REVOLVING CREDIT SECURITY AGREEMENT
By
FOAMEX L.P.,
as Borrower,
and
THE GUARANTORS PARTY HERETO
and
BANK OF AMERICA, N.A.,
as Administrative Agent
______________________
Dated as of February 12,
2007
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
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SECTION 1.1.
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Definitions
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2
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SECTION 1.2.
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Interpretation
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9
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SECTION 1.3.
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Resolution of Drafting Ambiguities
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9
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SECTION 1.4.
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Perfection Certificate
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9
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ARTICLE II
GRANT OF SECURITY AND SECURED
OBLIGATIONS
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SECTION 2.1.
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Grant of Security Interest
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9
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ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER
ASSURANCES;
USE OF PLEDGED COLLATERAL
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SECTION 3.1.
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Delivery of Certificated Securities
Collateral
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11
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SECTION 3.2.
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Perfection of Uncertificated Securities
Collateral
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12
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SECTION 3.3.
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Financing Statements and Other Filings;
Maintenance of
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|
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Perfected Security Interest
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12
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SECTION 3.4.
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Other Actions
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13
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SECTION 3.5.
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Joinder of Additional Guarantors
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16
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SECTION 3.6.
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Supplements; Further Assurances
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16
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND
COVENANTS
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SECTION 4.2.
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Validity of Security Interest
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18
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SECTION 4.3.
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Defense of Claims; Transferability of Pledged
Collateral
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18
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SECTION 4.4.
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Other Financing Statements
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18
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SECTION 4.5.
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Chief Executive Office; Change of Name;
Jurisdiction of
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SECTION 4.6.
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Location of Inventory and Equipment
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19
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SECTION 4.7.
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Due Authorization and Issuance
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19
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SECTION 4.8.
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Consents, etc.
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19
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SECTION 4.9.
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Pledged Collateral
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19
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SECTION 4.10.
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[Insurance
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20
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SECTION 4.11.
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ABL Collateral Accounts.
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20
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SECTION 4.12.
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Accounts
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20
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ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES
COLLATERAL
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SECTION 5.1.
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Pledge of Additional Securities
Collateral
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21
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SECTION 5.2.
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Voting Rights; Distributions; etc.
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21
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SECTION 5.3.
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Defaults, etc.
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22
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SECTION 5.4.
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Certain Agreements of Pledgors As Issuers and
Holders
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ARTICLE VI
CERTAIN PROVISIONS CONCERNING
INTELLECTUAL
PROPERTY COLLATERAL
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SECTION 6.1.
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Grant of Intellectual Property
License
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23
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SECTION 6.2.
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Protection of Administrative Agent’s
Security
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23
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SECTION 6.3.
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After-Acquired Property
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24
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SECTION 6.4.
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Litigation
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24
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ARTICLE VII
CERTAIN PROVISIONS CONCERNING
RECEIVABLES
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SECTION 7.1.
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Maintenance of Records
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25
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SECTION 7.3.
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Modification of Terms, etc.
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26
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SECTION 7.4.
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Collection
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27
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ARTICLE VIII
TRANSFERS
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SECTION 8.1.
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Transfers of Pledged Collateral
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28
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ARTICLE IX
REMEDIES
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SECTION 9.2.
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Notice of Sale
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30
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SECTION 9.3.
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Waiver of Notice and Claims
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30
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SECTION 9.4.
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Certain Sales of Pledged Collateral
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30
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SECTION 9.5.
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No Waiver; Cumulative Remedies
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32
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SECTION 9.6.
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Certain Additional Actions Regarding
Intellectual Property
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32
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ARTICLE X
APPLICATION OF PROCEEDS
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SECTION 10.1.
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Application of Proceeds
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32
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ARTICLE XI
MISCELLANEOUS
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SECTION 11.1.
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Concerning Administrative Agent
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33
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SECTION 11.2.
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Administrative Agent May Perform; Administrative
Agent Appointed
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SECTION 11.3.
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Continuing Security Interest;
Assignment
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34
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SECTION 11.4.
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Termination; Release
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35
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SECTION 11.5.
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Modification in Writing
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35
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SECTION 11.7.
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Governing Law, Consent to Jurisdiction and
Service of
|
|
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Process; Waiver of Jury Trial
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36
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SECTION 11.8.
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Severability of Provisions
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36
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SECTION 11.9.
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Execution in Counterparts
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36
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SECTION 11.10.
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Business Days
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36
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SECTION 11.11.
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No Credit for Payment of Taxes or
Imposition
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36
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SECTION 11.12.
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No Claims Against Administrative
Agent
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36
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SECTION 11.13.
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No Release
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36
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SECTION 11.14.
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Obligations Absolute
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37
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SECTION 11.15.
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Intercreditor Agreement
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38
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EXHIBIT 1
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Form of Issuer’s Acknowledgment
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EXHIBIT 2
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Form of Pledge Amendment
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EXHIBIT 3
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Form of Joinder Agreement
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EXHIBIT 4
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Form of Revolving Credit Copyright Security
Agreement
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EXHIBIT 5
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Form of Revolving Credit Patent Security
Agreement
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EXHIBIT 6
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Form of Revolving Credit Trademark Security
Agreement
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SCHEDULE A
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ABL Collateral Accounts
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REVOLVING CREDIT SECURITY
AGREEMENT
This REVOLVING CREDIT SECURITY
AGREEMENT dated as of February 12, 2007 (as amended, amended
and restated, supplemented or otherwise modified from time to time
in accordance with the provisions hereof, this “
Agreement ”) made by and among FOAMEX L.P., a Delaware
limited partnership (the “ Borrower ”), FOAMEX
INTERNATIONAL INC., a Delaware corporation ( “
Holdings ”), and the other Guarantors listed on the
signature pages hereto (together with Holdings, the “
Original Guarantors ”) or from time to time party
hereto by execution of a Joinder Agreement (the “
Additional Guarantors ,” and together with the
Original Guarantors, the “ Guarantors ”), as
pledgors, assignors and debtors (the Borrower, together with the
Guarantors, in such capacities and together with any successors in
such capacities, the “ Pledgors ,” and each, a
“ Pledgor ”), in favor of BANK OF AMERICA, N.A.,
in its capacity as administrative agent pursuant to the Credit
Agreement (as hereinafter defined), as pledgee, assignee and
secured party (in such capacities and together with any successors
in such capacities, the “ Administrative Agent
”).
R E C I T A L S
:
A. The
Borrower, the Original Guarantors, the Administrative Agent, the
lending institutions party thereto from time to time (the “
Lenders ”) and certain other parties have entered into
that certain revolving credit agreement, dated as of
February 12, 2007 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “
Credit Agreement ”; which term shall also include and
refer to any increase in the amount of indebtedness under the
Credit Agreement and any refinancing or replacement of the Credit
Agreement (whether under a bank facility, securities offering or
otherwise) or one or more successor or replacement facilities
whether or not with a different group of agents or lenders (whether
under a bank facility, securities offering or otherwise) and
whether or not with different obligors upon the Administrative
Agent’s acknowledgment of the termination of the predecessor
Credit Agreement).
B. Each
Guarantor has, pursuant to the Credit Agreement, unconditionally
guaranteed the Secured Obligations.
C. The
Borrower and each Guarantor will receive substantial benefits from
the execution, delivery and performance of the obligations under
the Credit Agreement and the other Loan Documents and each is,
therefore, willing to enter into this Agreement.
D. This
Agreement is given by each Pledgor in favor of the Administrative
Agent for the benefit of the Secured Parties to secure the payment
and performance of all of the Secured Obligations.
E. It
is a condition to the obligations of the Lenders to make the Loans
under the Credit Agreement and issue or cause the issuance of
Letters of Credit and Credit Support as provided in the Credit
Agreement that each Pledgor execute and deliver the applicable Loan
Documents, including this Agreement.
A G R E E M E N T
:
NOW THEREFORE, in consideration of
the foregoing premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, each
Pledgor and the Administrative Agent hereby agree as
follows:
ARTICLE I
DEFINITIONS AND
INTERPRETATION
|
|
SECTION 1.1.
|
Definitions .
|
(a) Unless
otherwise defined herein or in the Credit Agreement, capitalized
terms used herein that are defined in the UCC shall have the
meanings assigned to them in the UCC; provided that in any
event, the following terms shall have the meanings assigned to them
in the UCC:
“ Accounts ”;
“ Bank ”; “ Certificated Securities
”; “ Chattel Paper ”; “
Commercial Tort Claim ”; “ Commodity
Account ”; “ Commodity Contract ”;
“ Commodity Intermediary ”; “
Documents ”; “ Electronic Chattel Paper
”; “ Entitlement Order ”; “
Equipment ”; “ Financial Asset ”;
“ Fixtures ”; “ Goods ”,
“ Inventory ”; “ Letter-of-Credit
Rights ”; “ Letters of Credit ”;
“ Money ”; “ Payment Intangibles
”; “ Proceeds ”; “ Records
”; “ Securities Account ”; “
Securities Intermediary ”; “ Security
Entitlement ”; “ Supporting Obligations
”; “ Tangible Chattel Paper ”; and “
Uncertificated Security ”.
(b) Terms
used but not otherwise defined herein that are defined in the
Credit Agreement shall have the meanings given to them in the
Credit Agreement. The sections of Annex A to the Credit Agreement
entitled “Other Interpretive Provisions” and
“Accounting Terms” shall apply herein mutatis
mutandis .
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(c)
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The following terms shall have the following
meanings:
|
“ ABL Collateral
” shall have the meaning assigned to such term in the
Intercreditor Agreement.
“ ABL Collateral
Account ” shall mean the Deposit Accounts identified on
Schedule A hereto and any other Deposit Account or
Securities Account established or approved by the Administrative
Agent and subject to its Control (and with respect to which the
Agent’s Lien in such Deposit Account or Securities Account is
prior to all other Liens (including Permitted Liens)) and into
which any ABL Collateral shall be deposited from time to
time.
“ Account Debtor
” shall mean each person who is obligated on a Receivable or
Supporting Obligation related thereto.
“ Administrative Agent
” shall have the meaning assigned to such term in the
Preamble hereof.
“ Agreement ”
shall have the meaning assigned to such term in the Preamble
hereof.
“ Bailee Letter ”
shall mean a letter in a form that is reasonably satisfactory to
the Administrative Agent.
“ BofA Accounts ”
shall mean lockbox accounts number 3750206876, 750325553 and
018076-932-3 established by the Borrower at Bank of America,
N.A.
“ Borrower ”
shall have the meaning assigned to such term in the Preamble
hereof.
“ Collateral Support
” shall mean all property (real or personal) assigned,
hypothecated or otherwise securing any Pledged Collateral and shall
include any security agreement or other agreement granting a lien
or security interest in such real or personal property.
“ Commodity Account Control
Agreement ” shall mean a control agreement in a form that
is reasonably satisfactory to the Administrative Agent establishing
the Administrative Agent’s Control with respect to any
Commodity Account.
“ Contracts ”
shall mean, collectively, with respect to each Pledgor, all sale,
service, performance, equipment or personal property lease
contracts and agreements and all other contracts or agreements (in
each case, whether written or oral, or third party or
intercompany), between such Pledgor and any third party, and all
assignments, amendments, restatements, supplements, extensions,
renewals, replacements or modifications thereof.
“ Control ” shall
mean (i) in the case of each Deposit Account,
“control,” as such term is defined in
Section 9-104 of the UCC, (ii) in the case of any
Security Entitlement, “control,” as such term is
defined in Section 8-106 of the UCC, and (iii) in the
case of any Commodity Contract, “control,” as such term
is defined in Section 9-106 of the UCC.
“ Control Agent ”
shall have the meaning assigned to such term in the Intercreditor
Agreement.
“ Control Agreements
” shall mean, collectively, the Deposit Account Control
Agreements, the Securities Account Control Agreements and the
Commodity Account Control Agreements.
“ Control Collateral
” shall have the meaning assigned to such term in the
Intercreditor Agreement.
“ Copyrights ”
shall mean, collectively, with respect to each Pledgor, all
copyrights (whether statutory or common law, whether established or
registered in the United States or any other country or any
political subdivision thereof, whether registered or unregistered
and whether published or unpublished) and all copyright
registrations and applications thereof made by such Pledgor, in
each case, whether now owned or hereafter created or acquired by or
assigned to such Pledgor, together with any and all (i) rights
and privileges arising under applicable law with respect to such
Pledgor’s use of such copyrights, (ii) renewals thereof,
(iii) income, fees,
royalties, damages, claims and
payments now or hereafter due and/or payable with respect thereto,
including damages and payments for past, present or future
infringements thereof, (iv) rights corresponding thereto
throughout the world and (v) rights to sue for past, present
or future infringements thereof.
“ Credit Agreement
” shall have the meaning assigned to such term in Recital
A hereof.
“ Deposit Account Control
Agreement ” shall mean a control agreement in a form that
is reasonably satisfactory to the Administrative Agent establishing
the Administrative Agent’s Control with respect to any
Deposit Account.
“ Deposit Accounts
” shall mean, collectively, with respect to each Pledgor,
(i) all “deposit accounts” as such term is defined
in the UCC and all accounts and sub-accounts relating to any of the
foregoing accounts and (ii) all cash, funds, checks, notes and
instruments from time to time on deposit in any of the accounts or
sub-accounts described in clause (i) of this
definition.
“ Distributions ”
shall mean, collectively, with respect to each Pledgor, all
dividends, cash, options, warrants, rights, instruments,
distributions, returns of capital or principal, income, interest,
profits and other property, interests (debt or equity) or proceeds,
including as a result of a split, revision, reclassification or
other like change of the Pledged Securities, from time to time
received, receivable or otherwise distributed to such Pledgor in
respect of or in exchange for any or all of the Pledged Securities
or Intercompany Notes.
“ Excluded Accounts
” shall mean, collectively, (i) any Deposit Account or
Securities Account that is maintained with an average daily balance
not exceeding $10,000 at any time; provided that the
aggregate average daily balance of all such Deposit Accounts and
Securities Accounts excluded pursuant to this clause (i),
shall not exceed $1,000,000, and (ii) any Deposit Account or
Securities Account that is a fiduciary or similar account for the
benefit of employees.
“ Excluded Property
” shall mean:
(a) any
permit or license issued by a Governmental Authority to any Pledgor
or any agreement to which any Pledgor is a party, in each case,
only to the extent and for so long as the terms of such permit,
license or agreement or any Requirement of Law applicable thereto,
validly prohibit the creation by such Pledgor of a security
interest in such permit, license or agreement in favor of the
Administrative Agent (after giving effect to
Sections 9-406(d), 9-407(a), 9-408(a) or 9-409 of the UCC (or
any successor provision or provisions) or any other applicable law
(including the Bankruptcy Code) or principles of
equity);
(b) assets
owned by any Pledgor on the date hereof or hereafter acquired that
is subject to a purchase money Lien or other Lien permitted by
clauses (j), (l) and (o) of Section 7.14 of the Credit
Agreement or a Capital Lease Obligation permitted to be incurred
pursuant to the provisions of the Credit Agreement if the contract
or other agreement in which such Lien is granted (or the
documentation providing for such
purchase money Lien or Capital Lease
Obligation) validly prohibits the creation of any other Lien on
such assets; and
(c) any
Pledged Securities which are specifically excluded from the
definition of Pledged Securities by virtue of the proviso to such
definition;
provided , however , that Excluded Property shall
not include any Proceeds, substitutions or replacements of any
Excluded Property (unless such Proceeds, substitutions or
replacements would constitute Excluded Property).
“ General Intangibles
” shall mean, collectively, with respect to each Pledgor, all
“general intangibles,” as such term is defined in the
UCC, of such Pledgor and, in any event, shall include (i) all
of such Pledgor’s rights, title and interest in, to and under
all Contracts and insurance policies (including all rights and
remedies relating to monetary damages, including indemnification
rights and remedies, and claims for damages or other relief
pursuant to or in respect of any Contract), (ii) all know-how
and warranties relating to any of the Pledged Collateral or the
Mortgaged Property, (iii) any and all other rights, claims,
choses-in-action and causes of action of such Pledgor against any
other Person and the benefits of any and all collateral or other
security given by any other Person in connection therewith,
(iv) all guarantees, endorsements and indemnifications on, or
of, any of the Pledged Collateral or any of the Mortgaged Property,
(v) all lists, books, records, correspondence, ledgers,
printouts, files (whether in printed form or stored
electronically), tapes and other papers or materials containing
information relating to any of the Pledged Collateral or any of the
Mortgaged Property, including all customer or tenant lists,
identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, appraisals, recorded knowledge,
surveys, studies, engineering reports, test reports, manuals,
standards, processing standards, performance standards, catalogs,
research data, computer and automatic machinery software and
programs and the like, field repair data, accounting information
pertaining to such Pledgor’s operations or any of the Pledged
Collateral or any of the Mortgaged Property and all media in which
or on which any of the information or knowledge or data or records
may be recorded or stored and all computer programs used for the
compilation or printout of such information, knowledge, records or
data, (vi) all licenses, consents, permits, variances,
certifications, authorizations and approvals, however
characterized, now or hereafter acquired or held by such Pledgor,
including building permits, certificates of occupancy,
environmental certificates, industrial permits or licenses and
certificates of operation and (vii) all rights to reserves,
deferred payments, deposits, refunds, indemnification of claims and
claims for tax or other refunds against any Governmental Authority,
except in each case for Excluded Property.
“ Goodwill ”
shall mean, collectively, with respect to each Pledgor, the
goodwill connected with such Pledgor’s business including all
goodwill connected with (i) the use of and symbolized by any
Trademark or Intellectual Property License with respect to any
Trademark in which such Pledgor has any interest, (ii) all
know-how, trade secrets, customer and supplier lists, proprietary
information, inventions, methods, procedures, formulae,
descriptions, compositions, technical data, drawings,
specifications, name plates, catalogs, confidential information and
the right to limit the use or disclosure thereof by any person,
pricing and cost information, business and marketing plans and
proposals, consulting agreements, engineering contracts and such
other assets which relate to such goodwill and (iii) all
product lines of such Pledgor’s business.
“ Guarantors ”
shall have the meaning assigned to such term in the Preamble
hereof.
“ Instruments ”
shall mean, collectively, with respect to each Pledgor, all
“instruments,” as such term is defined in
Article 9, rather than Article 3, of the UCC, and shall
include all promissory notes, drafts, bills of exchange or
acceptances.
“ Intellectual Property
Collateral ” shall mean, collectively, the Patents,
Trademarks, Copyrights, Intellectual Property Licenses and
Goodwill.
“ Intellectual Property
Licenses ” shall mean, collectively, with respect to each
Pledgor, all written license agreements to which such Pledgor is a
party with any other party other than an Affiliate or Subsidiary
with respect to any Patent, Trademark or Copyright or any other
patent, trademark or copyright, whether such Pledgor is a licensor
or licensee, under any such license agreement, subject in each case
to the terms of such license agreements, and the right to prepare
for sale, sell and advertise for sale, all Inventory now or
hereafter covered by such license agreements.
“ Intercompany Notes
” shall mean, with respect to each Pledgor, all intercompany
notes described in Schedule 11 to the Perfection Certificate
and intercompany notes hereafter acquired by such Pledgor and all
certificates, instruments or documents evidencing such intercompany
notes, and all assignments, amendments, restatements, supplements,
extensions, renewals, replacements or modifications thereof to the
extent permitted pursuant to the terms hereof.
“ Investment Property
” shall mean a Security, whether certificated or
uncertificated, Security Entitlement, Securities Accounts,
Commodity Contract or Commodity Account, excluding, however, the
Securities Collateral.
“ Joinder Agreement
” shall mean an agreement substantially in the form of
Exhibit 3 hereto.
“ Lenders ” shall
have the meaning assigned to such term in Recital A
hereof.
“ Material Intellectual
Property Collateral ” shall mean any Intellectual
Property Collateral that is material (i) to the use and
operation of the Pledged Collateral or Mortgaged Property or
(ii) to the business, results of operations, prospects or
condition, financial or otherwise, of any Pledgor.
“ Mortgaged Property
” shall have the meaning assigned to such term in the
Mortgages.
“ Motor Vehicles
” shall mean all trucks, trailers, tractors, service
vehicles, automobiles and other registered mobile equipment of the
Loan Parties.
“ Original Guarantors
” shall have the meaning assigned to such term in the
Preamble hereof.
“ Patents ” shall
mean, collectively, with respect to each Pledgor, all patents
issued or assigned to, and all patent applications and
registrations made by, such Pledgor (whether established or
registered or recorded in the United States or any other country or
any political subdivision thereof), together with any and all
(i) rights and privileges arising under applicable law with
respect to such Pledgor’s use of any patents,
(ii) inventions and improvements described and claimed
therein, (iii) reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof and amendments
thereto, (iv) income, fees, royalties, damages, claims and
payments now or hereafter due and/or payable thereunder and with
respect thereto including damages and payments for past, present or
future infringements thereof, (v) rights corresponding thereto
throughout the world and (vi) rights to sue for past, present
or future infringements thereof.
“ Perfection
Certificate ” shall mean that certain perfection
certificate dated as of the date hereof, executed and delivered by
each Pledgor in favor of the Administrative Agent for the benefit
of the Secured Parties and attached hereto as Exhibit 7 ,
and each other Perfection Certificate (which shall be in form
reasonably acceptable to the Administrative Agent) executed and
delivered by the applicable Guarantor in favor of the
Administrative Agent for the benefit of the Secured Parties
contemporaneously with the execution and delivery of each Joinder
Agreement executed in accordance with Section 3.5
hereof.
“ Pledge Amendment
” shall have the meaning assigned to such term in Section
5.1 hereof.
“ Pledged Collateral
” shall have the meaning assigned to such term in Section
2.1 hereof.
“ Pledged Securities
” shall mean, collectively, with respect to each Pledgor,
(i) all issued and outstanding Equity Interests of each issuer
set forth on Schedules 10(a) and 10(b) to the
Perfection Certificate as being owned by such Pledgor and all
options, warrants, rights, agreements and additional Equity
Interests of whatever class of any such issuer acquired by such
Pledgor (including by issuance), together with all rights,
privileges, authority and powers of such Pledgor relating to such
Equity Interests in each such issuer or under any Organizational
Document of each such issuer, and the certificates, instruments and
agreements representing such Equity Interests and any and all
interest of such Pledgor in the entries on the books of any
financial intermediary pertaining to such Equity Interests,
(ii) all Equity Interests of any issuer, which Equity
Interests are hereafter acquired by such Pledgor (including by
issuance) and all options, warrants, rights, agreements and
additional Equity Interests of whatever class of any such issuer
acquired by such Pledgor (including by issuance), together with all
rights, privileges, authority and powers of such Pledgor relating
to such Equity Interests or under any Organizational Document of
any such issuer, and the certificates, instruments and agreements
representing such Equity Interests and any and all interest of such
Pledgor in the entries on the books of any financial intermediary
pertaining to such Equity Interests, from time to time acquired by
such Pledgor in any manner, and (iii) all Equity Interests
issued in respect of the Equity Interests referred to in
clause (i) or (ii) upon any consolidation or merger of any
issuer of such Equity Interests; provided , however ,
that with respect to the voting Equity Interests of any Foreign
Subsidiary (other than any Canadian Subsidiary) or Foamex Thailand,
Pledged
Securities shall not include any
such voting Equity Interests to the extent in excess of 65% of the
aggregate outstanding voting Equity Interests of such Foreign
Subsidiary or Foamex Thailand.
“ Pledgor ” shall
have the meaning assigned to such term in the Preamble
hereof.
“ Receivables ”
shall mean all (i) Accounts, (ii) Chattel Paper,
(iii) Payment Intangibles, (iv) General Intangibles,
(v) Instruments and (vi) all other rights to payment,
whether or not earned by performance, for goods or other property
sold, leased, licensed, assigned or otherwise disposed of, or
services rendered or to be rendered, regardless of how classified
under the UCC together with all of Pledgors’ rights, if any,
in any goods or other personal property giving rise to such right
to payment and all Collateral Support and Supporting Obligations
related thereto and all Records relating thereto.
“ Revolving Credit
Copyright Security Agreement ” shall mean an agreement
substantially in the form of Exhibit 4 hereto.
“ Revolving Credit Patent
Security Agreement ” shall mean an agreement
substantially in the form of Exhibit 5 hereto.
“ Revolving Credit
Trademark Security Agreement ” shall mean an agreement
substantially in the form of Exhibit 6 hereto.
“ Securities Account
Control Agreement ” shall mean a control agreement in a
form that is reasonably satisfactory to the Administrative Agent
establishing the Administrative Agent’s Control with respect
to any Securities Account.
“ Securities Collateral
” shall mean, collectively, the Pledged Securities, the
Intercompany Notes and the Distributions.
“ Trademarks ”
shall mean, collectively, with respect to each Pledgor, all
trademarks (including service marks), slogans, logos, certification
marks, trade dress, uniform resource locations (URL’s),
domain names, corporate names and trade names, whether registered
or unregistered, owned by or assigned to such Pledgor and all
registrations and applications for the foregoing (whether statutory
or common law and whether established or registered in the United
States or any other country or any political subdivision thereof)
(except for “intent-to-use” applications for trademark
or service mark registrations filed pursuant to Section 1(b)
of the Lanham Act, 15 U.S.C. § 1051, unless and until an
Amendment to Allege Use or a Statement of Use under
Sections 1(c) and 1(d) of said Act has been filed), together
with any and all (i) rights and privileges arising under
applicable law with respect to such Pledgor’s use of any
trademarks, (ii) reissues, continuations, extensions and
renewals thereof and amendments thereto, (iii) income, fees,
royalties, damages and payments now and hereafter due and/or
payable thereunder and with respect thereto, including damages,
claims and payments for past, present or future infringements
thereof, (iv) rights corresponding thereto throughout the
world and (v) rights to sue for past, present and future
infringements thereof.
“ UCC ” shall
mean the Uniform Commercial Code as in effect from time to time in
the State of New York; provided , however , that, at
any time, if by reason of mandatory provisions of law, any or all
of the perfection or priority of the Administrative Agent’s
and the
Secured Parties’ security
interest in any item or portion of the Pledged Collateral is
governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term
“UCC” shall mean the Uniform Commercial Code as in
effect, at such time, in such other jurisdiction for purposes of
the provisions hereof relating to such perfection or
priority.
SECTION 1.2.
Interpretation . The rules of interpretation specified in
the Credit Agreement shall be applicable to this
Agreement.
SECTION 1.3.
Resolution of Drafting Ambiguities . Each Pledgor
acknowledges and agrees that it was represented by counsel in
connection with the execution and delivery hereof, that it and its
counsel reviewed and participated in the preparation and
negotiation hereof and that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party (
i.e. , the Administrative Agent) shall not be employed in
the interpretation hereof.
SECTION 1.4.
Perfection Certificate . The Administrative Agent and each
Secured Party agree that the Perfection Certificate and all
descriptions of Pledged Collateral and schedules thereto are and
shall at all times remain a part of this Agreement.
ARTICLE II
GRANT OF SECURITY AND SECURED
OBLIGATIONS
SECTION 2.1.
Grant of Security Interest . As collateral security for the
payment and performance in full of all the Secured Obligations,
each Pledgor hereby pledges and grants to the Administrative Agent
for the benefit of the Secured Parties, a lien on and security
interest in all of the right, title and interest of such Pledgor
in, to and under the following property, wherever located, and
whether now existing or hereafter arising or acquired from time to
time (collectively, the “ Pledged Collateral
”):
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(ii)
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all Equipment, Goods, Inventory and
Fixtures;
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(iii)
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all Documents, Instruments and Chattel
Paper;
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(iv)
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all Letters of Credit and Letter-of-Credit
Rights;
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(v)
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all Securities Collateral;
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(vi)
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all Investment Property;
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(vii)
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all Intellectual Property Collateral;
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(viii)
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the Commercial Tort Claims described on
Schedule 13 to the Perfection Certificate;
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(ix)
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all General Intangibles;
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(x)
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all Money and all Deposit Accounts;
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(xi)
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all Supporting Obligations;
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(xii)
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all books and records relating to the Pledged
Collateral; and
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(xiii)
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to the extent not covered by clauses (i) through
(xii) of this sentence, all other personal property of such
Pledgor, whether tangible or intangible, and all Proceeds and
products of each of the foregoing and all accessions to,
substitutions and replacements for, and rents, profits and products
of, each of the foregoing, any and all Proceeds of any insurance,
indemnity, warranty or guaranty payable to such Pledgor from time
to time with respect to any of the foregoing.
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Notwithstanding anything to the
contrary contained in clauses (i) through (xiii) above, the
security interest created by this Agreement shall not extend to,
and the term “Pledged Collateral” shall not include,
any Excluded Property and the Pledgors shall from time to time at
the reasonable request of the Administrative Agent give written
notice to the Administrative Agent identifying in reasonable detail
the Excluded Property and shall provide to the Administrative Agent
such other information regarding the Excluded Property as the
Administrative Agent may reasonably request and (ii) from and
after the Closing Date, no Pledgor shall permit to become effective
in any document creating, governing or providing for any material
permit, license or agreement a provision that would prohibit the
creation of a Lien on such material permit, license or agreement in
favor of the Administrative Agent unless such Pledgor believes, in
its reasonable judgment, that such prohibition is usual and
customary in transactions of such type.
It is further understood and agreed
that, notwithstanding anything herein to the contrary, at any time
that the Intercreditor Agreement is in effect, any Control
Collateral that is required to be delivered to the Administrative
Agent hereunder shall be delivered to the Control Agent and the
Control Agent shall act as agent of the Administrative Agent and
the Secured Parties with respect to all Control
Collateral.
SECTION 2.2.
Filings . (a) Each Pledgor hereby irrevocably
authorizes the Administrative Agent at any time and from time to
time to file in any relevant jurisdiction any financing statements
(including fixture filings) and amendments thereto that contain the
information required by Article 9 of the Uniform Commercial
Code of each applicable jurisdiction for the filing of any
financing statement or amendment relating to the Pledged
Collateral, including (i) whether such Pledgor is an
organization, the type of organization and any organizational
identification number issued to such Pledgor, (ii) any
financing or continuation statements or other documents without the
signature of such Pledgor where permitted by law, including the
filing of a financing statement describing the Pledged Collateral
as “all assets now owned or hereafter acquired by the Pledgor
or in which Pledgor otherwise has rights” and (iii) in
the case of a financing statement filed as a fixture filing or
covering Pledged Collateral constituting minerals or the like to be
extracted or timber to be cut, a sufficient description of the real
property to which such Pledged Collateral relates. Each Pledgor
agrees to
provide all information described in
the immediately preceding sentence to the Administrative Agent
promptly upon request by the Administrative Agent.
(b) Each
Pledgor hereby ratifies its authorization for the Administrative
Agent to file in any relevant jurisdiction any financing statements
of the type described in clause (a) above relating to the
Pledged Collateral if filed prior to the date hereof, with the
Administrative Agent delivering a copy of such filing to the
applicable Pledgor.
(c) Each
Pledgor hereby further authorizes the Administrative Agent to file
filings with the United States Patent and Trademark Office or
United States Copyright Office (or any successor office or any
similar office in any other country), including the Revolving
Credit Copyright Security Agreement, the Revolving Credit Patent
Security Agreement and the Revolving Credit Trademark Security
Agreement, or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the security
interest granted by such Pledgor hereunder, without the signature
of such Pledgor, and naming such Pledgor where permitted by law, as
debtor, and the Administrative Agent, as secured party.
(d) Each
Pledgor hereby agrees to notify the Administrative Agent when an
Amendment to Allege Use or a Statement of Use under
Sections 1(c) and 1(d) of the Lanham Act, 15 U.S.C.
§ 1051 has been filed in the United States Patent and
Trademark Office in respect of any “intent-to-use”
applications for trademark or service mark registrations filed
pursuant to Section 1(b) of such Act within 30 days of the end
of the fiscal quarter in which such filing is made.
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER
ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1.
Delivery of Certificated Securities Collateral . Each
Pledgor represents and warrants that all certificates, agreements
or instruments representing or evidencing the Securities Collateral
in existence on the date hereof have been delivered to the Control
Agent or the Administrative Agent in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer or
assignment in blank and that (assuming continuing possession by the
Control Agent or the Administrative Agent of any such Securities
Collateral constituting Certificated Securities), the
Administrative Agent has a perfected security interest therein
prior to all other Liens on such Securities Collateral except for
Permitted Liens which have priority over, or are pari passu with,
the security interest on such Securities Collateral by operation of
law or pursuant to the Intercreditor Agreement. Each Pledgor hereby
agrees that all certificates, agreements or instruments
representing or evidencing Securities Collateral acquired by such
Pledgor after the date hereof shall promptly (but in any event
within ten Business Days after receipt thereof by such Pledgor) be
delivered to and held by or on behalf of the Control Agent or the
Administrative Agent pursuant hereto. All certificated Securities
Collateral shall be in suitable form for transfer by delivery or
shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the
Administrative Agent. The Administrative Agent shall have the
right, at any time upon the
occurrence and during the
continuance of any Event of Default, to endorse, assign or
otherwise transfer to or to register in the name of the
Administrative Agent or any of its nominees or endorse for
negotiation any or all of the Securities Collateral, without any
indication that such Securities Collateral is subject to the
security interest hereunder. In addition, upon the occurrence and
during the continuance of an Event of Default, the Administrative
Agent shall have the right at any time to exchange certificates
representing or evidencing Securities Collateral for certificates
of smaller or larger denominations.
SECTION 3.2.
Perfection of Uncertificated Securities Collateral . Each
Pledgor represents and warrants that the Administrative Agent has a
perfected security interest in all uncertificated Pledged
Securities pledged by it hereunder that are in existence on the
date hereof prior to all other Liens on such Securities Collateral
except for Permitted Liens which have priority over, or are pari
passu with, the security interest on such Pledged Securities by
operation of law or pursuant to the Intercreditor Agreement. Each
Pledgor hereby agrees that if any of the Pledged Securities are at
any time not evidenced by certificates of ownership, then each
applicable Pledgor shall, to the extent permitted by applicable
law, (i) cause (or, if the issuer is not a Subsidiary, use
commercially reasonable efforts to cause) the issuer to execute and
deliver to the Administrative Agent an acknowledgment of the pledge
of such Pledged Securities substantially in the form of Exhibit
1 hereto or such other form that is reasonably satisfactory to
the Administrative Agent, (ii) if necessary or desirable to
perfect a security interest in such Pledged Securities, cause (or,
if the issuer is not a Subsidiary, use commercially reasonable
efforts to cause) such pledge to be recorded on the equityholder
register or the books of the issuer, execute any customary pledge
forms or other documents necessary or appropriate to complete the
pledge and give the Administrative Agent the right to transfer such
Pledged Securities under the terms hereof, and (iii) after the
occurrence and during the continuance of any Event of Default, upon
request by the Administrative Agent, (A) cause (or, if the
issuer is not a Subsidiary, use commercially reasonable efforts to
cause) the Organization Documents of each such issuer to be amended
to provide that such Pledged Securities shall be treated as
“securities” for purposes of the UCC and (B) cause
(or, if the issuer is not a Subsidiary, use commercially reasonable
efforts to cause) such Pledged Securities to become certificated
and delivered to the Administrative Agent in accordance with the
provisions of Section 3.1 . Each Pledgor hereby agrees that
if any of the Pledged Securities not issued by any Subsidiary of
such Pledgor are at any time not evidenced by certificates of
ownership, such Pledgor shall enter agreements granting
“control” to the Administrative Agent with respect to
such uncertificated Pledged Securities or take any other action
reasonably requested by the Administrative Agent in order to
perfect security interest therein prior to all other Liens on such
Pledged Securities except for Permitted Liens which have priority
over, or are pari passu with, the security interest on such Pledged
Securities by operation of law or pursuant to the Intercreditor
Agreement.
SECTION 3.3.
Financing Statements and Other Filings; Maintenance of Perfected
Security Interest Each Pledgor represents and warrants that all
financing statements, agreements, instruments and other documents
necessary to perfect the security interest granted by it to the
Administrative Agent in respect of the Pledged Collateral have been
delivered to the Administrative Agent in completed and, to the
extent necessary or appropriate, duly executed form for filing in
each governmental, municipal or other office specified in
Schedule 7 to the Perfection Certificate. Each Pledgor
agrees that at the sole cost and expense of the Pledgors, such
Pledgor will maintain the security interest created by this
Agreement in the Pledged
Collateral as a perfected security
interest subject only to Permitted Liens and prior to all other
Liens on such Pledged Collateral except, in the case of Pledged
Collateral other than ABL Collateral, for Permitted Liens
identified in clauses (b), (j),(l), (o) and (r) of Section
7.14 of the Credit Agreement and, with respect to all Pledged
Collateral, except for Permitted Liens which have priority over, or
are pari passu with, the security interest on such Pledged
Collateral by operation of law or pursuant to the Intercreditor
Agreement.
SECTION 3.4.
Other Actions . In order to further ensure the attachment,
perfection and priority of, and the ability of the Administrative
Agent to enforce, the Administrative Agent’s security
interest in the Pledged Collateral, each Pledgor represents and
warrants (as to itself) as follows and agrees, in each case at such
Pledgor’s own expense, to take the following actions with
respect to the following Pledged Collateral:
(a)
Instruments and Tangible Chattel Paper . As of the date
hereof, no amounts payable under or in connection with any of the
Pledged Collateral are evidenced by any Instrument or Tangible
Chattel Paper other than such Instruments and Tangible Chattel
Paper listed in Schedule 11 to the Perfection Certificate.
Each Instrument and each item of Tangible Chattel Paper in excess
of $500,000 listed in Schedule 11 to the Perfection
Certificate has been properly endorsed, assigned and delivered to
the Control Agent or the Administrative Agent, accompanied by
instruments of transfer or assignment duly executed in blank. If at
any time any amount in excess of $500,000 then payable under or in
connection with any of the Pledged Collateral shall be evidenced by
any Instrument or Tangible Chattel Paper, the Pledgor acquiring
such Instrument or Tangible Chattel Paper shall promptly (but in
any event within ten Business Days after receipt thereof) endorse,
assign and deliver the same to the Control Agent or the
Administrative Agent, accompanied by such instruments of transfer
or assignment duly executed in blank as the Administrative Agent
may from time to time specify.
(b)
Deposit Accounts . As of the date hereof, no Pledgor has any
Deposit Accounts other than the accounts listed in Schedule
14 to the Perfection Certificate. The Administrative Agent has
a perfected security interest in each such Deposit Account (other
than any Excluded Account and the BofA Accounts), which security
interest is perfected by Control. With respect to each BofA
Account, the Borrower shall, within 60 days of the Closing Date
either (i) provide evidence reasonably acceptable to the
Administrative Agent that it has closed each such BofA Account or
(ii) deliver to the Administrative Agent a Deposit Account Control
Agreement with respect to such BofA Account, duly executed by the
Borrower and Bank of America, N.A., in its capacity as the Bank (it
being understood that if any such BofA Account is not closed in
accordance with the foregoing, such BofA Account shall be an ABL
Collateral Account for the purposes hereof, subject to a first
priority security interest in favor of the Administrative Agent).
No Pledgor shall hereafter establish and maintain any Deposit
Account (other than any Excluded Account) unless (1) it shall
have given the Administrative Agent 10 days’ prior written
notice of its intention to establish such new Deposit Account with
a Bank, (2) such Bank shall be reasonably acceptable to the
Administrative Agent and (3) such Bank and such Pledgor shall
have duly executed and delivered to the Administrative Agent a
Deposit Account Control Agreement with respect to such Deposit
Account within 15 days of the establishment of such Deposit Account
(or such longer
period of time as the Administrative
Agent may agree to in writing). The Administrative Agent agrees
with each Pledgor that the Administrative Agent shall not give any
instructions directing the disposition of funds from time to time
credited to any Deposit Account or withhold any withdrawal rights
from such Pledgor with respect to funds from time to time credited
to any Deposit Account unless a Triggering Event has occurred or a
Default or Event of Default has occurred and is continuing. The
second sentence of this Section 3.4(b) shall not apply to
the “Master Funding Account” of Foamex International
Inc. at Bank of America, N.A. (Account No. 3752192166) or to any
other disbursement account opened by a Pledgor (in the ordinary
course of business) at Bank of America, N.A. that Bank of America,
N.A. does not permit to be subject to a Deposit Account Control
Agreement. No Pledgor shall grant Control of any Deposit Account to
any person other than the First Lien Term Collateral Agent, the
Second Lien Term Collateral Agent and the Administrative
Agent.
(c)
Securities Accounts and Commodity Accounts . (i) As of
the date hereof, no Pledgor has any Securities Accounts or
Commodity Accounts other than those listed in Schedule 14 to
the Perfection Certificate. The Administrative Agent has a
perfected security interest in each such Securities Account and
Commodity Account, which security interest is perfected by Control
(except with respect to any Securities Account that is an Excluded
Account). No Pledgor shall hereafter establish and maintain any
Securities Account or Commodity Account with any Securities
Intermediary or Commodity Intermediary unless (1) it shall
have given the Administrative Agent 10 days’ prior written
notice of its intention to establish such new Securities Account or
Commodity Account with such Securities Intermediary or Commodity
Intermediary, (2) such Securities Intermediary or Commodity
Intermediary shall be reasonably acceptable to the Administrative
Agent and (3) such Securities Intermediary or Commodity
Intermediary, as the case may be, and such Pledgor shall have duly
executed and delivered a Control Agreement with respect to such
Securities Account (except with respect to any Securities Account
that is an Excluded Account) or Commodity Account, as the case may
be within 15 days of the establishment of such Securities Account
or Commodity Account (or such longer period of time as the
Administrative Agent may agree to in writing). Each Pledgor shall
accept any cash and Investment Property in trust for the benefit of
the Administrative Agent and within two (2) Business Days of
actual receipt thereof, deposit any and all cash and Security
Entitlements received by it into a Deposit Account or Securities
Account subject to Administrative Agent’s Control or, if in
the ordinary course of business, an Excluded Account (provided that
any cash and Securities Entitlement that is received by a Pledgor
that constitutes ABL Collateral shall be deposited into an ABL
Collateral Account). The Administrative Agent agrees with each
Pledgor that the Administrative Agent shall not give any
Entitlement Orders or instructions or directions to any issuer of
uncertificated securities, Securities Intermediary or Commodity
Intermediary, and shall not withhold its consent to the exercise of
any withdrawal or dealing rights by such Pledgor, unless a
Triggering Event has occurred or a Default or Event of Default has
occurred and is continuing or, after giving effect to any such
investment and withdrawal rights, would occur. The provisions of
this Section 3.4(c) shall not apply to any Financial Assets
credited to any ABL Collateral Account for which the Administrative
Agent is the Securities Intermediary. No Pledgor shall grant
Control over any Investment Property to any Person other than the
First Lien
Term Collateral Agent, the Second
Lien Term Collateral Agent and the Administrative Agent.
(ii) As
between the Administrative Agent and the Pledgors, the Pledgors
shall bear the investment risk with respect to the Investment
Property and Pledged Securities, and the risk of loss of, damage
to, or the destruction of the Investment Property and Pledged
Securities, whether in the possession of, or maintained as a
Security Entitlement or deposit by, or subject to the Control of,
the Administrative Agent, a Securities Intermediary, a Commodity
Intermediary, any Pledgor or any other person.
(d)
Electronic Chattel Paper and Transferable Records . As of
the date hereof, no amount under or in connection with any of the
Pledged Collateral is evidenced by any Electronic Chattel Paper or
any “transferable record” (as that term is defined in
Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act, or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant
jurisdiction) other than such Electronic Chattel Paper and
transferable records listed in Schedule 11 to the Perfection
Certificate. If any amount in excess of $500,000 payable under or
in connection with any of the Pledged Collateral shall be evidenced
by any Electronic Chattel Paper or any transferable record, the
Pledgor acquiring such Electronic Chattel Paper or transferable
record shall promptly notify the Administrative Agent thereof and
shall use commercially reasonable efforts to take such action as
the Administrative Agent may reasonably request to vest in the
Administrative Agent control of such Electronic Chattel Paper under
Section 9-105 of the UCC or control under Section 201 of
the Federal Electronic Signatures in Global and National Commerce
Act or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as in effect in such jurisdiction, of such
transferable record. The Administrative Agent agrees with such
Pledgor that the Administrative Agent will arrange, pursuant to
procedures reasonably satisfactory to the Administrative Agent, for
the Pledgor to make alterations to the Electronic Chattel Paper or
transferable record permitted under Section 9-105 of the UCC
or, as the case may be, Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in control
to allow without loss of control, unless an Event of Default has
occurred and is continuing or would occur after taking into account
any action by such Pledgor with respect to such Electronic Chattel
Paper or transferable record.
(e)
Letter-of-Credit Rights . If any Pledgor is at any time a
beneficiary under a Letter of Credit now or hereafter issued with a
face amount in excess of $500,000, such Pledgor shall promptly
notify the Administrative Agent thereof and such Pledgor shall, at
the reasonable request of the Administrative Agent, use
commercially reasonable efforts to, either (i) arrange for the
issuer and any confirmer of such Letter of Credit to consent to an
assignment to the Administrative Agent of the proceeds of any
drawing under the Letter of Credit or (ii) arrange for the
Administrative Agent to become the transferee beneficiary of such
Letter of Credit, in each case, pursuant to an agreement in form
and substance reasonably satisfactory to the Administrative Agent,
and with the Administrative Agent agreeing, in each case, that the
proceeds of any drawing under the Letter of Credit are to be
applied as provided in the Credit Agreement.
