[Execution Copy]
NEW GFI SECURITY AGREEMENT
This NEW GFI SECURITY AGREEMENT (as amended, supplemented, amended and
restated or otherwise modified from time to time, this "Security Agreement"),
dated as of February 27, 1998, is made by FOAMEX CARPET CUSHION, INC., a
Delaware corporation (the "Grantor"), in favor of CITICORP USA, INC., as New GFI
Intercreditor 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 February 27, 1998
(as amended, supplemented, amended and restated or modified from time to time,
the "Credit Agreement"), among the Grantor, certain institutions party thereto
from time to time as lenders (the "Lenders"), certain institutions party thereto
from time to time as issuing banks (the "Issuing Banks"), 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 therein, the "Administrative Agents"), the Lenders and the
Issuing Banks have extended Commitments to make Credit Extensions to the
Grantor;
WHEREAS, the Collateral Agent has entered into the New GFI
Intercreditor Agreement, dated as of February 27, 1998 (as amended,
supplemented, amended and restated or modified from time to time, the "New GFI
Intercreditor Agreement"), pursuant to which it has agreed to act as a
collateral agent (the "New GFI Intercreditor Collateral Agent") with respect to,
among other things, the Collateral;
WHEREAS, in connection with the sale of all non-real estate assets by
General Felt Industries, Inc. ("GFI") to the Grantor, the Grantor has issued a
promissory note in an original principal amount of $70,200,000 (the "New GFI
Note") to GFI;
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
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.
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NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, 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):
"Administrative Agents" is defined in the first recital.
"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.
"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
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(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.
"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.
"Equipment" is defined in clause (a) of Section 2.1.
"GFI" is defined in the third recital.
"Grantor" is defined in the preamble.
"Holder" means the holder of the New GFI Note.
"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" is defined in clause (b) of Section 2.1
"Issuing Banks" is defined in the first recital.
"Lenders" is defined in the first recital.
"New GFI Intercreditor Agreement" is defined in the second recital.
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"New GFI Intercreditor Collateral Agent" is defined in the
second recital.
"New GFI Note" is defined in the third recital.
"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.
"Receivables" is defined in clause (c) of Section 2.1.
"Related Contracts" is defined in clause (c) of Section 2.1.
"Requisite Secured Parties" is defined in the New GFI Intercreditor
Agreement.
"Secured Obligations" is defined in Section 2.2.
"Secured Parties" means, collectively, (i) the Lenders, the Issuing
Banks, the Administrative Agents, the Collateral Agent, and any Lender in its
capacity as a counterparty to a Hedging Obligation, (ii) the New GFI
Intercreditor Collateral Agent, and (iii) and the Holder.
"Security Agreement" is defined in the preamble.
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"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;
(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
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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 from time to
time in the State of New York.
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 assigns and pledges
to the Collateral Agent for its ratable benefit and the ratable benefit of each
of the other Secured Parties, and hereby grants to the Collateral Agent for its
ratable benefit and the ratable benefit of each of the other 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 in all of its forms of the Grantor,
wherever located, including
(i) all raw materials and work in process therefor,
finished goods thereof, and materials used or consumed in
the manufacture or production thereof,
(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), and
(iii) all goods which are returned to or
repossessed by the Grantor,
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and all accessions thereto, products thereof and documents therefor
(any and all such inventory, materials, goods, accessions, products and
documents being the "Inventory");
(c) all accounts, contracts, contract rights, chattel paper,
documents, instruments, and general intangibles (including tax refunds)
of the Grantor, whether or not arising out of or in connection with the
sale or lease of goods or the rendering of services, and all rights of
the Grantor now or hereafter existing in and to all security
agreements, guaranties, leases and other contracts securing or
otherwise relating to any such accounts, contracts, contract rights,
chattel paper, documents, instruments, and general intangibles (any and
all such accounts, contracts, contract rights, chattel paper,
documents, instruments, and general intangibles being the
"Receivables", and any and all such security agreements, guaranties,
leases and other contracts being the "Related Contracts");
(d) all Intellectual Property Collateral of the Grantor;
(e) 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;
(f) all of the Grantor's other property and rights of
every kind and description and interests therein; and
(g) 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) and (f), proceeds deposited from time
to time in the Collateral Account and in any lock boxes 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.
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SECTION 2.2. Security for Obligations. This Security Agreement secures
the payment in full in cash of (i) all Obligations of the Grantor now or
hereafter existing under the Credit Agreement, the Notes 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 (ii) all obligations of the
Grantor under the New GFI Note (all such Obligations of the Grantor 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 Secured Party
may assign or otherwise transfer (in whole or in part) any Secured Obligation
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 Secured Party under any Secured Obligation (including this
Security Agreement) or otherwise, subject, however, to any contrary provisions
in such assignment or transfer. 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
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(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
(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 Grantor
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 or the New GFI
Note,
(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 the New GFI Note 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
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shall not be subject to (and the Grantor 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 or the New
GFI Note,
(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
(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
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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 the Grantor 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 Collateral, etc. 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 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 E 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 detailed in the Amendatory Agreement and, except as
otherwise set forth in Item F 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 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 Effective Date, 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 G 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
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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.
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 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;
(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.
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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.
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 Secured Parties 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
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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 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 and
preserve such records and 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 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
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"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, Sections
10.01(f) or 10.01(g) of the New GFI Note 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, Sections 10.01(f) or 10.01(g) of the New GFI Note
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, Sections 10.01(f) or 10.01(g) of the
New GFI Note 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:
(a) the Grantor shall not, unless the Grantor shall
either (i) reasonably and in good faith determine (and notice
-15-
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
-16-
(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
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)).
-17-
(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, 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
-18-
(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 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, negotiable
document or chattel paper, deliver and pledge to the Collateral Agent
hereunder such promissory note, instrument, negotiable document or
chattel paper 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
-19-
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 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.
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, Sections 10.01(f) or
10.01(g) of the New GFI Note 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:
(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).
-20-
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.
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
-21-
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 be applied (after payment of any
amounts payable to the Collateral Agent pursuant to Section 6.2) by the
Collateral Agent in accordance with the New GFI Intercreditor
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 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
-22-
(iii) the exercise or enforcement of any of the
rights of the Collateral Agent or the other 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 Requisite Secured Parties),
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
SECTION 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, 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. 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
-23-
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.
SECTION 7.8. Conflicts. In the event of any conflict between the terms
of this Security Agreement and the New GFI Intercreditor Agreement, the terms of
the New GFI Intercreditor Agreement shall govern.
-24-
IN WITNESS WHEREOF, the Grantor has caused this Security Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
FOAMEX CARPET CUSHION, INC.
By /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
-25-
New GFI Security Agreement
CITICORP USA, INC., as
Collateral Agent
By /s/ Xxx Xxxxxx
------------------------------
Name:
Title:
-26-
SCHEDULE I
to New GFI
Security Agreement
Item A. Location of Equipment
---------------------
Description Location
----------- --------
See Attached
Item B. Location of Inventory
---------------------
Description Location
----------- --------
See Attached
Item C. Location of Lock Boxes
----------------------
Contact
Bank Name and Address Account Number Person
--------------------- -------------- ------
1. Citibank, N.A. 4060-5549
2. Citibank, N.A. 4075-0148
Item D. Place(s) of Business and Chief Executive Office
-----------------------------------------------
0000 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000
Item E. Trade Names
-----------
Nouveau
Performer & Plus
Excellence
Millenia
Pavillion
Xxxxxxxxxx
X-0 XX
X-0X
X-0
X-0X
Xxxx-Xxxx
Ultima
Pinnacle
Ultra Plush
T-102
Ultra Life & Plus
NPL-25
Item F. Merger or Other Corporate Reorganization
----------------------------------------
None other than contemplated in the Amendatory Agreement
Item G. Government Contracts
--------------------
None
SCHEDULE II
to New GFI
Security Agreement
Item A. Patents
-------
Issued Patents
--------------
Issue
Country Patent No. Date Inventor(s) Title
------- ---------- ---- ----------- -----
USA US 4797977 Picker Assembly
USA US 3847647 Process of Applying
Adhesive to a Floor
Covering
USA US 3704197 Removable Floor
Covering
Pending Patent Applications
---------------------------
Country Serial No. Filing Date Inventor(s) Title
------- ---------- ----------- ----------- -----
None
Patent Applications in Preparation
----------------------------------
Expected
Country Docket No. Filing Date Inventor(s) Title
------- ---------- ----------- ----------- -----
None
Item B. Patent Licenses
---------------
Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
None
SCHEDULE III
to New GFI
Security Agreement
Item A. Trademarks
----------
Registered Trademarks
---------------------
Country Trademark Registration No. Registration Date
------- --------- ---------------- -----------------
See attached
Pending Trademark Applications
------------------------------
Country Trademark Serial No. Filing Date
------- --------- ---------- -----------
See attached
Trademark Applications in Preparation
-------------------------------------
Expected Products/
Country Trademark Docket No. Filing Date Services
------- --------- ---------- ----------- --------
None
Item B. Trademark Licenses
------------------
Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
--------- --------- -------- -------- ---- ----
None
SCHEDULE IV
to New GFI
Security Agreement
Item A. Copyrights/Mask Works
---------------------
Registered Copyrights/Mask Works
Country Registration No. Registration Date Author(s) Title
------- ---------------- ----------------- --------- -----
None
Copyright/Mask Work Pending Registration Applications
Country Serial No. Filing Date Author(s) Title
------- ---------- ----------- --------- -----
None
Copyright/Mask Work Registration Applications in Preparation
Expected
Country Docket No. Filing Date Author(s) Title
------- ---------- ----------- --------- -----
None
Item B. Copyright/Mask Work Licenses
Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
None
SCHEDULE V
to New GFI
Security Agreement
Trade Secret or Know-How Licenses
---------------------------------
Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
See attached
EXHIBIT A
to New GFI
Security Agreement
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT (this "Agreement"), dated as of February
27, 1998, is made between FOAMEX CARPET CUSHION, INC., a Delaware corporation
(the "Grantor") and 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 February 27, 1998
(as amended, supplemented, amended and restated or modified from time to time,
the "Credit Agreement"), among the Grantor, certain institutions party thereto
from time to time as lenders (the "Lenders"), certain institutions party thereto
from time to time as issuing banks (the "Issuing Banks"), 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, the "Administrative Agents"), the Lenders and the Issuing
Banks have extended Commitments to make Credit Extensions to the Grantor;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered the New GFI Security Agreement, dated as of February 27,
1998 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Security Agreement");
WHEREAS, pursuant to the Security Agreement, the Grantor is required to
execute and deliver this Agreement and to grant to the Collateral Agent a
continuing security interest in all of the Patent Collateral (as defined below)
to secure all Secured Obligations; and
WHEREAS, the Grantor has duly authorized the execution,
delivery and performance of this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the Grantor agrees, for the benefit of each
Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or
the context otherwise requires, terms used in this Agreement,
-1-
including its preamble and recitals, have the meanings provided (or incorporated
by reference) in the Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Secured Obligations, the Grantor does hereby mortgage, pledge
and hypothecate to the Collateral Agent, and grant to the Collateral Agent a
security interest in, for its benefit and the benefit of each Secured Party, all
of the following property (the "Patent Collateral"), whether now owned or
hereafter acquired or existing by it:
(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 Attachment 1 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 Attachment 1 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 Attachment 1 attached hereto, and
for breach or enforcement of any patent license, including any patent
license referred to in Item B of Attachment 1 attached hereto, and all
rights corresponding thereto throughout the world.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Collateral Agent in the Patent Collateral with the United States Patent and
Trademark Office and corresponding offices in other countries of the world. The
security interest granted hereby has been granted as a supplement to, and not in
limitation of, the security interest granted to the Collateral Agent for its
benefit and the benefit of each Secured Party under the Security Agreement. The
Security Agreement (and all rights and remedies of the Collateral Agent and each
Secured Party thereunder) shall remain in full force and effect in accordance
with its terms.
SECTION 4. Release of Security Interest. Upon payment in full in cash
of all Secured Obligations, the termination or expiry
-2-
of all Letters of Credit and the termination of all Commitments, the Collateral
Agent shall, at the Grantor's expense, execute and deliver to the Grantor all
instruments and other documents as may be necessary or proper to release the
lien on and security interest in the Patent Collateral which has been granted
hereunder.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Collateral Agent with respect to
the security interest in the Patent Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which (including
the remedies provided for therein) are incorporated by reference herein as if
fully set forth herein.
SECTION 6. Loan Document, etc. This 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 of the Credit Agreement.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
-3-
New GFI Patent Security Agreement
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 CARPET CUSHION, INC.
By
---------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
-4-
New GFI Patent Security Agreement
CITICORP USA, INC., as
Collateral Agent
By
-------------------------
Name:
Title: Attorney-in-Fact
-5-
ATTACHMENT 1
to New GFI Patent
Security Agreement
Item A. Patents
-------
Issued Patents
--------------
Country Patent No. Issue Date Inventor(s) Title
------- ---------- ---------- ----------- -----
Pending Patent Applications
---------------------------
*Country Serial No. Filing Date Inventor(s) Title
-------- ---------- ----------- ----------- -----
Patent Applications in Preparation
----------------------------------
Expected
*Country Docket No. Filing Date Inventor(s) Title
-------- ---------- ----------- ----------- -----
Item B. Patent Licenses
---------------
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
--------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
EXHIBIT B
to New GFI
Security Agreement
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as of
February 27, 1998, is made between FOAMEX CARPET CUSHION, INC., a Delaware
corporation (the "Grantor") and 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 February 27, 1998
(as amended, supplemented, amended and restated or modified from time to time,
the "Credit Agreement"), among the Grantor, certain institutions party thereto
from time to time as lenders (the "Lenders"), certain institutions party thereto
from time to time as issuing banks (the "Issuing Banks"), 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, the "Administrative Agents"), the Lenders and the Issuing
Banks have extended Commitments to make Credit Extensions to the Grantor;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered the New GFI Security Agreement, dated as of February 27,
1998 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Security Agreement");
WHEREAS, pursuant to the Security Agreement, the Grantor is required to
execute and deliver this Agreement and to grant to the Collateral Agent a
continuing security interest in all of the Trademark Collateral (as defined
below) to secure all Secured Obligations; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the Grantor agrees, for the benefit of each
Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement,
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including its preamble and recitals, have the meanings provided (or incorporated
by reference) in the Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Secured Obligations, the Grantor does hereby mortgage, pledge
and hypothecate to the Collateral Agent, and grant to the Collateral Agent a
security interest in, for its benefit and the benefit of each Secured Party, all
of the following property (the "Trademark Collateral"), whether now owned or
hereafter acquired or existing by it:
(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 Attachment 1 attached hereto;
(b) all Trademark licenses, including each Trademark
license referred to in Item B of Attachment 1 attached hereto;
(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 Attachment 1 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.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of
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registering the security interest of the Collateral Agent in the Trademark
Collateral with the United States Patent and Trademark Office and corresponding
offices in other countries of the world. The security interest granted hereby
has been granted as a supplement to, and not in limitation of, the security
interest granted to the Collateral Agent for its benefit and the benefit of each
Secured Party under the Security Agreement. The Security Agreement (and all
rights and remedies of the Collateral Agent and each Secured Party thereunder)
shall remain in full force and effect in accordance with its terms.
SECTION 4. Release of Security Interest. Upon payment in full in cash
of all Secured Obligations, the termination or expiry of all Letters of Credit
and the termination of all Commitments, the Collateral Agent shall, at the
Grantor's expense, execute and deliver to the Grantor all instruments and other
documents as may be necessary or proper to release the lien on and security
interest in the Trademark Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Collateral Agent with respect to
the security interest in the Trademark Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
SECTION 6. Loan Document, etc. This 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 of the Credit Agreement.
SECTION 7. Counterparts. This Agreement may be executed by
the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together
but one and the same agreement.
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New GFI Trademark Security Agreement
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 CARPET CUSHION, INC.
By
--------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
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New GFI Trademark Security Agreement
CITICORP USA, INC., as
Collateral Agent
By
---------------------------
Name:
Title: Attorney-in-Fact
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ATTACHMENT 1
to New GFI Trademark
Security Agreement
Item A. Trademarks
----------
Registered Trademarks
---------------------
*Country Trademark Registration No. Registration Date
-------- --------- ---------------- -----------------
Pending Trademark Applications
------------------------------
*Country Trademark Serial No. Filing Date
-------- --------- ---------- -----------
Trademark Applications in Preparation
-------------------------------------
Expected Products/
*Country Trademark Docket No. Filing Date Services
-------- --------- ---------- ----------- --------
Item B. Trademark Licenses
------------------
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
--------- --------- -------- -------- ---- ----
--------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
EXHIBIT C
to New GFI
Security Agreement
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT (this "Agreement"), dated as of
February 27, 1998, is made between FOAMEX CARPET CUSHION, INC., a Delaware
corporation (the "Grantor") and 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 February 27, 1998
(as amended, supplemented, amended and restated or modified from time to time,
the "Credit Agreement"), among the Grantor, certain institutions party thereto
from time to time as lenders (the "Lenders"), certain institutions party thereto
from time to time as issuing banks (the "Issuing Banks"), 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, the "Administrative Agents"), the Lenders and the Issuing
Banks have extended Commitments to make Credit Extensions to the Grantor;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered the New GFI Security Agreement, dated as of February 27,
1998 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "Security Agreement");
WHEREAS, pursuant to the Security Agreement, the Grantor is required to
execute and deliver this Agreement and to grant to the Collateral Agent a
continuing security interest in all of the Copyright Collateral (as defined
below) to secure all Secured Obligations; and
WHEREAS, the Grantor has duly authorized the execution,
delivery and performance of this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the Grantor agrees, for the benefit of each
Secured Party, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or
the context otherwise requires, terms used in this Agreement,
including its preamble and recitals, have the meanings provided (or incorporated
by reference) in the Security Agreement.
SECTION 2. Grant of Security Interest. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Secured Obligations, the Grantor does hereby mortgage, pledge
and hypothecate to the Collateral Agent, and grant to the Collateral Agent a
security interest in, for its benefit and the benefit of each Secured Party, all
of the following property (the "Copyright Collateral"), whether now owned or
hereafter acquired or existing by it, being 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 Attachment 1 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 Attachment 1 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.
SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Collateral Agent in the Copyright Collateral with the United States
Copyright Office and corresponding offices in other countries of the world. The
security interest granted hereby has been granted as a supplement to, and not in
limitation of, the security interest granted to the Collateral Agent for its
benefit and the benefit of each Secured Party under the Security Agreement. The
Security Agreement (and all rights and remedies of the Collateral Agent and each
Secured Party thereunder) shall remain in full force and effect in accordance
with its terms.
SECTION 4. Release of Security Interest. Upon payment in full in cash
of all Secured Obligations, the termination or expiry of all Letters of Credit
and the termination of all Commitments, the Collateral Agent shall, at the
Grantor's expense, execute and deliver to the Grantor all instruments and other
documents as may be necessary or proper to release the lien on and security
interest in the Copyright Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Collateral Agent with respect to
the security interest in the
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Copyright Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which (including the remedies provided
for therein) are incorporated by reference herein as if fully set forth herein.
SECTION 6. Loan Document, etc. This 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 of the Credit Agreement.
SECTION 7. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
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New GFI Copyright Security Agreement
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 CARPET CUSHION, INC.
By
--------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
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New GFI Copyright Security Agreement
CITICORP USA, INC., as
Collateral Agent
By
--------------------------
Name:
Title:
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ATTACHMENT 1
to New GFI Copyright
Security Agreement
Item A. Copyrights/Mask Works
---------------------
Registered Copyrights/Mask Works
--------------------------------
*Country Registration No. Registration Date Author(s) Title
-------- ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
-----------------------------------------------------
*Country Serial No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
------------------------------------------------------------
Expected
*Country Docket No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Item B. Copyright/Mask Work Licenses
----------------------------
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
