SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement"), dated as of
August 15, 1997, made by TRACE Foam Company, Inc., a Delaware corporation (the
"Grantor"), in favor of The Bank of Nova Scotia (the "Lender"),
W I T N E S S E T H:
WHEREAS, pursuant to a Margin Loan Credit Agreement, dated as of
August 15, 1997 (together with all amendments and other modifications, if any,
from time to time thereafter made thereto, the "Credit Agreement"), between
TRACE International Holdings, Inc., a Delaware corporation (the "Borrower") and
the Lender, the Lender has extended Commitments to make Loans to the Borrower;
and
WHEREAS, as a condition precedent to the making of the initial Loan
under the Credit Agreement, the Grantor is required to execute and deliver this
Security Agreement; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce the Lender to make Loans
(including the initial Loan) to the Borrower pursuant to the Credit Agreement,
the Grantor agrees, for the benefit of the Lender, as follows:
DEFINITIONS
SECTION 1.2. 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):
"Borrower" is defined in the first recital.
"Collateral" is defined in Section 2.1.
"Credit Agreement" is defined in the first recital.
"Grantor" is defined in the preamble.
"Lender" is defined in the preamble.
"Management Agreement" is defined in Section 2.1.
"Secured Obligations" is defined in Section 2.2.
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"Security Agreement" is defined in the preamble.
"U.C.C." means the Uniform Commercial Code, as in effect 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
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, ETC.
SECTION 2.1. Grant of Security Interest. The Grantor hereby grants to
the Lender a security interest in, all of the Grantor's right, title and
interest, whether now existing or hereafter arising or acquired, in and to (the
"Collateral") the 21 Foam Management Agreement, effective as of October 13,
1992, between Foamex, L.P., a Delaware limited partnership ("Foamex"), and the
Grantor, as affirmed by the Affirmation Agreement, dated as of December 14,
1993, by and among Trace Foam Company, Inc., Foamex and FMXI, Inc., and amended
by the First Amendment to the Management Agreement, dated as of June 12, 1997,
as it may be amended or otherwise modified from time to time (as so amended or
modified, the "Management Agreement"), including, without limitation,
(a) all rights of the Grantor to receive moneys due and to
become due under or pursuant to the Management Agreement;
(b) all rights of the Grantor to receive proceeds of any
insurance, indemnity, warranty, guaranty or collateral security with
respect to the Management Agreement;
(c) all claims of the Grantor for damages arising out of or
for breach of or default under the Management Agreement; and
(d) to the extent not included in the foregoing, all
proceeds of any and all of the foregoing collateral.
SECTION 2.2. Security for Obligations. This Security Agreement secures the
payment of all Obligations now or hereafter existing under the Credit Agreement,
the Notes and each other Loan Document, and all obligations of the Borrower to
the Lender now or hereafter existing under the Other Credit Agreement,
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whether for principal, interest, costs, fees, expenses or otherwise, and all
other obligations of the Borrower to the Lender, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent or now or
hereafter existing or due or to become due, and all obligations of the Grantor
now or hereafter existing under this Security Agreement and each other Loan
Document to which it is or may become a party (all such Obligations and other
obligations of the Borrower and the Grantor being the "Secured Obligations").
SECTION 2.3. Continuing Security and Security Interest; Transfer of
Notes. This Security Agreement shall create a continuing Security of and
security interest in the Collateral and shall
(a) remain in full force and effect until payment in full of
all Secured Obligations and the termination of the Commitments and any
other commitments of the Lender to the Borrower;
(b) be binding upon the Grantor, its successors, transferees
and assigns; and
(c) inure, together with the rights and remedies of the
Lender hereunder, to the benefit of the Lender and its successors,
transferees and assigns.
Without limiting the generality of the foregoing clause (c), the Lender may
assign or otherwise transfer (in whole or in part) the Notes or Loans 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 the Lender
under any Loan Document (including this Security Agreement) or otherwise,
subject, however, to any contrary provisions in such assignment or transfer, and
to the provisions of Section 11.1 of the Credit Agreement and Section 11.1 of
the Other Credit Agreement. Upon the payment in full of all Secured Obligations
and the termination of the Commitment and any other commitments of the Lender to
the Borrower, the security interest granted herein shall terminate and all
rights to the Collateral shall revert to the Grantor. Upon any such termination,
the Lender will, at the Grantor's sole expense, execute and deliver to the
Grantor such instruments as the Grantor shall reasonably request to evidence
such termination.
SECTION 2.4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding,
(a) the Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same
extent as if this Security Agreement had not been executed;
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(b) the exercise by the Lender of any of its rights hereunder
shall not release the Grantor from any of its duties or obligations
under the contracts and agreements included in the Collateral; and
(c) the Lender shall not have any obligation or liability under
any such contracts or agreements included in the Collateral by reason
of this Security Agreement, nor shall the Lender 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 Lender and
the security interests granted to the Lender hereunder, and all obligations of
the Grantor hereunder, shall be absolute and unconditional, irrespective of
(a) any lack of validity or enforceability of the Credit
Agreement, any Note or any other Loan Document;
(b) the failure of the Lender or any holder of any Note
(i) to assert any claim or demand or to enforce
any right or remedy against the Borrower, any other Obligor
or any other Person under the provisions of the Credit
Agreement, any Note, any other Loan Document or otherwise,
or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any Secured
Obligations;
(c) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations or any other
extension, compromise or renewal of any Secured Obligation;
(d) any reduction, limitation, impairment or termination of any
Secured Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject
to (and the 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;
(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;
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(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
Borrower, any other Obligor, any surety or any guarantor.
SECTION 2.6. 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. 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 Lender and
each holder of a Note and shall immediately be paid to the Lender 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 (or other agreement(s) pursuant to which such Secured Obligations are
outstanding); provided, however, that if
(a) the Grantor has made payment to the Lender and each holder of
the Notes of all or any part of the Secured Obligations, and
(b) all Secured Obligations have been paid in full and the
Commitments and any other commitments of the Lender to the Borrower
have been permanently terminated,
the Lender and each holder of the Notes agrees that, at the Grantor's request,
the Lender and such holder of the Notes will execute and deliver to the Grantor
appropriate documents (without recourse and without representation or warranty)
necessary to evidence the transfer by subrogation to the Grantor of an interest
in the Secured Obligations resulting from such payment by the Grantor. In
furtherance of the foregoing, for so long as any Secured Obligations or
Commitments or any other commitments by the Lender to the Borrower remain
outstanding, the Grantor shall refrain from taking any action or commencing any
proceeding against the Borrower or any other Obligor (or its successors or
assigns, whether in connection with a bankruptcy proceeding or otherwise) to
recover any amounts in respect of payments made under this Security Agreement to
the Lender or any holder of the Notes.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. The Grantor represents
and warrants unto the Lender as set forth in this Article.
SECTION 3.1.1. Validity of Assigned Agreement. The Management
Agreement, a true and complete copy of which has been furnished to the Lender,
has been duly authorized, executed and delivered by the parties thereto, has not
been amended or otherwise modified except as set forth in Section 2.1, and is in
full force and effect and is binding upon and enforceable against Grantor and to
Grantor's knowledge the other party thereto in accordance with its terms. The
Grantor has fully performed all of its obligations under the Assigned Agreement
and the other party to the Management Agreement has no defense, setoff or
counterclaim arising under the Assigned Agreement. There exists no default under
the Management Agreement Grantor and to Grantor's knowledge the other party
thereto.
SECTION 3.1.2. Location of Collateral. The place(s) of business and
chief executive office of the Grantor and the office(s) where the Grantor keeps
its records concerning the Collateral are located at the address specified for
the Grantor on the signature page(s) hereto. The Grantor has no trade name. 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 "21" Foam Company Inc. None of the
Collateral is evidenced by a promissory note or other instrument.
SECTION 3.1.3. Ownership, No Liens, etc. The Grantor owns the
Collateral free and clear of any Lien, security interest, charge or encumbrance
except for the security interest created by this Security 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 Lender relating to this Security Agreement.
SECTION 3.1.4. 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 3.1.5. Authorization, Approval, etc. Except for the filing of
a Form UCC-1 with the Secretary of State of the State of New York and the County
Register of New York County. No authorization, approval or other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required either
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(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 Lender of its
rights and remedies hereunder.
SECTION 3.1.6. Compliance with Laws. The Grantor is in compliance with
the requirements of all applicable laws (including, without limitation, the
provisions of the Fair Labor Standards Act), rules, regulations and orders of
every governmental authority, non-compliance with which might materially
adversely affect the business, properties, assets, operations, condition
(financial or otherwise) or prospects of the Grantor or the value of the
Collateral or the worth of the Collateral as collateral security.
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 or the
Lender shall have any outstanding Commitment or other commitment by the Lender
to the Borrower, the Grantor will, unless the Lender shall otherwise consent in
writing, perform the obligations set forth in this Section.
SECTION 4.1.1. As to the Assigned Agreement. The Grantor shall at its
expense:
(a) perform and observe all the terms and provisions of the
Management Agreement to be performed or observed by it, maintain the
Management Agreement in full force and effect, enforce the Management
Agreement in accordance with its terms, and take all such action to
such end as may be from time to time requested by the Lender; and
(b) furnish to the Lender promptly upon receipt thereof copies of
all notices, requests and other documents received by the Grantor
under or pursuant to the Management Agreement, and from time to time
(i) furnish to the Lender such information and reports regarding the
Collateral as the Lender may reasonably request and (ii) upon request
of the Lender make to Foamex L.P. such demands and requests for
information and reports as the Grantor is entitled to make under the
Management Agreement.
SECTION 4.1.1. 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, or create or suffer to exist any
Lien, security interest or other charge
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or encumbrance upon or with respect to any of the Collateral, except
for the Security and security interest created by this Security
Agreement;
(b) cancel or terminate the Management Agreement or consent
to or accept any cancellation or termination thereof;
(c) without the prior written consent of Lender, amend or
otherwise modify the Management Agreement or give any consent, waiver
or approval thereunder;
(d) waive any default under or breach of the Management
Agreement; or
(e) take any other action in connection with the Management
Agreement which would impair the value of the interest or rights of
the Grantor thereunder or which would impair the interest or rights of
the Lender.
SECTION 4.1.3. Further Assurances. The Grantor agrees that from time
to time, at the expense of the Grantor, the Grantor will promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Lender may request, in order to
perfect and protect the security interest granted or purported to be granted
hereby or to enable the Lender to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, the Grantor will execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as the Lender may request, in order to perfect and
preserve the security interest granted or purported to be granted hereby.
With respect to the foregoing and the grant of the security interest hereunder,
the Grantor hereby authorizes the Lender to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral without the signature of the Grantor where permitted by law. A
carbon, photographic or other reproduction of this Security Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
SECTION 4.1.1. Place of Perfection; Records; Prior Notice of Name
Change. The Grantor shall keep its place(s) of business and chief executive
office and the office(s) where it keeps its records concerning the Collateral,
and the original copies of the Management Agreement and of all other chattel
paper which evidence the Collateral, at the location therefor specified in
Section 3.1.2 or, upon 30 days' prior written notice to the Lender, at
such other location in a jurisdiction where all action required by Section 4.1.3
shall have been taken with respect to
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the Collateral. The Grantor will hold and preserve such records and will permit
representatives of the Lender at any time during normal business hours to
inspect and make abstracts from such records. The Grantor will not change its
name except upon 30 days' prior written notice to the Lender.
ARTICLE V
THE LENDER
SECTION 5.1. Lender Appointed Attorney-in-Fact. The Grantor hereby
irrevocably appoints the Lender 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 Lender's discretion, to take any action
(including any action under the Management Agreement that the Grantor is
entitled to take) and to execute any instrument which the Lender may deem
necessary or advisable to accomplish the purposes of this Security Agreement,
including, without limitation:
(a) after the occurrence and continuance of an Event of Default,
to ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under
or in connection with 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 Lender may deem to be necessary or desirable for
the collection thereof or to enforce compliance with the terms and
conditions of the Management Agreement; and
(d) to perform the affirmative obligations of the Grantor
hereunder (including all obligations of the Grantor pursuant to
Section 4.1.1 and Section 4.1.3).
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. Lender May Perform. If the Grantor fails to perform any
agreement contained herein, the Lender may itself perform, or cause performance
of, such agreement, and the expenses of the Lender incurred in connection
therewith shall be payable by the Grantor pursuant to Section 6.2.
SECTION 5.3. Lender Has No Duty. In addition to, and not in limitation
of, Section 2.4, the powers conferred on the Lender hereunder are solely to
protect its interest in the Collateral
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and shall not impose any duty upon 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 Lender 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 Lender is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, the Lender 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 Lender 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 Lender 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 exercise any and all rights and
remedies of the Grantor under or in connection with the Management
Agreement or otherwise in respect of the Collateral, including,
without limitation, any and all rights of the Grantor to demand or
otherwise require payment of any amount under, or performance of any
provision of, the Management Agreement;
(b) all payments received by the Grantor under or in connection
with the Management Agreement or otherwise in respect of the
Collateral shall be received in trust for the benefit of the Lender,
shall be segregated from other funds of the Grantor and shall be
forthwith paid over to the Lender in the same form as so received
(with any necessary endorsement); and
(c) all payments made under or in connection with the Management
Agreement or otherwise in respect of the Collateral and received by
the Lender may, in the discretion of the Lender, be held by the Lender
as collateral for, and/or then or at any time thereafter applied
(after payment of any amounts payable to the Lender pursuant to
Section 6.2) in whole or in part by the Lender against, all or any
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part of (a) first the Secured Obligations relating to the Tranche B Loans until
paid in full, (b) second, the Secured Obligations relating to the Tranche A
Loans, (c) third, the Secured Obligations relating to the Other Credit Agreement
and (iv) fourth, to all other Secured Obligations. Any surplus of such payments
held by the Lender and remaining after payment in full of all the Secured
Obligations shall be paid over to the Grantor or to whomsoever may be lawfully
entitled to receive such surplus.
SECTION 6.2. Indemnity and Expenses.
(a) The Grantor agrees to indemnify the Lender from and against
any and all claims, losses and liabilities arising out of or resulting
from this Security Agreement (including, without limitation,
enforcement of this Security Agreement), except claims, losses or
liabilities resulting from the Lender's gross negligence or wilful
misconduct.
(b) The Grantor will upon demand pay to the Lender the amount of
any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the
Lender may incur in connection with (i) the administration of this
Security Agreement, (ii) the custody or preservation of, or the
collection from or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of the Lender
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 Lender, 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 in writing (including telegraphic
communication) and, if to the Grantor, mailed or telegraphed or delivered to it,
addressed to it at the address set forth below its signature hereto, if to the
Lender, mailed or delivered to it, addressed to it at the address of the
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Lender specified in the Credit Agreement, or as to either party at such other
address as shall be designated by such party in a written notice to each other
party complying as to delivery with the terms of this Section. All such notices
and other communications shall, when mailed or telegraphed, respectively, be
effective when deposited in the mails or delivered to the telegraph company,
respectively, addressed as aforesaid.
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. Governing Law, Entire Agreement, etc. THIS SECURITY
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, 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 SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.7. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
SECURITY AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER OR THE GRANTOR SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
OTHER PROPERTY MAY BE BROUGHT, AT THE LENDER'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE GRANTOR
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION. THE GRANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK. THE GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE
OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF SUCH LITIGATION
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BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
GRANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT
OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR
TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, THE GRANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT
OF ITS OBLIGATIONS UNDER THIS Security AGREEMENT.
SECTION 7.8. Waiver of Jury Trial. THE LENDER AND THE GRANTOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS SECURITY AGREEMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
LENDER OR THE GRANTOR. THE GRANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED
FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION
OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THIS SECURITY AGREEMENT AND
EACH SUCH OTHER LOAN DOCUMENT.
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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.
TRACE FOAM COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
Title: Senior Vice President, Secretary and
General Counsel
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:__________________________________
Telecopier: (000) 000-0000
00
XXX XXXX XX XXXX XXXXXX
By: /s/ Xxxxx X. Xxxxx
Authorized Signatory
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