Exhibit 10.26
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GUARANTEE AND COLLATERAL AGREEMENT
made by
U.S. OFFICE PRODUCTS COMPANY
and certain of its Subsidiaries
in favor of
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of June 10, 1998
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TABLE OF CONTENTS
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SECTION 1. DEFINED TERMS...............................................................................2
1.1 Definitions.................................................................................2
1.2 Other Definitional Provisions...............................................................7
SECTION 2. GUARANTEE...................................................................................8
2.1 Guarantee...................................................................................8
2.2 Right of Contribution.......................................................................9
2.3 No Subrogation..............................................................................9
2.4 Amendments, etc. with respect to the Borrower Obligations...................................9
2.5 Guarantee Absolute and Unconditional...................................................... 10
2.6 Reinstatement............................................................................. 11
2.7 Payments.................................................................................. 11
SECTION 3. GRANT OF SECURITY INTEREST................................................................ 11
3.1 Collateral................................................................................ 11
3.2 Pledged Collateral........................................................................ 12
3.3 Certain Exceptions........................................................................ 12
3.4 Investment Property....................................................................... 13
SECTION 4. REPRESENTATIONS AND WARRANTIES............................................................ 13
4.1 Representations and Warranties of Each Guarantor.......................................... 13
4.2 Representations and Warranties of Each Grantor............................................ 13
4.2.1 Title; No Other Liens.............................................................. 14
4.2.2 Perfected First Priority Liens..................................................... 14
4.2.3 Chief Executive Office............................................................. 16
4.2.4 Inventory and Equipment............................................................ 16
4.2.5 Farm Products...................................................................... 16
4.2.6 Receivables........................................................................ 16
4.2.7 Intellectual Property.............................................................. 16
4.3 Representations and Warranties of Each Pledgor............................................ 17
SECTION 5. COVENANTS................................................................................. 18
5.1 Covenants of Each Guarantor............................................................... 18
5.2 Covenants of Each Grantor................................................................. 18
5.2.1 Delivery of Instruments and Chattel Paper.......................................... 18
5.2.2 Maintenance of Insurance........................................................... 18
5.2.3 Payment of Obligations............................................................. 19
5.2.4 Maintenance of Perfected Security Interest; Further
Documentation...................................................................... 19
5.2.5 Changes in Locations, Name, etc. .................................................. 19
5.2.6 Notices............................................................................ 20
5.2.7 Pledged Securities................................................................. 20
5.2.8 Receivables........................................................................ 20
5.2.9 Maintenance of Records............................................................. 21
5.2.10 Acquisition of Intellectual Property............................................... 21
5.2.11 Protection of Trade Secrets........................................................ 21
5.2.12 Contracts.......................................................................... 21
5.3 Covenants of Each Pledgor................................................................. 21
SECTION 6. REMEDIAL PROVISIONS....................................................................... 23
6.1 Certain Matters Relating to Receivables................................................... 23
6.2 Communications with Obligors; Grantors Remain Liable...................................... 24
6.3 Pledged Stock............................................................................. 24
6.4 Proceeds to be Turned Over To Administrative Agent........................................ 25
6.5 Application of Proceeds................................................................... 26
6.6 Code and Other Remedies................................................................... 26
6.7 Registration Rights....................................................................... 27
6.8 Waiver; Deficiency........................................................................ 28
SECTION 7. THE ADMINISTRATIVE AGENT.................................................................. 28
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc............................... 28
7.2 Duty of Administrative Agent.............................................................. 30
7.3 Execution of Financing Statements......................................................... 31
7.4 Authority of Administrative Agent......................................................... 31
7.5 Right Of Inspection....................................................................... 31
SECTION 8. MISCELLANEOUS............................................................................. 32
8.1 Amendments in Writing..................................................................... 32
8.2 Notices................................................................................... 32
8.3 No Waiver by Course of Conduct; Cumulative Remedies....................................... 32
8.4 Enforcement Expenses; Indemnification..................................................... 32
8.5 Successors and Assigns.................................................................... 33
8.6 Set-Off................................................................................... 33
8.7 Counterparts.............................................................................. 33
8.8 Severability.............................................................................. 33
8.9 Section Headings.......................................................................... 34
8.10 Integration............................................................................... 34
8.11 GOVERNING LAW............................................................................. 34
8.12 Submission To Jurisdiction; Waivers....................................................... 34
8.13 Acknowledgements.......................................................................... 35
8.14 WAIVER OF JURY TRIAL...................................................................... 35
8.15 Additional Granting Parties............................................................... 35
8.16 Releases.................................................................................. 35
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of June 10,
1998, made by U.S. OFFICE PRODUCTS COMPANY, a Delaware corporation ("USOP" or
the "Borrower"), and each of the other signatories hereto (together with the
Borrower and any other Domestic Subsidiary of the Borrower that becomes a party
hereto from time to time after the date hereof, collectively, the "Granting
Parties"; individually, a "Granting Party"), in favor of THE CHASE MANHATTAN
BANK, as administrative agent (in such capacity, the "Administrative Agent") for
the banks and other financial institutions (collectively, the "Lenders";
individually, a "Lender") from time to time parties to the Credit Agreement,
dated as of June 9, 1998 (as amended, waived, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower, Blue Star Group
Limited, a New Zealand corporation ("Blue Star Group"), the Lenders, the
Administrative Agent, BANKERS TRUST COMPANY, as syndication agent (in such
capacity, the "Syndication Agent") and XXXXXXX XXXXX CAPITAL CORPORATION, as
documentation agent (in such capacity, the "Documentation Agent" and, together
with the Administrative Agent and the Syndication Agent, the "Agents").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;
WHEREAS, it is a condition to the obligation of the Lenders
to make their respective extensions of credit to the Borrower under the Credit
Agreement that the Granting Parties shall execute and deliver this Agreement to
the Administrative Agent for the benefit of the Lenders;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrower to make valuable
transfers to one or more of the other Granting Parties in connection with the
operation of their respective businesses; and
WHEREAS, the Borrower and the other Granting Parties are
engaged in related businesses, and each such Granting Party will derive
substantial direct and indirect benefit from the making of the extensions of
credit under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and to
induce the Agents and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Granting Party hereby agrees with the Administrative Agent, for
the ratable benefit of the Secured Parties (as defined below), as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement, and the following terms which are defined in the
Code (as defined below) are used
herein as so defined: Chattel Paper, Documents, Equipment, Farm Products,
Fixtures, General Intangibles and Inventory.
(b) The following terms shall have the following meanings:
"Accounts": all accounts (as defined in the Code) of the
Grantors, including, without limitation, all Accounts (as defined in
the Credit Agreement) of the Grantors, but in any event excluding all
Accounts that have been sold or otherwise transferred in connection
with a Permitted Receivables Securitization.
"Administrative Agent": as defined in the Preamble hereto.
"Agents": as defined in the Preamble hereto.
"Agreement": this Guarantee and Collateral Agreement, as
the same may be amended, waived, supplemented or otherwise modified
from time to time.
"Blue Star Obligations": the collective reference to the
unpaid principal of and interest on the Loans and Reimbursement
Obligations and all other obligations and liabilities of Blue Star
Group (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of
the Loans and Reimbursement Obligations and interest accruing at the
then applicable rate provided in the Credit Agreement after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to Blue Star Group, whether
or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to any Agent or any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing
or hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, this Agreement, the other Loan Documents or
any other document made, delivered or given in connection therewith, in
each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all reasonable fees and disbursements
of counsel to the Administrative Agent or to the Lenders that are
required to be paid by Blue Star Group pursuant to the terms of any of
the foregoing agreements) and obligations in respect of over-drafts and
related liabilities owed to the Administrative Agent or any of its
Affiliates and arising from treasury, depository and cash management
services or in connection with any automated clearing house transfers
of funds.
"Borrower": as defined in the Preamble hereto.
"Borrower Obligations": the collective reference to the
unpaid principal of and interest on the Loans and Reimbursement
Obligations and all other obligations and liabilities of the Borrower
(including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of
the Loans and Reimbursement Obligations and interest accruing at the
then applicable rate provided in the Credit Agreement after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or
not a claim for post-filing or post-petition interest is allowed in
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such proceeding) to any Agent or any Lender (or, in the case of any
Lender Hedge Agreement, any affiliate of any Lender and, in the case of
any L/C Obligations arising in connection with any Blue Star Letters of
Credit, any Blue Star L/C Issuing Lender), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, this Agreement, the other Loan Documents,
any Letter of Credit, any letter of credit referred to in subsection
8.2(i) of the Credit Agreement issued by any Lender or any affiliate of
any Lender, any Lender Hedge Agreement or any other document made,
delivered or given in connection therewith, in each case whether on
account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without
limitation, all reasonable fees and disbursements of counsel to the
Administrative Agent or to the Lenders that are required to be paid by
the Borrower pursuant to the terms of any of the foregoing agreements)
and obligations in respect of over-drafts and related liabilities owed
to the Administrative Agent or any of the Affiliates and arising from
treasury, depository and cash management services or in connection with
any automated clearing house transfers of funds.
"Code": the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Collateral": as defined in Section 3.1, subject to
the exclusions of Section 3.3.
"Collateral Account Bank": The Chase Manhattan Bank
or another bank which at all times is a Lender as selected
by the relevant Grantor and notified to the Administrative
Agent in writing promptly following such selection.
"Collateral Proceeds Account": the cash collateral
account established by the relevant Grantor at an office of
the Collateral Account Bank in the name of the Administrative Agent.
"Commitments": the collective reference to: (i) the
Revolving Credit Commitments, (ii) the obligation of each
Multi-Draw Term Loan Lender, Tranche A Term Loan Lender and
each Tranche B Term Loan Lender, respectively, to make
Multi-Draw Term Loans, a Tranche A Term Loan and a Tranche B
Term Loan, respectively, to the Borrower pursuant to subsection 2.6 of
the Credit Agreement, (iii) the Swing Line Commitment and (iv) the
obligation of the Issuing Lender to issue Letters of Credit to the
Borrower pursuant to subsection 3.1 of the Credit Agreement.
"Contracts": with respect to any Grantor, all of its
contracts, agreements, instruments and indentures except for the
contracts listed on Schedule 7, as the same may from time to time be
amended, waived, supplemented or otherwise modified, including, without
limitation, (i) all rights of such Grantor to receive moneys due and to
become due to it thereunder or in connection therewith, (ii) all rights
of such Grantor to damages arising thereunder and (iii) all rights of
such Grantor to perform and to exercise all remedies thereunder.
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"Copyright Licenses": with respect to any Grantor, all
United States written license agreements of such Grantor with any
Person who is not an Affiliate or a Subsidiary of the Grantor providing
for the grant by or to such Grantor of any right to use any Copyright
of such Grantor, including, without limitation, the license agreements
listed on Schedule 5 hereto subject, in each case, to the terms of such
license agreements, and the right to prepare for sale, sell and
advertise for sale, all Inventory now or hereafter covered by such
licenses.
"Copyrights": with respect to any Grantor, all of such
Grantor's right, title and interest in and to all United States
copyrights, whether or not the underlying works of authorship have been
published or registered, United States copyright registrations and
copyright applications, including, without limitation, the copyright
registrations listed on Schedule 5, and (a) all renewals thereof, (b)
all income, royalties, damages and payments now and hereafter due
and/or payable with respect thereto, including, without limitation,
payments under all licenses entered into in connection therewith, and
damages and payments for past, present or future infringements thereof
and (c) the right to xxx or otherwise recover for past, present and
future infringements thereof.
"Credit Agreement": as defined in the Preamble hereto.
"Documentation Agent": as defined in the Preamble hereto.
"General Fund Account": the general fund account of
the relevant Grantor.
"Granting Party" and "Granting Parties": as defined
in the Preamble hereto.
"Grantor": the Borrower and each Domestic
Subsidiary of the Borrower that from time to time becomes a party
hereto.
"Guarantor Obligations": with respect to any Guarantor,
all obligations and liabilities of such Guarantor which may arise under
or in connection with this Agreement (including, without limitation,
Section 2) or any other Loan Document to which such Guarantor is a
party, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent, to the Other Representatives or to
the Lenders that are required to be paid by such Guarantor pursuant to
the terms of this Agreement or any other Loan Document).
"Guarantors": the collective reference to each
Granting Party other than the Borrower.
"Instruments": has the meaning specified in the
Code, but excluding the Pledged Securities.
"Intellectual Property": with respect to any
Grantor, the collective reference to such Grantor's
Copyrights, Copyright Licenses, Patents, Patent Licenses,
Trade Secrets, Trademarks and Trademark Licenses.
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"Intercompany Note": with respect to any Grantor,
any promissory note in a principal amount in excess of
$1,000,000 evidencing loans made by such Grantor to the Borrower or any
of its Subsidiaries.
"Investment Property": the collective reference to:
(i) all "investment property" as such term is defined in
Section 9-115 of the Uniform Commercial Code in effect in
the State of New York on the date hereof, and (ii) whether
or not constituting "investment property" as so defined, all
Pledged Securities.
"IP Collateral": with respect to any Grantor, the
collective reference to such Grantor's Patents, Patent Licenses,
Trademarks, Trademark Licenses, General Intangibles connected with the
use of or symbolized by the Trademarks and Patents and, to the extent
not otherwise included, all Proceeds and products of any and all of the
foregoing and all collateral security and guarantees given by any
Person with respect to any of the foregoing.
"Issuers": the collective reference to each issuer
of a Pledged Security.
"Lender" and "Lenders": as defined in the Preamble
hereto.
"Lender Hedge Agreements": as to any Grantor, all interest
rate swaps, caps or collar agreements or similar arrangements entered
into by such Person with any Lender (or any affiliate of any Lender)
providing for protection against fluctuations in interest rates or
currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific contingencies,
including, without limitation, all Interest Rate Protection Agreements
and Permitted Hedging Arrangements.
"Obligations": (i) in the case of the Borrower, the
Borrower Obligations, and (ii) in the case of each Guarantor, its
Guarantor Obligations.
"Patent Licenses": with respect to any Grantor, all United
States written license agreements of such Grantor with any Person who
is not an Affiliate or a Subsidiary concerning any of the Patents of
such Grantor or such other Person's patents, whether such Grantor is a
licensor or a licensee under any such agreement, including, without
limitation, the license agreements listed on Schedule 5, subject, in
each case, to the terms of such license agreements, and the right to
prepare for sale, sell and advertise for sale, all Inventory now or
hereafter covered by such licenses.
"Patents": with respect to any Grantor, all of such
Grantor's right, title and interest in and to all United States
patents, patent applications and patentable inventions, including,
without limitation, all patents and patent applications identified in
Schedule 5, and including, without limitation, (a) all inventions and
improvements described and claimed therein, (b) the right to xxx or
otherwise recover for any and all past, present and future
infringements thereof, (c) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered
into in connection therewith, and damages and payments for past,
present or future infringements thereof), and (d)
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all other rights corresponding thereto in the United States and all
reissues, divisions, continuations, continuations-in-part, substitutes,
renewals, and extensions thereof, all improvements thereon, and all
other rights of any kind whatsoever of such Grantor accruing thereunder
or pertaining thereto.
"Pledged Collateral": as defined in Section 3.2,
subject to the exclusions of Section 3.3.
"Pledged Notes": with respect to any Pledgor, all
Intercompany Notes at any time issued to such Pledgor and each other
promissory note in a principal amount in excess of $1,000,000 issued to
or held by such Pledgor (other than promissory notes issued in
connection with extensions of trade credit by any Pledgor in the
ordinary course of business) including, without limitation, all such
notes listed on Schedule 2; provided, however, that only 65% of each
Blue Star Intercompany Note shall be a Pledged Note.
"Pledged Securities": the collective reference to
the Pledged Notes and the Pledged Stock.
"Pledged Stock": with respect to any Pledgor, the
shares of Capital Stock listed on Schedule 2 as held by such
Pledgor, provided that in no event shall there be pledged, nor shall
any Pledgor be required to pledge, directly or indirectly, (x) any
Capital Stock of any Subsidiary other than a Material Subsidiary or (y)
more than 65% of any series of the outstanding Capital Stock of any
Foreign Subsidiary or Foreign Subsidiary Holdco pursuant to this
Agreement.
"Pledgor": the Borrower (with respect to Pledged
Securities held by the Borrower) and any other Granting
Party (with respect to Pledged Securities held by such Granting Party).
"Proceeds": all "proceeds" as such term is defined in
Section 9-306(1) of the Uniform Commercial Code in effect in the State
of New York on the date hereof and, in any event, Proceeds of Pledged
Securities shall include, without limitation, all dividends or other
income from the Pledged Securities, collections thereon or
distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or
leased or for services rendered, whether or not such right is evidenced
by an Instrument or Chattel Paper and whether or not it has been earned
by performance, including, without limitation, any Account.
"Secured Parties": the collective reference to (a) each of
the Agents, (b) the Lenders (including, without limitation, the Issuing
Lender and the Swing Line Lender), (c) each Lender or any affiliate of
such Lender which has entered into any Lender Hedge Agreement with the
Borrower or any of its Subsidiaries issued any letter of credit
referred to in subsection 8.2(i) of the Credit Agreement and (d) the
successors, indorsees, transferees and assigns (to the extent permitted
by the Loan Documents) of any of the foregoing.
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"Security Collateral": as defined in Section 3.2,
subject to the exclusions of Section 3.3.
"Subsidiary Guarantor": each Material Subsidiary of
the Borrower other than any Foreign Subsidiary or Foreign Subsidiary
Holdco.
"Syndication Agent": as defined in the Preamble hereto.
"Trademark Licenses": with respect to any Grantor, all
United States written license agreements of such Grantor with any
Person who is not an Affiliate or a Subsidiary concerning any of the
Trademarks of such Grantor or such other Person's names or trademarks,
whether such Grantor is a licensor or a licensee under any such
agreement, including, without limitation, the license agreements listed
on Schedule 5, subject, in each case, to the terms of such license
agreements, and the right to prepare for sale, sell and advertise for
sale, all Inventory now or hereafter covered by such licenses.
"Trademarks": with respect to any Grantor, all of such
Grantor's right, title and interest in and to all United States
trademarks, service marks, trade names, trade dress or other indicia of
trade origin or business identifiers, trademark and service xxxx
registrations, and applications for trademark or service xxxx
registrations (except for "intent to use" applications for trademark or
service xxxx registrations filed pursuant to Section 1(b) of the Xxxxxx
Act, 15 U.S.C. Section. 1051, unless and until an Amendment to Allege
Use or a Statement of Use under Sections 1(c) and 1(d) of said Act has
been filed), and any renewals thereof, including, without limitation,
each registration and application identified in Schedule 5, and
including, without limitation, (a) the right to xxx or otherwise
recover for any and all past, present and future infringements or
dilutions thereof, (b) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered
into in connection therewith, and damages and payments for past,
present or future infringements thereof), and (c) all other rights
corresponding thereto in the United States and all other rights of
any kind whatsoever of such Grantor accruing thereunder or pertaining
thereto in the United States, together in each case with the goodwill
of the business connected with the use of, and symbolized by, each such
trademark, service xxxx, trade name, trade dress or other indicia of
trade origin or business identifiers.
"Trade Secrets": with respect to any Grantor, all of such
Grantor's right, title and interest in and to all United States trade
secrets, including, without limitation, know-how, processes, formulae,
compositions, designs, and confidential business and technical
information, and all rights of any kind whatsoever accruing thereunder
or pertaining thereto, including, without limitation, (a) all income,
royalties, damages and payments now and hereafter due and/or payable
with respect thereto, including, without limitation, payments under all
licenses, non-disclosure agreements and memoranda of understanding
entered into in connection therewith, and damages and payments for
past, present or future misappropriations thereof and (b) the right to
xxx or otherwise recover for past, present or future misappropriations
thereof.
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"Vehicles": all cars, trucks, trailers, construction and
earth moving equipment and other vehicles covered by a certificate of
title law of any state and all tires and other appurtenances to any of
the foregoing.
1.2 Other Definitional Provisions. (a) The words
"hereof", "herein", "hereto" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Annex
references are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to
the Collateral, Pledged Collateral or Security Collateral, or any part thereof,
when used in relation to a Granting Party shall refer to such Granting Party's
Collateral, Pledged Collateral or Security Collateral or the relevant part
thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby,
jointly and severally, unconditionally and irrevocably, guarantees to the
Administrative Agent, for the ratable benefit of the Secured Parties, the prompt
and complete payment and performance by the Borrower when due and payable
(whether at the stated maturity, by acceleration or otherwise) of the Borrower
Obligations.
(b) Each of the Guarantors and the Borrower hereby,
jointly and severally, unconditionally and irrevocably, guarantees to the
Administrative Agent, for the ratable benefit of the Secured Parties, the prompt
and complete payment and performance by Blue Star Group when due and payable
(whether at the stated maturity, by acceleration or otherwise) of the Blue Star
Obligations.
(c) Anything herein or in any other Loan Document
to the contrary notwithstanding, the maximum liability of each Guarantor
hereunder and under the other Loan Documents shall in no event exceed the amount
which can be guaranteed by such Guarantor under applicable law, including
applicable federal and state laws relating to the insolvency of debtors (after
giving effect to the right of contribution established in Section 2.2).
(d) Each Guarantor agrees that the Borrower Obligations
may at any time and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guarantee contained in this Section 2
or affecting the rights and remedies of the Administrative Agent or any other
Secured Party hereunder.
(e) The guarantee contained in this Section 2 shall
remain in full force and effect until the earlier to occur of (i) the first date
on which all the Loans, any Reimbursement Obligations, all other Borrower
Obligations then due and owing, and the obligations of each Guarantor under the
guarantee contained in this Section 2 then due and owing shall have been
satisfied by payment in full in cash, no Letter of Credit shall be outstanding
and the
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Commitments shall be terminated, notwithstanding that from time to time
during the term of the Credit Agreement the Borrower may be free from any
Borrower Obligations or (ii) as to any Guarantor, the sale or other
disposition of all of the Capital Stock of such Guarantor as
permitted under the Credit Agreement.
(f) No payment made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any other Secured Party from the Borrower, any of
the Guarantors, any other guarantor or any other Person by virtue of any action
or proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Borrower Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of any
Guarantor hereunder which shall, notwithstanding any such payment (other than
any payment made by such Guarantor in respect of the Borrower Obligations or any
payment received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the earlier to occur of (i) the
first date on which all the Loans, any Reimbursement Obligations, and all other
Borrower Obligations then due and owing are paid in full in cash, no Letter of
Credit shall be outstanding and the Commitments are terminated or (ii) the sale
or other disposition of all of the Capital Stock of such Guarantor as permitted
under the Credit Agreement.
2.2 Right of Contribution. Each Guarantor hereby
agrees that to the extent that a Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Guarantor shall be
entitled to seek and receive contribution from and against any other Guarantor
hereunder which has not paid its proportionate share of such payment. Each
Guarantor's right of contribution shall be subject to the terms and conditions
of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the
obligations and liabilities of any Guarantor to the Administrative Agent and the
other Secured Parties, and each Guarantor shall remain liable to the
Administrative Agent and the other Secured Parties for the full amount
guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by
any Guarantor hereunder or any set-off or application of funds of any Guarantor
by the Administrative Agent or any other Secured Party, no Guarantor shall be
entitled to be subrogated to any of the rights of the Administrative Agent or
any other Secured Party against the Borrower or any other Guarantor or any
collateral security or guarantee or right of offset held by the Administrative
Agent or any other Secured Party for the payment of the Borrower Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the Administrative
Agent and the other Secured Parties by the Borrower on account of the Borrower
Obligations are paid in full in cash, no Letter of Credit shall be outstanding
and the Commitments are terminated. If any amount shall be paid to any Guarantor
on account of such subrogation rights at any time when all of the Borrower
Obligations shall not have been paid in full in cash, such amount shall be held
by such Guarantor in trust for the Administrative Agent and the other Secured
Parties, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Administrative Agent in
the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Administrative Agent, if required), to be held as collateral security
9
for the Borrower Obligations (whether matured or unmatured) and/or then or at
any time thereafter may be applied against the Borrower Obligations, whether
matured or unmatured, in such order as the Administrative Agent may determine.
2.4 Amendments, etc. with respect to the Borrower
Obligations. To the maximum extent permitted by applicable law, each Guarantor
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the Borrower Obligations made by the
Administrative Agent or any other Secured Party may be rescinded by the
Administrative Agent or such other Secured Party and any of the Borrower
Obligations continued, and the Borrower Obligations, or the liability of any
other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
other Secured Party, and the Credit Agreement and the other Loan Documents and
any other documents executed and delivered in connection therewith may be
amended, waived, modified, supplemented or terminated, in whole or in part, as
the Administrative Agent (or the Required Lenders and/or such other requisite
percentage of the Lenders as is required pursuant to subsection 12.1 of the
Credit Agreement, as the case may be) may deem advisable from time to time, and
any collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any other Secured Party for the payment of the Borrower
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor any other Secured Party shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Borrower Obligations or for the guarantee contained in this Section 2 or
any property subject thereto, except to the extent required by applicable law.
2.5 Guarantee Absolute and Unconditional. Each
Guarantor waives, to the maximum extent permitted by applicable law, any and all
notice of the creation, renewal, extension or accrual of any of the Borrower
Obligations and notice of or proof of reliance by the Administrative Agent or
any other Secured Party upon the guarantee contained in this Section 2 or
acceptance of the guarantee contained in this Section 2; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon the guarantee contained in this Section 2; and all dealings between the
Borrower and any of the Guarantors, on the one hand, and the Administrative
Agent and the other Secured Parties, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives, to the maximum
extent permitted by applicable law, diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Borrower or any of
the other Guarantors with respect to the Borrower Obligations. Each Guarantor
understands and agrees, to the extent permitted by applicable law, that the
guarantee contained in this Section 2 shall be construed as a continuing,
absolute and unconditional guarantee of payment. Each Guarantor hereby waives,
to the maximum extent permitted by applicable law, any and all defenses that it
may have arising out of or in connection with any and all of the following: (a)
the validity or enforceability of the Credit Agreement or any other Loan
Document, any of the Borrower Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any other
10
Secured Party, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Borrower against the Administrative Agent or any other Secured Party, (c)
any change in the time, place or manner of payment, amendment, or waiver or
increase in the Obligations, (d) any exchange, taking, or release of Collateral,
(e) any change in the corporate structure or existence of the Borrower, (f) any
application of Collateral to Obligations in accordance with the terms of this
Agreement or (g) any other circumstance whatsoever, other than indefeasible
payment in full in cash of the Borrower Obligations, which (with or without
notice to or knowledge of the Borrower or such Guarantor) constitutes, or might
be construed to constitute, an equitable or legal discharge of the Borrower for
the Borrower Obligations, or of such Guarantor under the guarantee contained in
this Section 2, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent or any other Secured Party may, but shall be
under no obligation to, make a similar demand on or otherwise pursue such rights
and remedies as it may have against the Borrower, any other Guarantor or any
other Person or against any collateral security or guarantee for the Borrower
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any other Secured Party to make any such demand, to
pursue such other rights or remedies or to collect any payments from the
Borrower, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower, any other Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent or any other Secured Party against
any Guarantor. For the purposes hereof "demand" shall include the commencement
and continuance of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this
Section 2 shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Borrower Obligations
is rescinded or must otherwise be restored or returned by the Administrative
Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any Guarantor or any substantial
part of its property, or otherwise, all as though such payments had not been
made.
2.7 Payments. Each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the office of the Administrative Agent located at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other address of the
Administrative Agent as may be designated to the Borrower and such Guarantor
from time to time in accordance with subsection 12.2 of the Credit Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
3.1 Collateral. Subject to Section 3.3, each Granting
Party that is a Grantor hereby grants to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in all of the
following property now owned or at any time hereafter acquired
11
by such Grantor or in which such Grantor now has or at any time in the future
may acquire any right, title or interest (collectively, the "Collateral"), as
collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations of such Grantor:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment (other than Vehicles);
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) the Collateral Proceeds Account;
(k) all books and records pertaining to any of the
foregoing; and
(l) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing;
provided that Collateral shall not include any Pledged Collateral, or any
property or assets specifically excluded from Pledged Collateral (including any
Capital Stock of any Foreign Subsidiary or Foreign Subsidiary Holdco in excess
of 65% of any series of such stock).
3.2 Pledged Collateral. Subject to Section 3.3, each
Granting Party that is a Pledgor hereby grants to the Administrative Agent, for
the ratable benefit of the Secured Parties, a security interest in all of the
Pledged Securities and other Investment Property now owned or at any time
hereafter acquired by such Pledgor, and any Proceeds thereof (the "Pledged
Collateral"), as collateral security for the prompt and complete performance
when due (whether at the stated maturity, by acceleration or otherwise) of the
obligations of the Pledgor; (the Collateral (if any) and the Pledged Collateral
(if any) of any Granting Party being collectively referred to herein as such
Granting Party's "Security Collateral"); provided that Pledged Collateral shall
not include any Capital Stock of any Foreign Subsidiary or Foreign Subsidiary
Holdco in excess of 65% of any series of such stock but shall include Investment
Property in the nature of Capital Stock of a Subsidiary that is not a Material
Subsidiary; and provided further that the Borrower shall use its reasonable best
efforts to promptly grant to the Administrative Agent, for the ratable benefit
of the Secured Parties, a
12
security interest in all of the Pledged Securities and other Investment Property
now owned or at any time hereafter acquired by the Pledgor listed on Schedule
3.2.
3.3 Certain Exceptions. No security interest is or will
be granted pursuant hereto in (and the terms Collateral, Pledged Collateral and
Security Collateral shall not include) the right, title and interest of any
Granting Party under or in:
(a) any Instruments, Contracts, Chattel Paper, General
Intangibles, Investment Property, Copyright Licenses, Patent Licenses,
Trademark Licenses or other contracts or agreements with or issued by
Persons other than a Subsidiary of the Borrower (collectively,
"Excluded Agreements") that would otherwise be included in the Security
Collateral (and such Excluded Agreements shall not be deemed to
constitute a part of the Security Collateral) for so long as, and to
the extent that, the granting of such a security interest pursuant
hereto would result in a breach, default or termination of such
Excluded Agreements;
(b) any Equipment that would otherwise be included in the
Security Collateral (and such Equipment shall not be deemed to
constitute a part of the Security Collateral) if such Equipment is
subject to a Lien permitted by subsection 8.3(h) of the Credit
Agreement; or
(c) any property that would otherwise be included in
Security Collateral that has been sold or otherwise transferred in a
Permitted Receivables Securitization or that is subject to any Lien
permitted under subsection 8.3(p) of the Credit Agreement or
constitutes the Proceeds or products of any property that has been so
sold or otherwise transferred; or
(d) any Blue Star Intercompany Notes, so long as such Blue
Star Intercompany Notes are held by a BSIN Subsidiary 65% of the
Capital Stock of which is pledged pursuant hereto.
3.4 Investment Property. It is agreed that,
notwithstanding any other provision hereof to the contrary, no Granting Party
shall be required to deliver or otherwise grant "control" (as defined in Section
8-106 of the Code) over any Cash Equivalent or similar item of Investment
Property pursuant hereto (it being understood that perfection of the security
interest therein shall be solely by the filing of financing statements) and any
representation as to the security interest in such Investment Property is
qualified by reference by the foregoing.
3.5 Blue Star Intercompany Notes. It is agreed that,
notwithstanding any other provision hereof to the contrary, the security
interest in that portion of the Blue Star Intercompany Notes provided for herein
shall be released, at the request of the Borrower, upon the consummation of any
contribution or transfer thereof to a BSIN Subsidiary.
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SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Each Guarantor.
To induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Guarantor hereby represents and warrants
to the Administrative Agent and each other Secured Party that the
representations and warranties set forth in Section 5 of the Credit Agreement as
they relate to such Guarantor or to the Loan Documents to which such Guarantor
is a party, each of which representations and warranties is hereby incorporated
herein by reference, are true and correct in all material respects, and the
Administrative Agent and each other Secured Party shall be entitled to rely on
each of such representations and warranties as if fully set forth herein;
provided that each reference in each such representation and warranty to the
Borrower's knowledge shall, for the purposes of this Section 4.1, be deemed to
be a reference to such Guarantor's knowledge.
4.2 Representations and Warranties of Each Grantor.
To induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby represents and warrants
to the Administrative Agent and each other Secured Party that:
4.2.1 Title; No Other Liens. Except for the security
interests granted to the Administrative Agent, for the ratable benefit of the
Secured Parties, pursuant to this Agreement and the other Liens permitted to
exist on such Grantor's Collateral by the Credit Agreement (including without
limitation subsection 8.3 thereof), such Grantor owns each material item of such
Grantor's Collateral free and clear of any and all Liens. Except as set forth on
Schedule 6, as of the date hereof no currently effective financing statement or
other similar public notice with respect to all or any part of such Grantor's
Collateral is on file or of record in any public office, except such as have
been filed in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, pursuant to this Agreement or as are permitted by the Credit
Agreement (including without limitation subsection 8.3 thereof) or any other
Loan Document or with respect to which termination statements will be delivered
on the Effective Date.
4.2.2 Perfected First Priority Liens. (i) This
Agreement is effective to create, as collateral security for the Obligations of
such Grantor, valid and enforceable Liens on such Grantor's Collateral in favor
of the Administrative Agent, for the benefit of the Secured Parties, except as
enforceability may be affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditor's rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
(ii) Except with regard to Liens (if any) on Specified
Assets, upon the completion of the Filings, and the delivery to and continuing
possession by the Administrative Agent of all Instruments, Chattel Paper and
Documents, a security interest in which is perfected by possession, the Liens
created pursuant to this Agreement will constitute valid Liens on and (to the
extent provided herein) perfected security interests in such Grantor's
Collateral in favor of the Administrative Agent for the benefit of the Secured
Parties, and will be prior to all other Liens of all other Persons other than
Permitted Liens, and which Liens are
14
enforceable as such as against all other Persons other than Ordinary Course
Buyers, except to the extent that (a) the recording of an assignment or other
transfer of title to the Administrative Agent or the recording of applicable
documents in the United States Patent and Trademark Office or the United States
Copyright Office may be necessary for perfection or enforceability, and (b)
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law) or by an implied
covenant of good faith and fair dealing. As used in this Section 4.2.2(ii), the
following terms shall have the following meanings:
"Filings": the filing or recording of the Financing
Statements, the Mortgages, and this Agreement as set forth
in subsection 5.14 of the Credit Agreement, filings in the
United States Patent and Trademark Office and any filings
after the Effective Date in any other jurisdiction as may be
necessary under any Requirement of Law.
"Financing Statements": the financing statements
delivered to the Administrative Agent by each Grantor on the
Effective Date for filing in the jurisdictions listed on
Schedule 5.14 to the Credit Agreement (which Financing
Statements are in proper form for filing in such jurisdictions).
"Ordinary Course Buyers": with respect to goods only,
buyers in the ordinary course of business to the extent provided in
Section 9-307(1) of the Uniform Commercial Code as in effect from time
to time in the applicable jurisdiction.
"Permitted Liens": Liens permitted pursuant to the
Loan Documents, including without limitation, those liens permitted to
exist pursuant to subsection 8.3 of the Credit Agreement.
"Specified Assets": the following property and assets of
each Grantor:
(1) Equipment constituting Fixtures;
(2) Patents, Patent Licenses, Trademarks and Trademark
Licenses to the extent that (a) Liens thereon cannot be perfected by
the filing of financing statements under the Uniform Commercial Code or
by the filing and acceptance thereof in the United States Patent and
Trademark Office or (b) such Patents, Patent Licenses, Trademarks and
Trademark Licenses are not, individually or in the aggregate, material
to the business of the Borrower and its Subsidiaries taken as a whole;
(3) Copyrights and Copyright Licenses and Accounts or
Receivables arising therefrom to the extent that the Uniform Commercial
Code as in effect from time to time in the relevant jurisdiction is not
applicable to the creation or perfection of Liens thereon;
(4) uncertificated securities;
15
(5) Collateral for which the perfection of Liens thereon
requires filings in or other actions under the laws of jurisdictions
outside of the United States of America, any State, territory or
dependency thereof or the District of Columbia;
(6) Contracts, Accounts or Receivables on which the United
States of America or any department, agency or instrumentality thereof
is the Obligor, and property or assets subject to any rights reserved
in favor of the United States government as required under law;
(7) goods included in Collateral received by any Person
for "sale or return" within the meaning of Section 2-326 of the
Uniform Commercial Code of the applicable jurisdiction, to the extent
of claims of creditors of such Person; and
(8) Proceeds of Accounts, Receivables or Inventory until
transferred to or deposited in the Collateral Proceeds Account.
4.2.3 Chief Executive Office. On the date hereof, such
Grantor's jurisdiction of organization and the location of such Grantor's chief
executive office or sole place of business are specified on Schedule 3.
4.2.4 Inventory and Equipment. On the date hereof, such
Grantor's Inventory and Equipment (other than mobile goods) are kept at the
locations listed on Schedule 4.
4.2.5 Farm Products. None of such Grantor's Collateral
constitutes, or is the Proceeds of, Farm Products.
4.2.6 Receivables. (i) The amounts represented by such
Grantor to the Administrative Agent or the other Secured Parties from time to
time as owing by each account debtor or by all account debtors in respect of
such Grantor's Receivables constituting Security Collateral will at such time be
the correct amount, in all material respects, actually owing by such account
debtor or debtors thereunder, except to the extent that appropriate reserves
therefor have been established on the books of such Grantor in accordance with
GAAP.
(ii) The places where such Grantor keeps its records
concerning such Grantor's Receivables constituting Security Collateral are
listed on Schedule 3 or such other location or locations of which such Grantor
shall have provided prior written notice to the Administrative Agent pursuant to
Section 5.2.5 hereof.
(iii) Unless otherwise indicated in writing to the
Administrative Agent, each Receivable constituting Security Collateral of such
Grantor arises out of a bona fide sale and delivery of goods or rendition of
services by such Grantor.
(iv) Such Grantor has not given any account debtor any
deduction in respect of the amount due under any such Account, except in the
ordinary course of business or as such Grantor may otherwise advise the
Administrative Agent in writing.
16
4.2.7 Intellectual Property. Schedule 5 lists all
material United States Patents and Trademarks registered, or pending
registration, in the United States Patent and Trademark Office and owned by such
Grantor in its own name as of the date hereof, and all material Trademark
Licenses and Patent Licenses (including, without limitation, material Trademark
Licenses for registered Trademarks and material Patent Licenses for registered
Patents) owned by such Grantor on the date hereof. Except as set forth on
Schedule 5, on the date hereof:
(i) each patent, patent application, trademark
registration and trademark application of such Grantor set forth on Schedule 5
is subsisting, has not been adjudged invalid, unregisterable or unpatentable, as
the case may be, or unenforceable in any respect that would reasonably be
expected to have a Material Adverse Effect and to the best of such Grantor's
knowledge, is valid, registerable or patentable, as the case may be, and
enforceable; and
(ii) no claim has been made and is continuing or, to the
knowledge of such Grantor, threatened that the use by such Grantor of any item
of IP Collateral is invalid or unenforceable or that the use by such Grantor of
any IP Collateral does or may violate the rights of any Person, which would have
a Material Adverse Effect. To such Grantor's knowledge, there is currently no
infringement or unauthorized use of any item of IP Collateral contained on
Schedule 5 hereto which would have a Material Adverse Effect.
4.3 Representations and Warranties of Each Pledgor.
To induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Pledgor hereby represents and warrants
to the Administrative Agent and each other Secured Party that:
4.3.1 The shares of Pledged Stock pledged by such
Pledgor hereunder constitute (i) in the case of Pledged Stock constituting
Capital Stock of any Domestic Subsidiary, all the issued and outstanding shares
of all classes of the Capital Stock of each such Domestic Subsidiary owned by
such Pledgor and (ii) in the case of each Foreign Subsidiary and Foreign
Subsidiary Holdco such percentage (not more than 65%) as is specified on
Schedule 2 of all the issued and outstanding shares of all classes of the
Capital Stock of each such Foreign Subsidiary and Foreign Subsidiary Holdco.
owned by such Pledgor.
4.3.2 All the shares of the Pledged Stock pledged by such
Pledgor hereunder have been duly and validly issued and are fully paid and
nonassessable.
4.3.3 Each of the Intercompany Notes pledged by such
Pledgor hereunder constitutes the legal, valid and binding obligation of the
obligor with respect thereto, enforceable in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
4.3.4 Such Pledgor is the record and beneficial owner of,
and has good title to, the Pledged Securities pledged by it hereunder, free of
any and all Liens or options in favor
17
of, or claims of, any other Person, except the security interest created by this
Agreement and Liens arising by operation of law or permitted by the Credit
Agreement.
4.3.5 Upon delivery to the Administrative Agent of the
certificates evidencing the Pledged Securities held by such Pledgor, together
with duly executed stock or bond powers or other instruments of transfer, the
security interest created by this Agreement in such Pledged Securities, assuming
the continuing possession of such Pledged Securities by the Administrative
Agent, will constitute a valid, perfected first priority security interest in
such Pledged Securities to the extent provided in and governed by the Code,
enforceable in accordance with its terms against all creditors of such Pledgor
and any persons purporting to purchase such Pledged Securities from such
Pledgor, except with respect to the first priority interests of Blue Star Group
in the Pledged Securities of Blue Star Group as to money owing from time to time
by the Borrower to the Blue Star Group, and except as enforceability may be
affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
SECTION 5. COVENANTS
5.1 Covenants of Each Guarantor. Each Guarantor
covenants and agrees with the Administrative Agent and the other Secured Parties
that, from and after the date of this Agreement until the earlier to occur of
the date upon which (i) the Loans, any Reimbursement Obligations, and all other
Obligations then due and owing shall have been paid in full in cash, no Letter
of Credit shall be outstanding and the Commitments shall have terminated and
(ii) all the Capital Stock of such Guarantor shall have been sold or otherwise
disposed of in accordance with the terms of the Credit Agreement, such Guarantor
shall take, or shall refrain from taking, as the case may be, each action that
is necessary to be taken or not taken, as the case may be, so that no Default or
Event of Default is caused by the failure to take such action or to refrain from
taking such action by such Guarantor or any of its Subsidiaries.
5.2 Covenants of Each Grantor. Each Grantor covenants
and agrees with the Administrative Agent and the other Secured Parties that,
from and after the date of this Agreement until the earlier to occur of the date
upon which (i) the Loans, any Reimbursement Obligations, and all other
Obligations then due and owing shall have been paid in full in cash, no Letter
of Credit shall be outstanding and the Commitments shall have terminated and
(ii) all the Capital Stock of such Grantor shall have been sold or otherwise
disposed of in accordance with the terms of the Credit Agreement,
5.2.1 Delivery of Instruments and Chattel Paper. If any
amount payable under or in connection with any of such Grantor's Collateral
shall be or become evidenced by any Instrument or Chattel Paper, except as
provided in the following sentence, such Grantor shall be entitled to retain
possession of all Collateral of such Grantor evidenced by any Instrument or
Chattel Paper, and shall hold all such Collateral in trust for the
Administrative Agent, for the ratable benefit of the Secured Parties. In the
event that an Event of Default shall have occurred and be continuing, upon the
request of the Administrative Agent, such
18
Instrument or Chattel Paper shall be promptly delivered to the Administrative
Agent, duly indorsed in a manner satisfactory to the Administrative Agent, to be
held as Collateral pursuant to this Agreement. Such Grantor shall not permit any
other Person to possess any such Collateral at any time other than in connection
with any Permitted Receivables Securitization or any transaction permitted under
subsection 8.13 of the Credit Agreement.
5.2.2 Maintenance of Insurance. (i) Such Grantor will
maintain, with financially sound and reputable companies, insurance policies (a)
insuring such Grantor's Inventory and Equipment against loss by fire, explosion,
theft and such other casualties as are usually insured against by similarly
sized and organized companies engaged in the same or a similar business and (b)
insuring such Grantor, the Administrative Agent and the other Secured Parties
against liability for personal injury and property damage relating to such
Inventory and Equipment, such policies to be in such amounts and covering at
least such risks as are usually insured against by companies engaged in the same
or a similar business.
(ii) All such insurance shall (a) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 15 days after receipt by the
Administrative Agent of written notice thereof, (b) name the Administrative
Agent as an additional insured party or loss payee and (c) include deductibles
consistent with past practice or industry practice or otherwise consistent with
industry practice.
5.2.3 Payment of Obligations. Such Grantor will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all material taxes, assessments and governmental
charges or levies imposed upon such Grantor's Collateral or in respect of income
or profits therefrom, as well as all material claims of any kind (including,
without limitation, material claims for labor, materials and supplies) against
or with respect to such Grantor's Collateral, except that no such tax,
assessment, charge or levy need be paid or satisfied if the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of such Grantor.
5.2.4 Maintenance of Perfected Security Interest;
Further Documentation. (i) Such Grantor shall maintain the security interest
created by this Agreement in such Grantor's Collateral as a perfected security
interest having at least the priority described in Section 4.2.2 and shall
defend such security interest against the claims and demands of all Persons
whomsoever.
(ii) Such Grantor will furnish to the Administrative
Agent from time to time statements and schedules further identifying and
describing such Grantor's Collateral and such other reports in connection with
such Grantor's Collateral as the Administrative Agent may reasonably request in
writing, all in reasonable detail.
(iii) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly execute and deliver such further instruments
and documents and take such further actions as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted by such Grantor,
including, without limitation, the filing of any financing or continuation
19
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby.
5.2.5 Changes in Locations, Name, etc. Such Grantor will
not, except upon (x) not fewer than 10 days' prior written notice to the
Administrative Agent with respect only to clause (iii) below and (y) delivery to
the Administrative Agent, if applicable, and in no event more than 45 days after
such additional location is established, of a written supplement to Schedule 4
showing any additional location at which such Grantor's Inventory or Equipment
shall be kept:
(i) permit any of such Grantor's Inventory or Equipment to
be kept at a location other than the location(s) applicable to such
Grantor listed on Schedule 4 (other than (A) Inventory or Equipment
being conveyed, sold, leased, assigned, transferred or otherwise
disposed of as permitted by the Credit Agreement and (B) mobile goods);
(ii) change the location of its chief executive office or
sole place of business from that referred to in Section 4.2.3; or
(iii) change its name, identity or corporate structure to
such an extent that any financing statement filed by the Administrative
Agent in connection with this Agreement would become seriously
misleading;
provided that, prior to taking any such action, or promptly after receiving a
written request therefor from the Administrative Agent, such Grantor shall
deliver to the Administrative Agent all additional executed financing statements
and other documents reasonably requested by the Administrative Agent to maintain
the validity, perfection and priority of the security interests provided for
herein.
5.2.6 Notices. Such Grantor will advise the
Administrative Agent promptly, in reasonable detail, of:
(i) any Lien (other than security interests created
hereby or Liens permitted under the Credit Agreement) on any of such Grantor's
Collateral which would adversely affect the ability of the Administrative Agent
to exercise any of its remedies hereunder; and
(ii) of the occurrence of any other event which would
reasonably be expected to have a material adverse effect on the aggregate value
of such Grantor's Collateral or on the security interests created hereby.
5.2.7 Pledged Securities. In the case of each Grantor
which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of
this Agreement relating to the Pledged Securities issued by it and will comply
with such terms insofar as such terms are applicable to it, (ii) it will notify
the Administrative Agent promptly in writing of the occurrence of any of the
events described in Section 5.3.1 with respect to the Pledged Securities issued
by it and (iii) the terms of Sections 6.3(c) and 6.7 shall apply to it, mutatis
mutandis, with respect to all actions that may be required of it pursuant to
Section 6.3(c) or 6.7 with respect to the Pledged Securities issued by it.
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5.2.8 Receivables. (i) Other than in the ordinary
course of business or as expressly permitted by the Loan Documents, such Grantor
will not (a) grant any extension of the time of payment of any of such Grantor's
Receivables, (b) compromise or settle any such Receivable for less than the full
amount thereof, (c) release, wholly or partially, any Person liable for the
payment of any Receivable or (d) allow any credit or discount whatsoever on any
such Receivable unless such extensions, compromises, settlements, releases,
credits or discounts would not reasonably be expected to materially adversely
affect the value of the Receivables constituting Collateral taken as a whole.
(ii) Such Grantor will deliver to the Administrative
Agent a copy of each material demand, notice or document received by it that
questions or calls into doubt the validity or enforceability of more than 10% of
the aggregate amount of the then outstanding Receivables.
5.2.9 Maintenance of Records. Such Grantor will keep and
maintain at its own cost and expense reasonably satisfactory and complete
records of its Collateral, including, without limitation, a record of all
payments received and all credits granted with respect to such Collateral, and
shall xxxx such records to evidence this Agreement and the Liens and the
security interests created hereby.
5.2.10 Acquisition of Intellectual Property. (i) Such
Grantor agrees that, should it obtain an ownership interest in any (x)
registration of material Copyright, Patent or Trademark or (y) any exclusive
rights under a material Copyright License, Patent License or Trademark License
which is not now a part of the Collateral, (A) the provisions of Section 3 shall
automatically apply thereto, (B) any such Copyright, Copyright License, Patent,
Patent License, Trademark or Trademark License shall automatically become part
of the Collateral, and (C) with respect to any ownership interest in any such
Copyright, Copyright License, Patent, Patent License, Trademark or Trademark
License that such Grantor should obtain, it shall give notice thereof to the
Administrative Agent in writing, in reasonable detail, at its address set forth
in the Credit Agreement within 90 days after the end of the calendar year in
which it obtains such ownership interest. Such Grantor authorizes the
Administrative Agent to modify this Agreement by amending Schedule 5 (and will
cooperate reasonably with the Administrative Agent in effecting any such
amendment) to include on Schedule 5 any Copyright, Copyright License, Patent,
Patent License, Trademark or Trademark License of which it receives notice under
this Section, or to prepare and file with the United States Patent and Trademark
Office or the United States Copyright Office a supplement to this Agreement to
include any Copyright, Patent or Trademark of which it receives notice under
this Section.
5.2.11 Protection of Trade Secrets. Such Grantor shall
take all steps that it deems commercially reasonable to preserve and protect the
secrecy of all material Trade Secrets of such Grantor.
5.2.12 Contracts. Such Grantor will perform and comply
in all material respects with such Grantor's obligations under its Contracts.
5.3 Covenants of Each Pledgor. Each Pledgor covenants
and agrees with the Administrative Agent and the other Secured Parties that,
from and after the date of this Agreement until the earlier to occur of the date
upon which (i) the Loans, any Reimbursement
21
Obligations, and all other Obligations then due and owing shall have been paid
in full in cash, no Letter of Credit shall be outstanding and the Commitments
shall have terminated and (ii) all the Capital Stock of such Pledgor shall have
been sold or otherwise disposed of in accordance with the terms of the Credit
Agreement.
5.3.1 If such Pledgor shall become entitled to receive or
shall receive any certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or similar rights in respect of the
Capital Stock of any Issuer, whether in addition to, in substitution of, as a
conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise
in respect thereof, such Pledgor shall, except as otherwise permitted by
subsection 8.9(m) of the Credit Agreement, accept the same as the agent of the
Administrative Agent and the other Secured Parties, hold the same in trust for
the Administrative Agent and the other Secured Parties and deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by such Pledgor to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by such
Pledgor, to be held by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Obligations (provided that in no event
shall there be pledged, nor shall any Pledgor be required to pledge, more than
65% of any series of the outstanding Capital Stock of any Foreign Subsidiary or
Foreign Subsidiary Holdco pursuant to this Agreement). Any sums paid upon or in
respect of the Pledged Securities upon the liquidation or dissolution of any
Issuer (except any liquidation or dissolution of any Subsidiary of the Borrower
in accordance with the Credit Agreement) shall be paid over to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations, and in case any distribution of capital shall be
made on or in respect of the Pledged Securities or any property shall be
distributed upon or with respect to the Pledged Securities pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Administrative Agent,
be delivered to the Administrative Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Securities shall be
received by such Pledgor, such Pledgor shall, until such money or property is
paid or delivered to the Administrative Agent, hold such money or property in
trust for the Secured Parties, segregated from other funds of such Pledgor, as
additional collateral security for the Obligations.
5.3.2 Without the prior written consent of the
Administrative Agent, such Pledgor will not (except as permitted by the Credit
Agreement) (i) vote to enable, or take any other action to permit, any Issuer to
issue any stock or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or exchange for
any stock or other equity securities of any nature of any Issuer, (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Pledged Securities or Proceeds thereof, (iii) create, incur or
permit to exist any Lien or option in favor of, or any material adverse claim of
any Person with respect to, any of the Pledged Securities or Proceeds thereof,
or any interest therein, except for the security interests created by this
Agreement or Liens arising by operation of law or (iv) enter into any agreement
or undertaking restricting the right or ability of such Pledgor or the
Administrative Agent to sell, assign or transfer any of the Pledged Securities
or Proceeds thereof.
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5.3.3 Such Pledgor shall maintain the security interest
created by this Agreement in such Pledgor's Pledged Collateral as a perfected
security interest having at least the priority described in Section 4.3.5 and
shall defend such security interest against the claims and demands of all
Persons whomsoever. At any time and from time to time, upon the written request
of the Administrative Agent, and at the sole expense of such Pledgor, such
Pledgor will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted by such Pledgor.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) At any
time and from time to time after the occurrence and during the continuance of an
Event of Default, the Administrative Agent shall have the right to make test
verifications of the Receivables in any reasonable manner and through any
reasonable medium that it reasonably considers advisable, and the relevant
Grantor shall furnish all such assistance and information as the Administrative
Agent may reasonably require in connection with such test verifications. At any
time and from time to time after the occurrence and during the continuance of an
Event of Default, upon the Administrative Agent's reasonable request and at the
expense of the relevant Grantor, such Grantor shall cause independent public
accountants or others reasonably satisfactory to the Administrative Agent to
furnish to the Administrative Agent reports showing reconciliations, aging and
test verifications of, and trial balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each
Grantor to collect such Grantor's Receivables and the Administrative Agent may
curtail or terminate said authority at any time after the occurrence and during
the continuance of an Event of Default. If required by the Administrative Agent
at any time after the occurrence and during the continuance of an Event of
Default, any Proceeds constituting payments of Receivables, when collected by
such Grantor, (i) shall be forthwith (and, in any event, within two Business
Days of receipt by such Grantor) deposited in, or otherwise transferred by such
Grantor to, the Collateral Proceeds Account established by such Grantor
maintained under the sole dominion and control of the Administrative Agent,
subject to withdrawal by the Administrative Agent for the account of the Secured
Parties only as provided in Section 6.5, and (ii) until so turned over, shall be
held by such Grantor in trust for the Administrative Agent and the other Secured
Parties, segregated from other funds of such Grantor. All Proceeds constituting
collections of Receivables while held by the Collateral Account Bank (or by any
Grantor in trust for the benefit of the Administrative Agent and the other
Secured Parties) shall continue to be collateral security for all of the
Obligations and shall not constitute payment thereof until applied as
hereinafter provided. At any time when an Event of Default has occurred and is
continuing, at the Administrative Agent's election, the Administrative Agent may
apply all or any part of the funds on deposit in the Collateral Proceeds Account
established by the relevant Grantor to the payment of the Obligations of such
Grantor then due and owing, such application to be made as set forth in Section
6.5 hereof.
(c) At any time and from time to time after the occurrence
and during the continuance of an Event of Default, and if the Administrative
Agent has terminated a
23
Grantor's right to collect Accounts pursuant to clause (b) above, at the
Administrative Agent's request, each Grantor shall deliver to the Administrative
Agent copies or, if required by the Administrative Agent for the enforcement
thereof or foreclosure thereon, originals of all documents held by such Grantor
evidencing, and relating to, the agreements and transactions which gave rise to
such Grantor's Receivables, including, without limitation, all statements
relating to such Grantor's Receivables and all orders, invoices and shipping
receipts.
(d) General Fund Account. So long as no Event of Default
has occurred and is continuing, the Administrative Agent shall instruct the
Collateral Account Bank to promptly remit any funds on deposit in each Grantor's
Collateral Proceeds Account to such Grantor's General Fund Account. In the event
that an Event of Default has occurred and is continuing, the Administrative
Agent and the Grantors agree that the Administrative Agent, at its option, may
require that each Collateral Proceeds Account be established at The Chase
Manhattan Bank. Each Grantor shall have the right, at any time and from time to
time, to withdraw such of its own funds from its own General Fund Account, and
to maintain such balances in its General Fund Account, as it shall deem to be
necessary or desirable.
6.2 Communications with Obligors; Grantors Remain Liable.
(a) The Administrative Agent in its own name or in the name of others may at any
time and from time to time after the occurrence and during the continuance of an
Event of Default communicate with obligors under the Receivables and parties to
the Contracts (in each case, to the extent constituting Collateral) to verify
with them to the Administrative Agent's satisfaction the existence, amount and
terms of any Receivables or Contracts.
(b) Upon the request of the Administrative Agent at any
time after the occurrence and during the continuance of an Event of Default,
each Grantor shall notify obligors on such Grantor's Receivables and parties to
such Grantor's Contracts (in each case, to the extent constituting Collateral)
that such Receivables and such Contracts have been assigned to the
Administrative Agent, for the ratable benefit of the Secured Parties, and that
payments in respect thereof shall be made directly to the Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of such Grantor's Receivables and
Contracts 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. Neither the Administrative Agent nor any Secured
Party shall have any obligation or liability under any Receivable or Contract
(or any agreement giving rise thereto) by reason of or arising out of this
Agreement or the receipt by the Administrative Agent or any other Secured Party
of any payment relating thereto, nor shall the Administrative Agent or any other
Secured Party be obligated in any manner to perform any of the obligations of
any Grantor under or pursuant to any Receivable or Contract (or any agreement
giving rise thereto) to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
6.3 Pledged Stock. (a) Unless an Event of Default shall
have occurred and be continuing and the Administrative Agent shall have given
notice to the relevant Pledgor of
24
the Administrative Agent's intent to exercise its corresponding rights pursuant
to Section 6.3(b), each Pledgor shall be permitted to receive all cash dividends
and distributions paid in respect of the Pledged Stock and all payments made in
respect of the Pledged Notes, to the extent permitted in the Credit Agreement,
and to exercise all voting and corporate rights with respect to the Pledged
Securities; provided, however, that no vote shall be cast or corporate right
exercised or such other action taken (other than in connection with a
transaction expressly permitted by the Credit Agreement) which would be
inconsistent with or result in any violation of any provision of the Credit
Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing
and the Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Pledgor or Pledgors, (i) the Administrative Agent shall
have the right to receive any and all cash dividends, payments or other Proceeds
paid in respect of the Pledged Securities and make application thereof to the
Obligations in such order as is provided in Section 6.5 and (ii) any or all of
the Pledged Securities shall be registered in the name of the Administrative
Agent or its nominee, and the Administrative Agent or its nominee may thereafter
exercise (x) all voting, corporate and other rights pertaining to such Pledged
Securities at any meeting of shareholders of the relevant Issuer or Issuers or
otherwise and (y) any and all rights of conversion, exchange, subscription and
any other rights, privileges or options pertaining to such Pledged Securities as
if it were the absolute owner thereof (including, without limitation, the right
to exchange at its discretion any and all of the Pledged Securities upon the
merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of any Issuer, or upon the exercise by the
relevant Pledgor or the Administrative Agent of any right, privilege or option
pertaining to such Pledged Securities, and in connection therewith, the right to
deposit and deliver any and all of the Pledged Securities with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Administrative Agent may reasonably determine), all
without liability (other than for its gross negligence or willful misconduct)
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Pledgor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing, provided that the Administrative Agent shall not exercise any voting or
other consensual rights pertaining to the Pledged Securities in any way that
would constitute an exercise of the remedies described in Section 6.6 other than
in accordance with Section 6.6.
(c) Each Pledgor hereby authorizes and instructs each
Issuer of any Pledged Securities pledged by such Pledgor hereunder to (i) comply
with any instruction received by it from the Administrative Agent in writing
that (x) states that an Event of Default has occurred and is continuing and (y)
is otherwise in accordance with the terms of this Agreement, without any other
or further instructions from such Pledgor, and each Pledgor agrees that each
Issuer shall be fully protected in so complying and (ii) to the extent so
provided in this Section 6.3, pay any dividends or other payments with respect
to the Pledged Securities directly to the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent.
In addition to the rights of the Administrative Agent and the other Secured
Parties specified in Section 6.1 with respect to payments of Receivables, if an
Event of Default shall occur and be continuing, and the Administrative Agent
shall have instructed any Grantor to do so, all Proceeds received
25
by such Grantor consisting of cash, checks and other 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, forthwith upon
receipt by such Grantor, be turned over to the Administrative Agent in the exact
form received by such Grantor (duly indorsed by such Grantor to the
Administrative Agent, if required). All Proceeds received by the Administrative
Agent hereunder shall be held by the Administrative Agent in the relevant
Collateral Proceeds Account maintained under its sole dominion and control. All
Proceeds while held by the Administrative Agent in such Collateral Proceeds
Account (or by such Grantor in trust for the Administrative Agent and the other
Secured Parties) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.
6.5 Application of Proceeds. It is agreed that if an
Event of Default shall occur and be continuing, any and all Proceeds of the
relevant Granting Party's Security Collateral received by the Administrative
Agent (whether from the relevant Granting Party or otherwise) shall be held by
the Administrative Agent for the benefit of the Secured Parties as collateral
security for the Obligations of the relevant Granting Party (whether matured or
unmatured), and/or then or at any time thereafter may, in the sole discretion of
the Administrative Agent, be applied by the Administrative Agent against the
Obligations of the relevant Granting Party then due and owing in the following
order of priority:
FIRST, to the payment of all reasonable costs and expenses
incurred by the Administrative Agent in connection with this Agreement,
the Credit Agreement, any other Loan Document or any of the Obligations
of the relevant Granting Party, including, without limitation, all
court costs and the reasonable fees and expenses of its agents and
legal counsel, and any other reasonable costs or expenses incurred in
connection with the exercise by the Administrative Agent of any right
or remedy under this Agreement, the Credit Agreement, or any other Loan
Document;
SECOND, to the ratable satisfaction of all other
Obligations of the relevant Granting Party; and
THIRD, to the relevant Granting Party or its successors or
assigns, or to whomsoever may be lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default
shall occur and be continuing, the Administrative Agent, on behalf of the
Secured Parties, may exercise, in addition to all other rights and remedies
granted to them in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Code or any other applicable law. Without limiting the
generality of the foregoing, to the extent permitted by applicable law, the
Administrative Agent, 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 Granting Party or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith (subject to the terms of any
documentation governing any Permitted Receivables Securitization) collect,
receive, appropriate and realize upon the Security Collateral, or any part
thereof, and/or may forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver the
26
Security Collateral or any part thereof (or contract 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 the Administrative Agent or any other
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 credit or for
future delivery without assumption of any credit risk. The Administrative Agent
or any other Secured Party shall have the right to the extent permitted by law,
upon any such sale or sales, to purchase the whole or any part of the Security
Collateral so sold, free of any right or equity of redemption in any Granting
Party, which right or equity is hereby waived and released. Each Granting Party
further agrees, at the Administrative Agent's request (subject to the terms of
any documentation governing any Permitted Receivables Securitization), to
assemble the Security Collateral and make it available to the Administrative
Agent at places which the Administrative Agent shall reasonably select, whether
at such Granting Party's premises or elsewhere. The Administrative Agent shall
apply the net proceeds of any action taken by it pursuant to this Section 6.6,
after deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Security Collateral or in any way relating to the Security Collateral or the
rights of the Administrative Agent and the other Secured Parties hereunder,
including, without limitation, reasonable attorneys' fees and disbursements, to
the payment in whole or in part of the Obligations of the relevant Granting
Party, in the order of priority specified in Section 6.5 above, and only after
such application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section
9-504(1)(c) of the Code, need the Administrative Agent account for the surplus,
if any, to any Granting Party. To the extent permitted by applicable law, each
Granting Party waives all claims, damages and demands it may acquire against the
Administrative Agent or any other Secured Party arising out of the exercise by
them of any rights hereunder, except to the extent arising as a result of the
gross negligence or willful misconduct of the Administrative Agent or such other
Secured Party. If any notice of a proposed sale or other disposition of
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.
6.7 Registration Rights. (a) If the Administrative
Agent shall determine to exercise its right to sell any or all of the Pledged
Stock pursuant to Section 6.6, and if in the reasonable opinion of the
Administrative Agent it is necessary or reasonably advisable to have the Pledged
Stock, or that portion thereof to be sold, registered under the provisions of
the Securities Act, the relevant Pledgor will use its reasonable best efforts to
cause the Issuer thereof to (i) execute and deliver, and use its best efforts to
cause the directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the reasonable opinion of the Administrative Agent, necessary or
advisable to register such Pledged Stock, or that portion thereof to be sold,
under the provisions of the Securities Act, (ii) use its reasonable best efforts
to cause the registration statement relating thereto to become effective and to
remain effective for a period of not more than one year from the date of the
first public offering of such Pledged Stock, or that portion thereof to be sold,
and (iii) make all amendments thereto and/or to the related prospectus which, in
the reasonable opinion of the Administrative Agent, are necessary or advisable,
all in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. Such
Pledgor agrees to cause such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all States and the District of Columbia
which the Administrative Agent shall reasonably designate and to
27
make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.
(b) Such Pledgor recognizes that the Administrative Agent
may be unable to effect a public sale of any or all such Pledged Stock, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Such Pledgor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.
(c) Such Pledgor agrees to use its reasonable best
efforts to do or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of such Pledged Stock pursuant to
this Section 6.7 valid and binding and in compliance with any and all other
applicable Requirements of Law. Such Pledgor further agrees that a breach of any
of the covenants contained in this Section 6.7 will cause irreparable injury to
the Administrative Agent and the other Secured Parties, that the Administrative
Agent and the other Secured Parties have no adequate remedy at law in respect of
such breach and, as a consequence, that each and every covenant contained in
this Section 6.7 shall be specifically enforceable against such Pledgor, and to
the extent permitted by applicable law, such Pledgor hereby waives and agrees
not to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is
continuing under the Credit Agreement.
6.8 Waiver; Deficiency. Each Granting Party (other than
the Borrower) waives and agrees not to assert any rights or privileges which it
may acquire under Section 9-112 of the Code, to the extent permitted by
applicable law. Each Granting Party shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Security Collateral are
insufficient to pay Obligations of such Granting Party and the fees and
disbursements of any attorneys employed by the Administrative Agent or any other
Secured Party to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-
Fact, etc. (a) Each Granting Party hereby irrevocably constitutes and appoints
the Administrative Agent and any officer or agent 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 Granting Party and in the
name of such Granting Party or in its own name, for the purpose of carrying out
the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be reasonably necessary
or desirable to accomplish the purposes of
28
this Agreement to the extent permitted by applicable law. Without limiting the
generality of the foregoing, at any time when an Event of Default has occurred
and is continuing (in each case to the extent permitted by applicable law), (x)
each Pledgor hereby gives the Administrative Agent the power and right, on
behalf of such Pledgor, without notice or assent by such Pledgor, to execute, in
connection with any sale provided for in Section 6.6 or 6.7, any indorsements,
assignments or other instruments of conveyance or transfer with respect to such
Pledgor's Pledged Collateral and (y) each Grantor hereby gives the
Administrative Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do any or all of the following:
(i) subject to the terms of any documentation governing
any Permitted Receivables Securitization, in the name of such Grantor
or its own name, or otherwise, take possession of and indorse and
collect any checks, drafts, notes, acceptances or other instruments for
the payment of moneys due under any Receivable of such Grantor that
constitutes Collateral or with respect to any other Collateral of such
Grantor and file any claim or take any other action or institute any
proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting
any and all such moneys due under any Receivable of such Grantor that
constitutes Collateral or with respect to any other Collateral of such
Grantor whenever payable;
(ii) in the case of any Copyright, Patent or Trademark
constituting Collateral of such Grantor, execute and deliver any and
all agreements, instruments, documents and papers as the Administrative
Agent may reasonably request to evidence the Administrative Agent's and
the other Secured Parties' security interest in such Copyright, Patent
or Trademark 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
the Collateral of such Grantor, other than Liens permitted under this
Agreement or the other Loan Documents, effect any repairs or any
insurance called for by the terms of this Agreement and pay all or any
part of the premiums therefor and the costs thereof; and
(iv) subject to the terms of any documentation governing
any Permitted Receivables Securitization, (1) direct any party liable
for any payment under any of the Collateral of such Grantor to make
payment of any and all moneys due or to become due thereunder directly
to the Administrative Agent or as the Administrative Agent shall
direct; (2) ask or demand for, collect, and receive payment of and
receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral
of such Grantor; (3) sign and indorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral of such Grantor; (4) commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral of such
Grantor or any portion thereof and to enforce any other right in
respect of any Collateral of such Grantor; (5) defend any suit, action
or proceeding brought against such Grantor with respect to any
Collateral of such Grantor; (6) settle, compromise or adjust any such
suit, action or proceeding described in clause (5) above and, in
connection therewith, to give such discharges or releases as the
Administrative
29
Agent may deem appropriate; (7) subject to any existing reserved rights
or licenses, assign any Copyright, Patent or Trademark constituting
Collateral of such Grantor (along with the goodwill of the business to
which any such Copyright, Patent or Trademark pertains), for such term
or terms, on such conditions, and in such manner, as the Administrative
Agent shall in its sole discretion determine; and (8) generally, sell,
transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral of such Grantor 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 and such
Grantor's expense, at any time, or from time to time, all acts and
things which the Administrative Agent deems necessary to protect,
preserve or realize upon the Collateral of such Grantor and the
Administrative Agent's and the other Secured Parties' security
interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Granting Party fails to perform or comply with
any of its agreements contained herein and such failure shall continue
unremedied for 7 days, 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 agreement.
(c) The reasonable 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 per annum equal to 1.75% above the rate
applicable to ABR Loans which are Tranche B Term Loans, from the date of payment
by the Administrative Agent to the date reimbursed by the relevant Granting
Party, shall be payable by such Granting Party to the Administrative Agent on
demand.
(d) Each Granting Party hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable as to the relevant Granting Party until this
Agreement is terminated as to such Granting Party, and the security interests in
the Security Collateral of such Granting Party created hereby are released.
7.2 Duty of Administrative Agent. The Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Security Collateral in its possession, under Section 9-207
of the Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar property for its own account. Neither
the Administrative Agent, any other Secured Party nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Security Collateral or for any delay in doing
so or shall be under any obligation to sell or otherwise dispose of any Security
Collateral upon the request of any Granting Party or any other Person or (except
as provided in the first sentence of this Section 7.2) to take any other action
whatsoever with regard to the Security Collateral or any part thereof. The
powers conferred on the Administrative Agent and the other Secured Parties
hereunder are solely to protect the Administrative Agent's and the other Secured
Parties' interests in the Security
30
Collateral and shall not impose any duty upon the Administrative Agent or any
other Secured Party to exercise any such powers. The Administrative Agent and
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 officers, directors, employees or agents shall be responsible
to any Granting Party for any act or failure to act hereunder, except for their
own gross negligence or willful misconduct.
7.3 Execution of Financing Statements. Pursuant to
Section 9-402 of the Code and any other applicable law, each Granting Party
authorizes the Administrative Agent to file or record financing statements and
other filing or recording documents or instruments with respect to such Granting
Party's Security Collateral without the signature of such Granting Party 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.
7.4 Authority of Administrative Agent. Each Granting
Party 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 or any amendment,
supplement or other modification of this Agreement shall, as between the
Administrative Agent and the Secured Parties, be governed by the Credit
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
Granting Parties, 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 Granting Party shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
7.5 Right Of Inspection. Upon reasonable written advance
notice to any Grantor and at reasonable intervals, or at any time and from time
to time after the occurrence and during the continuation of an Event of Default,
the Administrative Agent shall have reasonable access during normal business
hours to all the books, correspondence and records of such Granting Party, and
the Administrative Agent and its representatives may examine the same, and to
the extent reasonable, make extracts therefrom and photocopies thereof, and such
Granting Party agrees to render to the Administrative Agent, at such Granting
Party's reasonable cost and expense, such clerical and other assistance as may
be reasonably requested with regard thereto. The Administrative Agent and its
representatives shall also have the right, upon reasonable advance written
notice to such Granting Party, to enter during normal business hours into and
upon any premises owned, leased or operated by such Granting Party where any of
such Granting Party's Inventory or Equipment is located for the purpose of
inspecting the same, observing its use or otherwise protecting its interests
therein.
31
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. Except as otherwise provided
in subsection 12.1 of the Credit Agreement, none of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by each affected Granted Party and the
Administrative Agent, provided, that any provision of this Agreement imposing
obligations on any Granting Party may be waived by a written instrument executed
by the Administrative Agent.
8.2 Notices. All notices, requests and demands to or
upon the Administrative Agent or any Granting Party hereunder shall be effected
in the manner provided for in subsection 12.2 of the Credit Agreement; provided
that any such notice, request or demand to or upon any Guarantor shall be
addressed to such Guarantor at its notice address set forth on Schedule 1,
unless and until such Guarantor shall change such address by notice to the
Administrative Agent given in accordance with subsection 12.2 of the Credit
Agreement.
8.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Administrative Agent nor any other Secured Party shall by any act
(except by a written instrument pursuant to Section 8.1), 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 the Administrative Agent or any
other 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 the Administrative Agent or
any other Secured Party or any Granting Party of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or remedy which
the Administrative Agent or such other Secured Party or such Granting Party
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each
Guarantor agrees to pay or reimburse each Secured Party and the Administrative
Agent for all their respective reasonable costs and expenses incurred in
collecting against such Guarantor under the guarantee contained in Section 2 or
otherwise enforcing or preserving any rights under this Agreement against such
Guarantor and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the reasonable fees and disbursements of one firm
of counsel and local counsel to the Secured Parties and the Administrative
Agent.
(b) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Secured Parties harmless from, (x) any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other similar taxes which may be payable or determined
to be payable with respect to any of the Security Collateral and (y) any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement (collectively, the "Indemnified Liabilities"), in each case to the
extent the Borrower would be required to do so
32
pursuant to Section 11.5 of the Credit Agreement, and in any event excluding any
taxes or other indemnified liabilities arising from gross negligence or willful
misconduct of the Administrative Agent or any Secured Party or any of their
respective agents, officers, directors and successors.
(c) The agreements in this Section 8.4 shall survive
repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the Granting Parties, the
Administrative Agent and the Secured Parties and their respective successors and
assigns; provided that no Granting Party may assign, transfer or delegate any of
its rights or obligations under this Agreement without the prior written consent
of the Administrative Agent.
8.6 Set-Off. Each Guarantor hereby irrevocably
authorizes the Administrative Agent and each other Secured Party at any time and
from time to time without notice to such Guarantor, any other Guarantor, the
Borrower or Blue Star Group, any such notice being expressly waived by each
Guarantor, by the Borrower and by the Blue Star Group, to the extent permitted
by applicable law, upon the occurrence and during the continuance of an Event of
Default under Section 10.2(a) and Section 10.3(a) of the Credit Agreement and
any amount remaining unpaid after it becomes due and payable by such Guarantor
hereunder, to set-off and appropriate and apply against any such amount any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent or such other
Secured Party to or for the credit or the account of such Guarantor, or any part
thereof in such amounts as the Administrative Agent or such other Secured Party
may elect. The Administrative Agent and each other Secured Party shall notify
such Guarantor promptly of any such set-off and the application made by the
Administrative Agent or such other Secured Party of the proceeds thereof;
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Administrative Agent and each
other Secured Party under this Section 8.6 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Administrative Agent or such other Secured Party may have.
8.7 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
8.8 Severability. Any provision of this Agreement which
is 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 jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction; provided that,
with respect to any Pledged Collateral of any Foreign Subsidiary Holdco, all
rights, powers and remedies provided in this Agreement may be exercised only to
the extent that they do not violate any provision of any law, rule or regulation
of any Governmental Authority applicable to any such
33
Pledged Collateral or affecting the legality, validity or enforceability of any
of the provisions of this Agreement against any such Foreign Subsidiary Holdco
(such laws, rules or regulations, "Applicable Law") and are intended to be
limited to the extent necessary so that they will not render this Agreement
invalid, unenforceable or not entitled to be recorded, registered or filed under
the provisions of any Applicable Law.
8.9 Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan
Documents represent the entire agreement of the Granting Parties, the
Administrative Agent and the other Secured Parties with respect to the subject
matter hereof, and there are no promises, undertakings, representations or
warranties by the Granting Parties, the Administrative Agent or any other
Secured Party relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
8.12 Submission To Jurisdiction; Waivers. Each party
hereto hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of
any judgement in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient forum and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address referred to in Section 8.2 or at
such other address of which the Administrative Agent (in the case of
any other party hereto) or the Borrower (in the case of the
Administrative Agent) shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
34
(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or
proceeding referred to in this Section any punitive damages.
8.13 Acknowledgements. Each Guarantor hereby
acknowledges that
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents
to which it is a party;
(b) neither the Administrative Agent nor any other Secured
Party has any fiduciary relationship with or duty to any Guarantor
arising out of or in connection with this Agreement or any of the other
Loan Documents, and the relationship between the Guarantors, on the one
hand, and the Administrative Agent and the Secured Parties, on the
other hand, in connection herewith or therewith is solely that of
debtor and creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby and thereby among the Secured Parties or among the
Guarantors and the Secured Parties.
8.14 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
8.15 Additional Granting Parties. Each new Subsidiary of
the Borrower that is required to become a party to this Agreement pursuant to
Section 7.10 of the Credit Agreement shall become a Granting Party for all
purposes of this Agreement upon execution and delivery by such Subsidiary of an
Assumption Agreement in the form of Annex 1 hereto.
8.16 Releases. (a) At such time as the Loans, the
Reimbursement Obligations and the other Obligations then due and owing shall
have been paid in full in cash, the Commitments have been terminated and no
Letters of Credit shall be outstanding, all Security Collateral shall be
released from the Liens created hereby, and this Agreement and all obligations
(other than those expressly stated to survive such termination) of the
Administrative Agent and each Granting Party hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party, and
all rights to the Security Collateral shall revert to the Granting Parties. At
the request and sole expense of any Granting Party following any such
termination, the Administrative Agent shall deliver to such Granting Party any
Security Collateral held by the Administrative Agent hereunder, and execute and
deliver to such Granting Party such documents (including, without limitation,
Uniform Commercial Code termination statements) as such Granting Party shall
reasonably request to evidence such termination.
(b) In connection with the sale or other disposition of
all of the Capital Stock of any Guarantor or the sale or other disposition of
Security Collateral permitted under the Credit Agreement (including, without
limitation, any Permitted Receivables Securitization and any contribution or
other transfer of any Blue Star Intercompany Notes to any BSIN
35
Subsidiary) and the release of such Guarantor from its Guarantee or the release
of the Security Collateral subject to such sale or other disposition, the
Administrative Agent shall execute and deliver to the relevant Granting Party
(at the sole cost and expense of such Granting Party) all releases or other
documents (including, without limitation, Uniform Commercial Code termination
statements) necessary or reasonably desirable for the release of the Liens
created hereby on such Security Collateral and, if applicable, such Guarantee as
such Granting Party may reasonably request.
36
IN WITNESS WHEREOF, each of the undersigned has caused
this Guarantee and Collateral Agreement to be duly executed and delivered as of
the date first above written.
U.S. OFFICE PRODUCTS COMPANY
By: /s/ XXXX DIRECTOR
------------------------------
Name: Xxxx Director
Title Executive Vice President
ACTION WHOLESALE SERVICE, INC.
By: /s/ XXXXXX X. XXXXX
------------------------------
Name: Xxxxxx X. Xxxxx
Title President
AFFORDABLE INTERIOR SYSTEMS, INC.
By: /s/ XXXXXX XXXXXXX
------------------------------
Name: Xxxxxx Xxxxxxx
Title President
AMERICAN LOOSE LEAF/BUSINESS
PRODUCTS, INC.
By: /s/ XXXXX XXXXXXXX
------------------------------
Name: Xxxxx Xxxxxxxx
Title President
XXXXXXX OFFICE SUPPLY & EQUIPMENT
CO.
By: /s/ J. XXXXXX XXXXXXX
------------------------------
Name: J. Xxxxxx Xxxxxxx
Title President
BINDERY SYSTEMS, INC.
By: /s/ XXXXXX X. XXXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title President
37
XXX XXXXXX OFFICE SUPPLY CO.
By: /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title President
BUSINESSWORKS, INC.
By: /s/ XXXX XXXXXXX
------------------------------
Name: Xxxx Xxxxxxx
Title President
XXXXXXXXX-XXXXXXX-CONTENAY, LLC
By: /s/ XXXXXX X. XXXX
------------------------------
Name: Xxxxxx X. Xxxx
Title President
CAROLINA OFFICE EQUIPMENT COMPANY,
INC.
By: /s/ XXXXXXX X. XXXXXXX XX
------------------------------
Name: Xxxxxxx X. Xxxxxxx XX
Title President
CENTRAL TEXAS OFFICE PRODUCTS, INC.
By: /s/ XXXXXX X. XXXXX, XX.
------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: President
XXXXXXXXXX HOLDINGS, LLC
By: /s/ XXXX X. XXXXX
------------------------------
Name: Xxxx X. Xxxxx
Title President
XXXXXXXXX-XXXX, INC.
By: /s/ XXXXXX X. XXXX
------------------------------
Name: Xxxxxx X. Xxxx
Title President
38
XXXXXXX-XXXXXXX COMPANY, LIMITED
By: /s/ XXXX X. XXXXXX XX.
------------------------------
Name: Xxxx X. Xxxxxx Xx.
Title President
XXXXXXXX OFFICE FURNITURE CO.
By: /s/ XXXX X. XXXXXXXX
------------------------------
Name: Xxxx X. Xxxxxxxx
Title President
EXPERT OFFICE SERVICES, INC.
By: /s/ XXX XXXXXXXXX
------------------------------
Name: Xxx Xxxxxxxxx
Title President
FORT XXXXX OFFICE SUPPLY, INC.
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title President
FORTY-FIFTEEN XXXXX REDEVELOPMENT
CORP.
By: /s/ XXXXXXX X. XXXXXXX
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title President
GENERAL OFFICE PRODUCTS COMPANY
By: /s/ XXX XXXXXX
------------------------------
Name: Xxx Xxxxxx
Title President
GLOBAL MAILBOX EXPRESS, LLC
By: /s/ XXXXXXX X. GURMALLY
------------------------------
Name: Xxxxxxx X. Gurmally
Title Managing Director
39
THE XX XXXX COMPANY
By: /s/ XXXXX X. XXXXXX
------------------------------
Name: Xxxxx X. Xxxxxx
Title President
X.X. XXXXXXX CO. INC.
By: /s/ XXXX X. XXXXXXX
------------------------------
Name: Xxxx X. Xxxxxxx
Title President
THE X. XXXXXX COMPANY, LLC
By: /s/ XXXX X. XXXXXX
------------------------------
Name: Xxxx X. Xxxxxx
Title President
KENTWOOD OFFICE FURNITURE, INC.
By: /s/ XXXXXX X. XXXXX
------------------------------
Name: Xxxxxx X. Xxxxx
Title President
LANDMARK INDUSTRIES, INC.
By: /s/ XXXXXXX X. XXXX
------------------------------
Name: Xxxxxxx X. Xxxx
Title President
XXXXXX ACQUISITION CORP.
By: /s/ XXXX X. DIRECTOR
------------------------------
Name: Xxxx X. Director
Title President
MAILBOXES, ETC.
By: /s/ XXXX DIRECTOR
------------------------------
Name: Xxxx Director
Title Vice President
40
MAIL BOXES, ETC. USA, INC.
By: /s/ XXXX DIRECTOR
------------------------------
Name: Xxxx Director
Title Vice President
XXXXXXXXX'X, INC.
By: /s/ XXXXXXX X. XXXX
------------------------------
Name: Xxxxxxx X. Xxxx
Title President
MILE HIGH OFFICE SUPPLY, LLC
By: /s/ XXXX SIRPOLAIDIS
------------------------------
Name: Xxxx Xxxxxxxxxxx
Title President
XXXXX XXXXXX BUSINESS PRODUCTS, INC.
By: /s/ XXX XXXXXXXXX
------------------------------
Name: Xxx Xxxxxxxxx
Title President
MODERN FOOD SYSTEMS, INC.
By: /s/ XXXXXXX XXXXXX
------------------------------
Name: Xxxxxxx Xxxxxx
Title President
MODERN VENDING, INC.
By: /s/ XXXXXXX XXXXXX
------------------------------
Name: Xxxxxxx Xxxxxx
Title President
XXXXXX OFFICE MACHINES, INC.
By: /s/ XXXXX XXXXXXXX
------------------------------
Name: Xxxxx Xxxxxxxx
Title President
41
NATIONAL OFFICE SUPPLY, INC.
By: /s/ XXXXXXX X. XXXXXXXX XX.
------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title President
NEW MEXICO OFFICE SOLUTIONS, INC.
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title President
THE OFFICE FURNITURE STORE, INC.
By: /s/ XXXX X. XXXXX
------------------------------
Name: Xxxx X. Xxxxx
Title President
THE OFFICE WORKS, INC.
By: /s/ XXXXX X. XXXXX
------------------------------
Name: Xxxxx X. Xxxxx
Title Assistant Secretary
PEAR COMMERCIAL INTERIORS
By: /s/ XXXXXX X. PEAR
------------------------------
Name: Xxxxxx X. Pear
Title President
PRICE MODERN, INC.
By: /s/ MILFORD A. MERCHANT
------------------------------
Name: Milford A. Merchant
Title President
RADAR BUSINESS SYSTEMS, INC.
By: /s/ XXXXXX XXXXXXX XX.
------------------------------
Name: Xxxxxx Xxxxxxx Xx.
Title President
42
RAINEN BUSINESS INTERIORS, INC.
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title President
SAGOT OFFICE INTERIORS, INC.
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx Xxxxx
Title President
XXXXXXX VENDING SERVICE, INC.
By: /s/ XXXXXX X. XXXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title President
STURGIS ACQUISITION CORP.
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title President
XXXXXXXX'X OFFSET SERVICES, INC.
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title President
THE SYSTEMS HOUSE, INC.
By: /s/ XXXX X. XXXXX
------------------------------
Name: Xxxx X. Xxxxx
Title President
U.S. OFFICE FURNITURE, INC.
U.S. OFFICE FURNITURE RENTALS, INC.
By: /s/ XXX XXXXXX
------------------------------
Name: Xxx Xxxxxx
Title Vice President Operations
43
U.S. OFFICE PRODUCTS-
GREAT LAKES, INC.
By: /s/ XXXXX X. XXXXX
------------------------------
Name: Xxxxx X. Xxxxx
Title President
USOP MERCHANDISING COMPANY
By: /s/ XXXXX X. XXXXXXX
------------------------------
Name: Xxxxx X. Xxxxxxx
Title President
X.X.XXXXXX PRODUCTS - MIDWEST LLC
By: /s/ XXXXX XXXX
------------------------------
Name: Xxxxx Xxxx
Title President
U.S. OFFICE PRODUCTS OF
NORTHERN WISCONSIN, INC.
By: /s/ XXXXX XXXX
------------------------------
Name: Xxxxx Xxxx
Title President
U.S. OFFICE PRODUCTS OF
SOUTHERN CALIFORNIA, INC.
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title President
VEND-RITE SERVICE CORPORATION
By: /s/ XXXX X. XXXXXXX
------------------------------
Name: Xxxx X. Xxxxxxx
Title Vice President
44
XXXXXXXXXXX, INC.
By: /s/ XXX XXXXXXXXX
------------------------------
Name: Xxx Xxxxxxxxx
Title President
Acknowledged and Agreed to as
of the date hereof by:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By: _______________________________
Name:
Title:
