GUARANTY AND SECURITY AGREEMENT Dated as of June 4, 2007 among THE BOMBAY COMPANY, INC. BBA HOLDINGS, LLC BOMBAY INTERNATIONAL, INC. THE BOMBAY FURNITURE COMPANY, INC. and Each Other Grantor From Time to Time Party Hereto and GB MERCHANT PARTNERS,...
Dated
as
of June 4, 2007
among
THE
BOMBAY COMPANY, INC.
BBA
HOLDINGS, LLC
BOMBAY
INTERNATIONAL, INC.
THE
BOMBAY FURNITURE COMPANY, INC.
and
Each
Other Grantor
From
Time
to Time Party Hereto
and
GB
MERCHANT PARTNERS, LLC,
as
Administrative Agent and Collateral Agent
|
ARTICLE I
|
DEFINED
TERMS
|
1
|
|
Section 1.1
|
Definitions
|
1
|
|
Section 1.2
|
Certain
Other Terms
|
3
|
|
ARTICLE II
|
GUARANTY
|
3
|
|
Section 2.1
|
Guaranty
|
3
|
|
Section 2.2
|
Limitation
of Guaranty
|
3
|
|
Section 2.3
|
Contribution
|
3
|
|
Section 2.4
|
Authorization;
Other Agreements
|
4
|
|
Section 2.5
|
Guaranty
Absolute and Unconditional
|
4
|
|
Section 2.6
|
Waivers
|
5
|
|
Section 2.7
|
Reliance
|
5
|
|
ARTICLE III
|
GRANT
OF SECURITY INTEREST
|
6
|
|
Section 3.1
|
Collateral
|
6
|
|
Section 3.2
|
Grant
of Security Interest in Collateral
|
7
|
|
ARTICLE IV
|
REPRESENTATIONS
AND WARRANTIES
|
7
|
|
Section 4.1
|
Title;
No Other Liens
|
7
|
|
Section 4.2
|
Perfection
and Priority
|
7
|
|
Section 4.3
|
Reserved
|
8
|
|
Section 4.4
|
Pledged
Debt Instruments
|
8
|
|
Section 4.5
|
Instruments
and Tangible Chattel Paper Formerly Accounts
|
8
|
|
Section 4.6
|
Commercial
Tort Claims
|
8
|
|
Section 4.7
|
Enforcement
|
8
|
|
Section 4.8
|
Representations
and Warranties of the Loan Agreement
|
8
|
|
ARTICLE V
|
COVENANTS
|
8
|
|
Section 5.1
|
Maintenance
of Perfected Security Interest; Further Documentation and
Consents
|
8
|
|
Section 5.2
|
Pledged
Debt Instruments
|
9
|
|
Section 5.3
|
Accounts
|
9
|
|
Section 5.4
|
Delivery
of Instruments and Tangible Chattel Paper and Control of Investment
Property, Letter-of-Credit Rights and Electronic Chattel
Paper
|
10
|
|
Section 5.5
|
Notices
|
10
|
|
Section 5.6
|
Notice
of Commercial Tort Claims
|
10
|
|
Section 5.7
|
Compliance
with Loan Agreement
|
10
|
|
ARTICLE VI
|
REMEDIAL
PROVISIONS
|
11
|
|
Section 6.1
|
UCC
and Other Remedies
|
11
|
|
Section 6.2
|
Accounts
and Payments in Respect of General Intangibles
|
13
|
|
Section 6.3
|
Pledged
Debt Instrument
|
14
|
|
Section 6.4
|
Proceeds
to be Turned over to and Held by Administrative Agent
|
14
|
|
Section 6.5
|
Reserved
|
15
|
|
Section 6.6
|
Deficiency
|
15
|
|
ARTICLE VII
|
THE
ADMINISTRATIVE AGENT
|
15
|
|
Section 7.1
|
Administrative
Agent’s Appointment as Attorney-in-Fact
|
15
|
i
|
Section 7.2
|
Authorization
to File Financing Statements
|
16
|
|
Section 7.3
|
Authority
of Administrative Agent
|
17
|
|
Section 7.4
|
Duty;
Obligations and Liabilities
|
17
|
|
ARTICLE
VIII
|
MISCELLANEOUS
|
17
|
|
Section 8.1
|
Reinstatement
|
17
|
|
Section 8.2
|
Release
of Collateral
|
18
|
|
Section 8.3
|
Independent
Obligations
|
18
|
|
Section 8.4
|
No
Waiver by Course of Conduct
|
18
|
|
Section 8.5
|
Amendments
in Writing
|
19
|
|
Section 8.6
|
Additional
Grantors; Joinder Agreements
|
19
|
|
Section 8.7
|
Notices
|
19
|
|
Section 8.8
|
Successors
and Assigns
|
19
|
|
Section 8.9
|
Counterparts
|
19
|
|
Section 8.10
|
Severability
|
19
|
|
Section 8.11
|
Governing
Law
|
19
|
|
Section 8.12
|
Waiver
of Jury Trial
|
19
|
ii
TABLE
OF
CONTENTS
ANNEX
iii
NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO
THE
ADMINISTRATIVE AGENT PURSUANT TO THIS AGREEMENT
AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE ADMINISTRATIVE
AGENT
HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT, DATED
AS
OF EVEN DATE HEREWITH (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED
FROM TIME TO TIME, THE “INTERCREDITOR
AGREEMENT”),
BETWEEN GENERAL ELECTRIC CAPITAL CORPORATION, AS FIRST LIEN AGENT, AND THE
ADMINISTRATIVE AGENT, AS SECOND LIEN AGENT AND CERTAIN OTHER PERSONS PARTY
OR
THAT MAY BECOME PARTY THERETO FROM TIME TO TIME. IN THE EVENT OF ANY CONFLICT
BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION, THE RIGHTS OF THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT
WITH THOSE OF THE FIRST LIEN AGENT UNDER THE INTERCREDITOR AGREEMENT, THE TERMS
OF THE INTERCREDITOR AGREEMENT SHALL GOVERN AND CONTROL. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, UNTIL THE PAYMENT-IN-FULL (AS DEFINED
IN THE INTERCREDITOR AGREEMENT) OF THE OBLIGATIONS UNDER THE FIRST LIEN LOAN
AGREEMENT, (A) ANY ASSIGNMENT OR TRANSFER OF COLLATERAL HEREUNDER TO THE
ADMINISTRATIVE AGENT SHALL BE SUBORDINATED TO THE LIEN OF THE FIRST LIEN AGENT
IN ACCORDANCE WITH THE TERMS OF THE INTERCREDITOR AGREEMENT, (B) ANY DELIVERY
OF
ANY COLLATERAL OR ANY OTHER ITEM TO THE ADMINISTRATIVE AGENT REQUIRED HEREUNDER
SHALL BE TO THE FIRST LIEN AGENT, (C) ANY RIGHT OF THE ADMINISTRATIVE AGENT
TO
REQUIRE A GRANTOR TO CAUSE THE ADMINISTRATIVE AGENT TO OBTAIN EXCLUSIVE CONTROL
OF ANY INVESTMENT PROPERTY, CONTROL OVER LETTER-OF-CREDIT RIGHTS, CONTROL OVER
ELECTRONIC CHATTEL PAPER, CONTROL OVER ANY DEPOSIT ACCOUNT, OR AN ASSIGNMENT
OF
PROCEEDS WITH RESPECT TO A LETTER OF CREDIT, SHALL BE VESTED IN THE FIRST LIEN
AGENT (BUT SUBJECT TO THE RIGHT OF THE ADMINISTRATIVE AGENT TO ALSO HAVE CONTROL
OVER ANY DEPOSIT ACCOUNT, SUBJECT IN EACH SUCH CASE TO THE INTERCREDITOR
AGREEMENT) AND (D) ANY RIGHT OF THE ADMINISTRATIVE AGENT TO ASSERT ANY CLAIMS
ON
BEHALF OF A GRANTOR, SOLELY TO THE EXTENT PROVIDED IN THE INTERCREDITOR
AGREEMENT, SHALL BE VESTED IN THE ADMINISTRATIVE AGENT.
GUARANTY
AND SECURITY AGREEMENT, dated
as
of May __, 2007, by The Bombay Company, Inc. (the “Parent”)
and
each of the other entities listed on the signature pages hereof or that becomes
a party hereto pursuant to Section 8.6
(together with the Parent, the “Grantors”),
in
favor of GB Merchant Partners, LLC, as administrative agent and collateral
agent
(in such capacity, together with its successors and permitted assigns, the
“Administrative
Agent”)
for
the Lenders and each other Secured Party (each as defined in the Loan Agreement
referred to below).
W
I T N E
S S E T H:
WHEREAS,
pursuant to the Second Lien Term Loan Agreement dated as of May 4, 2007 (as
the
same may be amended, restated, amended and restated, supplemented, replaced
or
otherwise modified from time to time, the “Loan
Agreement”)
among
the Borrowers, the Lenders and the Administrative Agent, the Lenders have
severally agreed to make the Term Loan to the Borrowers upon the terms and
subject to the conditions set forth therein;
WHEREAS,
each
Grantor (only in its individual capacity as Guarantor, and not in its capacity
as a Borrower) has agreed to guaranty the Obligations (as defined in the Loan
Agreement) of the Borrowers;
WHEREAS,
each Grantor will derive substantial direct and indirect benefits from the
making of the Term Loan pursuant to the Loan Agreement; and
WHEREAS,
it is a
condition precedent to the obligation of the Lenders making the Term Loan
pursuant to the Loan Agreement that the Grantors shall have executed and
delivered this Agreement to the Administrative Agent;
NOW,
THEREFORE,
in
consideration of the premises and to induce the Lenders, the Administrative
Agent to enter into the Loan Agreement and to induce the Lenders to make the
Term Loan contemplated therein to the Borrowers thereunder, each Grantor hereby
agrees with the Administrative Agent as follows:
ARTICLE I
DEFINED
TERMS
Section 1.1 Definitions.
(a)
Capital
terms used herein without definition are used as defined in the Loan
Agreement.
(b) The
following terms have the meanings given to them in the UCC and terms used herein
without definition that are defined in the UCC have the meanings given to them
in the UCC (such meanings to be equally applicable to both the singular and
plural forms of the terms defined): “account”,
“account
debtor”,
“chattel
paper”,
“commercial
tort claim”,
“documents”,
“deposit
account”,
“electronic
chattel paper”,
“equipment”,
“fixtures”
“general
intangible”,
“goods”,
“instruments”,
“inventory”,
“investment
property”,
“letter-of-credit
right”,
“proceeds”,
“record”,
“securities
account”,
“security”,
“software”,
“supporting
obligation”
and
“tangible
chattel paper”.
(c) The
following terms shall have the following meanings:
“Agreement”
means
this Guaranty and Security Agreement.
“Collateral”
has
the
meaning specified in Section 3.1.
“Excluded
Deposit Account”
means
deposit accounts containing payroll obligations, tax liabilities and third
party
funds and not funds related to the Collateral.
“Excluded
Property”
means
any Permit, license, contract, instrument or other agreement held by any Grantor
that prohibits or requires the consent of any Person other than the Borrowers
and their Affiliates as a condition to the creation by such Grantor of a Lien
thereon, or any Permit, lease, license contract or other agreement held by
any
Grantor to the extent that any Requirement of Law applicable thereto prohibits
the creation of a Lien thereon, but only to the extent, and for so long as,
such
prohibition is not terminated or rendered unenforceable or otherwise deemed
ineffective by the UCC or any other Requirement of Law; provided,
however,
“Excluded
Property”
shall
not include any Lease or Leasehold or any proceeds, substitutions or
replacements of any Lease or Leasehold or Excluded Property (unless such
proceeds, substitutions or replacements would constitute Excluded
Property).
“First
Lien Agent”
has
the
meaning set forth in the Intercreditor Agreement.
“Guaranteed
Obligations”
has
the
meaning set forth in Section 2.1.
“Guarantor”
means
each Grantor only in their capacity as Guarantors and not in their capacities
as
Borrowers.
“Guaranty”
means
the guaranty of the Guaranteed Obligations made by the Guarantors as set forth
in this Agreement.
“Intercreditor
Agreement”
has
the
meaning set forth in the first page of this Agreement.
“Lease”
means
any lease or other agreement, no matter how styled or structured, pursuant
to
which any Borrower is entitled to the use or occupancy of any
space.
“Leasehold”
means
any lease, leasehold estate or interest of any Borrower in each of the
properties at or upon which any such Borrower conducts business, offers any
inventory for sale, or maintains any of the Collateral, whether or not for
retail sale, together with the Borrower’s interest in any of the improvements
and fixtures located upon or appurtenant to each such estate or interest,
including, without limitation, any rights of any such Borrower to payment,
proceeds or value of any kind or nature realized upon the sale, transfer or
assignment of any such estate or interest, whether or not such sale, assignment
or transfer occurs during any case commenced under the Bankruptcy
Code.
“Permit”
means,
with respect to any Person, any permit, approval, authorization, license,
registration, certificate, concession, grant, franchise, variance or permission
from, and any other Contractual Obligations with, any Governmental Authority,
in
each case whether or not having the force of law and applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.
2
“Pledged
Debt Instruments”
means
all right, title and interest of any Grantor in instruments or promissory notes
constituting Collateral and evidencing any Indebtedness owed to such Grantor
or
other obligations, and any distribution of property made on, in respect of
or in
exchange for the foregoing from time to time, exceeding $100,000 in the
aggregate including all Indebtedness described on Schedule I
of the
Perfection Certificate issued by the obligors named therein.
“Security
Cash Collateral Account”
means
a
Cash Collateral Account.
“Subsidiary
Guarantor”
means
any Guarantor that is a Subsidiary of the Parent.
“UCC”
means
the Uniform Commercial Code as from time to time in effect in the State of
New
York; provided,
however,
that,
in the event that, by reason of mandatory provisions of any applicable
Requirement of Law, any of the attachment, perfection or priority of the
Administrative Agent’s or any other Secured Party’s security interest in any
Collateral is governed by the Uniform Commercial Code of a jurisdiction other
than the State of New York, “UCC”
shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of the definitions related to or otherwise used in
such provisions.
Section 1.2 Certain
Other Terms.
(a)
The
meanings given to terms defined herein shall be equally applicable to both
the
singular and plural forms of such terms. The terms “herein”,
“hereof”
and
similar terms refer to this Agreement as a whole and not to any particular
Article, Section or clause in this Agreement.
References herein to an Annex, Article, Section or clause refer to the
appropriate Annex to, or Article, Section or clause in this
Agreement.
Where
the context requires, provisions relating to any Collateral when used in
relation to a Grantor shall refer to such Grantor’s Collateral or any relevant
part thereof.
(b) Section
1.5
(Interpretation)
of the
Loan Agreement is applicable to this Agreement as and to the extent set forth
therein.
ARTICLE II
GUARANTY
Section 2.1 Guaranty.
To
induce the Lenders to make the Loans, each Guarantor hereby, jointly and
severally, absolutely, unconditionally and irrevocably guarantees, as primary
obligor and not merely as surety, the full and punctual payment when due,
whether at stated maturity or earlier, by reason of acceleration, mandatory
prepayment or otherwise in accordance with any Loan Document, of all the
Obligations of the Borrowers (including Bombay Canada) whether existing on
the
date hereof or hereinafter incurred or created (other than, in the case of
the
Guarantors that are Borrowers, the Obligations owing by it in its capacity
as a
Borrower) (the “Guaranteed
Obligations”).
This
Guaranty by each Guarantor hereunder constitutes a guaranty of payment and
not
of collection.
Section 2.2 Limitation
of Guaranty.
Any
term or provision of this Guaranty or any other Loan Document to the contrary
notwithstanding, the maximum aggregate amount for which any Subsidiary Guarantor
shall be liable hereunder shall not exceed the maximum amount for which such
Subsidiary Guarantor can be liable without rendering this Guaranty or any other
Loan Document, as it relates to such Subsidiary Guarantor, subject to avoidance
under applicable Requirements of Law relating to fraudulent conveyance or
fraudulent
3
Section 2.3 Contribution.
To the
extent that any Subsidiary Guarantor shall be required hereunder to pay any
portion of any Guaranteed Obligation exceeding the greater of (a) the
amount of the economic benefit actually received by such Subsidiary Guarantor
from the Term Loan and other Obligations and (b) the amount such Subsidiary
Guarantor would otherwise have paid if such Subsidiary Guarantor had paid the
aggregate amount of the Guaranteed Obligations (excluding the amount thereof
repaid by the Borrowers) in the same proportion as such Subsidiary Guarantor’s
net worth on the date enforcement is sought hereunder bears to the aggregate
net
worth of all the Subsidiary Guarantors on such date, then such Subsidiary
Guarantor shall be reimbursed by such other Subsidiary Guarantors for the amount
of such excess, pro rata, based on the respective net worth of such other
Subsidiary Guarantors on such date.
Section 2.4 Authorization;
Other Agreements.
The
Secured Parties are hereby authorized, without notice to or demand upon any
Guarantor and without discharging or otherwise affecting the obligations of
any
Guarantor hereunder and without incurring any liability hereunder, from time
to
time, to do each of the following:
(a) (i)
modify, amend, supplement or otherwise change, (ii) accelerate or otherwise
change the time of payment or (iii) waive or otherwise consent to noncompliance
with, any Guaranteed Obligation or any Loan Document;
(b) apply
to
the Guaranteed Obligations any sums by whomever paid or however realized to
any
Guaranteed Obligation in such order as provided in the Loan
Documents;
(c) refund
at
any time any payment received by any Secured Party in respect of any Guaranteed
Obligation;
(d) (i)
Sell,
exchange, enforce, waive, substitute, liquidate, terminate, release, abandon,
fail to perfect, subordinate, accept, surrender, affect, impair or otherwise
alter or release any Collateral for any Guaranteed Obligation or any other
guaranty therefor in any manner, (ii) receive, take and hold additional
Collateral to secure any Guaranteed Obligation, (iii) add, release or substitute
any one or more other Guarantors, makers or endorsers of any Guaranteed
Obligation or any part thereof and (iv) otherwise deal in any manner with the
Borrowers and any other Guarantor, maker or endorser of any Guaranteed
Obligation or any part thereof; and
(e) settle,
release, compromise, collect or otherwise liquidate the Guaranteed
Obligations.
Section 2.5 Guaranty
Absolute and Unconditional.
Each
Guarantor hereby waives and agrees not to assert any defense, whether arising
in
connection with or in respect of any of the following or otherwise, and hereby
agrees that its obligations under this Guaranty are irrevocable, absolute and
unconditional and shall not be discharged as a result of or
4
(a) the
invalidity or unenforceability of any obligation of the Borrowers or any other
Guarantor under any Loan Document or any other agreement or instrument relating
thereto (including any amendment, consent or waiver thereto), or any security
for, or other guaranty of, any Guaranteed Obligation or any part thereof, or
the
lack of perfection or continuing perfection or failure of priority of any
security for the Guaranteed Obligations or any part thereof;
(b) the
absence of (i) any attempt to collect any Guaranteed Obligation or any part
thereof from the Borrowers or any other Guarantor or other action to enforce
the
same or (ii) any action to enforce any Loan Document or any Lien
thereunder;
(c) the
failure by any Person to take any steps to perfect and maintain any Lien on,
or
to preserve any rights with respect to, any Collateral;
(d) any
workout, insolvency, bankruptcy proceeding, reorganization, arrangement,
liquidation or dissolution by or against the Borrowers, any other Guarantor
or
any of the Borrowers’ other Subsidiaries or any procedure, agreement, order,
stipulation, election, action or omission thereunder, including any discharge
or
disallowance of, or bar or stay against collecting, any Guaranteed Obligation
(or any interest thereon) in or as a result of any such proceeding;
(e) any
foreclosure, whether or not through judicial sale, and any other Sale of any
Collateral or any election following the occurrence of an Event of Default
by
any Secured Party to proceed separately against any Collateral in accordance
with such Secured Party’s rights under any applicable Requirement of Law;
or
(f) any
other
defense, setoff, counterclaim or any other circumstance that might otherwise
constitute a legal or equitable discharge of the Borrowers, any other Guarantor
or any of the Borrowers’ other Subsidiaries, in each case other than the payment
in full of the Guaranteed Obligations.
Section 2.6 Waivers.
Each
Guarantor hereby unconditionally and irrevocably waives and agrees not to assert
any claim, defense, setoff or counterclaim based on diligence, promptness,
presentment, requirements for any demand or notice hereunder including any
of the following: (a) any demand for payment or performance and protest and
notice of protest, (b) any notice of acceptance, (c) any presentment, demand,
protest or further notice or other requirements of any kind with respect to
any
Guaranteed Obligation (including any accrued but unpaid interest thereon)
becoming immediately due and payable and (d) any other notice in respect of
any
Guaranteed Obligation or any part thereof, and any defense arising by reason
of
any disability or other defense of the Borrowers or any other Guarantor. Each
Guarantor further unconditionally and irrevocably agrees not to (x) enforce
or
otherwise exercise any right of subrogation or any right of reimbursement or
contribution or similar right against the Borrowers or any other Guarantor
by
reason of any Loan Document or any payment made thereunder or (y) assert any
claim, defense, setoff or counterclaim it may have against any other Loan Party
or set off any of its obligations to such other Loan Party against obligations
of such Loan Party to such Guarantor. No obligation of any Guarantor hereunder
shall be discharged other than by complete performance.
5
Section 2.7 Reliance.
Each
Guarantor hereby assumes responsibility for keeping itself informed of the
financial condition of the Borrowers, each other Guarantor and any other
guarantor, maker or endorser of any Guaranteed Obligation or any part thereof,
and of all other circumstances bearing upon the risk of nonpayment of any
Guaranteed Obligation or any part thereof that diligent inquiry would reveal,
and each Guarantor hereby agrees that no Secured Party shall have any duty
to
advise any Guarantor of information known to it regarding such condition or
any
such circumstances. In the event any Secured Party, in its sole discretion,
undertakes at any time or from time to time to provide any such information
to
any Guarantor, such Secured Party shall be under no obligation to
(a) undertake any investigation not a part of its regular business routine,
(b) disclose any information that such Secured Party, pursuant to accepted
or reasonable commercial finance or banking practices, wishes to maintain
confidential or (c) make any future disclosures of such information or any
other information to any Guarantor.
ARTICLE III
GRANT
OF
SECURITY INTEREST
Section 3.1 Collateral.
For the
purposes of this Agreement, all personal property, tangible and intangible,
now
owned or at any time hereafter acquired by a Grantor or in which a Grantor
now
has or at any time in the future may acquire any right, title or interests
is
collectively referred to as the “Collateral”,
which
term shall include, without limitation, all of the following:
(a) all
accounts;
(b) all
inventory, equipment and other goods;
(c) all
fixtures;
(d) all
documents;
(e) all
general intangibles;
(f) all
securities accounts and deposit accounts (other than Excluded Deposit Accounts),
including Store Accounts, Concentration Accounts, the Cash Collateral Account
and all deposits and credits therein;
(g) all
investment property;
(h) all
software;
(i) all
letters of credit, letter-of-credit rights, instruments, promissory notes,
drafts and chattel paper (including electronic chattel paper and tangible
chattel paper);
(j) all
supporting obligations with respect to any of the foregoing;
(k) all
books, records, and information relating to any of the foregoing and/or to
the
operation of any Grantor’s business, and all rights of access to such books,
6
(l) all
commercial tort claims;
(m) all
money
or other assets of such Grantor, including without limitation all money and
assets of such Grantor held by any Secured Party or by the First Lien Agent
for
the benefit of the Secured Parties, including all property of every description,
in the custody of or in transit to such Secured Party for any purpose, including
safekeeping, collection or pledge, for the account of such Grantor or as to
which such Grantor may have any right or power, including but not limited to
cash;
(n) all
Leases and Leaseholds; and
(o) to
the
extent not otherwise included, all proceeds of the foregoing including the
proceeds of insurance, all property or money resulting from the Sale of any
of
the foregoing and all other rights to payment not included in the
foregoing;
provided, however, that
“Collateral”
shall
not include any Excluded Property; and provided,
further,
that if
and when any property shall cease to be Excluded Property, such property shall
be deemed at all times from and after the date hereof to constitute
Collateral.
Section 3.2 Grant
of Security Interest in Collateral.
Each
Grantor, as collateral security for the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of the Obligations of such Grantor (the “Secured
Obligations”),
hereby mortgages, pledges and hypothecates to the Administrative Agent for
the
benefit of the Secured Parties, and grants to the Administrative Agent for
the
benefit of the Secured Parties a Lien on and security interest in, all of its
right, title and interest in, to and under the Collateral of such Grantor;
provided,
however,
that,
if and when any property that at any time constituted Excluded Property becomes
Collateral, the Administrative Agent shall have, and at all times from and
after
the date hereof be deemed to have had, a security interest in such
property.
ARTICLE IV
REPRESENTATIONS
AND WARRANTIES
To
induce
the Lenders and the Administrative Agent to enter into the Loan Documents,
each
Grantor hereby represents and warrants, in all material respects, to each of
the
following to the Administrative Agent, the Lenders and the other Secured
Parties:
Section 4.1 Title;
No Other Liens.
Such
Grantor (a) is the record and beneficial owner of the Collateral pledged by
it
hereunder constituting instruments and investment property and (b) has rights
in
or the power to transfer each other item of Collateral in which a Lien is
granted by it hereunder, free and clear of any other Lien (except for Permitted
Liens).
Section 4.2 Perfection
and Priority.
The
security interest granted pursuant to this Agreement constitutes a valid and
continuing perfected security interest in favor of the Administrative Agent
in
all Collateral subject, for the following Collateral, to the occurrence of
the
following: (i) in the case of all Collateral in which a security interest may
be
perfected by filing a financing statement under the UCC, the completion of
the
filings and other actions specified in Section
12
of the
Perfection Certificate (which, in the case of all filings and
7
Section 4.3 Reserved.
Section 4.4 Pledged
Debt Instruments.
As
of the
Closing Date, all Pledged Debt Instruments, if any, to the extent they exceed
$100,000 in the aggregate, have been delivered to the Agent.
Section 4.5 Instruments
and Tangible Chattel Paper Formerly Accounts.
No
amount payable to such Grantor under or in connection with any account is
evidenced by any instrument or tangible chattel paper that has not been
delivered to the First Lien Agent], properly endorsed for transfer, to the
extent delivery is required by Section 5.4(a).
Section 4.6 Commercial
Tort Claims.
The
only commercial tort claims of any Grantor existing on the date hereof and
constituting Collateral (regardless of whether the amount, defendant or other
material facts can be determined and regardless of whether such commercial
tort
claim has been asserted, threatened or has otherwise been made known to the
obligee thereof or whether litigation has been commenced for such claims) are
those listed on the Perfection Certificate, which sets forth such information
separately for each Grantor.
Section 4.7 Enforcement.
No
Permit, notice to or filing with any Governmental Authority or any other Person
or any consent from any Person is required for the exercise by the
Administrative Agent of its rights provided for in this Agreement or the
enforcement of remedies in respect of the Collateral pursuant to this Agreement,
including the transfer of any Collateral, except any approvals that may be
required to be obtained from any bailees or landlords to collect the
Collateral.
Section 4.8 Representations
and Warranties of the Loan Agreement.
The
representations and warranties as to such Grantor and its Subsidiaries made
by
the Borrowers in
8
ARTICLE V
COVENANTS
Each
Grantor agrees with the Administrative Agent to the following, as long as any
Obligation remains outstanding and, in each case, unless the Required Lenders
otherwise consent in writing:
Section 5.1 Maintenance
of Perfected Security Interest; Further Documentation and
Consents.
(a) Generally.
Such
Grantor shall (i) not use or permit any Collateral to be used unlawfully or
in
violation of any provision of any Loan Document, any material Requirement of
Law
or any policy of insurance covering the Collateral and (ii) not enter into
any
Contractual Obligation or undertaking restricting the right or ability of such
Grantor or the Administrative Agent to Sell any Collateral (except for those
set
forth in the Loan Documents and the First Lien Loan Documents).
(b) Such
Grantor shall maintain the security interest created by this Agreement as a
perfected security interest having at least the priority described in
Section 4.2
and
shall defend such security interest and such priority against the claims and
demands of all Persons.
(c) At
any
time and from time to time, upon the written request of the Administrative
Agent, such Grantor shall, for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted, (i)
promptly and duly execute and deliver, and have recorded, such further
documents, including an authorization to file (or, as applicable, the filing)
of
any financing statement or amendment under the UCC (or other filings under
similar Requirements of Law) in effect in any jurisdiction with respect to
the
security interest created hereby and (ii) take such further action as the
Administrative Agent may reasonably request, including (A) using its reasonable
commercial efforts to secure all approvals necessary or appropriate for the
assignment to or for the benefit of the Administrative Agent of any Contractual
Obligation, held by such Grantor and to enforce the security interests granted
hereunder and (B) executing and delivering any Control Agreements in form and
substance acceptable to the Administrative Agent with respect to deposit
accounts and securities accounts required by the Loan Agreement.
(d) Such
Grantor shall not authorize or permit any assignment, pledge, Lien, security
interest, encumbrance, restriction or any hypothecation of any Lease or
Leasehold, except as shall be permitted under the Loan Agreement.
Section 5.2 Pledged
Debt
Instruments.
(a) Delivery
of Pledged Debt Instruments.
Such
Grantor shall deliver to the Administrative Agent, in suitable form for transfer
and in form and substance satisfactory to the Administrative Agent, all Pledged
Debt Instruments to the extent they exceed $100,000 in the
aggregate.
(b) Event
of Default.
During
the continuance of an Event of Default, the Administrative Agent shall have
the
right, at any time in its discretion and without notice
9
(c) Cash
Distributions with respect to Pledged Debt Instrument.
Except
as provided in Article VI,
such
Grantor shall be entitled to receive all cash distributions paid in respect
of
the Pledged Debt Instruments.
Section 5.3 Accounts.
(a)
Such
Grantor shall not, other than in the ordinary course of business, (i) grant
any
extension of the time of payment of any account, (ii) compromise or settle
any
account for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any account, (iv) allow any
credit or discount on any account or (v) amend, supplement or modify any account
in any manner that could adversely affect the value thereof.
(b) The
Administrative Agent shall have the right to make test verifications of the
Accounts in any manner and through any medium that it reasonably considers
advisable, and such Grantor shall furnish all such assistance and information
as
the Administrative Agent may reasonably require in connection therewith. At
any
time and from time to time, upon the Administrative Agent’s request, such
Grantor shall cause independent public accountants or others satisfactory to
the
Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
accounts; provided,
however,
that
unless a Default shall be continuing, the Administrative Agent shall request
no
more than two such reports during any calendar year.
Section 5.4 Delivery
of Instruments and Tangible Chattel Paper and Control of Investment Property,
Letter-of-Credit Rights and Electronic Chattel Paper.
(a)
If any
amount in excess of $100,000 payable under or in connection with any Collateral
owned by such Grantor shall be or become evidenced by an instrument or tangible
chattel paper other than such instrument delivered in accordance with
Section 5.2(a)
and in
the possession of the Administrative Agent, such Grantor shall xxxx all such
instruments and tangible chattel paper with the following legend: “This writing
and the obligations evidenced or secured hereby are subject to the security
interest of GB Merchant Partners, LLC, as Administrative Agent” and, at the
request of the Administrative Agent, shall immediately deliver such instrument
or tangible chattel paper to the Administrative Agent, duly indorsed in a manner
satisfactory to the Administrative Agent.
(b) Such
Grantor shall not grant “control” (within the meaning of such term under Article
9-106 of the UCC) over any investment property or deposit account to any Person
other than the Administrative Agent, except as otherwise contemplated by the
Intercreditor Agreement.
(c) If
any
amount in excess of $100,000 payable under or in connection with any Collateral
owned by such Grantor shall be or become evidenced by electronic chattel paper,
such Grantor shall take all steps necessary to grant the Administrative Agent
control of all such electronic chattel paper for the purposes of Section 9-105
of the UCC (or any similar section under any equivalent UCC) and all
"transferable records" as defined in each of the Uniform Electronic Transactions
Act and the Electronic Signatures in Global and National Commerce
Act.
Section 5.5 Notices.
Such
Grantor shall promptly notify the Administrative Agent in writing of its
acquisition of any interest hereafter in property constituting Collateral
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Section 5.6 Notice
of Commercial Tort Claims.
Such
Grantor agrees that, if it shall acquire any interest in any commercial tort
claim that constitutes Collateral (whether from another Person or because such
commercial tort claim shall have come into existence constituting Collateral),
(i) such Grantor shall, immediately upon such acquisition, deliver to the
Administrative Agent, in each case in form and substance satisfactory to the
Administrative Agent, a notice of the existence and nature of such commercial
tort claim and a supplement to Schedule 9
of the
Perfection Certificate containing a specific description of such commercial
tort
claim, (ii) Section 3.1
shall
apply to such commercial tort claim and (iii) such Grantor shall execute and
deliver to the Administrative Agent, in each case in form and substance
satisfactory to the Administrative Agent, any document, and take all other
action, deemed by the Administrative Agent to be reasonably necessary or
appropriate for the Administrative Agent to obtain, on behalf of the Lenders,
a
perfected security interest having at least the priority set forth in
Section 4.2
in all
such commercial tort claims. Any supplement to Schedule 9
of the
Perfection Certificate delivered pursuant to this Section 5.6
shall,
after the receipt thereof by the Administrative Agent, become part of the
Perfection Certificate for all purposes hereunder other than in respect of
representations and warranties made prior to the date of such
receipt.
Section 5.7 Compliance
with Loan Agreement.
Such
Grantor agrees to comply with all covenants and other provisions applicable
to
it under the Loan Agreement, including Sections
2.17,
10.3
and
10.4
of the
Loan Agreement and agrees to the same submission to jurisdiction as that agreed
to by the Borrowers in the Loan Agreement.
ARTICLE VI
REMEDIAL
PROVISIONS
Section 6.1 UCC
and Other Remedies. (a) UCC
Remedies.
During
the continuance of an Event of Default, the Administrative Agent may exercise,
in addition to all other rights and remedies granted to it in this Agreement
and
in any other instrument or agreement securing, evidencing or relating to any
Secured Obligation, all rights and remedies of a secured party under the UCC
or
any other applicable law.
(b) Disposition
of Collateral.
Without
limiting the generality of the foregoing, the Administrative Agent may, without
demand of performance or other demand, presentment, protest, advertisement
or
notice of any kind (except any notice required by law referred to below) to
or
upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), during the continuance of any
Event of Default (personally or through its agents or attorneys), (i) enter
upon
the premises where any Collateral is located, without any obligation to pay
rent, through self-help, without judicial process, without first obtaining
a
final judgment or giving any Grantor or any other Person notice or opportunity
for a hearing on the Administrative Agent's claim or action, (ii) collect,
receive, appropriate and realize upon any Collateral and (iii) Sell, grant
option or options to purchase and deliver any Collateral (enter into Contractual
Obligations to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker’s board or office of any Secured
Party or elsewhere upon such terms and conditions as it may deem advisable
and
at such prices as it may deem best, for cash or on
11
(c) Management
of the Collateral.
Each
Grantor further agrees, that, during the continuance of any Event of Default,
(i) at the Administrative Agent’s request, it shall assemble the Collateral and
make it available to the Administrative Agent at places that the Administrative
Agent shall reasonably select, whether at such Grantor’s premises or elsewhere,
(ii) without limiting the foregoing, the Administrative Agent also has the
right
to require that each Grantor store and keep any Collateral pending further
action by the Administrative Agent and, while any such Collateral is so stored
or kept, provide such guards and maintenance services as shall be necessary
to
protect the same and to preserve and maintain such Collateral in good condition,
(iii) until the Administrative Agent is able to Sell any Collateral, the
Administrative Agent shall have the right to hold or use such Collateral to
the
extent that it deems appropriate for the purpose of preserving the Collateral
or
its value or for any other purpose deemed appropriate by the Administrative
Agent and (iv) the Administrative Agent may, if it so elects, seek the
appointment of a receiver or keeper to take possession of any Collateral and
to
enforce any of the Administrative Agent's remedies (for the benefit of the
Secured Parties), with respect to such appointment without prior notice or
hearing as to such appointment. The Administrative Agent shall not have any
obligation to any Grantor to maintain or preserve the rights of any Grantor
as
against third parties with respect to any Collateral while such Collateral
is in
the possession of the Administrative Agent.
(d) Application
of Proceeds.
The
Administrative Agent shall apply the cash proceeds of any action taken by it
pursuant to this Section 6.1,
after
deducting all reasonable costs and expenses of every kind incurred in connection
therewith or incidental to the care or safekeeping of any Collateral or in
any
way relating to the Collateral or the rights of the Administrative Agent and
any
other Secured Party hereunder, including reasonable attorneys’ fees and
disbursements, to the payment in whole or in part of the Secured Obligations,
as
set forth in the Loan Agreement, and only after such application and after
the
payment by the Administrative Agent of any other amount required by any
Requirement of Law, need the Administrative Agent account for the surplus,
if
any, to any Grantor.
(e) Direct
Obligation.
Neither
the Administrative Agent nor any other Secured Party shall be required to make
any demand upon, or pursue or exhaust any right or remedy against, any Grantor,
any other Loan Party or any other Person with respect to the payment of the
Obligations or to pursue or exhaust any right or remedy with respect to any
Collateral therefor or any direct or indirect guaranty thereof. All of the
rights and remedies of the Administrative Agent and any other Secured Party
under any Loan Document shall be cumulative, may be exercised individually
or
concurrently and not exclusive of any other rights or remedies provided by
any
Requirement of Law. To the extent it may lawfully do so, each Grantor absolutely
and irrevocably waives and relinquishes the benefit and advantage of, and
covenants not to assert against the Administrative Agent or any Lender, any
valuation, stay, appraisement, extension, redemption or similar laws and any
and
all rights or defenses it may have as a surety, now or hereafter existing,
arising out of the exercise by them of any rights hereunder. If any notice
of a
proposed sale or other disposition of any Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition.
12
(f) Commercially
Reasonable.
To the
extent that applicable Requirements of Law impose duties on the Administrative
Agent to exercise remedies in a commercially reasonable manner, each Grantor
acknowledges and agrees that it is not commercially unreasonable for the
Administrative Agent to do any of the following:
(i) fail
to
incur significant costs, expenses or other Liabilities reasonably deemed as
such
by the Administrative Agent to prepare any Collateral for disposition or
otherwise to complete raw material or work in process into finished goods or
other finished products for disposition;
(ii) fail
to
obtain Permits, or other consents, for access to any Collateral to Sell or
for
the collection or Sale of any Collateral, or, if not required by other
Requirements of Law, fail to obtain Permits or other consents for the collection
or disposition of any Collateral;
(iii) fail
to
exercise remedies against account debtors or other Persons obligated on any
Collateral or to remove Liens on any Collateral or to remove any adverse claims
against any Collateral;
(iv) advertise
dispositions of any Collateral through publications or media of general
circulation, whether or not such Collateral is of a specialized nature or to
contact other Persons, whether or not in the same business as any Grantor,
for
expressions of interest in acquiring any such Collateral;
(v) exercise
collection remedies against account debtors and other Persons obligated on
any
Collateral, directly or through the use of collection agencies or other
collection specialists, hire one or more professional auctioneers to assist
in
the disposition of any Collateral, whether or not such Collateral is of a
specialized nature or, to the extent deemed appropriate by the Administrative
Agent, obtain the services of other brokers, investment bankers, consultants
and
other professionals to assist the Administrative Agent in the collection or
disposition of any Collateral, or utilize Internet sites that provide for the
auction of assets of the types included in the Collateral or that have the
reasonable capacity of doing so, or that match buyers and sellers of assets
to
dispose of any Collateral;
(vi) dispose
of assets in wholesale rather than retail markets;
(vii) disclaim
disposition warranties, such as title, possession or quiet enjoyment;
or
(viii) purchase
insurance or credit enhancements to insure the Administrative Agent against
risks of loss, collection or disposition of any Collateral or to provide to
the
Administrative Agent a guaranteed return from the collection or disposition
of
any Collateral.
Each
Grantor acknowledges that the purpose of this Section 6.1
is to
provide a non-exhaustive list of actions or omissions that are commercially
reasonable when exercising remedies against any Collateral and that other
actions or omissions by the Secured Parties shall not be deemed commercially
unreasonable solely on account of not being indicated in this
13
Section 6.1.
Without
limitation upon the foregoing, nothing contained in this Section 6.1
shall be
construed to grant any rights to any Grantor or to impose any duties on the
Administrative Agent that would not have been granted or imposed by this
Agreement or by applicable Requirements of Law in the absence of this
Section 6.1.
Section 6.2 Accounts
and Payments in Respect of General Intangibles.
(a)
In
addition to, and not in substitution for, any similar requirement in the Loan
Agreement, if required by the Administrative Agent at any time during the
continuance of an Event of Default, any payment of accounts or payment in
respect of general intangibles constituting Collateral, when collected by any
Grantor, shall be promptly (and, in any event, within 2 Business Days) deposited
by such Grantor in the exact form received, duly indorsed by such Grantor to
the
Administrative Agent, in a Security Cash Collateral Account, subject to
withdrawal by the Administrative Agent as provided in Section 6.4.
Until
so turned over, such payment shall be held by such Grantor in trust for the
Administrative Agent, segregated from other funds of such Grantor. Each such
deposit of proceeds of accounts and payments in respect of general intangibles
shall be accompanied by a report identifying in reasonable detail the nature
and
source of the payments included in the deposit.
(b) At
any
time during the continuance of an Event of Default:
(i) each
Grantor shall, upon the Administrative Agent’s request, deliver to the
Administrative Agent all original and other documents evidencing, and relating
to, the Contractual Obligations and transactions that gave rise to any account
or any payment in respect of general intangibles, including all original orders,
invoices and shipping receipts and notify account debtors that the accounts
or
general intangibles have been collaterally assigned to the Administrative Agent
and that payments in respect thereof shall be made directly to the
Administrative Agent;
(ii) the
Administrative Agent may, without notice, at any time during the continuance
of
an Event of Default, limit or terminate the authority of a Grantor to collect
its accounts or amounts due under general intangibles or any thereof and, in
its
own name or in the name of others, communicate with account debtors to verify
with them to the Administrative Agent’s satisfaction the existence, amount and
terms of any account or amounts due under any general intangible. In addition,
the Administrative Agent may at any time enforce such Grantor’s rights against
such account debtors and obligors of general intangibles; and
(iii) each
Grantor shall take all actions, deliver all documents and provide all
information necessary or reasonably requested by the Administrative Agent to
ensure any Internet Domain Name is registered.
(c) Anything
herein to the contrary notwithstanding, each Grantor shall remain liable under
each account and each payment in respect of general intangibles to observe
and
perform all the conditions and obligations to be observed and performed by
it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. No Secured Party shall have any obligation or liability under any
agreement giving rise to an account or a payment in respect of a general
intangible by reason of or arising out of any Loan Document or the receipt
by
any Secured Party of any payment relating thereto, nor shall any Secured Party
be obligated in any manner to perform any obligation of any Grantor under or
pursuant to any agreement giving rise to an account or a payment in respect
of a
general intangible, to make any payment, to make any inquiry as to the nature
or
the sufficiency of
14
Section 6.3 Pledged
Debt
Instrument.
Each
Grantor hereby expressly irrevocably authorizes and instructs, without any
further instructions from such Grantor, each issuer of any Pledged Debt
Instrument pledged hereunder by such Grantor to (i) comply with any instruction
received by it from the Administrative Agent in writing that states that an
Event of Default is continuing and is otherwise in accordance with the terms
of
this Agreement and each Grantor agrees that such issuer shall be fully protected
from Liabilities to such Grantor in so complying and (ii) unless otherwise
expressly permitted hereby, make any payment with respect to the Pledged Debt
Instrument directly to the Administrative Agent.
Section 6.4 Proceeds
to be Turned over to and Held by Administrative Agent.
Unless
otherwise expressly provided in the Loan Agreement or this Security Agreement,
upon an Event of Default all proceeds of any Collateral received by any Grantor
hereunder in cash or Cash Equivalents shall be held by such Grantor in trust
for
the Administrative Agent and the other Secured Parties, segregated from other
funds of such Grantor, and shall, promptly upon receipt by any Grantor, be
turned over to the Administrative Agent in the exact form received (with any
necessary endorsement). All such proceeds of Collateral and any other proceeds
of any Collateral received by the Administrative Agent in cash or Cash
Equivalents shall be held by the Administrative Agent in a Security Cash
Collateral Account. All proceeds being held by the Administrative Agent in
a
Security Cash Collateral Account (or by such Grantor in trust for the
Administrative Agent) shall continue to be held as collateral security for
the
Secured Obligations and shall not constitute payment thereof until applied
as
provided in the Loan Agreement.
The
proceeding provisions of this Section are subject to the Intercreditor
Agreement, and in the event of any conflict the provisions of the Intercreditor
Agreement shall control.
Section 6.5 Reserved
Section 6.6 Deficiency.
Each
Grantor shall remain liable for any deficiency if the proceeds of any sale
or
other disposition of any Collateral are insufficient to pay the Secured
Obligations and the fees and disbursements of any attorney employed by the
Administrative Agent or any other Secured Party to collect such
deficiency.
ARTICLE VII
THE
ADMINISTRATIVE AGENT
Section 7.1 Administrative
Agent’s Appointment as Attorney-in-Fact.
(a)
Each
Grantor hereby irrevocably constitutes and appoints the Administrative Agent
and
any Related Person thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of the Loan Documents, to, during
the
continuance of an Event of Default, take any appropriate action and to execute
any document or instrument that may be necessary or desirable to accomplish
the
purposes of the Loan Documents, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent and its Related
Persons the power and right, on behalf of such Grantor, without notice to or
assent by such Grantor, to do any of the following when an Event of Default
shall be continuing:
15
(i) in
the
name of such Grantor, in its own name or otherwise, take possession of and
indorse and collect any check, draft, note, acceptance or other instrument
for
the payment of moneys due under any account or general intangible or with
respect to any other Collateral and file any claim or take any other action
or
proceeding in any court of law or equity or otherwise deemed appropriate by
the
Administrative Agent for the purpose of collecting any such moneys due under
any
account or general intangible or with respect to any other Collateral whenever
payable;
(ii) in
the
case of any Intellectual Property owned by or licensed to the Grantors, execute,
deliver and have recorded any document that the Administrative Agent may request
to evidence, effect, publicize or record the Administrative Agent’s license or
security interest in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented
thereby;
(iii) pay
or
discharge taxes and Liens levied or placed on or threatened against any
Collateral, effect any repair or pay any insurance called for by the terms
of
the Loan Agreement (including all or any part of the premiums therefor and
the
costs thereof);
(iv) execute,
in connection with any Sale provided for in Section 6.1
or
Section 6.5,
any
document to effect or otherwise necessary or appropriate to evidence the Sale
of
any Collateral; or
(v) (A)
direct any party liable for any payment under any Collateral to make payment
of
any moneys due or to become due thereunder directly to the Administrative Agent
or as the Administrative Agent shall direct, (B) ask or demand for, and collect
and receive payment of and receipt for, any moneys, claims and other amounts
due
or to become due at any time in respect of or arising out of any Collateral,
(C)
sign and indorse any invoice, freight or express xxxx, xxxx of lading, storage
or warehouse receipt, draft against debtors, assignment, verification, notice
and other document in connection with any Collateral, (D) commence and prosecute
any suit, action or proceeding at law or in equity in any court of competent
jurisdiction to collect any Collateral and to enforce any other right in respect
of any Collateral, (E) defend any actions, suits, proceedings, audits, claims,
demands, orders or disputes brought against such Grantor with respect to any
Collateral, (F) settle, compromise or adjust any such actions, suits,
proceedings, audits, claims, demands, orders or disputes and, in connection
therewith, give such discharges or releases as the Administrative Agent may
deem
appropriate, (G) sub-license any Intellectual Property owned by the Grantors
or
any IP Licenses of the Grantors throughout the world on such terms and
conditions set forth in Section
6.21
of the
Loan Agreement and in such manner as the Administrative Agent shall in its
sole
discretion determine, including the execution and filing of any document
necessary to effectuate or record such license and (H) generally, Sell,
xxxxx x Xxxx on, make any Contractual Obligation with respect to and otherwise
deal with, any Collateral as fully and completely as though the Administrative
Agent were the absolute owner thereof for all purposes and do, at the
Administrative Agent’s option, at any time or from time to time, all acts and
things that the Administrative Agent deems necessary to protect, preserve or
realize upon any Collateral and the Secured Parties’ security interests therein
and to effect the intent of the Loan Documents, all as fully and effectively
as
such Grantor might do.
16
(b) If
any
Grantor fails to perform or comply with any Contractual Obligation contained
herein, the Administrative Agent, at its option, but without any obligation
so
to do, may perform or comply, or otherwise cause performance or compliance,
with
such Contractual Obligation.
(c) The
expenses of the Administrative Agent incurred in connection with actions
undertaken as provided in this Section 7.1,
together with interest thereon at a rate set forth in Section
2.6
of the
Loan Agreement, from the date of payment by the Administrative Agent to the
date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.
(d) Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be
done by virtue of this Section 7.1.
All
powers, authorizations and agencies contained in this Agreement are coupled
with
an interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.
Section 7.2 Authorization
to File Financing Statements.
Each
Grantor authorizes the Administrative Agent and its Related Persons, at any
time
and from time to time, to file or record financing statements, amendments
thereto, and other filing or recording documents or instruments with respect
to
any Collateral in such form and in such offices as the Administrative Agent
reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement. A photographic or other reproduction
of this Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any jurisdiction.
Such Grantor also hereby ratifies its authorization for the Administrative
Agent
to have filed any initial financing statement or amendment thereto under the
UCC
(or other similar laws) in effect in any jurisdiction if filed prior to the
date
hereof.
Section 7.3 Authority
of Administrative Agent.
Each
Grantor acknowledges that the rights and responsibilities of the Administrative
Agent under this Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative
Agent
of any option, voting right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Agreement shall, as between
the
Administrative Agent and the other Secured Parties, be governed by the Loan
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Administrative Agent and the
Grantors, the Administrative Agent shall be conclusively presumed to be acting
as agent for the Secured Parties with full and valid authority so to act or
refrain from acting, and no Grantor shall be under any obligation or entitlement
to make any inquiry respecting such authority.
Section 7.4 Duty;
Obligations and Liabilities.
(a) Duty
of Administrative Agent.
The
Administrative Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession shall be to deal
with
it in the same manner as the Administrative Agent deals with similar property
for its own account. The powers conferred on the Administrative Agent hereunder
are solely to protect the Administrative Agent’s interest in the Collateral and
shall not impose any duty upon the Administrative Agent to exercise any such
powers. The Administrative Agent shall be accountable only for amounts that
it
receives as a result of the exercise of such powers, and neither it nor any
of
its Related Persons shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct
as
finally
17
(b) Obligations
and Liabilities with respect to Collateral.
No
Secured Party and no Related Person thereof shall be liable for failure to
demand, collect or realize upon any Collateral or for any delay in doing so
or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to any Collateral. The powers conferred on the
Administrative Agent hereunder shall not impose any duty upon any other Secured
Party to exercise any such powers. The other Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their respective officers,
directors, employees or agents shall be responsible to any Grantor for any
act
or failure to act hereunder, except for their own gross negligence or willful
misconduct as finally determined by a court of competent
jurisdiction.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Reinstatement.
Each
Grantor agrees that, if any payment made by any Loan Party or other Person
and
applied to the Secured Obligations is at any time annulled, avoided, set aside,
rescinded, invalidated, declared to be fraudulent or preferential or otherwise
required to be refunded or repaid, or the proceeds of any Collateral are
required to be returned by any Secured Party to such Loan Party, its estate,
trustee, receiver or any other party, including any Grantor, under any
bankruptcy law, state or federal law, common law or equitable cause, then,
to
the extent of such payment or repayment, any Lien or other Collateral securing
such liability shall be and remain in full force and effect, as fully as if
such
payment had never been made. If, prior to any of the foregoing, (a) any Lien
or
other Collateral securing such Grantor’s liability hereunder shall have been
released or terminated by virtue of the foregoing or (b) any provision of the
Guaranty hereunder shall have been terminated, cancelled or surrendered, such
Lien, other Collateral or provision shall be reinstated in full force and effect
and such prior release, termination, cancellation or surrender shall not
diminish, release, discharge, impair or otherwise affect the obligations of
any
such Grantor in respect of any Lien or other Collateral securing such obligation
or the amount of such payment.
Section 8.2 Release
of Collateral.
(a)
At the
time provided in clause (b)(ii)
of
Section 9.10
of the
Loan Agreement, the Collateral shall be released from the Lien created hereby
and this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and each Grantor hereunder
shall terminate, all without delivery of any instrument or performance of any
act by any party, and all rights to the Collateral shall revert to the Grantors.
Each Grantor is hereby authorized to file UCC amendments at such time evidencing
the termination of the Liens so released. At the request of any Grantor
following any such termination, the Administrative Agent shall deliver to such
Grantor any Collateral of such Grantor held by the Administrative Agent
hereunder and execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence such termination.
(b) If
the
Administrative Agent shall be directed or permitted pursuant to clause
(i)
or
(ii) of
Section 9.10(b)
of the
Loan Agreement to release any Lien or any Collateral, such Collateral shall
be
released from the Lien created hereby to the extent provided under, and subject
to the terms and conditions set forth in, such clauses
(i)
and
(ii).
In
18
(c) At
the
time provided in Section
9.10(a)
of the
Loan Agreement and at the request of the Borrower, a Grantor shall be released
from its obligations hereunder in the event that all the Securities of such
Grantor shall be Sold to any Person that is not an Affiliate of any Borrower
and
the Subsidiaries of any Borrower in a transaction permitted by the Loan
Documents.
Section 8.3 Independent
Obligations.
The
obligations of each Grantor hereunder are independent of and separate from
the
Secured Obligations and the Guaranteed Obligations of the other Grantors. If
any
Secured Obligation or Guaranteed Obligation is not paid when due, or upon any
Event of Default, the Administrative Agent may, at its sole election, proceed
directly and at once, without notice, against any Grantor and any Collateral
to
collect and recover the full amount of any Secured Obligation or Guaranteed
Obligation then due, without first proceeding against any other Grantor, any
other Loan Party or any other Collateral and without first joining any other
Grantor or any other Loan Party in any proceeding.
Section 8.4 No
Waiver by Course of Conduct.
No
Secured Party shall by any act (except by a written instrument pursuant to
Section 8.5),
delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default. No failure
to exercise, nor any delay in exercising, on the part of any Secured Party,
any
right, power or privilege hereunder shall operate as a waiver thereof. No single
or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by any Secured Party of any right or remedy hereunder
on
any one occasion shall not be construed as a bar to any right or remedy that
such Secured Party would otherwise have on any future occasion.
Section 8.5 Amendments
in Writing.
None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except in accordance with Section 10.1
of the
Loan Agreement; provided,
however,
that
the annex to this Agreement may be supplemented (but no existing provisions
may
be modified and no Collateral may be released) through Joinder Agreements,
in
substantially the form of Annex 1,
duly
executed by the Administrative Agent and each Grantor directly affected
thereby.
Section 8.6 Additional
Grantors;
Joinder Agreements.
If, at
the option of any Borrower or as required pursuant to Section 6.11
of the
Loan Agreement, such Borrower shall cause a Subsidiary that is not a Grantor
to
become a Grantor hereunder, such Subsidiary shall execute and deliver to the
Administrative Agent a Joinder Agreement substantially in the form of
Annex 1
and
shall thereafter for all purposes be a party hereto and have the same rights,
benefits and obligations as a Grantor party hereto on the Closing
Date.
Section 8.7 Notices.
All
notices, requests and demands to or upon the Administrative Agent or any Grantor
hereunder shall be effected in the manner provided for in Section 10.11
of the
Loan Agreement; provided,
however,
that
any such notice, request or demand to or upon any Grantor shall be addressed
to
the Borrower’s notice address set forth in such Section
10.11.
19
Section 8.8 Successors
and Assigns.
This
Agreement shall be binding upon the successors and assigns of each Grantor
and
shall inure to the benefit of each Secured Party and their successors and
assigns; provided,
however,
that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Administrative
Agent.
Section 8.9 Counterparts.
This
Agreement may be executed in any number of counterparts and by different parties
in separate counterparts, each of which when so executed shall be deemed to
be
an original and all of which taken together shall constitute one and the same
agreement. Signature pages may be detached from multiple separate counterparts
and attached to a single counterpart. Delivery of an executed signature page
of
this Agreement by facsimile transmission or by Electronic Transmission shall
be
as effective as delivery of a manually executed counterpart hereof.
Section 8.10 Severability.
Any
provision of this Agreement being held illegal, invalid or unenforceable in
any
jurisdiction shall not affect any part of such provision not held illegal,
invalid or unenforceable, any other provision of this Agreement or any part
of
such provision in any other jurisdiction.
Section 8.11 Governing
Law.
This
Agreement and the rights and obligations of the parties hereto shall be governed
by, and construed and interpreted in accordance with, the law of the State
of
New York.
Section 8.12 WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY
JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR
THE
TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER FOUNDED IN
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT
NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY 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
BY
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
8.12
SIGNATURE
PAGES FOLLOW
20
IN
WITNESS WHEREOF,
each of
the undersigned has caused this Guaranty and Security Agreement to be duly
executed and delivered as of the date first above written.
THE
BOMBAY COMPANY,
INC.
as
Grantor
|
By:
|
____________________________ |
Name:
Title:
BBA
HOLDINGS,
LLC
as
Grantor
|
By:
|
____________________________ |
Name:
Title:
BOMBAY
INTERNATIONAL,
INC.
as
Grantor
|
By:
|
_____________________________ |
Name:
Title:
THE
BOMBAY FURNITURE
COMPANY, INC.
as
Grantor
|
By:
|
_____________________________ |
Name:
Title:
ACCEPTED
AND AGREED
as
of the
date first above written:
GB
MERCHANT PARTNERS, LLC
as
Administrative Agent and Collateral Agent
|
By:
|
____________________________________ |
Name:
Title:
ANNEX 1
TO
FORM
OF
JOINDER AGREEMENT
This
JOINDER
AGREEMENT,
dated
as of ______________ __, 20__, is delivered pursuant to Section 8.6
of the
Guaranty and Security Agreement, dated as of May ___, 2007, by The Bombay
Company, Inc. (the “Parent”)
and
the Affiliates of the Parent from time to time party thereto as Grantors in
favor of GB Merchant Partners, LLC as administrative agent and collateral agent
for the Secured Parties referred to therein (the “Guaranty
and Security Agreement”).
Capitalized terms used herein without definition are used as defined in the
Guaranty and Security Agreement.
By
executing and delivering this Joinder Agreement, the undersigned, as provided
in
Section 8.6
of the
Guaranty and Security Agreement, hereby becomes a party to the Guaranty and
Security Agreement as a Grantor thereunder with the same force and effect as
if
originally named as a Grantor therein and, without limiting the generality
of
the foregoing, as collateral security for the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of the Secured Obligations of the undersigned, hereby mortgages, pledges and
hypothecates to the Administrative Agent for the benefit of the Secured Parties,
and grants to the Administrative Agent for the benefit of the Secured Parties
a
lien on and security interest in, all of its right, title and interest in,
to
and under the Collateral of the undersigned and expressly assumes all
obligations and liabilities of a Grantor thereunder. The undersigned hereby
agrees to be bound as a Grantor for the purposes of the Guaranty and Security
Agreement.
The
information set forth in Annex 1-A
is
hereby added to the information set forth in the Perfection Certificate. By
acknowledging and agreeing to this Joinder Agreement, the undersigned hereby
agrees that this Joinder Agreement may be attached to the Guaranty and Security
Agreement and represents that the information set forth in Annex
1-A
is true,
correct and complete.
The
undersigned hereby represents and warrants that each of the representations
and
warranties contained in Article IV
of the
Guaranty and Security Agreement applicable to it is true and correct in all
material respects on and as the date hereof as if made on and as of such
date.
IN
WITNESS WHEREOF,
the
undersigned has caused this Joinder Agreement to be duly executed and delivered
as of the date first above written.
[ADDITIONAL
GRANTOR]
|
By:
|
______________________________ |
Name:
Title:
A1-1
ACKNOWLEDGED
AND AGREED
as
of the
date first above written:
EACH
GRANTOR PLEDGING
[ADDITIONAL
COLLATERAL]
By:____________________________
Name:
Title:
GB
MERCHANT PARTNERS, LLC
as
Administrative Agent and Collateral Agent
By:____________________________
Name:
Title:
A1-2
ANNEX
1-A
PERFECTION
CERTIFICATE UPDATE
[Perfection
Certificate for each additional Xxxxxxx]
X0-0
