Subsidiary Security Agreement [Amended and Restated] (2002)Full Document 

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               AMENDED AND RESTATED SUBSIDIARY SECURITY AGREEMENT
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     This AMENDED AND RESTATED SUBSIDIARY SECURITY AGREEMENT (as amended,
supplemented, amended and restated or otherwise modified from time to time, this
"Security Agreement"), dated as of July 18, 2001, is made by FOAMEX MEXICO II,
INC., a Delaware corporation (the "Grantor" or the "Borrower"), in favor of
CITICORP USA, INC., as collateral agent (together with any successor thereto
in such capacity, the "Collateral Agent") for each of the Secured Parties.

                              W I T N E S S E T H:
                              - - - - - - - - - -

     WHEREAS, pursuant to a Credit Agreement, dated as of June 12, 1997 as
amended and restated as of February 27, 1998, and as further amended and
restated on June 29, 1999, and as amended by Amendment No. 1 thereto dated as of
December 23, 1999, Amendment No. 2 thereto dated as of February 18, 2000 and by
Amendment No. 3 thereto as of the date hereof ("Amendment No. 3") (and as it may
be further amended, supplemented, amended and restated or modified from time to
time, the "Credit Agreement"), among the Grantor, FMXI, Inc., a Delaware
corporation and managing general partner of the Grantor, the Lenders, the
Issuing Banks and Citicorp USA, Inc., as Collateral Agent for the Lenders and
the Issuing Banks and The Bank of Nova Scotia, as Funding Agent for the Lenders
and the Issuing Banks (together with the Collateral Agent, in such capacity the
"Administrative Agents"), the Lenders and the Issuing Banks have extended
Commitments to make Credit Extensions and have made Credit Extensions to the
Borrower;

     WHEREAS, this Security Agreement amends and restates the terms and
conditions of the Security Agreement dated as of June 12, 1997 (the "Existing
Security Agreement") between the Grantor and, the Collateral Agent and the Liens
granted thereunder shall continue in full force and effect with the same
priority as set forth in the Existing Security Agreement; and

     WHEREAS, as a condition precedent to the effectiveness of Amendment No. 3,
the Grantor is required to execute and deliver this Security Agreement;

     WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
and the Issuing Banks to make and/or maintain Credit Extensions to the Borrower
pursuant to the Credit Agreement, the Grantor agrees, for the benefit of each
Secured Party, as follows:



                                    ARTICLE I
                                   DEFINITIONS

     SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):

     "Account" means a right to payment of a monetary obligation, whether or not
earned by performance,

          (a) for property that has been or is to be sold, leased, licensed,
     assigned, or otherwise disposed of;

          (b) for services rendered or to be rendered;

          (c) for a policy of insurance issued or to be issued;

          (d) for a secondary obligation incurred or to be incurred;

          (e) for energy provided or to be provided; or

          (f) arising out of the use of a credit or charge card or information
     contained on or for use with the card.

     "Administrative Agents" is defined in the first recital.

     "Authenticate" means

          (a) to sign; or

          (b) to execute or otherwise adopt a symbol, or encrypt or similarly
     process a record in whole or in part, with the present intent of the
     authenticating person to identify the person and adopt or accept a record.

     "Borrower" is defined in the preamble.

     "Chattel Paper" means a record or records that evidence both a monetary
obligation and a security interest in specific goods, a security interest in
specific goods and software used in the goods, a security interest in specific
goods and license of software used in the goods, a lease of specific goods, or a

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