TAX DISTRIBUTION ADVANCE AGREEMENT
BY AND BETWEEN
FOAMEX L.P.
AND
FOAMEX-JPS AUTOMOTIVE L.P.
Dated as of December __, 1996
ARTICLE I. DEFINITIONS......................................................1
ARTICLE II. THE ADVANCE.....................................................2
Section 2.1. Commitment to Advance.......................................2
ARTICLE III. PAYMENT........................................................3
Section 3.1. Payment of Principal and Interest...........................3
Section 3.3. Optional Prepayment of the Advance..........................3
ARTICLE IV. MUTUAL REPRESENTATIONS AND WARRANTIES...........................4
Section 4.1. Organization...............................................4
Section 4.2. Authorization, Validity and Enforceability.................4
Section 4.3. Violation or Breach........................................4
Section 4.4. Consents and Approvals.....................................5
ARTICLE V. EVENTS OF DEFAULT................................................5
Section 5.1. Events of Default...........................................5
Section 5.2. Remedies....................................................6
ARTICLE VI. MISCELLANEOUS...................................................6
Section 6.1. Nature of Obligation........................................6
Section 6.2. Notices.....................................................6
Section 6.3. Construction................................................7
Section 6.4. Assignment..................................................7
Section 6.5. Severability................................................7
Section 6.6. Amendments..................................................7
Section 6.7. Entire Agreement............................................7
TAX DISTRIBUTION ADVANCE AGREEMENT
This Tax Distribution Advance Agreement (the "Agreement") dated as of
December __, 1996 is made by and between Foamex-JPS Automotive L.P., a Delaware
limited partnership ("FJPS"), and Foamex L.P., a Delaware limited partnership
("Foamex").
WHEREAS, Foamex entered into a First Amended and Restated Tax Sharing
Agreement dated as of December 14, 1993, with its partners, which provides for
certain distributions ("Tax Sharing Payments") to be made by Foamex to its
partners (as amended by the First Amendment to Fourth Amended and Restated
Partnership Agreement of Foamex L.P., dated June 28, 1994, the "Tax Sharing
Agreement"); and
WHEREAS, FJPS has requested that Foamex, from time to time, make
certain advances of Tax Sharing Payments to FJPS, and Foamex is willing to make
such advances on the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
"Advance" shall have the meaning specified in Section 2.1(a) hereof.
"Availability" shall have the meaning specified in Section 2.1(b)
"Bankruptcy Law" shall mean Title 11, U.S. Code or any similar federal
or state law for the relief, supervision, conservation, reorganization or
liquidation of debtors or for the benefit of creditors.
"Business Day" shall mean a day that is not a Saturday or a Sunday or
a day on which banking institutions are not required to be open in the State of
New York.
"Custodian" shall mean any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Event of Default" shall mean any of the events specified in Section
5.1 hereof.
"FJPS" shall have the meaning specified in the recitals hereto.
"Maturity Date" shall have the meaning specified in Section 3.1(a)
hereof.
"Foamex" shall have the meaning specified in the recitals hereto.
"Note" shall have the meaning specified in Section 2.1(e) hereof.
"Tax Sharing Agreement" shall have the meaning specified in the
recitals hereto.
"Tax Sharing Payments" shall have the meaning specified in the
recitals hereto.
ARTICLE II.
THE ADVANCE
Section 2.2. Commitment to Advance.
(a) FJPS shall have the right, from time to time, to take an advance
against future Tax Sharing Payments (an "Advance") from Foamex of all or a
portion of the Availability in effect at such time.
(b) "Availability" at any point in time shall mean $17 million, less
all previous Advances.
(c) The making of each Advance by Foamex shall be subject to the
following terms and conditions:
(i) no Event of Default shall have occurred and be continuing;
(ii) FJPS shall have delivered to Foamex a certificate of a duly
authorized officer of FJPS to the effect that all of the
representations and warranties of FJPS set forth in this Agreement are
true and correct as of the date of the Advance as though restated as
of such date.
(iii) the making of the Advance shall not constitute a Default or
Event of Default under the terms of the Third Amended and Restated
Credit Agreement, dated as of July 30, 1996, among Foamex L.P.,
General Felt Industries, Inc., Trace Foam Company, Inc., FMXI Inc.,
the Institutions from time to time party thereto as Lenders, the
Institutions from time to time party thereto as Issuing Banks, and
Citibank N.A. and The Bank of Nova Scotia, as Administrative Agents,
as such agreement may be amended.
(d) FJPS shall notify Foamex in writing of its intention to borrow the
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Advance pursuant to Section 2.1(a) and the amount of the Advance. Foamex shall
extend the Advance to FJPS on the date which is no more than three Business Days
after receipt of such notice.
(e) The Advances shall be evidenced by a promissory note duly executed
by FJPS payable to the order of Foamex, substantially in the form of Exhibit A
hereto (the "Note").
ARTICLE III.
PAYMENT
Section 3.1. Payment of Principal and Interest.
(a) FJPS shall pay to Foamex the outstanding principal of the Advance
on December 31, 1999 (the "Maturity Date"), together with accrued and unpaid
interest.
(b) Each Advance shall bear interest at a fixed rate per annum
(determined on the date of the Advance) equal to the greater of (i) the yield to
maturity on the FJPS Senior Secured Discount Debentures due 2004 as of such
date, plus one hundred twenty five (125) basis points, or (ii) 13.25%.
(c) Interest shall be computed on the basis of a 360-day year of
twelve 30-day months).
Section 3.2. Mandatory Prepayment of the Advance.
(a) During such time as there is an Advance outstanding, FJPS shall
apply 50% of all Tax Sharing Payments to a mandatory prepayment of the Advances.
(b) FJPS grants to Foamex an express right of offset to withhold and
apply in accordance with the terms of this Agreement all Tax Sharing Payments
which FJPS is required to apply to a mandatory prepayment of the Advance
pursuant to Section 3.2(a).
(c) All mandatory prepayments of the Advances shall be applied first
to interest and then to the principal of the outstanding Advances with the
highest associated interest rate.
Section 3.3. Optional Prepayment of the Advance. FJPS may at any time
and from time to time prepay or repay the Advance, in whole or in part, without
premium or penalty. All Optional Prepayments shall be applied first to interest
and then to the principal of the outstanding Advances with the highest
associated interest rate.
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ARTICLE IV.
MUTUAL REPRESENTATIONS AND WARRANTIES
Each party hereto represents and warrants to the other as follows:
Section 4.1. Organization. It is a limited partnership duly formed and
validly existing in good standing under the laws of its jurisdiction of
formation, and has all requisite partnership power and authority to own, lease
and operate its assets and properties and to conduct its business as currently
being conducted.
Section 4.2. Authorization, Validity and Enforceability. It has full
partnership power and authority to execute, deliver and perform its obligations
under this Agreement. The execution, delivery and performance by it of this
Agreement and the consummation by it of the transactions contemplated hereby
have been duly authorized by its general partner or other governing body and no
other proceedings on its part are necessary to authorize this Agreement or the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by it, and constitutes the legal, valid and binding obligation of it,
enforceable against it in accordance with the terms hereof, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting rights of creditors generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
Section 4.3. Violation or Breach. The execution, delivery and
performance by it of this Agreement and the consummation of the transactions
contemplated hereby, do not and will not conflict with, result in a violation or
breach of, constitute a default (or an event which with the giving of notice or
the lapse of time or both would constitute a default) or give rise to any right
of termination or acceleration of any right or obligation of it under, or result
in the creation or imposition of any lien, mortgage, pledge, security interest,
claim, right of first refusal or other limitation on transfer or other
encumbrance upon any of its assets or properties by reason of the terms of, (a)
its certificate of limited partnership, agreement of limited partnership,
by-laws or other charter or organizational document, (b) any contract,
agreement, lease, license, mortgage, note, bond, debenture, indenture or other
instrument or obligation to which it is a party or by or to which it or its
assets or properties may be bound or subject, (c) any order, writ, judgment,
injunction, award, decree, law, statute, rule or regulation applicable to it or
(d) any license, permit, order, consent, approval, registration, authorization
or qualification with or under any governmental agency, other than
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(i) in the case of clause (b) above, with respect to Foamex, the Company
Security Agreement, dated as of June 3, 1993, by Foamex and Foamex Capital
Corporation in favor of Fleet National Bank (formerly known as Shawmut Bank,
National Association) as trustee for the holders of 9 1/2% Senior Secured Notes
due 2000, and (ii) in the case of clauses (b), (c) or (d) above, any conflict,
violation, breach or default which would not, individually or in the aggregate
together with all other such conflicts, violations, breaches or defaults, have a
material adverse effect on it or have a material adverse effect on its ability
to perform its obligations, or consummate the transactions contemplated,
hereunder.
Section 4.4. Consents and Approvals. No consent, approval,
authorization, license or order of, registration or filing with, or notice to,
any governmental agency is necessary to be obtained, made or given by it in
connection with the execution, delivery and performance by it of this Agreement
or the consummation by it of the transactions contemplated hereby.
ARTICLE V.
EVENTS OF DEFAULT
Section 5.1. Events of Default. Each of the following shall constitute
an "Event of Default" under this Agreement:
(a) FJPS defaults in the payment of the principal or interest on any
Advance when the same becomes due and payable on the Maturity Date or otherwise;
(b) FJPS fails to comply with any of its other covenants or agreements
in this Agreement or the Note and the default continues for thirty days after
receipt by FJPS of written notice thereof from Foamex;
(c) there shall be a default under any evidence of indebtedness of
FJPS, whether any such indebtedness exists as of the date hereof or shall
hereafter be created, in the amount, individually or in the aggregate, of
$15,000,000 or more, if the effect of such default is to accelerate, or to
permit the holder(s) of such indebtedness or a trustee for such holder(s) to
accelerate, the maturity of such indebtedness, or such indebtedness is not paid
at maturity;
(d) a court of competent jurisdiction enters a final and
non-appealable judgment against FJPS in which FJPS is required to pay an amount
(calculated after the application of any proceeds of insurance policies
applicable to such loss), individually or in the aggregate, in excess of
$5,000,000, and such final and non-appealable judgment remains unsatisfied for a
period of 60 days;
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(e) FJPS pursuant to or within the meaning of any Bankruptcy Law (i)
becomes insolvent, (ii) fails generally to pay its debts as they become due,
(iii) admits in writing its inability to pay its debts generally as they become
due, (iv) commences a voluntary case or proceeding, (v) consents to, or
acquiesces in, the institution of a bankruptcy or an insolvency proceeding
against it or the entry of a judgment, decree or order for relief against it in
an involuntary case or proceeding, (vi) applies for, consents to or acquiesces
in the appointment of or taking possession by a Custodian of FJPS or of all or
substantially all of its property or (vii) makes a general assignment for the
benefit of its creditors; or
(f) a court of competent jurisdiction enters a judgment, decree or
order under any Bankruptcy Law which (i) is for relief against FJPS in an
involuntary case, (ii) appoints a Custodian of FJPS or a Custodian for all or
substantially all of its property or (iii) orders the winding-up or liquidation
of FJPS; and such judgment, decree or order shall remain unstayed and in effect
for a period of 60 consecutive days.
Section 5.4. Remedies. If an Event of Default specified in clause (e)
or (f) of Section 5.1 hereof occurs, the Advance shall automatically become due
and payable at the principal amount thereof, together with interest accrued
thereon. If such event is any other Event of Default, Foamex may, at its option,
by notice in writing to FJPS, declare the Advance to be, and the Advance shall
thereupon be and become, immediately due and payable together with interest
accrued thereon, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by FJPS. Foamex may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (except nonpayment of principal or
interest that has become due solely because of the acceleration) have been
cured, paid or waived.
ARTICLE VI.
MISCELLANEOUS
Section 6.1. Nature of Obligation. FJPS hereby waives presentment and
demand for payment, notice of dishonor, protest and notice of protest of the
Note and agrees to perform and comply with each of the terms, covenants and
provisions contained in this Agreement.
Section 6.2. Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given (a) when delivered
personally to the recipient, (b) when sent to the recipient by telecopy (with
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receipt confirmed) if during normal business hours of the recipient, otherwise
on the next Business Day, or (c) one Business Day after the date sent to the
recipient by reputable express courier service (charges prepaid). Such notices,
demands and other communications shall be sent to FJPS and Foamex at such
address as either party hereto may, from time to time, designate in writing
delivered pursuant to the terms of this Section.
Section 6.3. Construction. This Agreement has been executed and
delivered in the State of New York, and shall be governed by and construed in
accordance with the laws of the State of New York.
Section 6.4. Assignment. Any of the rights, duties or obligations of
FJPS may not be transferred, assigned, except with the written consent of
Foamex. Subject to the foregoing, this Agreement shall be binding upon, and
inure to the benefit of the parties hereto and their respective permitted
successors and assigns.
Section 6.5. Severability. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 6.6. Amendments. The terms, provisions and conditions of this
Agreement may not be changed, modified or amended in any manner except by an
instrument in writing duly executed by both of the parties hereto.
Section 6.7. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof,
supersedes and is in full substitution for any and all prior agreements and
understandings among them relating to such subject matter, and no party shall be
liable or bound to the other party hereto in any manner with respect to such
subject matter by any warranties, representations, indemnities, covenants or
agreements except as specifically set forth herein. The Exhibits and Schedules
to this Agreement are hereby incorporated and made a part hereof and are an
integral part of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
FOAMEX-JPS AUTOMOTIVE L.P.
By: FJGP Inc., its general partner
By: _______________________
Name: Xxxxxx X. Xxxxx, Xx.
Title: Vice President and
Secretary
FOAMEX L.P.
By: FMXI, Inc.
Its: managing general partner
By: _______________________
Name: Xxxxxx X. Xxxxx, Xx.
Title: Vice President and
Secretary
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PROMISSORY NOTE
$17,000,000 New York, New York
December __, 1996
THE UNDERSIGNED FOAMEX-JPS AUTOMOTIVE L.P., a Delaware limited
partnership ("Maker"), HEREBY PROMISES TO PAY to the order of FOAMEX L.P., a
Delaware limited partnership ("Payee"), on December 31, 1999, the principal
amount of SEVENTEEN MILLION DOLLARS ($17,000,000), or, if less, the outstanding
Advances of Maker by Payee pursuant to the terms of that certain Tax
Distribution Advance Agreement dated as of December __, 1996 (the "Tax
Distribution Advance Agreement") between Maker and Payee together, in each case,
with all accrued and outstanding interest in respect of such principal amount.
Maker promises to pay the interest on and principal of this Note in
accordance with the terms and conditions of the Tax Distribution Advance
Agreement.
Both principal and interest are payable in lawful money of the United
States of America in same day or immediately available funds to the account of
Payee at 0000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000, or at such other
place or places as any subsequent holder of this Note may, from time to time,
designate in writing. Whenever any payment to be made hereunder shall be stated
to be due on a day that is not a Business Day, such payment shall be due instead
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of such payment of interest and not in the
computation of the succeeding payment of interest.
Payee or any subsequent holder of this Note shall have the right to
assign its rights hereunder or any interest herein without the prior written
consent of Maker.
This Note is subject to the terms and conditions of the Tax
Distribution Advance Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
All the covenants, stipulations, promises and agreements made by or
contained in this Note or in the Tax Distribution Advance Agreement on behalf of
the undersigned shall bind its successors, whether so expressed or not.
No failure on the part of Payee to exercise, and no delay in
exercising, any right under this Note shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first set forth above.
FOAMEX-JPS AUTOMOTIVE L.P.
By: FJGP Inc., its general partner
By: _______________________
Name:
Title:
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