SECURITY AGREEMENT
Exhibit 10.6
SECURITY AGREEMENT (this “Agreement”), dated as of April 10, 2008, by and among (a)
rue21, inc., a Pennsylvania corporation (the “Lead Borrower”), (b) r services llc, a
Virginia limited liability company (the “Guarantor”) (the Lead Borrower and the Guarantor
are hereinafter referred to, individually, as a “Grantor” and, collectively, as the
“Grantors”), and (c) Bank of America, N.A., a national banking association, as collateral
agent (in such capacity, the “Collateral Agent”) for its own benefit and the benefit of
the other Credit Parties (as defined in the Credit Agreement referred to below), in consideration
of the mutual covenants contained herein and benefits to be derived herefrom.
WITNESSETH:
WHEREAS, reference is made to that certain Credit Agreement, dated as of April 10, 2008 (as
amended, modified, supplemented or restated and in effect from time to time, the “Credit
Agreement”), by and among (i) the Lead Borrower and the other Borrowers from time to time
party thereto (collectively, with the Lead Borrower, the “Borrowers”), (ii) the Guarantor
and the other Guarantors from time to time party thereto (collectively, with the Guarantor, the
“Guarantors”), (iii) the Lenders from time to time party thereto (individually, a
“Lender” and, collectively, the “Lenders”), and (iv) Bank of America, N.A., as
Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer, pursuant to which the
Lenders have agreed to make Loans to the Borrowers, and the L/C Issuer has agreed to issue Letters
of Credit for the account of the Borrowers, upon the terms and subject to the conditions specified
in the Credit Agreement; and
WHEREAS, reference is also made to that certain Guaranty, dated as of April 10, 2008 (as
amended, modified, supplemented or restated and in effect from time to time, the
“Guaranty”), executed by the Guarantor in favor of the Administrative Agent, the
Collateral Agent and the other Credit Parties, pursuant to which the Guarantor guarantees the
payment and performance of the Guaranteed Obligations (as defined in the Guaranty); and
WHEREAS, the obligations of the Lenders to make Loans and of the L/C Issuer to issue Letters
of Credit are each conditioned upon, among other things, the execution and delivery by the
Grantors of an agreement in the form hereof to secure the Secured Obligations (as defined herein).
NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in this
Agreement, and for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Grantors and the Collateral Agent, on its own behalf and on behalf of the other
Credit Parties (and each of their respective successors or assigns), hereby agree as follows:
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ARTICLE 1
Definitions
SECTION 1.01 Generally. All references herein to the UCC shall mean the
Uniform Commercial Code as in effect from time to time in the State of New York; provided,
however, that if a term is defined in Article 9 of the UCC differently than in another
Article thereof, the term shall have the meaning set forth in Article 9; provided further
that, if by reason of mandatory provisions of law, perfection, or the effect of perfection or
non-perfection, of the Security Interest in any Collateral or the availability of any remedy
hereunder is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New
York, “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such perfection or effect of perfection or non-perfection or
availability of such remedy, as the case may be.
SECTION 1.02 Definition of Certain Terms Used Herein. Unless the context
otherwise requires, all capitalized terms used but not defined herein shall have the meanings set
forth in the Credit Agreement. In addition, as used herein, the following terms shall have the
following meanings:
“Accessions” shall have the meaning given that term in the UCC.
“Account Debtor” shall have the meaning given that term in the
UCC.
“Blue Sky Laws” shall have the meaning assigned to such term in SECTION 6.01 of this
Agreement.
“Borrowers” shall have the meaning assigned to such term in the preliminary statement
of this Agreement.
“Chattel Paper” shall have the meaning given that term in the UCC.
“Collateral” shall mean all personal property of each Grantor, including, without
limitation, all: (a) Accounts, (b) Chattel Paper, (c) Commercial Tort Claims (including, but not
limited to, those Commercial Tort Claims listed on Schedule 3.07 hereto), (d) Deposit
Accounts, (e) Documents, (f) Equipment, (g) Fixtures, (h) General Intangibles (including Payment
Intangibles), (i) Goods, (j) Instruments, (k) Inventory, (1) Investment Property, (m)
Letter-of-Credit Rights, (n) Software, (o) Supporting Obligations, (p) money, policies and
certificates of insurance, deposits, cash, or other property, (q) all books, records, and
information relating to any of the foregoing ((a) through (p)) and/or to the operation of any
Grantor’s business, and all rights of access to such books, records, and information, and all
property in which such books, records, and information are stored, recorded and maintained, (r) all
insurance proceeds, refunds, and premium rebates, including, without limitation, proceeds of fire
and credit insurance, whether any of such proceeds, refunds, and premium rebates arise out of any
of the foregoing ((a) through (q)) or otherwise, (s) all liens, guaranties, rights, remedies, and
privileges pertaining to any of the foregoing ((a) through (r)), including the right of stoppage in
transit, and (t) any of
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the foregoing, whether now owned or now due, or in which any Grantor has an interest, or hereafter
acquired, arising, or to become due, or in which any Grantor obtains an interest, and all
products, Proceeds, substitutions, and Accessions of or to any of the foregoing; provided,
however, that the Collateral shall not include, and the Security Interest shall not attach
to, (a) any rights or property acquired under a lease, contract, property rights agreement or
license, the grant of a security interest in which shall constitute or result in (i) the
abandonment, invalidation or unenforceability of any right, title or interest of any Grantor
therein or (ii) a breach or termination pursuant to the terms of, or a default under, any lease,
contract, property rights agreement or license (other than to the extent that any restriction on
such assignment would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of
the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other
applicable Law or principles of equity), provided that the Proceeds from any such lease,
contract, property rights agreement or license shall not be excluded from the definition of
Collateral to the extent that the assignment of such Proceeds is not prohibited, or (b) any
Security or other Equity Interest representing more than 65% of the Voting Equity Interests of any
CFC.
“Collateral Agent” shall have the meaning assigned to such term in the preamble of
this Agreement.
“Collateral Agent’s Rights and Remedies” shall have the meaning assigned to such term
in SECTION 8.08.
“Commercial Tort Claim” shall have the meaning given that term in the
UCC.
“Commodity Account” shall have the meaning given that term in the
UCC.
“Commodity Intermediary” shall have the meaning given that term in
the UCC.
“Control” shall have the meaning given that term in the UCC.
“Credit Agreement” shall have the meaning assigned to such term in the preliminary
statement of this Agreement.
“Deposit Account” shall have the meaning given that term in the UCC and shall also
include all demand, time, savings, passbook, or similar accounts maintained with a bank or other
financial institution.
“Documents” shall have the meaning given that term in the UCC.
“Electronic Chattel Paper” shall have the meaning given that term in the
UCC.
“Equipment” shall mean “equipment”, as defined in the UCC, and shall also mean all
furniture, store fixtures, motor vehicles, rolling stock, machinery, office equipment, plant
equipment, tools, dies, molds, and other goods, property, and assets which are used and/or were
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purchased for use in the operation or furtherance of a Grantor’s business, and any and all
Accessions or additions thereto, and substitutions therefor.
“Financial Asset” shall have the meaning given that term in the UCC.
“Financing Statement” shall have the meaning given that term in the
UCC.
“Fixtures” shall have the meaning given that term in the UCC.
“General Intangibles” shall have the meaning given that term in the UCC, and shall
also include, without limitation, all: Payment Intangibles; rights to payment for credit extended;
deposits; amounts due to any Grantor; credit memoranda in favor of any Grantor; warranty claims;
tax refunds and abatements; insurance refunds and premium rebates; all means and vehicles of
investment or hedging, including, without limitation, options, warrants, and futures contracts;
records; customer lists; telephone numbers; goodwill; causes of action; judgments; rights to
collect payments under any settlement or other agreement; literary rights; rights to performance;
royalties; license and/or franchise fees; rights of admission; licenses; franchises; license
agreements, including all rights of any Grantor to enforce same; permits, certificates of
convenience and necessity, and similar rights granted by any governmental authority; developmental
ideas and concepts; proprietary processes; blueprints, drawings, designs, diagrams, plans,
reports, and charts; catalogs; technical data; tapes, disks, semi-conductors chips and printouts;
IP Collateral (as defined in the Intellectual Property Security Agreement); proposals; cost
estimates, and reproductions on paper, or otherwise, of any and all concepts or ideas, and any
matter related to, or connected with, the design, development, manufacture, sale, marketing,
leasing, or use of any or all property produced, sold, or leased, by or credit extended or
services performed, by any Grantor, whether intended for an individual customer or the general
business of any Grantor, or used or useful in connection with research by any Grantor.
“Goods” shall have the meaning given that term in the UCC.
“Grantor” and “Grantors” shall have the meaning assigned to such terms in the
preamble of this Agreement.
“Guarantor” shall have the meaning assigned to such term in the preamble of this
Agreement.
“Guarantors” shall have the meaning assigned to such term in the preliminary
statement of this Agreement.
“Guaranty” shall have the meaning assigned to such term in the preliminary statement
of this Agreement.
“Indemnitee” shall have the meaning assigned to such term in SECTION 8.06 of this Agreement.
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“Instruments” shall have the meaning given that term in the UCC.
“Inventory” shall have the meaning given that term in the UCC, and shall also
include, without limitation, all: (a) Goods which (i) are leased by a Person as lessor, (ii) are
held by a Person for sale or lease or to be furnished under a contract of service, (iii) are
furnished by a Person under a contract of service, or (iv) consist of raw materials, work in
process, or materials used or consumed in a business; (b) Goods of said description in transit;
(c) Goods of said description which are returned, repossessed or rejected; and (d) packaging,
advertising, and shipping materials related to any of the foregoing.
“Investment Property” shall have the meaning given that term in the UCC.
“Joinder Agreement” shall mean an agreement substantially in the form of Exhibit
A hereto.
“Lead Borrower” shall have the meaning assigned to such term in the preamble of this
Agreement.
“Lender” and “Lenders” shall have the meaning assigned to such terms in the
preliminary statement of this Agreement.
“Letter-of-Credit Right” shall have the meaning given that term in the UCC and shall
also mean any right to payment or performance under a letter of credit, whether or not the
beneficiary has demanded, or is at the time entitled to demand, payment or performance.
“Letters of Credit” shall have the meaning given that term in the UCC.
“Payment Intangible” shall have the meaning given that term in the UCC and shall also
mean any General Intangible under which the Account Debtor’s primary obligation is a monetary
obligation.
“Proceeds” shall mean “proceeds”, as defined in the UCC, and shall also mean each
type of property described in the definition of Collateral.
“Secured Obligations” shall mean, collectively, the Obligations (as defined in the
Credit Agreement) and the Guaranteed Obligations (as defined in the Guaranty); provided, however,
that Obligations which constitute Other Liabilities shall be Secured Obligations solely to the
extent that there is sufficient Collateral following satisfaction of the obligations described in
clause (a) of the definition of Obligations.
“Securities Act” shall have the meaning assigned to such term in SECTION 6.01 of this
Agreement.
“Securities Account” shall have the meaning given that term in the UCC.
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“Securities Intermediary” shall have the meaning given that term in the UCC.
“Security” shall have the meaning given that term in the UCC.
“Security Entitlement” shall have the meaning given that term in the UCC.
“Security Interest” shall have the meaning assigned to such term in SECTION 2.01 of
this Agreement.
“Software” shall have the meaning given that term in the UCC.
“Supporting Obligation” shall have the meaning given that term in the UCC and shall
also refer to a Letter-of-Credit Right or secondary obligation that supports the payment or
performance of an Account, Chattel Paper, a Document, a General Intangible, an Instrument, or
Investment Property.
“Voting Equity Interests” shall mean, with respect to any Person, the Equity
Interests of all classes (or equivalent interests) which ordinarily, in the absence of
contingencies, entitle holders thereof to vote for the election of directors (or Persons
performing similar functions) of such Person, even though the right so to vote has been suspended
by the happening of such contingency.
SECTION 1.03 Rules of Interpretation. The rules of interpretation specified in Sections 1.02 through 1.06 of the Credit Agreement shall be applicable to this Agreement.
ARTICLE 2
Security Interest
SECTION 2.01 Security Interest. As security for the payment or performance, as
the case may be, in full of the Secured Obligations, each Grantor hereby grants to the Collateral
Agent, its successors and assigns, for its own benefit and the benefit of the other Credit Parties,
a security interest in all of such Grantor’s right, title and interest in, to and under the
Collateral (the “Security Interest”). Without limiting the foregoing, each Grantor hereby
designates the Collateral Agent as such Grantor’s true and lawful attorney, exercisable by the
Collateral Agent whether or not an Event of Default exists, with full power of substitution, at the
Collateral Agent’s option, to file one or more Financing Statements, continuation statements, or to
sign other documents for the purpose of perfecting, confirming, continuing, or protecting the
Security Interest granted by each Grantor, without the signature of any Grantor (each Grantor
hereby appointing the Collateral Agent as such Person’s attorney to sign such Person’s name to any
such instrument or document, whether or not an Event of Default exists), and naming any Grantor or
the Grantors, as debtors, and the Collateral Agent, as secured party. Any such financing statement
may indicate the Collateral as “all assets of the Grantor”, “all personal property of the
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debtor” or words of similar effect, regardless of whether any particular asset comprised in the
Collateral falls within the scope of Article 9 of the UCC.
SECTION 2.02 No Assumption of Liability. The Security Interest is granted as
security only and shall not subject the Collateral Agent or any other Credit Party to, or in any
way alter or modify, any obligation or liability of any Grantor with respect to or arising out of
the Collateral.
ARTICLE 3
Representations and Warranties
Each Grantor represents and warrants to the Collateral Agent and the other Credit Parties
that:
SECTION 3.01 Title and Authority. Each Grantor has good and valid rights in,
and title to, the Collateral with respect to which it has purported to grant a Security Interest
hereunder and has full power and authority to grant to the Collateral Agent the Security Interest
in such Collateral pursuant hereto and to execute, deliver and perform its obligations in
accordance with the terms of this Agreement, without the consent or approval of any other Person,
other than any consent or approval which has been obtained.
SECTION 3.02 Filings. Upon the filing of UCC Financing Statements or other
appropriate filings, recordings or registrations naming each Grantor as “debtor” and the
Collateral Agent as “secured party” and containing a description of the Collateral in each
governmental, municipal or other office as is necessary to publish notice of and protect the
validity of and to establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for its own benefit and the benefit of the other Credit Parties) in respect of
all Collateral in which the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and its territories and
possessions, the Security Interest granted to the Collateral Agent (for its own benefit and the
benefit of the other Credit Parties) hereunder shall constitute a legal, valid and perfected
security interest in the Collateral, and no further or subsequent filing, refiling, recording,
rerecording, registration or re-registration is necessary in any such jurisdiction, except as
provided under applicable Law with respect to the filing of continuation statements or as a result
of any change in a Grantor’s name or jurisdiction of incorporation or formation or under any other
circumstances under which, pursuant to the UCC, filings previously made have become misleading or
ineffective in whole or in part.
SECTION 3.03 Validity and Priority of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all of the Collateral securing the payment
and performance of the Secured Obligations, and (b) subject to the making of the filings described
in SECTION 3.02 above, a perfected security interest in all of the Collateral (to the extent
perfection in the Collateral can be accomplished by such filing) and (c) subject to the obtaining
of Control, a perfected security interest in all of the Collateral (to the extent perfection in the
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Collateral can be accomplished by Control). The Security Interest is and shall be prior to any
other Lien on any of the Collateral, subject only to Permitted Encumbrances having priority by
operation of applicable Law.
SECTION 3.04 Absence of Other Liens. The Collateral is owned by each Grantor
free and clear of any Lien, except for (i) Permitted Encumbrances or (ii) Liens for which
termination statements or releases (or payoff letters providing for the delivery or filing of
termination statements or releases) have been delivered to the Collateral Agent. Except, in each
case, for Permitted Encumbrances, no Grantor has (a) filed or consented to the filing of (i) any
Financing Statement or analogous document under the UCC or any other applicable Law covering any
Collateral, (ii) any assignment in which any Grantor assigns any Collateral or any security
agreement or similar instrument covering any Collateral with the United States Patent and
Trademark Office or the United States Copyright Office or (iii) any assignment in which any
Grantor assigns any Collateral or any security agreement or similar instrument covering any
Collateral with any foreign governmental, municipal or other office, or (b) entered into any
agreement in which any Grantor grants Control over any Collateral, which Financing Statement,
control agreement or analogous document, assignment, security agreement or similar instrument is
still in effect.
SECTION 3.05 Bailees, Warehousemen, Etc. Except as set forth on Schedule
3.05
hereto, no Inventory of any Grantor is in the care or custody of any third party or stored or
entrusted with a bailee or other third party and none shall hereafter be placed under such care,
custody, storage or entrustment unless a Collateral Access Agreement is delivered to the
Collateral Agent by such third party or bailee.
SECTION 3.06 Consignments. Except as set forth on Schedule 3.06 hereto, no
Grantor has, and none shall have, possession of any property on consignment.
SECTION 3.07 Commercial Tort Claims. As of the date hereof, none of the
Collateral consists of a Commercial Tort Claim, except as set forth on Schedule 3.07
hereto.
SECTION 3.08 Instruments and Chattel Paper. As of the date hereof, no amounts payable under or in connection with any of the Collateral are evidenced by any Instrument or
Chattel Paper with an individual face value in excess of $500,000 (or, with respect to all such
Instruments or Chattel Paper, an aggregate face value in excess of $1,000,000), other than such
Instruments and Chattel Paper listed in Schedule 3.08 hereto. Each Instrument and each item
of Chattel Paper listed in Schedule 3.08 hereto has been properly endorsed, assigned and
delivered to the Collateral Agent, accompanied by instruments of transfer or assignment duly
executed in blank.
SECTION 3.09 Securities Accounts and Commodity Accounts. As of the date
hereof, no Grantor has any Securities Accounts or Commodity Accounts other than those listed in
Schedule 3.09 hereto.
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SECTION 3.10 Electronic Chattel Paper and Transferable Records. As of the date
hereof, no amount under or in connection with any of the 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) with an individual face
value in excess of $500,000 (or, with respect to all such Electronic Chattel Paper or transferable
records, an aggregate face value in excess of $1,000,000), other than such Electronic Chattel
Paper and transferable records listed in Schedule 3.10 hereto.
ARTICLE 4
Covenants
SECTION 4.01 Change of Name; Location of Collateral: Records: Place of
Business.
(a) Each Grantor will furnish to the Collateral Agent at least thirty (30) days prior
written notice of any change in: (i) any Grantor’s name or in any trade name used to
identify it in the conduct of its business or in the ownership of its properties; (ii) the
location of any Grantor’s chief executive office, its principal place of business, any
office in which it maintains books or records relating to Collateral owned by it or any
office or facility at which Collateral owned by it is located (including the establishment
of any such new office or facility); (iii) any Grantor’s organizational structure (i.e. the
type of entity that such Grantor is) or jurisdiction of incorporation or formation; or (iv)
any Grantor’s Federal Taxpayer Identification Number or organizational identification
number, if any, assigned to it by its state of organization. Each Grantor agrees not to
effect or permit any change referred to in the preceding sentence unless all filings,
publications and registrations have been made under the UCC or other applicable Law that are
required in order for the Collateral Agent to continue at all times following such change to
have a valid, legal and perfected first priority security interest in all the Collateral
(subject only to Permitted Encumbrances having priority by operation of applicable Law) for
its own benefit and the benefit of the other Credit Parties.
(b) Each Grantor agrees (i) to maintain, at its own cost and expense, records with
respect to the Collateral owned by it which are complete and accurate in all material
respects and which are consistent with its current practices, but in any event to include
accounting records which are complete in all material respects indicating all payments and
proceeds received with respect to any part of the Collateral, and (ii) at such time or times
as the Collateral Agent may reasonably request, promptly to prepare and deliver to the
Collateral Agent a duly certified schedule or schedules in form and detail reasonably
satisfactory to the Collateral Agent showing the identity, amount and location of any and
all Collateral.
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SECTION 4.02 Protection of Security. Each Grantor shall, at its own cost and
expense, take any and all actions reasonably necessary to defend title to the Collateral against
all Persons and to defend the Security Interest of the Collateral Agent in the Collateral and the
priority thereof against any Lien (other than Permitted Encumbrances).
SECTION 4.03 Further Assurances. Each Grantor agrees, at its own expense, to
execute, acknowledge, deliver and cause to be duly filed all such further documents, Financing
Statements, agreements and instruments and take all such further actions as the Collateral Agent
may from time to time reasonably request to better assure, preserve, protect and perfect the
Security Interest and the rights and remedies created hereby or the validity or priority of such
Security Interest, including the payment of any fees and taxes required in connection with the
execution and delivery of this Agreement, the granting of the Security Interest and the filing of
any Financing Statements or other documents in connection herewith or therewith. Without limiting
the foregoing, each Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause
to be duly filed all such further documents, Financing Statements, agreements and instruments and
take all such further actions as the Collateral Agent may from time to time reasonably request to
perfect the Collateral Agent’s Security Interest in all Accounts, Inventory, Deposit Accounts,
Investment Property, and the Proceeds therefrom (including causing the Collateral Agent to have
Control of any such Collateral to the extent required under the Credit Agreement and to the extent
perfection in such Collateral can be accomplished by Control).
SECTION 4.04 Inspection and Verification. Each Grantor shall, and shall cause
each of its Subsidiaries to, permit representatives and independent contractors of the Collateral
Agent to visit its properties and inspect the Collateral and all records related thereto (and to
make extracts and copies from such records), to discuss its affairs, finances and accounts with
its directors, officers and Registered Public Accounting Firm, and to conduct appraisals,
commercial finance examinations and other evaluations, all in accordance with and subject to the
terms and conditions of Section 6.10 of the Credit Agreement. The Collateral Agent and such
Persons as the Collateral Agent may reasonably designate shall have the right to verify the
validity, amount, quality, quantity, value, condition and status of, or any other matter relating
to, the Collateral, including, in the case of Accounts or Collateral in the possession of any
third Person, by contacting Account Debtors or the third Person possessing such Collateral for the
purpose of making such a verification. The Collateral Agent shall have the right, subject to the
confidentiality provisions of Section 10.07 of the Credit Agreement, to share any information it
gains from such inspection or verification with any Credit Party. The Grantors shall pay the fees
and expenses of the Collateral Agent or such other Persons with respect to such inspections and
verifications to the extent required by the terms of Section 6.10 of the Credit Agreement.
SECTION 4.05 Taxes; Encumbrances. At its option, the Collateral Agent may
discharge past due taxes, assessments, charges, fees, Liens, security interests or other
encumbrances at any time levied or placed on the Collateral (other than Permitted Encumbrances),
and may take any other action which the Collateral Agent may reasonably deem necessary or desirable
to repair, maintain or preserve any of the Collateral to the extent any
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Grantor fails to do so as required by the Credit Agreement or this Agreement, and each Grantor
jointly and severally agrees to reimburse the Collateral Agent on demand for any payment made or
any expense incurred by the Collateral Agent pursuant to the foregoing authorization;
provided, however, that the Collateral Agent shall not have any obligation to
undertake any of the foregoing and shall have no liability on account of any action so undertaken
except where a court of competent jurisdiction determines by final and nonappealable judgment that
the Collateral Agent’s actions constitute gross negligence or willful misconduct; provided further that the making of any such payments or the taking of any such action by the
Collateral Agent shall not be deemed to constitute a waiver of any Default or Event of Default
arising from any Grantor’s failure to have made such payments or taken such action. Nothing in
this SECTION 4.05 shall be interpreted as excusing any Grantor from the performance of any
covenants or other promises of any Grantor with respect to taxes, assessments, charges, fees,
Liens, security interests or other encumbrances and maintenance as set forth herein or in the
other Loan Documents.
SECTION 4.06 Assignment of Security Interest. If at any time any Grantor shall
take a security interest in any property of an Account Debtor or any other Person to secure
payment and performance of an Account with a value in excess of $500,000 (or, with respect to all
such property, an aggregate value in excess of $1,000,000), such Grantor shall promptly assign
such security interest to the Collateral Agent. Such assignment need not be filed of public record
unless necessary to continue the perfected status of the security interest against creditors of,
and transferees from, the Account Debtor or other Person granting the security interest.
SECTION 4.07 Continuing Obligations of the Grantors. Each Grantor shall remain
liable to observe and perform all the conditions and obligations to be observed and performed by
it under each contract, agreement or instrument relating to the Collateral, all in accordance with
the terms and conditions thereof, and each Grantor jointly and severally agrees to indemnify and
hold harmless the Collateral Agent and the Credit Parties from and against any and all liability
for such performance.
SECTION 4.08 Use and Disposition of Collateral. None of the Grantors shall
make or permit to be made a collateral assignment, pledge or hypothecation of the Collateral or
shall grant any other Lien in respect of the Collateral or shall grant Control of any Collateral to
any Person, except for Permitted Encumbrances. Except for Permitted Dispositions, none of the
Grantors shall make or permit to be made any transfer of the Collateral. Each Grantor shall remain
at all times in possession of the Collateral owned by it, except with respect to the following: (a)
Eligible In-Transit Inventory and Inventory which is the subject of an Eligible Letter of Credit;
(b) Inventory placed under the care, custody, storage or entrustment of a bailee or other third
party, provided that such bailee or other third party shall have delivered to the
Collateral Agent a Collateral Access Agreement on terms reasonably satisfactory to the Collateral
Agent; (c) sales of Inventory in the ordinary course of business and other Permitted Dispositions;
(d) movement of Inventory from one location of such Grantor to another location
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of such Grantor; and (e) disposal of Equipment in the ordinary course of business or which is
obsolete, worn out, damaged beyond repair or no longer used or useful.
SECTION 4.09 Limitation on Modification of Accounts. None of the Grantors
will, without the Collateral Agent’s prior written consent, grant any extension of the time of
payment of any of the Accounts, compromise, compound or settle the same for less than the full
amount thereof, release, wholly or partly, any Person liable for the payment thereof or allow any
credit or discount whatsoever thereon, except, in each case, for extensions, releases, credits,
discounts, compromises or settlements granted or made in the ordinary course of business or
consistent with its current practices.
SECTION 4.10 Insurance.
(a) Each Grantor shall (i) maintain or shall cause to be maintained such insurance as
is required pursuant to Section 6.07 of the Credit Agreement; and (ii) furnish to the
Collateral Agent, upon written request, full information as to the insurance carried.
(b) Each Grantor hereby irrevocably makes, constitutes and appoints the Collateral
Agent (and all officers, employees or agents designated by the Collateral Agent) as such
Grantor’s true and lawful agent (and attorney-in-fact), exercisable only after the
occurrence and during the continuance of a Cash Dominion Event, for the purpose of making,
settling and adjusting claims in respect of Collateral under policies of insurance,
endorsing the name of such Grantor on any check, draft, instrument or other item of payment
for the proceeds of such policies of insurance and for making all determinations and
decisions with respect thereto. In the event that any Grantor at any time or times shall
fail to obtain or maintain any of the policies of insurance required hereby or to pay any
premium in whole or in part relating thereto, the Collateral Agent may, without waiving or
releasing any obligation or liability of the Grantors hereunder or any Default or Event of
Default, in its sole discretion, obtain and maintain such policies of insurance and pay such
premium and take any other actions with respect thereto as the Collateral Agent deems
advisable. All sums disbursed by the Collateral Agent in connection with this SECTION
4.10, including reasonable attorneys’ fees, court costs, expenses and other charges
relating thereto, shall be payable, upon demand, by the Grantors to the Collateral Agent and
shall be additional Secured Obligations secured hereby.
SECTION 4.11 Commercial Tort Claims. If any Grantor shall at any time hold or
acquire a Commercial Tort Claim having a value in excess of $1,000,000, such Grantor shall promptly
(but, in any event, within five (5) Business Days) notify the Collateral Agent in writing of the
details thereof, and such Grantor shall take such actions as the Collateral Agent shall reasonably
request in order to grant to the Collateral Agent, for the ratable benefit of the Credit Parties, a
perfected security interest therein and in the Proceeds thereof.
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SECTION 4.12 Legend. Upon the occurrence and during the continuance of an
Event of Default, and at the request of the Collateral Agent, each Grantor shall legend, in form
and manner reasonably satisfactory to the Collateral Agent, its Accounts and its books, records
and documents evidencing or pertaining thereto with an appropriate reference to the fact that such
Accounts have been assigned to the Collateral Agent, for its own benefit and the benefit of the
other Credit Parties, and that the Collateral Agent has a security interest therein.
SECTION 4.13 Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce, the Collateral
Agent’s Security Interest in the Collateral, each Grantor covenants and agrees, in each case at
such Grantor’s own expense, to take the following actions with respect to the following
Collateral:
(a) If any amount then payable under or in connection with any of the Collateral shall
become evidenced by any Instrument or Chattel Paper with an individual face value in excess
of $500,000 (or, with respect to all such Instruments or Chattel Paper, an aggregate face
value in excess of $1,000,000), other than such Instruments and Chattel Paper listed in
Schedule 3.08 hereto, the Grantor acquiring such Instrument or Chattel Paper shall
promptly (but, in any event, within five (5) Business Days after receipt thereof) endorse,
assign and deliver the same to the Collateral Agent, accompanied by such instruments of
transfer or assignment duly executed in blank as the Collateral Agent may from time to time
specify.
(b) No Grantor shall hereafter establish and maintain any Securities Account or
Commodity Account with any Securities Intermediary or Commodity Intermediary unless (i) such
Securities Intermediary or Commodity Intermediary shall be reasonably acceptable to the
Collateral Agent, and (ii) such Securities Intermediary or Commodity Intermediary, as the
case may be, and such Grantor shall have duly executed and delivered a control agreement
with respect to such Securities Account or Commodity Account, as the case may be. Each
Grantor shall accept any cash and Investment Property in trust for the benefit of the
Collateral Agent and within one (1) Business Day of actual receipt thereof, deposit any and
all cash and Investment Property received by it into a Deposit Account or Securities Account
subject to the Collateral Agent’s Control. The provisions of this SECTION 4.13(b) shall not
apply to any Financial Assets credited to a Securities Account for which the Collateral
Agent is the Securities Intermediary. No Grantor shall grant Control over any Investment
Property to any person other than the Collateral Agent.
(c) As between the Collateral Agent and the Grantors, the Grantors 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 Securities (except
where a court of competent jurisdiction determines by final and nonappealable judgment that
such loss, damage or destruction has resulted from the gross
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negligence or willful misconduct of the Collateral Agent), whether in the possession of, or
maintained as a Security Entitlement or deposit by, or subject to the Control of, the
Collateral Agent, a Securities Intermediary, a Commodity Intermediary, any Grantor or any
other Person.
(d) If any amount payable under or in connection with any of the Collateral shall
become evidenced by any Electronic Chattel Paper or any transferable record with an
individual face value in excess of $500,000 (or, with respect to all such Electronic Chattel
Paper or transferable records, an aggregate face value in excess of $1,000,000), other than
such Electronic Chattel Paper and transferable records listed in Schedule 3.10
hereto, the Grantor acquiring such Electronic Chattel Paper or transferable record shall
promptly notify the Collateral Agent thereof and shall take such action as the Collateral
Agent may reasonably request to vest in the Collateral 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.
(e) If any Grantor is at any time a beneficiary under a Letter of Credit now or
hereafter issued having a face value in an amount in excess of $500,000 (or with respect to
all such Letters of Credit, having an aggregate face value in an amount in excess of
$1,000,000), such Grantor shall promptly notify the Collateral Agent thereof and such
Grantor shall, at the request of the Collateral Agent, pursuant to an agreement in form and
substance reasonably satisfactory to the Collateral Agent, either (i) arrange for the issuer
and any confirmer of such Letter of Credit to consent to an assignment to the Collateral
Agent of the proceeds of any drawing under the Letter of Credit and to cause the proceeds of
any drawing under such Letter of Credit to be paid directly to the Collateral Agent after
the occurrence and during the continuance of any Cash Dominion Event, or (ii) arrange for
the Collateral Agent to become the transferee beneficiary of such Letter of Credit, with the
Collateral Agent agreeing, in each case, that the proceeds of any drawing under the Letter
of Credit are to be paid directly to the Collateral Agent after the occurrence and during
the continuance of any Cash Dominion Event and applied as provided in the Credit Agreement.
SECTION 4.14 Joinder of Additional Grantors. Upon the formation or acquisition
of any new Subsidiary (other than any CFC or a Subsidiary that is held by a CFC) by any Grantor,
then such Grantor shall, at such Grantor’s expense, cause such Subsidiary to execute and deliver to
the Collateral Agent a Joinder Agreement substantially in the form of Exhibit Ahereto and
to comply with the requirements of Section 6.12 of the Credit Agreement, within the time periods
specified therein, and, upon such execution and delivery, such Subsidiary shall constitute a
“Grantor” for all purposes hereunder with the same force and effect as if originally named as a
Grantor herein. The execution and delivery of such Joinder Agreement shall not require the consent
of any Grantor hereunder. The rights and obligations of each Grantor
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hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as
a party to this Agreement.
ARTICLE 5
Collections; Power of Attorney
SECTION 5.01 Collections.
(a) Each Grantor shall at all times comply with the cash management provisions of
Section 6.13 of the Credit Agreement, including, without limitation, after the occurrence
and during the continuance of a Cash Dominion Event, causing the ACH or wire transfer no
less frequently than daily (and whether or not there are then any outstanding Secured
Obligations) of all cash receipts and collections into the Concentration Account or a
Blocked Account, as provided for in the Credit Agreement.
(b) Without the prior written consent of the Collateral Agent (which consent shall not
be unreasonably withheld), no Grantor shall modify or amend the instructions pursuant to any
of the Credit Card Notifications or the Blocked Account Agreements. So long as no Event of
Default has occurred and is continuing, each Grantor shall, and the Collateral Agent hereby
authorizes each Grantor to, enforce and collect all amounts owing on the Inventory and
Accounts, for the benefit and on behalf of the Collateral Agent and the other Credit
Parties; provided, however, that such authorization may, at the direction of
the Collateral Agent, be terminated upon the occurrence and during the continuance of any
Event of Default.
SECTION 5.02 Power of Attorney. Each Grantor irrevocably makes, constitutes
and appoints the Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor’s true and lawful agent and attorney-in-fact, and in such
capacity the Collateral Agent shall have the right, with power of substitution for each Grantor and
in each Grantor’s name or otherwise, for the use and benefit of the Collateral Agent and the other
Credit Parties, (a) at any time, whether or not a Default or Event of Default has occurred, to take
actions required to be taken by the Grantors under SECTION 2.01 of this Agreement, (b) upon
the occurrence and during the continuance of a Cash Dominion Event or as otherwise permitted under
the Credit Agreement, (i) to take actions required to be taken by the Grantors under SECTION
5.01 of this Agreement; and (ii) to receive, endorse, assign and/or deliver any and all notes,
acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral
or any part thereof, and (c) upon the occurrence and during the continuance of an Event of Default
or as otherwise permitted under the Credit Agreement, (i) to demand, collect, receive payment of,
give receipt for and give discharges and releases of all or any of the Collateral; (ii) to sign the
name of any Grantor on any invoices, schedules of Collateral, freight or express receipts, or bills
of lading storage receipts, warehouse receipts or other documents of title relating to any of the
Collateral; (iii) to sign the name of any Grantor on any notice to such Grantor’s Account Debtors;
(iv) to sign the name of any Grantor on any proof of claim in
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bankruptcy against Account Debtors, and on notices of lien, claims of mechanic’s liens, or
assignments or releases of mechanic’s liens securing the Accounts; (v) to sign change of address
forms to change the address to which each Grantor’s mail is to be sent to such address as the
Collateral Agent shall designate; (vi) to receive and open each Grantor’s mail, remove any
Proceeds of Collateral therefrom and turn over the balance of such mail either to the Lead
Borrower or to any trustee in bankruptcy or receiver of a Grantor, or other legal representative
of a Grantor whom the Collateral Agent reasonably determines to be the appropriate person to whom
to so turn over such mail; (vii) to commence and prosecute any and all suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise
realize on all or any of the Collateral or to enforce any rights in respect of any Collateral;
(viii) to settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (ix) to take all such action as may be reasonably
necessary to obtain the payment of any letter of credit and/or banker’s acceptance of which any
Grantor is a beneficiary; (x) to repair, manufacture, assemble, complete, package, deliver, alter
or supply goods, if any, necessary to fulfill in whole or in part the purchase order of any
customer of any Grantor; (xi) to use, license or transfer any or all General Intangibles of any
Grantor, subject to those restrictions to which such Grantor is subject under applicable Law and
by contract; (xii) to cause all Documents (including, without limitation, freight or express
receipts, or bills of lading storage receipts, warehouse receipts or other documents of title) to
name the Collateral Agent as consignee and to obtain control over the Documents; and (xiii) to
use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all
or any of the Collateral, and to do all other acts and things reasonably necessary to carry out
the purposes of this Agreement, as fully and completely as though the Collateral Agent was the
absolute owner of the Collateral for all purposes; provided, however, that nothing
herein contained shall be construed as requiring or obligating the Collateral Agent or any other
Credit Party to make any commitment or to make any inquiry as to the nature or sufficiency of any
payment received by the Collateral Agent or any other Credit Party, or to present or file any
claim or notice. It is understood and agreed that the appointment of the Collateral Agent as the
agent and attorney-in-fact of each Grantor for the purposes set forth above is coupled with an
interest and is irrevocable,
SECTION 5.03 No Obligation to Act. The Collateral Agent shall not be obligated
to do any of the acts or to exercise any of the powers authorized by SECTION 5.02, but if
the Collateral Agent elects to do any such act or to exercise any of such powers, it shall not be
accountable for more than it actually receives as a result of such exercise of power, and shall not
be responsible to any Grantor for any act or omission to act, except where a court of competent
jurisdiction determines by final and nonappealable judgment that the subject act or omission to act
has resulted from the gross negligence or willful misconduct of the Collateral Agent. The
provisions of SECTION 5.02 shall in no event relieve any Grantor of any of its obligations
hereunder or under any other Loan Document with respect to the Collateral or any part thereof or
impose any obligation on the Collateral Agent or any other Credit Party to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any way limit the
exercise by the Collateral Agent or any other Credit Party of any other or further right which it
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may have on the date of this Agreement or hereafter, whether hereunder, under any other Loan
Document, by applicable Law or otherwise.
ARTICLE 6
Remedies
SECTION 6.01 Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, it is agreed that the Collateral Agent shall have in any
jurisdiction in which enforcement hereof is sought, in addition to all other rights and remedies,
the rights and remedies of a secured party under the UCC or other applicable Law. The rights and
remedies of the Collateral Agent shall include, without limitation, the rights set forth in
SECTION 5.02 and the right to take any or all of the following actions at the same or
different times:
(a) With respect to any Collateral consisting of Accounts, General Intangibles
(including Payment Intangibles), Letter-of-Credit Rights, Instruments, Chattel Paper,
Documents, and Investment Property, the Collateral Agent may collect the Collateral with or
without the taking of possession of any of the Collateral.
(b) With respect to any Collateral consisting of Accounts, the Collateral Agent may:
(i) demand, collect and receive any amounts relating thereto, as the Collateral Agent may
determine; (ii) commence and prosecute any actions in any court for the purposes of
collecting any such Accounts and enforcing any other rights in respect thereof; (iii)
defend, settle or compromise any action brought and, in connection therewith, give such
discharges or releases as the Collateral Agent may reasonably deem appropriate; (iv)
without limiting the Collateral Agent’s rights set forth in SECTION 5.02 hereof,
receive, open and dispose of mail addressed to any Grantor and endorse checks, notes,
drafts, acceptances, money orders, bills of lading, warehouse receipts or other instruments
or documents evidencing payment, shipment or storage of the goods giving rise to such
Accounts or securing or relating to such Accounts, on behalf of and in the name of such
Grantor; and (v) sell, assign, transfer, make any agreement in respect of, or otherwise
deal with or exercise rights in respect of, any such Accounts or the goods or services
which have given rise thereto, as fully and completely as though the Collateral Agent was
the absolute owner thereof for all purposes.
(c) With respect to any Collateral consisting of Investment Property, the Collateral
Agent may: (i) exercise all rights of any Grantor with respect thereto, including without
limitation, the right to exercise all voting and corporate rights at any meeting of the
shareholders of the Issuer of any Investment Property and to exercise any and all rights of
conversion, exchange, subscription or any other rights, privileges or options pertaining to
any Investment Property as if the Collateral Agent was the absolute owner thereof,
including the right to exchange, at its discretion, any and all of any Investment Property
upon the merger, consolidation, reorganization, recapitalization or other
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readjustment of the Issuer thereof, all without liability except to account for property actually
received as provided in SECTION 5.03 hereof; (ii) transfer such Collateral at any time to
itself, or to its nominee, and receive the income thereon and hold the same as Collateral
hereunder or apply it to the Secured Obligations; and (iii) demand, xxx for, collect or make any
compromise or settlement it deems desirable. The Grantors recognize that (a) the Collateral Agent
may be unable to effect a public sale of all or a part of the Investment Property by reason of
certain prohibitions contained in the Securities Act of 1933, 15 X.X.X. §00 (as amended and in
effect, the “Securities Act”) or the Securities laws of various states (the “Blue Sky
Laws”), but may be compelled to resort to one or more private sales to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire the Investment Property
for their own account, for investment and not with a view to the distribution or resale thereof,
(b) that private sales so made may be at prices and upon other terms less favorable to the seller
than if the Investment Property were sold at public sales, (c) that neither the Collateral Agent
nor any other Credit Party has any obligation to delay sale of any of the Investment Property for
the period of time necessary to permit the Investment Property to be registered for public sale
under the Securities Act or the Blue Sky Laws, and (d) that private sales made under the foregoing
circumstances shall be deemed to have been made in a commercially reasonable manner.
Notwithstanding anything herein to the contrary, no Grantor shall be required to register, or
cause the registration of, any Investment Property under the Securities Act or any Blue Sky Laws.
(d) With respect to any Collateral consisting of Inventory, Goods, and Equipment, the
Collateral Agent may conduct one or more going out of business sales, in the Collateral Agent’s own
right or by one or more agents and contractors. Such sale(s) may be conducted upon any premises
owned, leased, or occupied by any Grantor. The Collateral Agent and any such agent or contractor,
in conjunction with any such sale, may augment the Inventory with other goods (all of which other
goods shall remain the sole property of the Collateral Agent or such agent or contractor). Any
amounts realized from the sale of such goods which constitute augmentations to the Inventory (net
of an allocable share of the costs and expenses incurred in their disposition) shall be the sole
property of the Collateral Agent or such agent or contractor and neither any Grantor nor any Person
claiming under or in right of any Grantor shall have any interest therein. Each purchaser at any
such going out of business sale shall hold the property sold absolutely, free from any claim or
right on the part of any Grantor.
(e) With or without legal process and with or without prior notice or demand for performance,
the Collateral Agent may enter upon, occupy, and use any premises owned or occupied by each
Grantor, and may exclude the Grantors from such premises or portion thereof as may have been so
entered upon, occupied, or used by the Collateral Agent. The Collateral Agent shall not be required
to remove any of the Collateral from any such premises upon the Collateral Agent’s taking
possession thereof, and may render any Collateral unusable to the Grantors. In no event shall the
Collateral Agent be liable
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to any Grantor for use or occupancy by the Collateral Agent of any premises pursuant to this
SECTION 6.01, nor for any charge (such as wages for the Grantors’ employees and utilities)
incurred in connection with the Collateral Agent’s exercise of the Collateral Agent’s Rights and
Remedies (as defined herein) hereunder, other than for direct or actual damages resulting from the
gross negligence or willful misconduct of the Collateral Agent as determined by a final and
nonappealable judgment of a court of competent jurisdiction.
(f) The Collateral Agent may require any Grantor to assemble the Collateral and make it
available to the Collateral Agent at such Grantor’s sole risk and expense at a place or places
which are reasonably convenient to both the Collateral Agent and such Grantor.
(g) The Collateral Agent may require any Grantor to name the Collateral Agent as consignee on
any Documents and to furnish the Collateral Agent with control over any such Documents.
(h) Each Grantor agrees that the Collateral Agent shall have the right, subject to applicable
Law, to sell or otherwise dispose of all or any part of the Collateral, at public or private sale,
for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate. Each
purchaser at any such sale shall hold the property sold absolutely, free from any claim or right
on the part of any Grantor.
(i) Unless the Collateral is perishable or threatens to decline speedily in value, or is of a
type customarily sold on a recognized market (in which event the Collateral Agent shall provide the
Grantors such advance notice as may be practicable under the circumstances), the Collateral Agent
shall give the Grantors at least ten (10) days’ prior written notice, by authenticated record, of
the date, time and place of any proposed public sale, and of the date after which any private sale
or other disposition of the Collateral may be made. Each Grantor agrees that such written notice
shall satisfy all requirements for notice to such Grantor which are imposed under the UCC or other
applicable Law with respect to the exercise of the Collateral Agent’s Rights and Remedies upon
default. The Collateral Agent shall not be obligated to make any sale or other disposition of any
Collateral if it shall determine not to do so, regardless of the fact that notice of sale or other
disposition of such Collateral shall have been given. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for sale, and such sale may, without further notice, be
made at the time and place to which the same was so adjourned.
(j) Any public sale shall be held at such time or times within ordinary business hours and at
such place or places as the Collateral Agent may fix and state in the notice of such sale. At any
sale or other disposition, the Collateral, or portion thereof, to be sold may be sold in one lot as
an entirety or in separate parcels, as the Collateral Agent
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may (in its sole and absolute discretion) determine. If any of the Collateral is sold,
leased, or otherwise disposed of by the Collateral Agent on credit, the Secured Obligations
shall not be deemed to have been reduced as a result thereof unless and until payment in
full is received thereon by the Collateral Agent. In the event that the purchaser fails to
pay for the Collateral, the Collateral Agent may resell the Collateral and apply the
proceeds from such resale in accordance with the terms of SECTION 6.02 of this
Agreement.
(k) At any public (or, to the extent permitted by applicable Law, private) sale made
pursuant to this SECTION 6.01, the Collateral Agent or any other Credit Party may
bid for or purchase, free (to the extent permitted by applicable Law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor, the Collateral or any
part thereof offered for sale and may make payment on account thereof by using any claim
then due and payable to the Collateral Agent or such other Credit Party from any Grantor on
account of the Secured Obligations as a credit against the purchase price, and the
Collateral Agent or such other Credit Party may, upon compliance with the terms of sale,
hold, retain and dispose of such property without further accountability to any Grantor
therefor to the extent permitted by applicable Law.
(1) For purposes hereof, a written agreement to purchase the Collateral or any portion
thereof shall be treated as a sale thereof. The Collateral Agent shall be free to carry out
such sale pursuant to such agreement and no Grantor shall be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that after the
Collateral Agent shall have entered into such an agreement all Events of Default shall have
been remedied and the Secured Obligations paid in full.
(m) As an alternative to exercising the power of sale herein conferred upon it, the
Collateral Agent may proceed by a suit or suits at law or in equity to foreclose upon the
Collateral and to sell the Collateral or any portion thereof pursuant to a judgment or
decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver.
(n) To the extent permitted by applicable Law, each Grantor hereby waives all rights
of redemption, stay, valuation and appraisal which such Grantor now has or may at any time
in the future have under any rule of law or statute now existing or hereafter enacted.
SECTION 6.02 Application of Proceeds. After the occurrence and during the
continuance of an Event of Default and acceleration of the Secured Obligations, the Collateral
Agent shall apply the proceeds of any collection or sale of the Collateral, as well as any
Collateral consisting of cash, or any Collateral granted under any other of the Collateral
Documents, in accordance with Section 8.03 of the Credit Agreement.
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The Collateral Agent shall have absolute discretion as to the time of application of any such
proceeds, moneys or balances in accordance with this Agreement. Upon any sale or other disposition
of the Collateral by the Collateral Agent (including pursuant to a power of sale granted by
statute or under a judicial proceeding), the receipt of the purchase money by the Collateral Agent
or of the officer making the sale or other disposition shall be a sufficient discharge to the
purchaser or purchasers of the Collateral so sold or otherwise disposed of and such purchaser or
purchasers shall not be obligated to see to the application of any part of the purchase money paid
over to the Collateral Agent or such officer or be answerable in any way for the misapplication
thereof.
ARTICLE 7
Perfection of Security Interest
SECTION 7.01 Perfection by Filing. This Agreement constitutes an authenticated
record, and each Grantor hereby authorizes the Collateral Agent, pursuant to the provisions of
SECTION 2.01 and SECTION 5.02, to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the Collateral, in such filing
offices as the Collateral Agent shall reasonably deem appropriate, and the Grantors shall pay the
Collateral Agent’s reasonable costs and expenses incurred in connection therewith.
SECTION 7.02 Other Perfection, Etc. Each Grantor shall at any time and from
time to time take such steps as the Collateral Agent may reasonably request for the Collateral
Agent (a) to obtain an acknowledgment, in form and substance reasonably satisfactory to the
Collateral Agent, of any bailee having possession of any of the Collateral that the bailee holds
such Collateral for the Collateral Agent, (b) to obtain Control of any Investment Property, Deposit
Accounts, Letter-of-Credit Rights or Electronic Chattel Paper, with any agreements establishing
Control to be in form and substance reasonably satisfactory to the Collateral Agent, and (c)
otherwise to insure the continued perfection of the Collateral Agent’s security interest in any of
the Collateral with the priority described in SECTION 3.03 and of the preservation of its
rights therein.
SECTION 7.03 Savings Clause. Nothing contained in this ARTICLE 7 shall be
construed to narrow the scope of the Collateral Agent’s Security Interest in any of the Collateral
or the perfection or priority thereof or to impair or otherwise limit any of the Collateral Agent’s
Rights and Remedies hereunder except (and then only to the extent) as mandated by the UCC.
ARTICLE 8
Miscellaneous
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SECTION 8.01 Notices. All communications and notices hereunder shall (except
as otherwise expressly permitted herein) be in writing and given as provided in Section 10.02 of
the Credit Agreement.
SECTION 8.02 Grant of Non-Exclusive License. Without limiting the provisions
of SECTION 6.01 hereof or any other rights of the Collateral Agent as the holder of a Lien
on any IP Collateral (as defined in the Intellectual Property Security Agreement), each Grantor
hereby grants to the Collateral Agent, and the representatives and independent contractors of the
Collateral Agent, a royalty free, non-exclusive, irrevocable license, to use, apply, and affix any
trademark, trade name, logo, or the like in which any Grantor now or hereafter has rights, such
license to be effective only upon the occurrence and during the continuance of any Event of
Default in connection with the Collateral Agent’s exercise of the Collateral Agent’s Rights and
Remedies hereunder including, without limitation, in connection with any completion of the
manufacture of Inventory or any sale or other disposition of Inventory. The license granted in
this SECTION 8.02 shall remain in full force and effect throughout the term of this
Agreement, notwithstanding the release of any Grantor hereunder.
SECTION 8.03 Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest and all obligations of each Grantor hereunder shall be absolute
and unconditional irrespective of (a) any lack of validity or enforceability of the Credit
Agreement, any other Loan Document, any agreement with respect to any of the Secured Obligations
or any other agreement or instrument relating to any of the foregoing, (b) 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 amendment or waiver of or any consent to any departure from the Credit Agreement, any
other Loan Document, or any other agreement or instrument with respect to any other Grantor, (c)
any exchange, release or non-perfection of any Lien on other collateral, or any release or
amendment or waiver of or consent under or departure from the Guaranty or any other guarantee,
securing or guaranteeing all or any of the Secured Obligations, or (d) any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any other Grantor in respect
of the Secured Obligations or this Agreement.
SECTION 8.04 Survival of Agreement. All covenants, agreements,
representations and warranties made by each Grantor herein and in any other Loan Document and in
the certificates or other instruments prepared or delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have been relied upon by the Collateral
Agent and the other Credit Parties and shall survive the execution and delivery of this Agreement
and the other Loan Documents and the making of any Loans and the issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf and notwithstanding
that the Collateral Agent, the L/C Issuer or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is extended under the Credit
Agreement, and shall continue in full force and effect unless terminated in accordance with
SECTION 8.14 hereof.
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SECTION 8.05 Binding Effect; Several Agreement; Assignments. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party, and all covenants, promises and agreements by or on
behalf of each Grantor that are contained in this Agreement shall bind and inure to the benefit of
each Grantor and its respective successors and assigns. This Agreement shall be binding upon each
Grantor and the Collateral Agent and their respective successors and assigns, and shall inure to
the benefit of each Grantor, the Collateral Agent and the other Credit Parties and their
respective successors and assigns, except that no Grantor shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any
such attempted assignment or transfer shall be void) except as expressly permitted by this
Agreement or the Credit Agreement. This Agreement shall be construed as a separate agreement with
respect to each Grantor and may be amended, modified, supplemented, waived or released with
respect to any Grantor with such Grantor’s written consent but without the approval of any other
Grantor and without affecting the obligations of any other Grantor hereunder.
SECTION 8.06 Collateral Agent’s Fees and Expenses; Indemnification.
(a) Without limiting or duplicating any of their obligations under the Credit
Agreement, the Guaranty or the other Loan Documents, the Grantors jointly and severally
agree to pay all reasonable out-of-pocket expenses incurred by the Collateral Agent,
including the reasonable fees, charges and disbursements of any counsel and any outside
consultants for the Collateral Agent, in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from or other
realization upon any of the Collateral, or (iii) the exercise, enforcement or protection of
any of the Collateral Agent’s Rights and Remedies hereunder.
(b) Without limiting or duplicating any of their indemnification obligations under the
Credit Agreement, the Guaranty or the other Loan Documents, the Grantors shall jointly and
severally indemnify the Collateral Agent (or any sub-agent thereof), each other Credit Party
and each Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses (including the fees, charges and
disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by any Grantor arising out of, in connection
with, or as a result of, (i) the execution or delivery of this Agreement, the Credit
Agreement, any other Loan Document or any other agreement or instrument contemplated hereby
or thereby, the performance by the parties hereto of their respective obligations hereunder
or thereunder, or the consummation of the transactions contemplated hereby or thereby, or,
in the case of the Collateral Agent (and any sub-agent thereof) and its Related Parties
only, the administration of this Agreement, the Credit Agreement and the other Loan
Documents, or (ii) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other theory,
whether brought by a third party or by any Grantor, and
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regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee or (y) result from a claim brought by any Grantor against an
Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other
Loan Document, if such Grantor has obtained a final and nonappealable judgment in its favor on
such claim as determined by a court of competent jurisdiction. In connection with any indemnified
claim hereunder, the Indemnitee shall be entitled to select its own counsel and the Grantors shall
pay the reasonable fees and expenses of such counsel in accordance with the terms of clause (d)
below.
(c) To the fullest extent permitted by applicable Law, no Grantor shall assert, and each
Grantor hereby waives, any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out
of, in connection with, or as a result of, this Agreement, the Credit Agreement, any other Loan
Document or any agreement or instrument contemplated hereby, or the transactions contemplated
hereby or thereby. No Indemnitee shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed to such unintended recipients by such
Indemnitee through telecommunications, electronic or other information transmission systems in
connection with this Agreement, the Credit Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct or actual damages resulting from
the gross negligence or willful misconduct of such Indemnitee as determined by a final and
nonappealable judgment of a court of competent jurisdiction.
(d) Any such amounts payable as provided hereunder shall be additional Secured Obligations
secured hereby and by the other Security Documents. All amounts due under this SECTION 8.06
shall be payable not later than ten (10) Business Days after demand therefor.
(e) The agreements in this SECTION 8.06 shall survive the resignation of the
Collateral Agent, the termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Secured Obligations.
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SECTION 8.07 Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 8.08 Waivers; Amendment.
(a) The rights, remedies, powers, privileges, and discretions of the Collateral Agent
hereunder (herein, the “Collateral Agent’s Rights and Remedies”) shall be cumulative
and not exclusive of any rights or remedies which it would otherwise have. No delay or
omission by the Collateral Agent in exercising or enforcing any of the Collateral Agent’s
Rights and Remedies shall operate as, or constitute, a waiver thereof. No waiver by the
Collateral Agent of any Event of Default or of any Default under any other agreement shall
operate as a waiver of any other Event of Default or other Default hereunder or under any
other agreement. No single or partial exercise of any of the Collateral Agent’s Rights or
Remedies, and no express or implied agreement or transaction of whatever nature entered into
between the Collateral Agent and any Person, at any time, shall preclude the other or
further exercise of the Collateral Agent’s Rights and Remedies. No waiver by the Collateral
Agent of any of the Collateral Agent’s Rights and Remedies on any one occasion shall be
deemed a waiver on any subsequent occasion, nor shall it be deemed a continuing waiver. The
Collateral Agent’s Rights and Remedies may be exercised at such time or times and in such
order of preference as the Collateral Agent may determine. The Collateral Agent’s Rights and
Remedies may be exercised without resort or regard to any other source of satisfaction of
the Secured Obligations. No waiver of any provisions of this Agreement or any other Loan
Document or consent to any departure by any Grantor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Grantor in any case shall entitle such Grantor or any
other Grantor to any other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to a written agreement entered into between the Collateral Agent and the
Grantor or Grantors with respect to whom such waiver, amendment or modification is to apply,
subject to any consent required in accordance with Section 10.01 of the Credit Agreement.
SECTION 8.09 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER
BASED ON CONTRACT, TORT
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OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.09.
SECTION 8.10 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION8.11 Counterparts. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single contract. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy or e-mail shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 8.12 Headings. Article and Section headings used herein are for
convenience of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 8.13 Jurisdiction; Waiver of Venue; Consent to Service of Process.
(a) EACH OF THE GRANTORS IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING
IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW
YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT
ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL
COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER
-26-
LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE COLLATERAL AGENT, ANY LENDER OR THE L/C ISSUER MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST ANY OF THE GRANTORS OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(b) EACH OF THE GRANTORS IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
IN ANY COURT REFERRED TO IN PARAGRAPH (A) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(c) EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
NOTICES IN SECTION 8.01. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
SECTION 8.14 Termination; Release of Collateral.
(a) Any Lien upon any Collateral will be released automatically if the Collateral constitutes
property being sold, transferred or disposed of in a Permitted Disposition upon receipt by the
Collateral Agent of the Net Proceeds thereof to the extent required by the Credit Agreement. Upon
at least two (2) Business Days prior written request by the Grantors, the Collateral Agent shall
execute such documents as may be necessary to evidence the release of the Liens upon any
Collateral described in this SECTION 8.14(a); provided, however, that (i) the
Collateral Agent shall not be required to execute any such document on terms which, in its
reasonable opinion, would, under applicable Law, expose the Collateral Agent to liability or
entail any adverse consequence other than the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect or impair the Secured Obligations
or any Liens (other than those expressly being released) upon (or obligations of any Grantor in
respect of) all interests retained by any Grantor, including, without limitation, the Proceeds of
any sale, all of which shall continue to constitute part of the Collateral.
(b) Except for those provisions which expressly survive the termination thereof, this
Agreement and the Security Interest granted herein shall terminate when (i) the Aggregate
Commitments have expired or been terminated, (ii) all of the Secured
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Obligations have been paid in full in cash or otherwise satisfied, (iii) all L/C
Obligations have been reduced to zero (or fully Cash Collateralized in a manner reasonably
satisfactory to the L/C Issuer and the Administrative Agent), and (iv) the L/C Issuer has
no further obligation to issue Letters of Credit under the Credit Agreement, at which time
the Collateral Agent shall execute and deliver to the Grantors, at the Grantors’ expense,
all UCC termination statements, releases and similar documents that the Grantors shall
reasonably request to evidence such termination; provided, however, that
the Credit Agreement, this Agreement, and the Security Interest granted herein shall be
reinstated if at any time payment, or any part thereof, of any Secured Obligation is
rescinded or must otherwise be restored by any Credit Party upon the bankruptcy or
reorganization of any Grantor. Any execution and delivery of termination statements,
releases or other documents pursuant to this SECTION 8.14 shall be without recourse to, or
warranty by, the Collateral Agent or any other Credit Party.
SECTION 8.15 Conflict. In the event of a conflict between this Agreement and the
Pledge Agreement, the terms of the Pledge Agreement shall control with respect to the Pledged
Collateral (as defined in the Pledge Agreement) and the terms of this Agreement shall control with
respect to all other Collateral. In the event of a conflict between this Agreement and the
Intellectual Property Security Agreement, the terms of the Intellectual Property Security Agreement
shall control with respect to the IP Collateral (as defined in the Intellectual Property Security
Agreement) and the terms of this Agreement shall control with respect to all other Collateral. In
the event of a conflict between this Agreement and the Credit Agreement, the terms of the Credit
Agreement shall control.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.
| GRANTORS: | rue21, inc. |
|||
| By: | /s/ Xxxxx XxXxxxxxx | |||
| Name: | Xxxxx XxXxxxxxx | |||
| Title: | Senior Vice President, Chief Financial Officer and Secretary | |||
| r services llc |
||||
| By: | /s/ Xxxxx XxXxxxxxx | |||
| Name: | Xxxxx XxXxxxxxx | |||
| Title: | Director and President | |||
Signature Page to Security Agreement
| COLLATERAL AGENT: | Bank of America, N.A. |
|||
| By: | /s/ Xxxxx Xxxxxxxxxxx | |||
| Name: | Xxxxx Xxxxxxxxxxx | |||
| Title: | Managing Director | |||
Signature Page to Security Agreement
EXHIBIT A
Form of Joinder Agreement
Form of Joinder Agreement
[Name of New Grantor]
[Address of New Grantor]
[Address of New Grantor]
[Date]
Ladies and Gentlemen:
Reference is made to the Security Agreement, dated as of April 10, 2008 (as amended,
modified, supplemented or restated and in effect from time to time, the “Security
Agreement”), by and among (a) rue21, inc., a Pennsylvania corporation (the “Lead
Borrower”), (b) r services llc, a Virginia limited liability company (the “Guarantor”)
(the Lead Borrower and the Guarantor are hereinafter referred to, individually, as a
“Grantor” and, collectively, as the “Grantors”), and (c) Bank of America, N.A., a
national banking association, as collateral agent (in such capacity, the “Collateral
Agent”) for its own benefit and the benefit of the other Credit Parties. All capitalized terms
used but not defined herein shall have the meanings set forth in the Security Agreement.
This Joinder Agreement supplements the Security Agreement and is delivered by the
undersigned, [ ] (the “New Grantor”), pursuant to Section 4.14 of the Security
Agreement. The New Grantor hereby agrees to be bound as a [Borrower/Guarantor] and as a Grantor
party to the Security Agreement by all of the terms, covenants and conditions set forth in the
Security Agreement to the same extent that it would have been bound if it had been a signatory to
the Security Agreement on the date of the Security Agreement. Without limiting the generality of
the foregoing, the New Grantor hereby grants and pledges to the Collateral Agent, its successors
and assigns, for its own benefit and the benefit of the other Credit Parties, as collateral
security for the full, prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of the Secured Obligations, a Lien on and security interest
in, all of its right, title and interest in, to and under the Collateral and expressly assumes all
obligations and liabilities of a [Borrower/Guarantor] and Grantor under the Security Agreement. The
New Grantor hereby makes each of the representations and warranties and agrees to each of the
covenants applicable to the Grantors contained in the Security Agreement.
Exhibit A to Security Agreement
Page 1
Page 1
Annexed hereto are supplements to each of the schedules to the Security Agreement with
respect to the New Grantor. Such supplements shall be deemed to be part of the Security Agreement.
This Joinder Agreement and any amendments, waivers, consents or supplements hereto may be
executed in any number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement.
THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the New Grantor has caused this Joinder Agreement to be executed and
delivered by its duly authorized officer as of the date first above written.
| [NEW GRANTOR] |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| AGREED TO AND ACCEPTED: BANK OF AMERICA, N.A., as Collateral Agent |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Schedules to be attached]
Exhibit A to Security Agreement
Page 2
Page 2
SCHEDULE 3.05
Bailees; Warehousemen
Pacific Logistics Corp. (“PLC”) pursuant to Shipper/Carrier Agreement, dated July 1, 2007, by and
between rue21, inc. and PLC. PLC is the consolidator for rue21, inc.
Schedules to Security Agreement
SCHEDULE 3.06
Consignments
NONE
Schedules to Security Agreement
SCHEDULE 3.07
Commercial Tort Claims
NONE
Schedules to Security Agreement
SCHEDULE 3.08
Instruments and Chattel Paper
NONE
Schedules to Security Agreement
SCHEDULE 3.09
Securities Accounts and Commodity Accounts
NONE
Schedules to Security Agreement
SCHEDULE 3.10
Electronic Chattel Paper and Transferable Records
NONE
Schedules to Security Agreement
