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Exhibit 10(i)A(6)
PERFORMANCE UNDERTAKING
This Performance Undertaking (this "Undertaking"), dated as of May 2, 2001,
is executed by National Service Industries, Inc., a Delaware corporation (the
"Performance Guarantor") in favor of NSI Funding, Inc., a Delaware corporation
(together with its successors and assigns, "Recipient").
RECITALS
1. NSI Enterprises, Inc., a California corporation ("NSI Enterprises"), and
National Service Industries, Inc., a Georgia corporation ("NSI Georgia"
and, together with NSI Enterprises, the "Originators") are parties to a
Receivables Sale Agreement, dated as of May 2, 2001 (as amended, restated
or otherwise modified from time to time, the "First-Step Sale Agreement"),
pursuant to which NSI Enterprises, subject to the terms and conditions
contained therein, plans to sell its right, title and interest in its
accounts receivable and certain related assets to NSI Georgia.
2. NSI Georgia and Recipient are parties to a Receivables Sale and
Contribution Agreement, dated as of May 2, 2001 (as amended, restated or
otherwise modified from time to time, the "Sale and Contribution Agreement"
and, together with the First-Step Sale Agreement, the "Sale Agreements"),
pursuant to which NSI Georgia, subject to the terms and conditions
contained therein, plans to sell or contribute its right, title and
interest in certain of its accounts receivable and certain related assets
(including NSI Georgia's rights under the First-Step Sale Agreement) to
Recipient.
3. Recipient intends to finance its purchases under the Sale and Contribution
Agreement in part by borrowing under a Credit and Security Agreement dated
as of May 2, 2001 (as the same may from time to time hereafter be amended,
supplemented, restated or otherwise modified, the "Credit and Security
Agreement" and, together with the Sale Agreements, the "Agreements") among
Recipient, as Borrower, NSI Georgia, as initial Servicer, Blue Ridge Asset
Funding Corporation ("Blue Ridge"), the banks and other financial
institutions from time to time party thereto as "Liquidity Banks" (together
with Blue Ridge, the "Lenders") and Wachovia Bank, N.A. or any successor
agent appointed pursuant to the terms of the Credit and Security Agreement,
as agent for the Lenders (in such capacity, the "Agent").
4. Performance Guarantor owns, directly or indirectly, one hundred percent
(100%) of the capital stock of each of the Originators and Recipient, and
each of the Originators (and accordingly, Performance Guarantor) is
expected to receive substantial direct and indirect benefits from their
sales and/or contributions of receivables pursuant to the Sale Agreements
(which benefits are hereby acknowledged).
5. As an inducement for Recipient to acquire Originators' accounts receivable
pursuant to the Sale Agreements, Performance Guarantor has agreed to
guaranty (a) the due and punctual performance by NSI Enterprises of its
obligations under the First-Step Sale Agreement, (b) the due and punctual
performance by NSI Georgia of its obligations under the Sale and
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Exhibit 10(i)A(6)
Contribution Agreement, and (c) the due and punctual performance by NSI
Georgia of its servicing duties, and NSI Enterprises of its sub-servicing
duties, under the Credit and Security Agreement.
6. Performance Guarantor wishes to guaranty the due and punctual performance
by NSI Enterprises and NSI Georgia of the aforesaid obligations as provided
herein.
AGREEMENT
NOW, THEREFORE, Performance Guarantor hereby agrees as follows:
Section 1. Definitions. Capitalized terms used herein and not defined
herein shall the respective meanings assigned thereto in the Agreements. In
addition:
"Guaranteed Obligations" means, collectively, (a) all covenants,
agreements, terms, conditions and indemnities to be performed and observed by
(i) NSI Enterprises as seller under the First-Step Sale Agreement or (ii) NSI
Georgia as seller and contributor under the Sale and Contribution Agreement,
including, without limitation, in each of the foregoing cases, the due and
punctual payment of all sums which are or may become due and owing by either
such Originator in its capacity as a seller or seller and contributor under the
Sale Agreements, whether for fees, expenses (including actual and reasonable
counsel fees), indemnified amounts or otherwise, whether upon any termination or
for any other reason, and (b) all Servicing-Related Obligations.
"Servicing Related Obligations" means all covenants, agreements, terms,
conditions and indemnities to be performed and observed by (i) NSI Georgia in
its capacity as Servicer under the Credit and Security Agreement, and/or (ii)
NSI Enterprises in its capacity as a sub-servicing delegate of the Servicer
under the Credit and Security Agreement.
Section 2. Guaranty of Performance of Guaranteed Obligations. Performance
Guarantor hereby guarantees to Recipient, the full and punctual payment and
performance by each Originator of its respective Guaranteed Obligations. This
Undertaking is an absolute, unconditional and continuing guaranty of the full
and punctual performance of all Guaranteed Obligations of each Originator under
the Agreements and each other document executed and delivered by either
Originator pursuant to the Agreements and is in no way conditioned upon any
requirement that Recipient first attempt to collect any amounts owing by either
Originator to Recipient, the Agent or Blue Ridge from any other Person or resort
to any collateral security, any balance of any deposit account or credit on the
books of Recipient, the Agent or Blue Ridge in favor of either Originator or any
other Person or other means of obtaining payment. Should either Originator
default in the payment or performance of any of its Guaranteed Obligations,
Recipient (or its assigns) may cause the immediate performance by Performance
Guarantor of the Guaranteed Obligations and cause any payment Guaranteed
Obligations to become forthwith due and payable to Recipient (or its assigns),
without demand or notice of any nature (other than as expressly provided
herein), all of which are hereby expressly waived by Performance Guarantor.
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Exhibit 10(i)A(6)
Notwithstanding the foregoing, this Undertaking is not a guarantee of the
payment or collection of any of the Receivables or the Loans, and Performance
Guarantor shall not be responsible for any Guaranteed Obligations to the extent
the failure to perform such Guaranteed Obligations by either Originator results
from Receivables being uncollectible on account of the insolvency, bankruptcy or
lack of creditworthiness of the related Obligor; provided that nothing herein
shall relieve either Originator from performing in full its Guaranteed
Obligations under the Agreements or Performance Guarantor of its undertaking
hereunder with respect to the full performance of such duties.
Section 3. Performance Guarantor's Further Agreements to Pay. Performance
Guarantor further agrees, as the principal obligor and not as a guarantor only,
to pay to Recipient (and its assigns), forthwith upon demand in funds
immediately available to Recipient, all reasonable costs and expenses (including
court costs and reasonable legal expenses) actually incurred or expended by
Recipient in connection with enforcement of the Guaranteed Obligations and/or
this Undertaking, together with interest on amounts not paid by Performance
Guarantor under this Undertaking within two Business Days after such amounts
become due until payment, at a rate of interest (computed for the actual number
of days elapsed based on a 360 day year) equal to the Prime Rate plus 2% per
annum, such rate of interest changing when and as the Prime Rate changes.
Section 4. Waivers by Performance Guarantor. Performance Guarantor waives
notice of acceptance of this Undertaking, notice of any action taken or omitted
by Recipient (or its assigns) in reliance on this Undertaking, and any
requirement that Recipient (or its assigns) be diligent or prompt in making
demands under this Undertaking, giving notice of any Termination Event,
Amortization Event, other default or omission by either Originator or asserting
any other rights of Recipient under this Undertaking. Performance Guarantor
warrants that it has adequate means to obtain from each Originator, on a
continuing basis, information concerning the financial condition of such
Originator, and that it is not relying on Recipient to provide such information,
now or in the future. Performance Guarantor also irrevocably waives all defenses
(i) that at any time may be available in respect of the Guaranteed Obligations
by virtue of any statute of limitations, valuation, stay, moratorium law or
other similar law now or hereafter in effect or (ii) that arise under the law of
suretyship, including impairment of collateral. Recipient (and its assigns)
shall be at liberty, without giving notice to or obtaining the assent of
Performance Guarantor and without relieving Performance Guarantor of any
liability under this Undertaking, to deal with each Originator and with each
other party who now is or after the date hereof becomes liable in any manner for
any of the Guaranteed Obligations, in such manner as Recipient in its sole
discretion deems fit, and to this end Performance Guarantor agrees that the
validity and enforceability of this Undertaking, including without limitation,
the provisions of Section 7 hereof, shall not be impaired or affected by any of
the following: (a) any extension, modification or renewal of, or indulgence with
respect to, or substitutions for, the Guaranteed Obligations or any part thereof
or any agreement relating thereto at any time; (b) any failure or omission to
enforce any right, power or remedy with respect to the Guaranteed Obligations or
any part thereof or any agreement relating thereto, or any collateral securing
the Guaranteed Obligations or any part thereof; (c) any waiver of any right,
power or remedy or of any Termination Event, Amortization Event, or default with
respect to the Guaranteed Obligations or any part thereof or any agreement
relating thereto; (d) any release, surrender, compromise, settlement, waiver,
subordination or modification, with or without consideration, of any other
obligation of any person or entity with respect to the Guaranteed Obligations or
any part thereof; (e) the enforceability or validity of the Guaranteed
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Exhibit 10(i)A(6)
Obligations or any part thereof or the genuineness, enforceability or validity
of any agreement relating thereto or with respect to the Guaranteed Obligations
or any part thereof; (f) the application of payments received from any source to
the payment of any payment obligations of either Originator or any part thereof
or amounts which are not covered by this Undertaking even though Recipient (or
its assigns) might lawfully have elected to apply such payments to any part or
all of the payment obligations of such Originator or to amounts which are not
covered by this Undertaking; (g) the existence of any claim, setoff or other
rights which Performance Guarantor may have at any time against either
Originator in connection herewith or any unrelated transaction; (h) any
assignment or transfer of the Guaranteed Obligations or any part thereof; or (i)
any failure on the part of either Originator to perform or comply with any term
of the Agreements or any other document executed in connection therewith or
delivered thereunder, all whether or not Performance Guarantor shall have had
notice or knowledge of any act or omission referred to in the foregoing clauses
(a) through (i) of this Section 4.
Section 5. Unenforceability of Guaranteed Obligations Against Originators.
Notwithstanding (a) any change of ownership of Performance Guarantor or either
Originator or the insolvency, bankruptcy or any other change in the legal status
of either Originator; (b) the change in or the imposition of any law, decree,
regulation or other governmental act which does or might impair, delay or in any
way affect the validity, enforceability or the payment when due of the
Guaranteed Obligations (unless the same shall be applicable to the Performance
Guarantor); (c) the failure of either Originator or Performance Guarantor to
maintain in full force, validity or effect or to obtain or renew when required
all governmental and other approvals, licenses or consents required in
connection with the Guaranteed Obligations or this Undertaking, or to take any
other action required in connection with the performance of all obligations
pursuant to the Guaranteed Obligations or this Undertaking; or (d) if any of the
moneys included in the Guaranteed Obligations have become irrecoverable from
either Originator for any other reason other than final payment in full of the
payment obligations in accordance with their terms or lawful setoff of claims
against the Purchasers, this Undertaking shall nevertheless be binding on
Performance Guarantor. This Undertaking shall be in addition to any other
guaranty or other security for the Guaranteed Obligations, and it shall not be
rendered unenforceable by the invalidity of any such other guaranty or security.
In the event that acceleration of the time for payment of any of the Guaranteed
Obligations is stayed upon the insolvency, bankruptcy or reorganization of
either Originator or for any other reason with respect to either Originator, all
such amounts then due and owing with respect to the Guaranteed Obligations under
the terms of the Agreements, or any other agreement evidencing, securing or
otherwise executed in connection with the Guaranteed Obligations, shall be
immediately due and payable by Performance Guarantor.
Section 6. Representations and Warranties. Performance Guarantor hereby
represents and warrants to Recipient and its assigns that (a) Performance
Guarantor is a corporation duly organized, validly existing and in good standing
under the laws of Delaware and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, and (b) this Undertaking has been duly
executed and delivered by Performance Guarantor and constitutes its legally
valid and binding obligation, enforceable against Performance Guarantor in
accordance with its terms, provided that the enforceability hereof is subject to
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Exhibit 10(i)A(6)
general principles of equity and to bankruptcy, insolvency and similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles.
Section 7. Subrogation. Notwithstanding anything to the contrary contained
herein, until the Guaranteed Obligations are paid in full Performance Guarantor:
(a) will not enforce or otherwise exercise any right of subrogation to any of
the rights of Recipient, the Agent or Blue Ridge against either Originator, (b)
hereby waives all rights of subrogation (whether contractual, under Section 509
of the United States Bankruptcy Code, at law or in equity or otherwise) to the
claims of Recipient, the Agent and Blue Ridge against either Originator and all
contractual, statutory or legal or equitable rights of contribution,
reimbursement, indemnification and similar rights and "claims" (as that term is
defined in the United States Bankruptcy Code) which Performance Guarantor might
now have or hereafter acquire against either Originator that arise from the
existence or performance of Performance Guarantor's obligations hereunder, (c)
will not claim any setoff, recoupment or counterclaim against either Originator
in respect of any liability of Performance Guarantor to such Originator and (d)
waives any benefit of and any right to participate in any collateral security
which may be held by Beneficiaries, the Agent or Blue Ridge.
Section 8. Termination of Performance Undertaking. Performance Guarantor's
obligations hereunder shall continue in full force and effect until all
Obligations are finally paid and satisfied in full and the Credit and Security
Agreement is terminated, provided that this Undertaking shall continue to be
effective or shall be reinstated, as the case may be, if at any time payment or
other satisfaction of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned upon the bankruptcy, insolvency, or
reorganization of either Originator or otherwise, as though such payment had not
been made or other satisfaction occurred, whether or not Recipient (or its
assigns) is in possession of this Undertaking. No invalidity, irregularity or
unenforceability by reason of the federal bankruptcy code or any insolvency or
other similar law, or any law or order of any government or agency thereof
purporting to reduce, amend or otherwise affect the Guaranteed Obligations shall
impair, affect, be a defense to or claim against the obligations of Performance
Guarantor under this Undertaking.
Section 9. Effect of Bankruptcy. This Performance Undertaking shall survive
the insolvency of either Originator and the commencement of any case or
proceeding by or against either Originator under the federal bankruptcy code or
other federal, state or other applicable bankruptcy, insolvency or
reorganization statutes. No automatic stay under the federal bankruptcy code
with respect to either Originator or other federal, state or other applicable
bankruptcy, insolvency or reorganization statutes to which either Originator is
subject shall postpone the obligations of Performance Guarantor under this
Undertaking.
Section 10. Setoff. Regardless of the other means of obtaining payment of
any of the Guaranteed Obligations, Recipient (and its assigns) is hereby
authorized at any time and from time to time during the existence of any
Amortization Event, without notice to Performance Guarantor (any such notice
being expressly waived by Performance Guarantor) and to the fullest extent
permitted by law, to set off and apply any deposits and other sums against the
obligations of Performance Guarantor under this Undertaking then past due for
more than two Business Days.
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Section 11. Taxes. All payments to be made by Performance Guarantor
hereunder shall be made free and clear of any deduction or withholding (except
for taxes excluded under Section 10.1 of the Credit and Security Agreement). If
Performance Guarantor is required by law to make any deduction or withholding on
account of any Taxes or otherwise from any such payment (except for taxes
excluded under Section 10.1 of the Credit and Security Agreement), the sum due
from it in respect of such payment shall be increased to the extent necessary to
ensure that, after the making of such deduction or withholding, Recipient
receive a net sum equal to the sum which they would have received had no
deduction or withholding been made.
Section 12. Further Assurances. Performance Guarantor agrees that it will
from time to time, at the request of Recipient (or its assigns), provide
information relating to the business and affairs of Performance Guarantor as
Recipient may reasonably request.
Section 13. Successors and Assigns. This Performance Undertaking shall be
binding upon Performance Guarantor, its successors and permitted assigns, and
shall inure to the benefit of and be enforceable by Recipient and its successors
and assigns. Without limiting the generality of the foregoing sentence,
Recipient may pledge or assign, and hereby notifies Performance Guarantor that
it has pledged and assigned, this Performance Undertaking to the Agent, for the
benefit of the Lenders, as security for the Obligations, and Performance
Guarantor hereby acknowledges that the Agent may enforce this Performance
Undertaking, on behalf of Recipient and the Lenders, with the same force and
effect as though the Agent were the Recipient hereunder. Subject to Section
7.1(c)(ii) of the Credit and Security Agreement, Performance Guarantor may not
assign or transfer any of its obligations hereunder without the prior written
consent of each of Recipient and the Agent.
Section 14. Amendments and Waivers. No amendment or waiver of any provision
of this Undertaking nor consent to any departure by Performance Guarantor
therefrom shall be effective unless the same shall be in writing and signed by
Recipient, the Agent and Performance Guarantor. No failure on the part of
Recipient to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right.
Section 15. Notices. All notices and other communications provided for
hereunder shall be made in writing and shall be addressed as follows: if to
Performance Guarantor, at the address set forth beneath its signature hereto,
and if to Recipient, at the addresses set forth beneath its signature to the
Credit and Security Agreement, or at such other addresses as each of Performance
Guarantor or any Recipient may designate in writing to the other. Each such
notice or other communication shall be effective (a) if given by telecopy, upon
the receipt thereof, (b) if given by mail, five (5) Business Days after the time
such communication is deposited in the mail with first class postage prepaid or
(c) if given by any other means, when received at the address specified in this
Section 15.
Section 16. GOVERNING LAW. THIS UNDERTAKING SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
GEORGIA.
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Exhibit 10(i)A(6)
Section 17. CONSENT TO JURISDICTION. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW: (A) EACH OF PERFORMANCE GUARANTOR AND RECIPIENT HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR GEORGIA STATE COURT SITTING IN XXXXXX COUNTY, GEORGIA IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS UNDERTAKING, THE AGREEMENTS OR
ANY OTHER DOCUMENT EXECUTED IN CONNECTION THEREWITH OR DELIVERED THEREUNDER AND
(B) EACH OF PERFORMANCE GUARANTOR AND RECIPIENT HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
Section 18. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF PERFORMANCE GUARANTOR AND RECIPIENT HEREBY WAIVES TRIAL
BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS UNDERTAKING, THE AGREEMENTS OR ANY OTHER
DOCUMENT EXECUTED IN CONNECTION THEREWITH OR DELIVERED THEREUNDER OR THE
RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER
Section 19. Bankruptcy Petition. Performance Guarantor hereby covenants and
agrees that, prior to the date that is one year and one day after the payment in
full of all outstanding senior indebtedness owed by Blue Ridge, it will not
institute against, or join any other Person in instituting against, Blue Ridge
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or
any state of the United States.
Section 20. Miscellaneous. This Undertaking constitutes the entire
agreement of Performance Guarantor with respect to the matters set forth herein.
The rights and remedies herein provided are cumulative and not exclusive of any
remedies provided by law or any other agreement, and this Undertaking shall be
in addition to any other guaranty of or collateral security for any of the
Guaranteed Obligations. The provisions of this Undertaking are severable, and in
any action or proceeding involving any state corporate law, or any state or
federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of Performance Guarantor hereunder
would otherwise be held or determined to be avoidable, invalid or unenforceable
on account of the amount of Performance Guarantor's liability under this
Undertaking, then, notwithstanding any other provision of this Undertaking to
the contrary, the amount of such liability shall, without any further action by
Performance Guarantor or Recipient, be automatically limited and reduced to the
highest amount that is valid and enforceable as determined in such action or
proceeding. Any provisions of this Undertaking which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
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Exhibit 10(i)A(6)
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise specified, references herein to "Section"
shall mean a reference to sections of this Undertaking.
{signature page follows}
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Exhibit 10(i)A(6)
IN WITNESS WHEREOF, Performance Guarantor has caused this Undertaking to be
executed and delivered as of the date first above written.
National Service Industries, Inc., A DELAWARE CORPORATION
By: ______________________________
Name: ____________________________
Title: _____________________________
Address for Notices:
NSI Center
0000 Xxxxxxxxx Xxxxxx, X.X.
Atlanta, Georgia 30309
Attention: Treasurer
Telecopier: 000-000-0000
Telephone: 000-000-0000
