (c) immediately following paragraph (b) thereof which reads as
follows:
(c) In connection with any prepayment, if any Junior Term Loan is prepaid
prior to the expiration date of the Junior Term Loan Interest Period
applicable thereto, the Borrowers shall pay to the Junior Term Lenders the
amounts described in Section 4.4.
16
2.35 Section 3.6 of the Credit Agreement is hereby amended by adding the
words "or "Junior Term Loan Interest Period", as appropriate" immediately after
the words "Interest Period" in clause (b) thereof.
2.36 Section 3.8 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:
3.8 Apportionment, Application and Reversal of Payments. Principal and
interest payments shall be apportioned ratably among the applicable Lenders
(according to the unpaid principal balance of the Loans to which such
payments relate held by each applicable Lender) and payments of the fees
shall, as applicable, be apportioned ratably among the applicable Lenders,
except for fees payable solely to the Administrative Agent and the Letter
of Credit Issuer. All payments shall be remitted to the Administrative
Agent (except as expressly provided herein otherwise) and all such payments
not relating to principal or interest of specific Loans, or not
constituting payment of specific fees or expenses, and all proceeds of
Accounts or other Collateral received by the Administrative Agent, shall be
applied, ratably, subject to the provisions of this Agreement (including,
without limitation, to the extent applicable, Section 3.4(f)):
(i) So long as no Event of Default is continuing: first, to pay any
fees, indemnities or expense reimbursements then due to the
Administrative Agent; second, to pay any amounts relating to Bank
Products of the type specified in clauses (ii) and (iii) of the
definition thereof then due to the Bank or any of its Affiliates from
any of the Borrowers; third, to pay any fees or expense reimbursements
then due to the Lenders from any of the Borrowers; fourth, to pay
interest due in respect of (x) all Revolving Loans, including
Non-Ratable Loans and Agent Advances, in an amount equal to the
Revolving Loan Interest Percentage of the Combined Interest Amount and
(y) all Term Loans, in an amount equal to the Term Loan Interest
Percentage of the Combined Interest Amount; fifth, to pay or prepay
principal of the Non-Ratable Loans and Agent Advances; sixth, to pay
or prepay principal of the Revolving Loans (other than Non-Ratable
Loans and Agent Advances) (subject to the proviso in the last sentence
of Section 3.4(a), without reduction in the Maximum Revolver Amount or
the establishment of a Permanent Reserve) and unpaid reimbursement
obligations in respect of Letters of Credit and Credit Support;
seventh, to pay or prepay principal of the Term Loans (to be applied
to the installments thereof in the inverse order of maturity);
provided, that notwithstanding the foregoing, only proceeds of
Specified Asset Dispositions and Designated Assets shall be applied to
the payment or prepayment of principal of the Term Loans; eighth, to
pay interest due in respect of the Junior Term Loans; ninth, to pay or
prepay principal of the Junior Term Loans; provided, that
notwithstanding the foregoing, only proceeds of Specified Asset
Dispositions and Designated Assets shall be applied to the payment or
prepayment of principal of the Junior Term Loans; tenth, to pay an
amount to the Administrative Agent equal to all outstanding
Obligations in respect of Letters of Credit and Credit Support to be
held as cash collateral for such Obligations; eleventh, to pay any
amounts relating to Bank
17
Products (to the extent not paid pursuant to clause second above) then
due to any Lender or any of its Affiliates from any of the Borrowers
and twelfth, to the payment of any other Obligations.
(ii) Upon the occurrence and during the continuance of an Event of
Default: first, to pay any fees, indemnities or expense reimbursements
then due to the Administrative Agent; second, to pay any fees or
expense reimbursements then due to the Lenders from any of the
Borrowers; third, to pay interest due in respect of (x) all Revolving
Loans, including Non-Ratable Loans and Agent Advances, in an amount
equal to the Revolving Loan Interest Percentage of the Combined
Interest Amount and (y) all Term Loans, in an amount equal to the Term
Loan Interest Percentage of the Combined Interest Amount; fourth, to
pay or prepay (or cash collateralize, if applicable) (x) in Revolving
Loan Application Order, the Revolving Loan Obligations in an amount
equal to the Revolving Loan Principal Percentage of the Combined
Obligation Amount and (y) principal of the Term Loans (to be applied
to installments thereof in inverse order of maturity) in an amount
equal to the Term Loan Principal Percentage of the Combined Obligation
Amount, fifth, to pay interest due in respect of the Junior Term
Loans, sixth, to pay or prepay principal of the Junior Term Loans,
seventh, to pay any amounts relating to Bank Products then due to any
Lender or any of its Affiliates from any of the Borrowers and eighth,
to the payment of any other Obligations; provided, that,
notwithstanding the foregoing, proceeds from the sale or other
disposition of Collateral as to which the Lien of the Administrative
Agent (and not the Term Loan B Agent) in such Collateral is valid,
perfected and enforceable shall be applied to the payment of the
"Excluded Working Capital Obligations" (as such term is defined in the
Senior Lenders Intercreditor Agreement) before being applied to the
payment of any other Obligations (such application to the payment of
the Excluded Working Capital Obligations to be in such order as
determined by the Administrative Agent).
Notwithstanding anything to the contrary contained in this Agreement,
unless so directed by the applicable Borrower, or unless an Event of
Default has occurred and is continuing, neither the Administrative Agent
nor any Lender shall apply any payments which it receives to any LIBOR Rate
Loan, except (a) on the expiration date of the Interest Period applicable
to any such LIBOR Rate Loan, or (b) in the event, and only to the extent,
that there are no outstanding Base Rate Loans owing by the applicable
Borrower and, in any event, the Borrowers shall pay LIBOR breakage losses
(in the case of payments which are applied to LIBOR Rate Loans or Junior
Term Loans) in accordance with Section 4.4. The Administrative Agent and
the Lenders shall have the continuing and exclusive right to apply and
reverse and reapply, in each instance in accordance with this Section 3.8,
any and all such proceeds and payments to any portion of the Obligations.
2.37 Section 4.2 of the Credit Agreement is hereby amended by adding new
clauses (c) and (d) immediately following clause (b) thereof which read as
follows:
18
(c) If any Junior Term Lender determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for any Junior Term Lender or its applicable
lending office to make Junior Term Loans bearing interest based upon the
LIBOR Rate, then, on notice thereof by that Junior Term Lender to the
Borrowers (or Foamex on behalf of the Borrowers) through the Administrative
Agent, any Junior Term Loans being made by that Junior Term Lender shall
bear interest based on the per annum rate set forth in the proviso to the
definition of "Junior Term Loan Rate" until that Junior Term Lender
notifies the Administrative Agent and the Borrowers (or Foamex on behalf of
the Borrowers) that the circumstances giving rise to such determination no
longer exist (at which time that Junior Term Lender's Junior Term Loans
shall bear interest based upon the LIBOR Rate as specified in the
definition of "Junior Term Loan Rate").
(d) If a Junior Term Lender determines that it is unlawful to maintain any
Junior Term Loan as a Loan bearing interest based upon the LIBOR Rate,
then, upon each Borrower's receipt (or Foamex's receipt on behalf of such
Borrower) of notice of such fact and demand from such Junior Term Lender
(with a copy to the Administrative Agent), the Junior Term Loans of that
Junior Term Lender owing by such Borrower then outstanding shall
automatically convert to Junior Term Loans that bear interest based on the
per annum rate set forth in the proviso to the definition of "Junior Term
Loan Rate" and such Borrower shall pay to such Junior Term Lender interest
accrued thereon and any amounts required under Section 4.4, either on the
last day of the Junior Term Loan Interest Period thereof, if that Junior
Term Lender may lawfully continue to maintain such Junior Term Loans to
such day, or immediately, if that Junior Term Lender may not lawfully
continue to maintain such Junior Term Loans.
2.38 Section 4.3(a) of the Credit Agreement is hereby amended by adding the
words "or Junior Term Loans" after the words "LIBOR Rate Loans" where it appears
in the sixth line thereof.
2.39 Section 4.4 of the Credit Agreement is hereby amended by (i) adding
the words "or Junior Term Loan" immediately after the words "LIBOR Rate Loan"
appearing in clause (a) thereof, (ii) adding the words "or Junior Term Loans"
immediately after the words "LIBOR Rate Loans" appearing in the fourth to last
line thereof, (iii) deleting the word "or" appearing at the end of clause (b)
thereof, (iv) adding the word "or" at the end of clause (c) thereof and (v)
adding a new clause (d) immediately following clause (c) thereof which reads as
follows:
(d) the failure of such Borrower to borrow the Junior Term Loans on the
Junior Term Loan Funding Date or the prepayment or other payment (including
after acceleration thereof) of any Junior Term Loans made to such Borrower
on a day that is not the last day of the relevant Junior Term Loan Interest
Period;
19
2.40 Section 4.5 of the Credit Agreement is hereby amended by (i) adding an
"(a)" immediately before the word "If" appearing in the first line thereof and
(ii) adding a new clause (b) immediately following clause (a) thereof which
reads as follows:
(b) If the Administrative Agent determines that for any reason adequate and
reasonable means do not exist for determining the LIBOR Rate for any Junior
Term Loan Interest Period with respect to the Junior Term Loans, or the
Majority Junior Term Lenders advise the Administrative Agent that the LIBOR
Rate for any Junior Term Loan Interest Period with respect to the Junior
Term Loans does not adequately and fairly reflect the cost to the Junior
Term Lenders of funding such Junior Term Loan, the Administrative Agent
will promptly so notify the Borrowers and each Junior Term Lender.
Thereafter, the Junior Term Loans shall bear interest based on the per
annum rate set forth in the proviso to the definition of "Junior Term Loan
Rate" until the Administrative Agent revokes such notice in writing.
2.41 Section 5.3(j)(ii) of the Credit Agreement is hereby amended by (a)
deleting the word "thirty (30)" appearing therein and substituting "fifteen
(15)" therefor, (b) deleting the "(x)" appearing immediately prior to the words
"in the case of" in the proviso thereto, (c) deleting the word "and" appearing
immediately before the "(y)" in the proviso thereto and (d) deleting clause (y)
of the proviso thereto in its entirety.
2.42 Section 6.1 of the Credit Agreement is hereby amended by adding the
words "and Junior Term Loans" immediately following the words "Term Loans"
appearing in the first parenthetical of the sixth sentence thereof.
2.43 Section 6.22 of the Credit Agreement is hereby amended by (a) adding
the parenthetical "(other than the Junior Term Loans)" immediately following the
word "Loans" appearing in the first line thereof and (b) adding the following
sentence immediately following the first sentence thereof:
The proceeds of the Junior Term Loans are to be used solely to repay the
principal balance of Foamex 13 1/2% Subordinated Notes outstanding on the
Junior Term Loan Funding Date and to pay fees and expenses incurred in
connection therewith.
2.44 Section 7.11 of the Credit Agreement is hereby amended by (a) deleting
the amount "$10,000" appearing in clause (xiv) thereof and substituting the
amount "$100,000" therefor, (b) deleting the word "and" appearing at the end of
clause (xiii) thereof, (c) deleting the "." at the end of clause (xiv) thereof
and substituting "; and" therefor and (d) adding a new clause (xv) which reads
as follows:
(xv) sales of Designated Assets by such Loan Party; provided, that the cash
Net Proceeds received by such Loan Party from the sale of any such Designated
Assets on the closing of such sale shall be in an aggregate amount not less than
(x) in the case of Designated Assets consisting of Real Estate of a Borrower or
Foamex Canada in which the Administrative Agent has a perfected Lien, 50% of the
fair market value of such Real Estate, as such fair market value is set
20
forth in the then most recent Real Estate Appraisal delivered to the
Administrative Agent and (y) in the case of Designated Assets consisting of
Equipment of a Borrower or Foamex Canada in which the Administrative Agent has a
perfected Lien, 80% of the orderly liquidation value of such Equipment, as such
orderly liquidation value is set forth in the then most recent Equipment
Appraisal delivered to the Administrative Agent.
2.45 Section 7.12 of the Credit Agreement is hereby amended by adding a new
clause (E) immediately following clause (D) thereof which reads as follows:
(E) Foamex may repurchase on or prior to the Junior Term Loan Funding Date,
at par or a discount, Foamex 13 1/2% Subordinated Notes with proceeds it
receives from any Designated Agreements, asset sales permitted under Section
7.11(xv)(but solely to the extent that (A) such proceeds are not required to be
applied to the Term Loans in accordance with clause "first" of the fifth
sentence of Section 3.4(f) and (B) the conditions specified in clause "second"
of the fifth sentence of Section 3.4(f) are satisfied) and the Additional B Term
Loans; provided, that (i) no Default or Event of Default shall have occurred and
be continuing on the date of any such repurchase or would be caused as a result
thereof and (ii) any such Foamex 13 1/2% Subordinated Notes being repurchased
shall be retired and cancelled promptly following the consummation of such
repurchase.
2.46 Clause (j) of Section 7.15 of the Credit Agreement is hereby amended
by adding the words ", including in respect of the Additional B Term Loans"
immediately following the words "Term Loan B Obligations" appearing therein.
2.47 Section 7.16 of the Credit Agreement is hereby amended by (i) adding
", 7.12(E)" immediately following "Sections 7.12(B)" in clause (b) thereof, (ii)
deleting the word "third" in clause (e) thereof and substituting "fifth"
therefor and (iii) adding the clause "or clause seventh of the fifth sentence of
Section 3.4(f)" immediately after the words "second sentence of Section 3.4(f)"
in clause (e) thereof.
2.48 Section 7.26 of the Credit Agreement is hereby amended by adding the
words "and each Fiscal Year thereafter" immediately after the number "2007" in
the first column of the table in such section.
2.49 Section 8.2 of the Credit Agreement is hereby amended by (a) adding
the words ", the Junior Term Lenders" immediately following the words "Revolving
Lenders" appearing in the first line thereof and (b) adding the words "and the
Junior Term Loans on the Junior Term Loan Funding Date" immediately following
the words "Closing Date" appearing in the third line thereof.
2.50 Section 9.1 of the Credit Agreement is hereby amended by deleting the
text of clause (q) thereof in its entirety and substituting "[Intentionally
Omitted];" therefor.
2.51 Section 11.1(a) of the Credit Agreement is hereby amended by adding
the words ", Junior Term Loan Commitment" immediately following the words
"Revolving Credit
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Commitment" appearing in each of the first line of clause (E) thereof and in the
third proviso to such Section.
2.52 Section 11.2(a) of the Credit Agreement is hereby amended by adding
the words "and Junior Term Loans" immediately following the words "Term Loans"
appearing in the tenth line thereof.
2.53 Section 12.8 of the Credit Agreement is hereby amended by adding the
words `, "Junior Term Lender", "Junior Term Lenders"' immediately following the
words "`Term Lenders'" in the last sentence thereof.
2.54 Section 12.9 of the Credit Agreement is hereby amended by deleting the
words "Revolving Credit Commitment and Revolving Loans" in the second sentence
thereof and substituting "Commitment and Loans" therefor.
2.55 Section 12.14 of the Credit Agreement is hereby amended by adding the
words ", Junior Term Loans" immediately following the words "Term Loans"
appearing in the second sentence thereof.
2.56 Section 12.15(e) of the Credit Agreement is hereby amended by adding
the words ", Junior Term Loans" immediately following the words "Revolving
Loans" appearing in the second to last line thereof.
2.57 Section 12.17(a) of the Credit Agreement is hereby amended by adding
the words "Junior Term Loans," immediately following the words "Term Loans,"
appearing in the last sentence thereof.
2.58 Section 12.21 of the Credit Agreement is hereby amended by adding the
words "or the Junior Term Lenders" immediately following the words "Term
Lenders".
2.59 The second sentence of the eighth paragraph in Article 13 of the
Credit Agreement is hereby amended by deleting each reference to "Revolving
Credit Commitments" and substituting "Commitments" therefor.
2.60 Schedule 1.2 to the Credit Agreement is hereby amended to add the
information set forth on Schedule 1.2 attached hereto.
2.61 A new Exhibit A-1 (Form of Junior Term Note) is hereby added to the
Credit Agreement in the form of Exhibit A-1 attached hereto.
SECTION 3. EFFECTIVENESS. This Amendment shall become effective on such
date as the following conditions shall have been satisfied in full:
3.1 Counterparts of this Agreement executed by the Borrowers, the
Guarantors, the Lenders and the Administrative Agent shall have been delivered
to the Administrative Agent.
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3.2 The Administrative Agent shall have received an amendment to the Senior
Lenders Intercreditor Agreement, duly executed by the Term Loan B Agent, Foamex
and those Affiliates of Foamex party thereto, in form and substance satisfactory
to the Administrative Agent.
3.3 The Administrative Agent shall have received a copy, certified by a
Responsible Officer of Foamex as true and complete, of an amendment to the Term
Loan B Agreement, consenting to the Junior Term Loans and providing for the
funding of the Additional B Term Loans, which amendment shall be in form and
substance satisfactory to the Administrative Agent and the Majority Lenders.
3.4 The Administrative Agent for the sole account of the Administrative
Agent and the Bank shall have received, in form and substance satisfactory to
the Administrative Agent and the Bank, a fully executed fee letter, dated the
date hereof (the "Fee Letter"), between the Administrative Agent and the
Borrowers and the Administrative Agent shall have received payment of all fees
payable thereunder.
3.5 The Borrower shall have paid to the Administrative Agent, for the
ratable benefit (based upon their respective Pro Rata Shares in effect
immediately prior to the effectiveness of this Amendment) of the Lenders who
have delivered to the Administrative Agent an executed signature page to this
Amendment prior to 2:00 p.m. on November 3, 2004, an amendment fee in the amount
of $100,000.
3.6 The Administrative Agent shall have received certified copies of
resolutions of the Board of Directors of each of the Loan Parties (or in the
case of a Loan Party that is not a corporation, the equivalent governing body)
approving the Junior Term Loans, the Additional B Term Loans and the
corresponding modifications to the Credit Agreement and the Term Loan B
Agreement and such opinions of counsel relating to the Junior Term Loans and
such modifications to the Credit Agreement as the Administrative Agent shall
reasonably request.
3.7 The Administrative Agent shall have received evidence that all
requisite governmental and third party consents and approvals (including,
without limitation, consents with respect to each Loan Party) to the
transactions contemplated by this Amendment have been obtained and remain in
effect; all applicable waiting periods shall have expired without any action
being taken by any competent authority; and no law or regulation shall be
applicable in the reasonable judgment of the Lenders that restrains, prevents or
imposes materially adverse conditions upon this Amendment, the Credit Agreement
as amended by this Amendment, any of the other Loan Documents or any of the
transactions contemplated hereby or thereby.
3.8 All proceedings taken in connection with the execution of this
Amendment, the Junior Term Notes, the Credit Agreement as amended by this
Amendment, all other Loan Documents and all documents and papers relating
thereto shall be satisfactory in form, scope and substance to the Administrative
Agent and the Lenders.
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SECTION 4. CONSENT TO AMENDMENTS TO SENIOR LENDERS INTERCREDITOR AGREEMENT
AND TERM LOAN B AGREEMENT.
4.1 Each of the Lenders, by its signature to this Amendment, hereby
authorizes the Administrative Agent to enter into the amendment to the Senior
Lenders Intercreditor Agreement referred to in Section 3.2 of this Amendment and
agrees to be bound by the provisions of the Senior Lenders Intercreditor
Agreement as so amended.
4.2 Each of the Lenders, by its signature to this Amendment, hereby
consents to the amendment to the Term Loan B Agreement providing for, among
other things, the funding of the Additional B Term Loans, a copy of which is
attached as Exhibit A hereto.
SECTION 5. COUNTERPARTS. This Amendment may be executed in counterparts,
each of which shall be an original, and all of which, taken together, shall
constitute a single instrument. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 6. REFERENCES TO CREDIT AGREEMENT. From and after the effectiveness
of this Amendment and the amendments contemplated hereby, all references in the
Credit Agreement to "this Agreement", "hereof", "herein", and similar terms
shall mean and refer to the Credit Agreement, as amended and modified by this
Amendment, and all references in other documents to the Credit Agreement shall
mean such agreement as amended and modified by this Amendment.
SECTION 7. RATIFICATION AND CONFIRMATION. The Credit Agreement is hereby
ratified and confirmed and, except as herein agreed, remains in full force and
effect. Each of the Borrower and the Guarantors represents and warrants that (i)
all representations and warranties contained in the Loan Documents are correct
in all material respects with the same effect as though such representations and
warranties had been made on and as of the date hereof (except to the extent that
such representations or warranties expressly related to a specified prior date,
in which case such representations and warranties shall be correct in all
material respects as of such specified prior date) and (ii) there exists no
Default or Event of Default. Each of the Guarantors hereby ratifies its
Guarantee of the Obligations (including, without limitation, the Junior Term
Loans) and its grant of a security interest in the Collateral in which it has an
interest to secure the payment of the Obligations.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the day and year
first above written.
FOAMEX L.P.
By: FMXI, Inc., its Managing General Partner
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Title: Vice President
-----------------------------
FMXI, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Title: Vice President
-----------------------------
FOAMEX INTERNATIONAL INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Title: Senior Vice President
-----------------------------
FOAMEX CANADA INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Title: Treasurer
-----------------------------
FOAMEX CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Title: Vice President
-----------------------------
FOAMEX LATIN AMERICA, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Title: Vice President
-----------------------------
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FOAMEX MEXICO, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Title: Vice President
-----------------------------
FOAMEX MEXICO II, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Title: Vice President
-----------------------------
FOAMEX ASIA, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Title: Vice President
-----------------------------
FOAMEX CARPET CUSHION LLC
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Title: Vice President
-----------------------------
BANK OF AMERICA, N.A.,
Individually and as Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------
Title: Vice President
-----------------------------
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxx XxXxxxxx
-----------------------------
Title: Duly Authorized Signatory
-----------------------------
BANK ONE, NA (Main Office Chicago)
By:
-----------------------------
Title:
-----------------------------
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THE CIT GROUP/COMMERCIAL SERVICES, INC.
By: /s/ Xxxx Stanza
-----------------------------
Title: Vice President
-----------------------------
CONGRESS FINANCIAL CORPORATION
(CENTRAL)
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Title: Vice President
-----------------------------
STATE OF CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM
By:
-----------------------------
Title:
-----------------------------
ORIX FINANCIAL SERVICES, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxx
-----------------------------
Title: Authorized Representative
-----------------------------
XXXXX FARGO FOOTHILL, LLC
By: /s/ Xxxx Xxxxxxx
-----------------------------
Title: Vice President
-----------------------------
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