Exhibit 4.4.16
Execution Form
AMENDED AND RESTATED SUBSIDIARY SECURITY AGREEMENT
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This AMENDED AND RESTATED SUBSIDIARY SECURITY AGREEMENT (as amended,
supplemented, amended and restated or otherwise modified from time to time, this
"Security Agreement"), dated as of July 18, 2001, is made by FOAMEX LATIN
AMERICA, INC., a Delaware corporation (the "Grantor" or the "Borrower"), in
favor of CITICORP USA, INC., as collateral agent (together with any successor(s)
thereto in such capacity, the "Collateral Agent") for each of the Secured
Parties.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a Credit Agreement, dated as of June 12, 1997 as
amended and restated as of February 27, 1998, and as further amended and
restated on June 29, 1999, and as amended by Amendment No. 1 thereto dated as of
December 23, 1999, Amendment No. 2 thereto dated as of February 18, 2000 and by
Amendment No. 3 thereto as of the date hereof ("Amendment No. 3") (and as it may
be further amended, supplemented, amended and restated or modified from time to
time, the "Credit Agreement"), among the Grantor, FMXI, Inc., a Delaware
corporation and managing general partner of the Grantor, the Lenders, the
Issuing Banks and Citicorp USA, Inc., as Collateral Agent for the Lenders and
the Issuing Banks and The Bank of Nova Scotia, as Funding Agent for the Lenders
and the Issuing Banks (together with the Collateral Agent, in such capacity the
"Administrative Agents"), the Lenders and the Issuing Banks have extended
Commitments to make Credit Extensions and have made Credit Extensions to the
Borrower;
WHEREAS, this Security Agreement amends and restates the terms and
conditions of the Security Agreement dated as of June 12, 1997 (the "Existing
Security Agreement") between the Grantor and, the Collateral Agent and the Liens
granted thereunder shall continue in full force and effect with the same
priority as set forth in the Existing Security Agreement; and
WHEREAS, as a condition precedent to the effectiveness of Amendment No. 3,
the Grantor is required to execute and deliver this Security Agreement;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
and the Issuing Banks to make and/or maintain Credit Extensions to the Borrower
pursuant to the Credit Agreement, the Grantor agrees, for the benefit of each
Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Account" means a right to payment of a monetary obligation, whether or not
earned by performance,
(a) for property that has been or is to be sold, leased, licensed,
assigned, or otherwise disposed of;
(b) for services rendered or to be rendered;
(c) for a policy of insurance issued or to be issued;
(d) for a secondary obligation incurred or to be incurred;
(e) for energy provided or to be provided; or
(f) arising out of the use of a credit or charge card or information
contained on or for use with the card.
"Administrative Agents" is defined in the first recital.
"Authenticate" means
(a) to sign; or
(b) to execute or otherwise adopt a symbol, or encrypt or similarly
process a record in whole or in part, with the present intent of the
authenticating person to identify the person and adopt or accept a record.
"Borrower" is defined in the preamble.
"Chattel Paper" means a record or records that evidence both a monetary
obligation and a security interest in specific goods, a security interest in
specific goods and software used in the goods, a security interest in specific
goods and license of software used in the goods, a lease of specific goods, or a
lease of specific goods and license of software used in the goods.
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"Collateral" is defined in Section 2.1; provided, however, that Collateral
hereunder shall not include any securities (including partnership interests and
limited liability company interests), it being understood that other Loan
Documents may, subject to certain limitations set forth therein, provide a
pledge of such assets.
"Collateral Account" is defined in Section 4.1.2(b).
"Collateral Agent" is defined in the preamble.
"Commercial Tort Claim" means a claim arising in tort with respect to
which:
(a) the claimant is an organization; or
(b) the claimant is an individual and the claim:
(i) arose in the course of the claimant's business or profession;
and
(ii) does not include damages arising out of personal injury to
or the death of an individual.
"Commodity Account" means an account maintained by a Commodity Intermediary
in which a Commodity Contract is carried out for a Commodity Customer.
"Commodity Contract" means a commodity futures contract, an option on a
commodity futures contract, a commodity option or any other contract that, in
each case, is
(a) traded on or subject to the rules of a board of trade that has
been designated as a contract market for such a contract pursuant to the
federal commodities laws; or
(b) traded on a foreign commodity board of trade, exchange or market,
and is carried on the books of a Commodity Intermediary for a Commodity
Customer.
"Commodity Customer" means a person for whom a Commodity Intermediary
carries a Commodity Contract on its books.
"Commodity Intermediary" means
(a) a Person who is registered as a futures commission merchant under
the federal commodities laws; or
(b) a Person who in the ordinary course of its business provides
clearance or settlement services for a board of trade that has been
designated as a contract market pursuant to federal commodities laws.
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"Computer Hardware and Software Collateral" means:
(a) all computer and other electronic data processing hardware,
integrated computer systems, central processing units, memory units,
display terminals, printers, features, computer elements, card readers,
tape drives, hard and soft disk drives, cables, electrical supply hardware,
generators, power equalizers, accessories and all peripheral devices and
other related computer hardware;
(b) all software programs (including both source code, object code and
all related applications and data files), whether now owned, licensed or
leased or hereafter acquired by the Grantor, designed for use on the
computers and electronic data processing hardware described in clause (a)
above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams, manuals,
guides and specifications) with respect to such hardware, software and
firmware described in the preceding clauses (a) through (c); and
(e) all rights with respect to all of the foregoing, including any and
all copyrights, licenses, options, warranties, service contracts, program
services, test rights, maintenance rights, support rights, improvement
rights, renewal rights and indemnifications and any substitutions,
replacements, additions or model conversions of any of the foregoing.
"Control" means any appropriate method of gaining control of collateral
under the U.C.C.
"Copyright Collateral" means all copyrights (including all copyrights for
semi-conductor chip product mask works) of the Grantor, whether statutory or
common law, registered or unregistered, now or hereafter in force throughout the
world including all of the Grantor's right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and also including the copyrights referred to in Item A of Schedule IV
attached hereto, and all applications for registration thereof, whether pending
or in preparation, all copyright licenses, including each copyright license
referred to in Item B of Schedule IV attached hereto, the right to xxx for past,
present and future infringements of any thereof, all rights corresponding
thereto throughout the world, all extensions and renewals of any thereof and all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.
"Credit Agreement" is defined in the first recital.
"Credit Extensions" means the Loans and the Letters of Credit.
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"Deposit Account" means a demand, time, savings, passbook, or similar
account maintained with a bank.
"Electronic Chattel Paper" means Chattel Paper evidenced by a record or
records consisting of information stored in an electronic medium.
"Equipment" is defined in clause (a) of Section 2.1.
"Existing Security Agreement" is defined in the second recital.
"General Intangible" means any personal property, including things in
action, payment intangibles and software, other than Accounts, Chattel Paper,
Commercial Tort Claims, Deposit Accounts, documents, goods, instruments,
investment property, Letter-of-Credit Rights, letters of credit, money, and oil,
or other minerals before extraction.
"Grantor" is defined in the preamble.
"Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"Inventory" means goods, other than farm products, which:
(a) are leased by a person as lessor;
(b) are held by a person for sale or lease or to be furnished under a
contract of service;
(c) are furnished by a person under a contract of service; or
(d) consist of raw materials, work in process, or materials used or
consumed in a business;
and includes, without limitation, (i) finished goods, returned goods and
materials and supplies of any kind, nature or description which are or
might be used in connection with the manufacture, packing, shipping,
advertising, selling or finishing of any of the foregoing; (ii) all goods
in which the Grantor has an interest in mass or a joint or other interest
or right of any kind (including goods in which the Grantor has an interest
or right as consignee); (iii) all goods which are returned to or
repossessed by the Grantor, and (iv) all accessions thereto, products
thereof and documents therefor.
"Lender" and "Lenders" are defined in the first recital.
"Letter-of-Credit Right" means a right to payment or performance under a
letter of credit, whether or not the beneficiary has demanded or is at the time
entitled to demand payment or
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performance but excludes the right of a beneficiary to demand payment or
performance under a letter of credit.
"Patent Collateral" means:
(a) all letters patent and applications for letters patent throughout
the world, including all patent applications in preparation for filing
anywhere in the world and including each patent and patent application
referred to in Item A of Schedule II attached hereto;
(b) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in
clause (a);
(c) all patent licenses, including each patent license referred to in
Item B of Schedule II attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the right
to xxx third parties for past, present or future infringements of any
patent or patent application, including any patent or patent application
referred to in Item A of Schedule II attached hereto, and for breach or
enforcement of any patent license, including any patent license referred to
in Item B of Schedule II attached hereto, and all rights corresponding
thereto throughout the world.
"Proceeds" means the following property:
(a) whatever is acquired upon the sale, lease, license, exchange, or
other disposition of Collateral;
(b) whatever is collected on, or distributed on account of,
Collateral;
(c) rights arising out of Collateral;
(d) to the extent of the value of Collateral, claims arising out of
the loss, nonconformity, or interference with the use of, defects or
infringement of rights in, or damage to, the Collateral; or
(e) to the extent of the value of Collateral and to the extent payable
to the debtor or the secured party, insurance payable by reason of the loss
or nonconformity of, defects or infringement of rights in, or damage to,
the Collateral.
"Receivables" means all Deposit Accounts (including all bank accounts,
collection accounts and concentration accounts, together with all funds held
therein and all certificates and instruments, if any, from time to time
representing or evidencing such accounts), Commodity Accounts, Chattel Paper,
documents, instruments, Letter- of -Credit Rights, Accounts (including invoices,
contracts, rights, accounts receivable, notes, refunds, indemnities, interest,
late charges,
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fees, undertakings and all other obligations and amounts owing to the Grantor
from any Person), health-care-insurance receivables, and all rights of the
Grantor now or hereafter existing in and to all Supporting Obligations
(including, without limitation, (i) all security agreements, guaranties, leases
and other contracts (collectively the "Related Contracts") securing or otherwise
relating to any such Accounts, Chattel Paper, documents, instruments,
Letter-of-Credit Rights, and health-care receivables and (ii) goods represented
by the sale or lease of delivery which gave rise to any of the foregoing,
returned or repossessed merchandise and rights of stoppage in transit, replevin,
reclamation and other rights and remedies of an unpaid vendor, lienor or secured
party.
"Related Contracts" is defined in the definition of "Receivables".
"Secured Obligations" is defined in Section 2.2.
"Secured Parties" means, collectively, the Lenders, the Issuing Banks, the
Administrative Agents, the Collateral Agent and the Funding Agent, and any
Lender in its capacity as a counterparty to an Hedging Obligation.
"Security Agreement" is defined in the preamble.
"Supporting Obligations" means a Letter-of-Credit Right or secondary
obligation that supports the payment or performance of an Account, Chattel
Paper, a document, a General Intangible, an instrument or investment property.
"Tangible Chattel Paper" means Chattel Paper evidenced by a record or
records consisting of information that is inscribed on a tangible medium.
"Trademark Collateral" means:
(a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos, other source of business
identifiers, prints and labels on which any of the foregoing have appeared
or appear, designs and general intangibles of a like nature (all of the
foregoing items in this clause (a) being collectively called a
"Trademark"), now existing anywhere in the world or hereafter adopted or
acquired, whether currently in use or not, all registrations and recordings
thereof and all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any
office or agency of the United States of America or any State thereof or
any foreign country, including those referred to in Item A of Schedule III
attached hereto;
(b) all Trademark licenses, including each Trademark license referred
to in Item B of Schedule III attached hereto;
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(c) all reissues, extensions or renewals of any of the items described
in clauses (a) and (b);
(d) all of the goodwill of the business connected with the use of, and
symbolized by the items described in, clauses (a) and (b); and
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by the Grantor against third parties for past, present
or future infringement or dilution of any Trademark, Trademark registration
or Trademark license, including any Trademark, Trademark registration or
Trademark license referred to in Item A and Item B of Schedule III attached
hereto, or for any injury to the goodwill associated with the use of any
such Trademark or for breach or enforcement of any Trademark license.
"Trade Secrets Collateral" means all common law and statutory trade secrets
and all other confidential or proprietary or useful information and all know-how
obtained by or used in or contemplated at any time for use in the business of
the Grantor (all of the foregoing being collectively called a "Trade Secret"),
whether or not such Trade Secret has been reduced to a writing or other tangible
form, including all documents and things embodying, incorporating or referring
in any way to such Trade Secret, all Trade Secret licenses, including each Trade
Secret license referred to in Schedule V attached hereto, and including the
right to xxx for and to enjoin and to collect damages for the actual or
threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.
"U.C.C." means the Uniform Commercial Code, as in effect in the State of
New York as it may be amended or modified from time to time and in effect.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined herein
or the context otherwise requires, terms used in this Security Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or in the
Credit Agreement or the context otherwise requires, terms for which meanings are
provided in the U.C.C. are used in this Security Agreement, including its
preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security. The Grantor hereby (i) confirms and
acknowledges the continuance of the security interests and Liens granted under
the Existing Security Agreement and (ii) assigns and pledges to the Collateral
Agent for its benefit and the ratable benefit of each of the Secured Parties,
and hereby grants to the Collateral Agent for its
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benefit and the ratable benefit of each of the Secured Parties, a security
interest in all of the following, whether now or hereafter existing or acquired
by the Grantor (the "Collateral"):
(a) all equipment in all of its forms of the Grantor, wherever
located, including all parts thereof and all accessions, additions,
attachments, improvements, substitutions and replacements thereto and
therefor and all accessories related thereto (any and all of the foregoing
being the "Equipment");
(b) all Inventory of the Grantor;
(c) all Receivables of the Grantor;
(d) all Intellectual Property Collateral of the Grantor;
(e) all General Intangibles of the Grantor;
(f) all Commercial Tort Claims of the Grantor;
(g) all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, evidencing,
embodying, incorporating or referring to, any of the foregoing in this
Section 2.1;
(h) all of the Grantor's other property and rights of every kind and
description and interests therein; and
(i) all products, offspring, rents, issues, profits, returns, income
and Proceeds of and from any and all of the foregoing Collateral (including
Proceeds which constitute property of the types described in clauses (a),
(b), (c), (d), (e), (f), (g) and (h), Proceeds deposited from time to time
in the Concentration Account, the Cash Collateral Account, and in any lock
boxes or Lockbox Account of the Grantor, and, to the extent not otherwise
included, all payments under insurance (whether or not the Collateral Agent
is the loss payee thereof), or any indemnity, warranty or guaranty, payable
by reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral).
Notwithstanding the foregoing, "Collateral" shall not include any general
intangibles or other rights arising under any contracts, instruments, licenses
or other documents as to which the grant of a security interest would constitute
a violation of a valid and enforceable restriction in favor of a third party on
such grant, unless and until any required consents shall have been obtained. The
Grantor agrees to use its best efforts to obtain any such required consent.
SECTION 2.2. Security for Obligations. This Security Agreement secures the
payment in full in cash of all Obligations of the Grantor now or hereafter
existing under the Credit Agreement, the Notes, the Foamex Guaranty and each
other Loan Document to which the Grantor is or may become a party, whether for
principal, interest, costs, fees, expenses or otherwise, and all obligations of
each other Obligor now or hereafter existing under each Loan
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Document to which the Grantor or such other Obligor is or may become a party
(all such Obligations of the Grantor and all such obligations of such other
Obligor being the "Secured Obligations").
SECTION 2.3. Continuing Security Interest; Transfer of Notes. This Security
Agreement shall create a continuing security interest in the Collateral and
shall
(a) remain in full force and effect until payment in full in cash of
all Secured Obligations, the termination or expiration of all Letters of
Credit and the termination of all Commitments,
(b) be binding upon the Grantor, its successors, transferees and
assigns, and
(c) inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Collateral Agent and each other
Secured Party.
Without limiting the generality of the foregoing clause (c), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all the rights and benefits in respect thereof
granted to such Lender under any Loan Document (including this Security
Agreement) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Article XIII of the Credit
Agreement. Upon the payment in full in cash of all Secured Obligations, the
termination or expiration of all Letters of Credit and the termination of all
Commitments, the security interest granted herein shall terminate and all rights
to the Collateral shall revert to the Grantor. Upon any such termination, the
Collateral Agent will, at the Grantor's sole expense, execute and deliver to the
Grantor such documents as the Grantor shall reasonably request to evidence such
termination. Upon any sale or other transfer of Collateral permitted by the
terms of the Credit Agreement, the security interest created hereunder in such
Collateral (but not in the proceeds thereof) shall be deemed to be automatically
released and the Collateral Agent will, at the Grantor's sole expense, execute
and deliver to the Grantor such documents as the Grantor shall reasonably
request to evidence such release.
SECTION 2.4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding
(a) the Grantor shall remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein, and shall
perform all of its duties and obligations under such contracts and
agreements to the same extent as if this Security Agreement had not been
executed,
(b) the exercise by the Collateral Agent of any of its rights
hereunder shall not release the Grantor from any of its duties or
obligations under any such contracts or agreements included in the
Collateral, and
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(c) neither the Collateral Agent nor any other Secured Party shall
have any obligation or liability under any such contracts or agreements
included in the Collateral by reason of this Security Agreement, nor shall
the Collateral Agent or any other Secured Party be obligated to perform any
of the obligations or duties of the Grantor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
SECTION 2.5. Security Interest Absolute. All rights of the Collateral Agent
and the security interests granted to the Collateral Agent hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional with
respect to the Secured Obligations, irrespective of
(a) any lack of validity or enforceability of the Credit Agreement,
any Note or any other Loan Document,
(b) the failure of any Secured Party or any holder of any Note
(i) to assert any claim or demand or to enforce any right or
remedy against the Grantor, any other Obligor or any other Person
under the provisions of the Credit Agreement, any Note, any other Loan
Document or otherwise, or
(ii) to exercise any right or remedy against any other guarantor
of, or collateral securing, any Secured Obligations,
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other
extension, compromise or renewal of any Secured Obligation,
(d) any reduction, limitation, impairment or termination of any
Secured Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and the
Pledgor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Secured Obligations or otherwise,
(e) any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of the Credit Agreement,
any Note or any other Loan Document,
(f) any addition, exchange, release, surrender or non-perfection of
any collateral (including the Collateral), or any amendment to or waiver or
release of or addition to or consent to departure from any guaranty, for
any of the Secured Obligations, or
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(g) any other circumstances which might otherwise constitute a defense
available to, or a legal or equitable discharge of, the Grantor, any other
Obligor, any surety or any guarantor.
SECTION 2.6. Postponement of Subrogation, etc. The Grantor will not
exercise any rights which it may acquire by reason of any payment made
hereunder, whether by way of subrogation, reimbursement or otherwise, until the
prior payment, in full and in cash, of all Secured Obligations, the termination
or expiration of all Letters of Credit, and the termination of all Commitments.
Any amount paid to the Grantor on account of any payment made hereunder prior to
the payment in full of all Secured Obligations shall be held in trust for the
benefit of the Secured Parties and each holder of a Note and shall immediately
be paid to the Secured Parties and each holder of a Note and credited and
applied against the Secured Obligations, whether matured or unmatured, in
accordance with the terms of the Credit Agreement; provided, however, that if
(a) the Grantor has made payment to the Secured Parties and each
holder of a Note of all or any part of the Secured Obligations, and
(b) all Secured Obligations have been paid in full, all Letters of
Credit have been terminated or expired and all Commitments have been
permanently terminated,
each Secured Party and each holder of a Note agrees that, at the Grantor's
request, the Secured Parties and the holders of the Notes will execute and
deliver to the Grantor appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by subrogation to
the Grantor of an interest in the Secured Obligations resulting from such
payment by the Grantor. In furtherance of the foregoing, for so long as any
Secured Obligations, Letters of Credit or Commitments remain outstanding, the
Grantor shall refrain from taking any action or commencing any proceeding
against a Borrower or any other Obligor (or its successors or assigns, whether
in connection with a bankruptcy proceeding or otherwise) to recover any amounts
in respect of payments made under this Security Agreement to any Secured Party
or any holder of a Note.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. The Grantor represents and
warrants to each Secured Party as set forth in this Section.
SECTION 3.1.1. Location of Debtor, Collateral, etc. The Grantor was
organized and remains organized solely under the laws of the state identified in
Item E of Schedule I. Item E of Schedule I hereto sets forth such Grantor's
organizational identification number or states that one does not exist. All of
the Equipment, Inventory and lock boxes of the Grantor are located at the places
specified in Item A, Item B and Item C, respectively, of
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Schedule I hereto. None of the Equipment and Inventory has, within the four
months preceding the date of this Security Agreement, been located at any place
other than the places specified in Item A and Item B, respectively, of Schedule
I hereto except as set forth in a footnote thereto. The place(s) of business and
chief executive office of the Grantor and the office(s) where the Grantor keeps
its records concerning the Receivables, and all originals of all chattel paper
which evidence Receivables, are located at the address set forth in Item D of
Schedule I hereto. The Grantor has no trade names other than those set forth in
Item H of Schedule I hereto. During the four months preceding the date hereof,
the Grantor has not been known by any legal name different from the one set
forth on the signature page hereto, nor has the Grantor been the subject of any
merger or other corporate reorganization, except as set forth in Item I of
Schedule I hereto. All Receivables having a value of at least $500,000 evidenced
by a promissory note or other instrument, negotiable document or Tangible
Chattel Paper have been duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
the Collateral Agent and delivered and pledged to the Collateral Agent pursuant
to Section 4.1.7. As of the date hereof, the Grantor is not a party to any
Federal, state or local government contract having a value in excess of $500,000
except as set forth in Item J of Schedule I hereto.
SECTION 3.1.2. Ownership, No Liens, etc. The Grantor owns its Collateral
free and clear of any Lien, security interest, charge or encumbrance except for
the security interest created by this Security Agreement and except as permitted
by the Credit Agreement. No effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in any
recording office, except such as may have been filed in favor of the Collateral
Agent relating to this Security Agreement or as have been filed in connection
with Liens permitted pursuant to Section 9.03 of the Credit Agreement.
SECTION 3.1.3. Possession and Control. The Grantor has exclusive possession
and control of its Equipment and Inventory. Other than the Collateral Agent, no
other Person has Control of any of the Collateral.
SECTION 3.1.4. Negotiable Documents, Instruments and Chattel Paper. The
Grantor has, contemporaneously herewith, delivered to the Collateral Agent
possession of all originals of all negotiable documents, instruments and
Tangible Chattel Paper currently owned or held by the Grantor (duly endorsed in
blank, if requested by the Collateral Agent) having a value of at least
$500,000.
SECTION 3.1.5. Intellectual Property Collateral. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
might have a Material Adverse Effect:
(a) such Intellectual Property Collateral is subsisting and has not
been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and enforceable;
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(c) the Grantor has made all necessary filings and recordations to
protect its interest in such Intellectual Property Collateral, including
recordations of all of its interests in the Patent Collateral and Trademark
Collateral in the United States Patent and Trademark Office and in
corresponding offices throughout the world and its claims to the Copyright
Collateral in the United States Copyright Office and in corresponding
offices throughout the world;
(d) the Grantor is the exclusive owner of the entire and unencumbered
right, title and interest in and to such Intellectual Property Collateral
and no claim has been made that the use of such Intellectual Property
Collateral does or may violate the asserted rights of any third party; and
(e) the Grantor has performed and will continue to perform all acts
and has paid and will continue to pay all required fees and taxes to
maintain each and every item of Intellectual Property Collateral in full
force and effect throughout the world, as applicable.
The Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of the Grantor's
business.
SECTION 3.1.6. Validity, etc. This Security Agreement creates a valid first
priority security interest in the Collateral, securing the payment of the
Secured Obligations, and all filings and other actions necessary or desirable to
perfect and protect such security interest have been duly taken.
SECTION 3.1.7. Authorization, Approval, etc. Except as have been obtained
or made and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required either
(a) for the grant by the Grantor of the security interest granted
hereby or for the execution, delivery and performance of this Security
Agreement by the Grantor, or
(b) for the perfection of or the exercise by the Collateral Agent of
its rights and remedies hereunder.
SECTION 3.1.8. Compliance with Laws. The Grantor is in compliance with the
requirements of all applicable laws (including the provisions of the Fair Labor
Standards Act), rules, regulations and orders of every governmental authority,
the non-compliance with which might have a Material Adverse Effect.
SECTION 3.1.9. Commercial Tort Claims. Except for matters disclosed in Item
G of Schedule I hereto, the Grantor does not own any Commercial Tort Claims.
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ARTICLE IV
COVENANTS
SECTION 4.1. Certain Covenants. The Grantor covenants and agrees that, so
long as any portion of the Secured Obligations shall remain unpaid, any Letters
of Credit shall be outstanding or any Lender shall have any outstanding
Commitment, the Grantor will, unless the Requisite Lenders shall otherwise
consent in writing, perform, comply with and be bound by the obligations set
forth in this Section.
SECTION 4.1.1. As to Equipment and Inventory. The Grantor hereby agrees
that it shall
(a) keep all the Equipment and Inventory (other than Inventory sold in
the ordinary course of business) at the places therefor specified in
Section 3.1.1 or, upon 30 days' prior written notice to the Collateral
Agent, at such other places in a jurisdiction where all representations and
warranties set forth in Article III (including Section 3.1.6) shall be true
and correct, and all action required pursuant to the first sentence of
Section 4.1.7 shall have been taken with respect to the Equipment and
Inventory;
(b) cause the Equipment to be maintained and preserved in the same
condition, repair and working order as when new, ordinary wear and tear
excepted, and in accordance with any manufacturer's manual; and forthwith,
or in the case of any loss or damage to any of the Equipment, as quickly as
practicable after the occurrence thereof, make or cause to be made all
repairs, replacements, and other improvements in connection therewith which
are necessary or desirable to such end; and promptly furnish to the
Collateral Agent a statement respecting any loss or damage to any of the
Equipment; and
(c) pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Equipment and
Inventory, except to the extent the validity thereof is being contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP have been set aside.
SECTION 4.1.2. As to Receivables.
(a) The Grantor shall keep its place(s) of business and chief
executive office and the office(s) where it keeps its records concerning
the Receivables, and all originals of all Tangible Chattel Paper which
evidenced Receivables, located at the address(es) set forth in Item D of
Schedule I hereto, or, upon 30 days' prior written notice to the Collateral
Agent, at such other locations in a jurisdiction where all actions required
by the first sentence of Section 4.1.7 shall have been taken with respect
to the Receivables; not change its name except upon 30 days' prior written
notice to the Collateral Agent; hold
15
and preserve such records and Tangible Chattel Paper; and permit
representatives of the Collateral Agent at any time during normal business
hours to inspect and make abstracts from such records and any Chattel
Paper. In addition, the Grantor shall give the Collateral Agent a
supplement to Schedule I hereto on each date a Compliance Certificate is
required to be delivered to the Collateral Agent under the Credit
Agreement, which shall set forth any changes to the information set forth
in Section 3.1.1.
(b) Upon written notice by the Collateral Agent to the Grantor
pursuant to this Section 4.1.2(b), all proceeds of Collateral received by
the Grantor shall be delivered in kind to the Collateral Agent for deposit
to a deposit account (the "Collateral Account") of the Grantor maintained
with the Collateral Agent, and the Grantor shall not commingle any such
proceeds, and shall hold separate and apart from all other property, all
such proceeds in express trust for the benefit of the Collateral Agent
until delivery thereof is made to the Collateral Agent. The Collateral
Agent will not give the notice referred to in the preceding sentence unless
there shall have occurred and be continuing a Default of the nature set
forth in Section 11.01(f) or 11.01(g) of the Credit Agreement or an Event
of Default.
(c) The Collateral Agent shall have the right to apply any amount in
the Collateral Account to the payment of any Secured Obligations which are
due and payable or payable upon demand, or to the payment of any Secured
Obligations at any time that an Event of Default shall exist.
SECTION 4.1.3. As to Collateral
(a) The Collateral Agent, however, may, at any time following a
Default of the nature set forth in Section 11.01(f) or 11.01(g) of the
Credit Agreement or an Event of Default, notify any parties obligated on
any of the Collateral to make payments to the Collateral Agent of any
amounts due or to become due thereunder and enforce collection of any of
the Collateral by suit or otherwise and surrender, release, or exchange all
or any part thereof, or compromise or extend or renew for any period
(whether or not longer than the original period) any indebtedness
thereunder or evidenced thereby. Upon request of the Collateral Agent
following a Default of the nature set forth in Section 11.01(f) or 11.01(g)
of the Credit Agreement or an Event of Default, the Grantor will, at its
own expense, notify any parties obligated on any of the Collateral to make
payment to the Collateral Agent of any amounts due or to become due
thereunder.
(b) The Collateral Agent is authorized to endorse, in the name of the
Grantor, any item, howsoever received by the Collateral Agent, representing
any payment on or other proceeds of any of the Collateral.
SECTION 4.1.4. As to Intellectual Property Collateral. The Grantor
covenants and agrees to comply with the following provisions as such provisions
relate to any Intellectual Property Collateral of the Grantor that:
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(a) the Grantor shall not, unless the Grantor shall either (i)
reasonably and in good faith determine (and notice of such determination
shall have been delivered to the Collateral Agent) that any of the Patent
Collateral is of negligible economic value to the Grantor, or (ii) have a
valid business purpose to do otherwise, do any act, or omit to do any act,
whereby any of the Patent Collateral may lapse or become abandoned or
dedicated to the public or unenforceable.
(b) the Grantor shall not, and the Grantor shall not permit any of its
licensees to, unless the Grantor shall either (i) reasonably and in good
faith determine (and notice of such determination shall have been delivered
to the Collateral Agent) that any of the Trademark Collateral is of
negligible economic value to the Grantor, or (ii) have a valid business
purpose to do otherwise,
(i) fail to continue to use any of the Trademark Collateral in
order to maintain all of the Trademark Collateral in full force free
from any claim of abandonment for non-use,
(ii) fail to maintain as in the past the quality of products and
services offered under all of the Trademark Collateral,
(iii) fail to employ all of the Trademark Collateral registered
with any Federal or state or foreign authority with an appropriate
notice of such registration,
(iv) adopt or use any other Trademark which is confusingly
similar or a colorable imitation of any of the Trademark Collateral,
(v) use any of the Trademark Collateral registered with any
Federal or state or foreign authority except for the uses for which
registration or application for registration of all of the Trademark
Collateral has been made, and
(vi) do or permit any act or knowingly omit to do any act whereby
any of the Trademark Collateral may lapse or become invalid or
unenforceable.
(c) the Grantor shall not, unless the Grantor shall either
(i) reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Collateral Agent) that
any of the Copyright Collateral or any of the Trade Secrets Collateral
is of negligible economic value to the Grantor, or
(ii) have a valid business purpose to do otherwise, do or permit
any act or knowingly omit to do any act whereby any of the Copyright
Collateral or any of the Trade Secrets Collateral may lapse or become
invalid or unenforceable or
17
placed in the public domain except upon expiration of the end of an
unrenewable term of a registration thereof.
(d) the Grantor shall notify the Collateral Agent immediately if it
knows, or has reason to know, that any application or registration relating
to any material item of the Intellectual Property Collateral may become
abandoned or dedicated to the public or placed in the public domain or
invalid or unenforceable, or of any adverse determination or development
(including the institution of, or any such determination or development in,
any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office or any foreign counterpart thereof or any court)
regarding the Grantor's ownership of any of the Intellectual Property
Collateral, its right to register the same or to keep and maintain and
enforce the same.
(e) in no event shall the Grantor or any of its agents, employees,
designees or licensees file an application for the registration of any
Intellectual Property Collateral with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, unless
it promptly informs the Collateral Agent, and upon request of the
Collateral Agent, executes and delivers any and all agreements,
instruments, documents and papers as the Collateral Agent may reasonably
request to evidence the Collateral Agent?s security interest in such
Intellectual Property Collateral and the goodwill and general intangibles
of the Grantor relating thereto or represented thereby.
(f) the Grantor shall take all necessary steps, including in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue any
application (and to obtain the relevant registration) filed with respect
to, and to maintain any registration of, the Intellectual Property
Collateral, including the filing of applications for renewal, affidavits of
use, affidavits of incontestability and opposition, interference and
cancellation proceedings and the payment of fees and taxes (except to the
extent that dedication, abandonment or invalidation is permitted under the
foregoing clauses (a), (b) and (c)).
(g) the Grantor shall, contemporaneously herewith execute and deliver
to the Collateral Agent a Patent Security Agreement, a Trademark Security
Agreement and a Copyright Security Agreement in the forms of Exhibit A,
Exhibit B and Exhibit C hereto, respectively, and shall execute and deliver
to the Collateral Agent any other document required to acknowledge or
register or perfect the Collateral Agent's interest in any part of the
Intellectual Property Collateral.
SECTION 4.1.5. Insurance. The Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
business and properties (including the Equipment and Inventory) against such
casualties and contingencies and of such types and in such amounts as is
required pursuant to the Credit Agreement and will,
18
upon the request of the Collateral Agent, furnish a certificate of a reputable
insurance broker setting forth the nature and extent of all insurance maintained
by the Grantor in accordance with this Section. Without limiting the foregoing,
the Grantor further agrees as follows:
(a) Each policy for property insurance shall show the Collateral Agent
as loss payee.
(b) Each policy for liability insurance shall show the Collateral
Agent as an additional insured.
(c) With respect to each life insurance policy, the Grantor shall
execute and deliver to the Collateral Agent a collateral assignment, notice
of which has been acknowledged in writing by the insurer.
(d) Each insurance policy shall provide that at least 30 days prior
written notice of cancellation or of lapse shall be given to the Collateral
Agent by the insured.
(e) The Grantor shall, if so requested by the Collateral Agent,
deliver to the Collateral Agent a copy of each insurance policy.
(f) All payments in respect of property insurance and life insurance
shall be deposited to the Collateral Account and if there shall be no
Collateral Account shall be paid to the Grantor.
SECTION 4.1.6. Transfers and Other Liens. The Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except Inventory in the ordinary course
of business or as permitted by the Credit Agreement; or
(b) create or suffer to exist any Lien or other charge or encumbrance
upon or with respect to any of the Collateral to secure Indebtedness of any
Person or entity, except for the security interest created by this Security
Agreement and except as permitted by the Credit Agreement.
SECTION 4.1.7. Further Assurances, etc. The Grantor agrees that, from time
to time at its own expense, it will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Collateral Agent may request, in order to perfect,
preserve and protect any security interest granted or purported to be granted
hereby or to enable the Collateral Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Grantor will
(a) at the request of the Collateral Agent, xxxx conspicuously each
document included in the Inventory, each Chattel Paper included in the
Receivables and each
19
Related Contract and, at the request of the Collateral Agent, each of its
records pertaining to the Collateral with a legend, in form and substance
satisfactory to the Collateral Agent, indicating that such document,
chattel paper, Related Contract or Collateral is subject to the security
interest granted hereby;
(b) if any Receivable having a value of at least $500,000 shall be
evidenced by a promissory note or other instrument, or negotiable document,
deliver and pledge to the Collateral Agent hereunder such promissory note,
instrument, or negotiable document duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Collateral Agent;
(c) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices (including any
assignment of claim form under or pursuant to the federal assignment of
claims statute, 31 U.S.C. ss.3726, any successor or amended version thereof
or any regulation promulgated under or pursuant to any version thereof), as
may be necessary or desirable, or as the Collateral Agent may request, in
order to perfect and preserve the security interests and other rights
granted or purported to be granted to the Collateral Agent hereby; and
(d) furnish to the Collateral Agent, from time to time at the
Collateral Agent's request, statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as the Collateral Agent may reasonably request, all in
reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
the Grantor hereby authorizes the Collateral Agent to Authenticate and to file
one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of the
Grantor where permitted by law. A carbon, photographic or other reproduction of
this Security Agreement or any financing statement covering the Collateral or
any part thereof shall be sufficient as a financing statement where permitted by
law.
SECTION 4.1.8 Bailees. No Collateral shall at any time be in the possession
or control of any warehouse, bailee or any of the Grantor's agents or processors
without the Collateral Agent's prior written consent and unless the Collateral
Agent, if the Collateral Agent has so requested, has received warehouse receipts
or bailee lien waivers satisfactory to the Collateral Agent prior to the
commencement of such possession or control. The Grantor shall, upon the request
of the Collateral Agent, notify any such warehouse, bailee, agent or processor
of the Liens, shall instruct such Person to hold all such Collateral for the
Collateral Agent's account subject to the Collateral Agent's instructions and
shall obtain an acknowledgement from such Person that such Person holds the
Collateral for the Collateral Agent's benefit.
SECTION 4.1.9 Chattel Paper. The Grantor will deliver to the Collateral
Agent all Tangible Chattel Paper having a value of at least $500,000 duly
endorsed and
20
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Collateral Agent. The Grantor will provide the
Collateral Agent with Control of all Electronic Chattel Paper, by having the
Collateral Agent identified as the assignee of the records(s) pertaining to the
single authoritative copy thereof and otherwise complying with the applicable
elements of Control set forth in the U.C.C.. The Grantor will also deliver to
the Collateral Agent all security agreements securing any Chattel Paper and
execute U.C.C. financing statement amendments assigning to the Collateral Agent
any U.C.C. financing statements filed by the Grantor in connection with such
security agreements. The Grantor will xxxx conspicuously all Chattel Paper with
a legend, in form and substance satisfactory to the Collateral Agent, indicating
that such Chattel Paper is subject to the Liens created hereunder.
SECTION 4.1.10 Letters of Credit. Upon the Collateral Agent's request, the
Grantor will deliver to the Collateral Agent all domestic Letters of Credit duly
endorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to the Collateral Agent. In connection
therewith, the Grantor will also deliver to the Collateral Agent all security
agreements securing any domestic Letters of Credit and execute U.C.C. financing
statement amendments assigning to the Collateral Agent any U.C.C. financing
statements filed by the Grantor in connection with such security agreements. The
Grantor will take any and all actions necessary (or required or requested by the
Collateral Agent), from time to time, to cause the Collateral Agent to obtain
exclusive Control of any Letter-of-Credit Rights owned by the Grantor in a
manner acceptable to the Collateral Agent.
SECTION 4.1.11 Commercial Tort Claims. The Grantor shall advise the
Collateral Agent promptly upon the Grantor becoming aware that it owns any
additional Commercial Tort Claims. With respect to any new Commercial Tort
Claim, the Grantor will execute and deliver such documents as the Agent deems
necessary to create, perfect and protect the Collateral Agent's security
interest in such Commercial Tort Claim.
SECTION 4.1.12 Bank Accounts. Upon request by the Collateral Agent, the
Grantor shall enter into a Control agreement in form and substance satisfactory
to the Collateral Agent, with each financial institution with which the Grantor
maintains from time to time any Deposit Account.
ARTICLE V
THE COLLATERAL AGENT
SECTION 5.1. Collateral Agent Appointed Attorney-in-Fact. The Grantor
hereby irrevocably appoints the Collateral Agent the Grantor's attorney-in-fact,
with full authority in the place and stead of the Grantor and in the name of the
Grantor or otherwise, from time to time in the Collateral Agent's discretion,
following the occurrence and continuation of a Default of the nature set forth
in Section 11.01(f) or 11.01(g) of the Credit Agreement or an Event of Default,
to take any action and to execute any instrument which the Collateral Agent may
deem necessary or advisable to accomplish the purposes of this Security
Agreement, including:
21
(a) to ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above;
(c) to file any claims or take any action or institute any proceedings
which the Collateral Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
the Collateral Agent with respect to any of the Collateral; and
(d) to perform the affirmative obligations of the Grantor hereunder
(including all obligations of the Grantor pursuant to Section 4.1.7).
The Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Collateral Agent May Perform. If the Grantor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by the Grantor pursuant to
Section 6.2.
SECTION 5.3. Collateral Agent Has No Duty. In addition to, and not in
limitation of, Section 2.4, the powers conferred on the Collateral Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining to
any Collateral.
SECTION 5.4. Reasonable Care. The Collateral Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, the Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as the Grantor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default, but failure of the Collateral Agent to
comply with any such request at any time shall not in itself be deemed a failure
to exercise reasonable care.
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ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Event of Default shall have occurred
and be continuing:
(a) The Collateral Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the U.C.C. (whether or not the U.C.C. applies to the affected
Collateral) and also may
(i) require the Grantor to, and the Grantor hereby agrees that it
will, at its expense and upon request of the Collateral Agent
forthwith, assemble all or part of the Collateral as directed by the
Collateral Agent and make it available to the Collateral Agent at a
place to be designated by the Collateral Agent which is reasonably
convenient to both parties, and
(ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Collateral Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms
as the Collateral Agent may deem commercially reasonable. The Grantor
agrees that, to the extent notice of sale shall be required by law, at
least ten days' prior notice to the Grantor of the time and place of
any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Collateral Agent shall
not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Collateral Agent may adjourn any public
or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Collateral Agent in respect of
any sale of, collection from, or other realization upon all or any part of
the Collateral shall, subject to the terms of any applicable Intercreditor
Agreement, be applied (after payment of any amounts payable to the
Collateral Agent pursuant to Section 6.2) pursuant to Section 3.02(b)(iii)
of the Credit Agreement.
SECTION 6.2. Indemnity and Expenses.
(a) The Grantor agrees to indemnify the Collateral Agent from and
against any and all claims, losses and liabilities arising out of or
resulting from this Security
23
Agreement (including enforcement of this Security Agreement), except
claims, losses or liabilities resulting from the Collateral Agent's gross
negligence or wilful misconduct.
(b) The Grantor will upon demand pay to the Collateral Agent the
amount of any and all reasonable expenses, including the reasonable fees
and disbursements of its counsel and of any experts and agents, which the
Collateral Agent may incur in connection with
(i) the administration of this Security Agreement,
(ii) the custody, preservation, use or operation of, or the sale
of, collection from, or other realization upon, any of the Collateral,
and
(iii) the exercise or enforcement of any of the rights of the
Collateral Agent or the Secured Parties hereunder, or
(iv) the failure by the Grantor to perform or observe any of the
provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Security Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION 7.2. Amendments; etc. No amendment to or waiver of any provision of
this Security Agreement nor consent to any departure by the Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Collateral Agent (on behalf of the Lenders or the Required Lenders, as
the case may be), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 7.3. Addresses for Notices. All notices and other communications
provided for hereunder shall be made in accordance with Section 13.08 of the
Credit Agreement.
SECTION 7.4. Section Captions. Section captions used in this Security
Agreement are for convenience of reference only, and shall not affect the
construction of this Security Agreement.
SECTION 7.5. Severability. Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law,
24
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Security Agreement.
SECTION 7.6. Counterparts. This Security Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed an
original and all of which shall constitute together but one and the same
agreement.
SECTION 7.7. Notices. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given shall be
in writing and may be personally served, telecopied, telexed or sent by courier
service or United States certified mail and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of a telecopy or
telex or four (4) Business Days after deposit in the United States mail with
postage prepaid and properly addressed. Notices to the Collateral Agent shall
not be effective until received by the Collateral Agent. For the purposes
hereof, the addresses of the parties hereto (until notice of a change thereof is
delivered as provided in this Section 7.7) shall be as set forth below each
party's name on the signature pages hereof, or, as to each party, at such other
address as may be designated by such party in a written notice to the other
party to this Security Agreement.
SECTION 7.8. Certain Consents and Waivers of the Grantor.
SECTION 7.8.1 Personal Jurisdiction. THE GRANTOR IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING IN NEW YORK,
NEW YORK, AND ANY COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN
SUCH COURTS, IN ANY ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED
TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED IN CONNECTION WITH THIS
SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT TO WHICH THE GRANTOR IS A PARTY,
WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND THE GRANTOR IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT. THE GRANTOR IRREVOCABLY DESIGNATES AND APPOINTS CORPORATION
SERVICE COMPANY, 00 XXXXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000, AS ITS AGENT (THE
"PROCESS AGENT") FOR SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH
COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED TO BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. THE GRANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
THE GRANTOR WAIVES IN ALL DISPUTES ANY OBJECTION
25
THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
THE GRANTOR AGREES THAT THE COLLATERAL AGENT SHALL HAVE THE RIGHT TO
PROCEED AGAINST THE GRANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE
THE ADMINISTRATIVE AGENTS, THE LENDERS AND THE ISSUING BANKS TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE SECURED OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE ADMINISTRATIVE AGENTS, ANY
LENDER OR ANY ISSUING BANK. THE GRANTOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO
THE LOCATION OF THE COURT IN WHICH THE COLLATERAL AGENT MAY COMMENCE A
PROCEEDING DESCRIBED IN THIS SECTION.
SECTION 7.8.2. Service of Process. THE GRANTOR IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE PROCESS AGENT OR THE GRANTOR?S NOTICE ADDRESS SPECIFIED
BELOW, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. THE
GRANTOR IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING WITH RESPECT TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF THE ADMINISTRATIVE AGENTS, THE LENDERS AND ISSUING BANKS TO BRING
PROCEEDINGS AGAINST THE GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 7.9. Governing Law, Entire Agreement, etc. THIS SECURITY AGREEMENT
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS SECURITY AGREEMENT AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY
PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
FOAMEX LATIN AMERICA, INC.
By /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
Notice address:
CITICORP USA, INC., as Collateral Agent
By /s/ Xxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
Notice address:
Citicorp USA, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
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