Exhibit 10.4

 

EXECUTION COPY

 

 

 

 

 

 

SECOND AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

 

THIS SECOND AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT (as it may be
amended, restated, supplemented or otherwise modified from time to time, the
“Security Agreement”) is entered into as of February 22, 2017, by and among
Essendant Co., an Illinois corporation (“Borrower”), Essendant Inc., a Delaware
corporation (“Holdings”), the entities listed on the signature pages hereto
(Borrower, Holdings and such listed entities, collectively, the “Initial
Grantors”) and any additional entities which become parties to this Security
Agreement by executing a Security Agreement Supplement hereto in substantially
the form of Annex I hereto (such additional entities, together with the Initial
Grantors, each a “Grantor”, and collectively, the “Grantors”), and JPMorgan
Chase Bank, N.A. (“JPMorgan”), in its capacity as administrative agent (the
“Administrative Agent”) for the lenders party to the Credit Agreement referred
to below.

 

PRELIMINARY STATEMENT

 

 

 

The Grantors,  the Administrative Agent,  and the Lenders are entering into a
Fifth Amended and Restated Credit Agreement dated as of February 22, 2017 (as it
may be amended, restated, supplemented or otherwise modified from time to time,
the “Credit Agreement”) which shall amend and restate in its entirety that
certain Fourth Amended and Restated Five-Year Revolving Credit Agreement, dated
as of July 8, 2013 (as it may be amended, restated, supplemented or otherwise
modified from time to time, the “Existing Credit Agreement”), by and among
certain of the Grantors, JPMorgan and the lenders party thereto;

 

Obligations under the Existing Credit Agreement are secured pursuant to that
certain Amended and Restated Security Agreement, dated as of October 15, 2007
(as amended, restated, supplemented, or otherwise modified from time to time
prior to the date hereof, the “Existing Security Agreement”) executed by certain
of the Grantors;

 

It is a condition precedent to the obligations of the Lenders to make their
extensions of credit under the Credit Agreement that the Grantors shall have
amended and restated the Existing Security Agreement in its entirety as
hereinafter set forth.

 

ACCORDINGLY, the Grantors and the Administrative Agent, on behalf of the Secured
Parties, hereby agree as follows:

 

ARTICLE I DEFINITIONS

 

1.1.Terms Defined in Credit Agreement.   All capitalized terms used herein and
not otherwise defined shall have the meanings assigned to such terms in the
Credit Agreement.

 

1.2.Terms Defined in UCC.   Terms defined in the UCC which are not otherwise
defined in this Security Agreement are used herein as defined in the UCC.

 

1.3.Definitions of Certain Terms Used Herein. As used in this Security
Agreement, in addition to the terms defined in the first paragraph hereof and in
the Preliminary Statement, the following terms shall have the following
meanings:

 

“Accounts” shall have the meaning set forth in Article 9 of the UCC.

 

ACTIVE 219795239v.12

 

 

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“Article” means a numbered article of this Security Agreement, unless another
document is specifically referenced.

 

“Chattel Paper” shall have the meaning set forth in Article 9 of the UCC.

 

“Collateral” shall have the meaning set forth in Article II.

 

“Collateral Access Agreement” means any landlord waiver or other agreement, in
form and substance satisfactory to the Administrative Agent in its Permitted
Discretion, between the Administrative Agent and any third party (including any
bailee, consignee, processor, customs broker, or other similar Person) in
possession of any Collateral or any landlord of any real property where any
Collateral is located, as such landlord waiver or other agreement may be
amended, restated, supplemented or otherwise modified from time to time.

 

“Collateral Deposit Account” shall have the meaning set forth in Section 7.1(a).

 

“Collateral Report” means any certificate (including any Revolving Borrowing
Base Certificate or FILO Borrowing Base Certificate), report or other document
(including, without limitation, the schedules to the Credit Agreement) delivered
by any Grantor to the Administrative Agent or any Lender with respect to the
Collateral pursuant to any Loan Document.

 

“Collection Account” shall have the meaning set forth in Section 7.1(b).

 

“Commercial Tort Claims” means commercial tort claims, as defined in the UCC of
any Grantor, including each commercial tort claim specifically described in
Exhibit J.

 

“Control” shall have the meaning set forth in Article 8 or, if applicable, in
Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

 

“Copyrights” means, with respect to any Person, all of such Person’s right,
title, and interest in and to the following: (a) all copyrights, rights and
interests in copyrights, works protectable by copyright, copyright
registrations, and copyright applications; (b) all renewals of any of the
foregoing; (c) all income, royalties, damages, and payments now or hereafter due
and/or payable under any of the foregoing, including, without limitation,
damages or payments for past or future infringements for any of the foregoing;
(d) the right to sue for past, present, and future infringements of any of the
foregoing; and (e) all rights corresponding to any of the foregoing throughout
the world.

 

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

 

“Deposit Account Control Agreement” means an agreement, in form and substance
reasonably satisfactory to the Administrative Agent in its Permitted Discretion,
among any Loan Party, a banking institution holding such Loan Party’s funds, and
the Administrative Agent with respect to collection and control of all deposits
and balances held in a Deposit Account maintained by such Loan Party with such
banking institution.

 

“Deposit Accounts” shall have the meaning set forth in Article 9 of the UCC.

 

“Documents” shall have the meaning set forth in Article 9 of the UCC.

 

“Effective Date” means the date of the Credit Agreement.

 

“Equipment” shall have the meaning set forth in Article 9 of the UCC.

 

“Event of Default” means an event described in Section 5.1.

 

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“Excluded Accounts” means (i) payroll and other employee wage and benefit
accounts, (ii) tax accounts, including sales tax accounts, (iii) petty cash
accounts funded in the ordinary course of business,

(iv) escrow, fiduciary or trust accounts, (v) designated disbursement accounts
and bank accounts that are not

located in the United States of America and (vi) the Securities Accounts listed
on Exhibit B on the Effective Date; provided that, notwithstanding anything to
the contrary set forth in foregoing, no Collateral Deposit Account, Liberty Bell
BAML Receivables Account or Operating Account shall be an Excluded Account.

 

“Excluded Assets” means (i) any leasehold interest in real property, (ii) any
property to the extent that the grant of a security interest therein is
prohibited by any applicable law or governmental authority, or requires a
consent not obtained of any governmental authority pursuant to any applicable
law except to the extent that such applicable law providing for such
prohibition, breach, default or termination or requiring such consent is
ineffective under applicable law; provided, that, the foregoing exclusion shall
in no way be construed to apply if any such prohibition is unenforceable under
Sections 9-406, 9-407, 9-408 of 9-409 of the UCC or other applicable law;
provided further that, immediately upon the ineffectiveness, lapse or
termination of such prohibition or the granting of such consent, such property
shall automatically constitute Collateral, (iii) any property to the extent that
the grant of a security interest therein is prohibited by, or constitutes a
breach or default under or results in the termination of or requires any consent
not obtained under, any contract, license, agreement, instrument or other
document evidencing or giving rise to such property or, in the case of any
investment property, any applicable shareholder or similar agreement, except to
the extent that the term in such contract, license, agreement, instrument or
other document or shareholder or similar agreement providing for such
prohibition, breach, default or termination or requiring such consent is
ineffective under applicable law and such prohibition has not been or is not
waived or the consent of the other party to such contract, lease, sublease,
permit, license, charter or similar agreement has not been or is not otherwise
obtained or under applicable law such prohibition cannot be waived; provided,
that, the foregoing exclusion shall in no way be construed (x) to apply if any
such prohibition is unenforceable under Sections 9-406, 9-407, 9-408 of 9-409 of
the UCC or other applicable law or (y) so as to limit, impair or otherwise
affect Administrative Agent’s unconditional continuing security interests in and
Liens upon any rights or interests of any Grantor in or to monies due or to
become due under any such contract, license, agreement, instrument or other
similar document; provided, further that such contract, license, agreement,
instrument or other similar document will cease to be Excluded Assets and will
become subject to the Lien granted hereunder, immediately and automatically, at
such time as the granting of a Lien hereunder is no longer prohibited, (iv) the
excess over 65% of all of the voting shares of Equity Interests in any
first-tier Foreign Subsidiary, (v) any Equity Interests of any Subsidiary of any
Foreign Subsidiary, (vi) any shares of Holdings’ capital stock that have been
repurchased by Holdings and held in treasury, (vii) any “intent to use”
trademark applications for which a statement of use has not been filed and
(viii) any property as to which the Administrative Agent determines in its sole
discretion that the costs of obtaining, perfecting or maintaining a Lien thereon
are excessive in relation to the practical benefit to be afforded thereby.

 

“Exhibit” refers to a specific exhibit to this Security Agreement, unless
another document is specifically referenced. Each reference to an Exhibit means
such Exhibit as updated from time to time in accordance with this Security
Agreement. At the option of the Borrower, any information to be provided in
Exhibit B, C, E or G hereto may be provided by a separate disclosure document
making reference to this Security Agreement and the applicable Exhibit, in which
case each reference to the applicable Exhibit shall be deemed a reference to
such disclosure document.

 

“Exhibit Effective Date” means (i) the date hereof, and (ii) the effective date
of each update to the Exhibits pursuant to Section 4.16.

 

“Fixtures” shall have the meaning set forth in Article 9 of the UCC.

 

“General Intangibles” shall have the meaning set forth in Article 9 of the UCC.

 

“Goods” shall have the meaning set forth in Article 9 of the UCC.

 

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“Instruments” shall have the meaning set forth in Article 9 of the UCC.

 

“Inventory” shall have the meaning set forth in Article 9 of the UCC.

 

“Investment Property” shall have the meaning set forth in Article 9 of the UCC.

 

“Lenders” means the lenders party to the Credit Agreement and their successors
and assigns.

 

“Letter-of-Credit Rights” shall have the meaning set forth in Article 9 of the
UCC.

 

“Liberty  Bell BAML Receivables Accounts” means the Deposit Accounts maintained
at Bank of America, N.A. and identified as the “Liberty Bell BAML Receivables
Accounts” in Exhibit B hereto.

 

“Licenses” means, with respect to any Person, all of such Person’s right, title,
and interest in and to (a) any and all licensing agreements or similar
arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income,
royalties, damages, claims, and payments now or hereafter due or payable under
and with respect thereto, including, without limitation, damages and payments
for past and future breaches thereof, and (c) all rights to sue for past,
present, and future breaches thereof.

 

“Nestor Sales Account” means the Deposit Account maintained by Nestor Sales LLC
at Bank of America, N.A. and identified as the “Nestor Sales Account” in Exhibit
B hereto.

 

“Operating Account” means those Deposit Accounts designated as “Operating
Accounts” in Exhibit B to this Security Agreement, as updated from time to time
by the Grantors pursuant to Section 7.2.

 

“Patents” means, with respect to any Person, all of such Person’s right, title,
and interest in and to: (a) any and all patents and patent applications; (b) all
inventions and improvements described and claimed therein;

 

(c)

all reissues, divisions, continuations, renewals, extensions, and
continuations-in-part thereof; (d) all income,

 

royalties, damages, claims, and payments now or hereafter due or payable under
and with respect thereto, including, without limitation, damages and payments
for past and future infringements thereof; (e) all rights to sue for past,
present, and future infringements thereof; and (f) all rights corresponding to
any of the foregoing throughout the world.

 

“Pledged Collateral” means all Instruments, Securities and other Investment
Property of the Grantors (including, without limitation, any Pledged Stock),
whether or not physically delivered to the Administrative Agent pursuant to this
Security Agreement (other than Excluded Assets).

 

“Pledged Stock” means, with respect to any Grantor, the shares of common and
preferred stock (or other ownership interest) of each issuer identified in
Exhibit G under the name of such Grantor and all other shares of capital stock
(or other ownership interest) of whatever class of each such issuer, now or
hereafter owned by such Grantor, and all certificates evidencing the same, and
shall include, without limitation, all of the capital stock of such Grantor’s
Domestic Subsidiaries owned by such Grantor and the requisite percentage of the
capital stock of all Material Foreign Subsidiaries required to be pledged
pursuant to the Credit Agreement, and owned by such Grantor.

 

“Receivables” means the Accounts, Chattel Paper, Documents, Investment Property,
Instruments and any other rights or claims to receive money which are General
Intangibles or which are otherwise included as Collateral.

 

“Section” means a numbered section of this Security Agreement, unless another
document is specifically referenced.

 

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“Securities Account” shall have the meaning set forth in Article 8 of the UCC.

 

“Security” shall have the meaning set forth in Article 8 of the UCC.

 

“Security Agreement Supplement” means any Security Agreement Supplement to this
Security Agreement in substantially the form of Annex I hereto executed by an
entity that becomes a Grantor under this Security Agreement after the date
hereof.

 

“Settlement Note” means a promissory note from an Account Debtor to a Grantor
evidencing such Account Debtor’s obligation to pay Accounts that are past due
when the terms of such note are approved by such Grantor.

 

“Stock Rights” means all dividends, instruments or other distributions and any
other right or property which the Grantors shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any Equity Interest constituting Collateral, any right to
receive an Equity Interest and any right to receive earnings, in which the
Grantors now have or hereafter acquire any right, issued by an issuer of such
Equity Interest.

 

“Supporting Obligations” shall have the meaning set forth in Article 9 of the
UCC.

 

“Trademarks” means, with respect to any Person, all of such Person’s right,
title, and interest in and to the following: (a) all trademarks (including
service marks), trade names, trade dress, and trade styles and the registrations
and applications for registration thereof and the goodwill of the business
symbolized by the foregoing; (b) all licenses of the foregoing, whether as
licensee or licensor; (c) all renewals of the foregoing; (d) all income,
royalties, damages, and payments now or hereafter due or payable with respect
thereto, including, without limitation, damages, claims, and payments for past
and future infringements thereof; (e) all rights to sue for past, present, and
future infringements of the foregoing, including the right to settle suits
involving claims and demands for royalties owing; and (f) all rights
corresponding to any of the foregoing throughout the world.

 

“UCC” means the Uniform Commercial Code, as in effect from time to time, of the
State of New York or of any other state the laws of which are required as a
result thereof to be applied in connection with the attachment, perfection or
priority of, or remedies with respect to, Administrative Agent’s or any other
Secured Party’s Lien on any Collateral.

 

 

 

terms.

The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined

 

 

ARTICLE II

GRANT OF SECURITY INTEREST

 

Each Grantor hereby pledges, assigns and grants to the Administrative Agent, on
behalf of and for the ratable benefit of the Secured Parties, a security
interest in all of its right, title and interest in, to and under all personal
property and other assets, whether now owned by or owing to, or hereafter
acquired by or arising in favor of such Grantor (including under any trade name
or derivations thereof), and whether owned or consigned by or to, or leased from
or to, such Grantor, and regardless of where located, but excluding Excluded
Assets (all of which will be collectively referred to as the “Collateral”),
including:

 

 

(i)

all Accounts;

 

 

(ii)

all Chattel Paper;

 

 

(iii)

all Copyrights, Patents and Trademarks;

 

 

(iv)

all Documents;

 

(i)

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(v)

all Equipment;

 

 

(vi)

all Fixtures;

 

 

(vii)

all General Intangibles;

 

 

(viii)

all Goods;

 

 

(ix)

all Instruments;

 

 

(x)

all Inventory;

 

 

(xi)

all Investment Property;

 

 

(xii)

all cash or cash equivalents;

 

 

(xiii)

all letters of credit, Letter-of-Credit Rights and Supporting Obligations;

 

 

(xiv)

all Deposit Accounts with any bank or other financial institution;

 

 

(xv)

all Commercial Tort Claims; and

 

 

(xvi)

all accessions to, substitutions for and replacements, proceeds (including Stock
Rights), insurance proceeds and products of the foregoing, together with all
books and records, customer lists, credit files, computer files, programs,
printouts and other computer materials and records related thereto and any
General Intangibles at any time evidencing or relating to any of the foregoing;

 

 

to secure the prompt and complete payment and performance of the Secured
Obligations.

 

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES

 

Each Grantor represents  and warrants, and each Grantor that becomes a party  to
this Security Agreement pursuant to the execution of a Security Agreement
Supplement represents and warrants (after giving effect to supplements, if any,
to each of the Exhibits hereto with respect to such Grantor as attached to such
Security Agreement Supplement or as the Exhibits are otherwise updated from time
to time in accordance with this Security Agreement), to the Administrative Agent
and the Lenders that:

 

3.1.Title, Authorization, Validity, Enforceability, Perfection and Priority.
Such Grantor has good and valid rights in or the power to transfer the
Collateral owned by it and title to the Collateral with respect to which it has
purported to grant a security interest hereunder,   free and clear of all Liens
except for Liens permitted under Section 4.1(e), and has requisite power and
authority to grant to the Administrative Agent the security interest in the
Collateral pursuant hereto. The execution and delivery by such Grantor of this
Security Agreement has been duly authorized by proper corporate or limited
liability company proceedings of such Grantor, as applicable, and this Security
Agreement constitutes a legal valid and binding obligation of such Grantor and
creates a security interest which is enforceable against such Grantor in all
Collateral it now owns or hereafter acquires, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer, voidable
transactions or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law. When financing statements have been filed in the
appropriate offices against such Grantor in the locations listed on Exhibit H,
the Administrative Agent will have a fully perfected first priority security
interest in that Collateral owned by such Grantor in which a security interest
may be perfected by filing under the UCC, subject only to Liens permitted under
Section 4.1(e).

 

3.2.Type and Jurisdiction of Organization.   The type of entity of such Grantor
and its state of organization are set forth on Exhibit A.

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3.3.Principal Location.  As of the Closing Date, such Grantor’s location of its
place of business (if it has only one) or its chief executive office (if it has
more than one place of business), are disclosed in Exhibit A.

 

3.4.Collateral Locations. All of such Grantor’s locations where (A) any
Collateral that constitutes Eligible Inventory with a market value in excess of
$250,000 in the aggregate or (B) any other Collateral with a market value in
excess of $1,000,000 in the aggregate, in each case, other than Collateral in
transit in the ordinary course of business, is stored or located are listed on
Exhibit A. All of said locations are owned by such Grantor except for locations
(i) which are leased by the Grantor as lessee and designated in Part VII(b) of
Exhibit A and (ii) at which Inventory is held in a public warehouse or is
otherwise held by a bailee or on consignment as designated in Part VII(c) of
Exhibit A.

 

3.5.Deposit Accounts and Securities Accounts.   All of  such Grantor’s Deposit
Accounts and Securities Accounts are listed on Exhibit B; provided that Grantors
shall have up to 30 days after the opening of any Excluded Account after the
Closing Date to update Exhibit B.

 

3.6.Exact Names. Such Grantor’s name in which it has executed this Security
Agreement is the exact name as it appears in such Grantor’s organizational
documents, as amended, as filed with such Grantor’s jurisdiction of
organization.   Except as set forth on Exhibit A, such Grantor has not, during
the five years preceding the Exhibit Effective Date, been known by or used any
other corporate or fictitious name, or been a party to any merger or
consolidation, or been a party to any acquisition.

 

3.7.Letter-of-Credit Rights and Chattel Paper.  As of the most recent Exhibit
Effective Date, Exhibit C lists all Letter-of-Credit Rights and Chattel Paper
having a face amount in excess of $1,000,000 owned by any of the Grantors. All
action by such Grantor necessary or desirable to protect and perfect the
Administrative Agent’s Lien on each item listed on Exhibit C as of the most
recent Exhibit Effective Date (including the delivery of all originals and the
placement of a legend on all Chattel Paper as required hereunder) has been duly
taken. The Administrative Agent will have a fully perfected first priority
security interest in the Collateral listed on Exhibit C, subject only to Liens
permitted under Section 4.1(e). Such Grantor has not pledged, assigned or
delivered any letter of credit or Chattel Paper to any third party other than
the Administrative Agent.

 

3.8.Accounts and Chattel Paper.

 

(a)The names of the obligors,  amounts owing,  due dates and other information
with respect to its Accounts and Chattel Paper are and will be correctly stated,
in all material respects, in all records of such Grantor relating thereto and in
all invoices and Collateral Reports with respect thereto furnished to the
Administrative Agent by such Grantor from time to time.   As of the time when
each Account or each item of Chattel Paper arises, such Grantor shall be deemed
to have represented and warranted that such Account or Chattel Paper, as the
case may be, and all records relating thereto, are genuine and in all material
respects what they purport to be.

 

(b)With respect any of its Accounts scheduled or listed in the most recent
Collateral Report as constituting Eligible Accounts, as of the date of such
Collateral Report, (i) such Accounts are Eligible Accounts; (ii) to such
Grantor’s knowledge, there are no facts, events or occurrences which in any way
impair the validity or enforceability thereof or could reasonably be expected to
materially reduce the amount payable thereunder as shown on such Grantor’s books
and records and any invoices, statements and Collateral Reports with respect
thereto; and (iii) such Grantor has not received any notice of proceedings or
actions which are threatened or pending against any Account Debtor which might
result in any adverse change in such Account Debtor’s financial condition.

 

(c)In addition, with respect to all of its Accounts, (i) no payments have been
or shall be made thereon except payments promptly delivered to a Collateral
Deposit Account or Liberty Bell BAML Receivables Account as required pursuant to
Section 7.1; and (ii) to such Grantor’s knowledge, all Account

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Debtors have the capacity to contract.

3.9.Inventory. With respect to any of its Inventory scheduled or listed on the
most recent Collateral Report as constituting Eligible Inventory, as of the date
of such Collateral Report, (a) such Inventory is Eligible Inventory, (b) such
Inventory (other than Inventory in transit in the ordinary course of business)
is located or stored at one of the locations set forth on Exhibit A (as updated
from time to time pursuant to Section 4.16 or the most recent Collateral Report)
or otherwise as permitted pursuant to Section 4.1(g), (c) such Inventory has
been produced in accordance with the Federal Fair Labor Standards Act of 1938,
as amended, and all rules, regulations and orders thereunder and (d) the
completion of manufacture, sale or other disposition of such Inventory by the
Administrative Agent following an Event of Default shall not require the consent
of any Person and shall not constitute a breach or default under any contract or
agreement to which such Grantor is a party or to which such property is subject.

 

3.10.Intellectual Property. Such Grantor does not have  any  interest in,  or
title  to, any Patent, Trademark or registered Copyright except as set forth in
Exhibit D or any application for any of the foregoing; provided that except
where the failure to own or hold license rights thereto would not reasonably be
expected to have a Material Adverse Effect. This Security Agreement is effective
to create a valid and continuing Lien on and, upon filing of appropriate
financing statements in the offices listed on Exhibit H and timely filing of
this Security Agreement with the United States Copyright Office and the United
States Patent and Trademark Office, fully perfected first priority security
interests in favor of the Administrative Agent (subject only to Liens permitted
under Section 4.1(e)) on such Grantor’s Patents, Trademarks and Copyrights, such
perfected security interests are enforceable as such as against any and all
creditors of and purchasers from such Grantor; and all action necessary or
desirable to protect and perfect the Administrative Agent’s Lien on such
Grantor’s Patents, Trademarks or Copyrights shall have been duly taken. The use
of such Patent, Trademark or Copyright as set forth in Exhibit D, by each
Grantor does not infringe upon the rights of any other Person, and each
Grantor’s rights thereto are not subject to any licensing agreement or similar
arrangement, in each case except where such infringement or licensing agreement
or similar arrangement would not reasonably be expected to have a Material
Adverse Effect.

 

3.11.Filing Requirements. As of the most recent Exhibit Effective Date, none of
its Equipment is covered by any certificate of title, except for the vehicles
and other Equipment described in Part I of Exhibit E. As of the most recent
Exhibit Effective Date, none of the Collateral owned by it is of a type for
which security interests or liens may be perfected by filing under any federal
statute except for (a) the vehicles and other Equipment described in Part II of
Exhibit E and (b) Patents, Trademarks and Copyrights held by such Grantor and
described in Exhibit D.

 

3.12.No Financing Statements, Security Agreements.   No valid financing
statement or security agreement describing all or any portion of the Collateral
which has not lapsed or been terminated (by a filing authorized by the secured
party in respect thereof) naming such Grantor as debtor has been filed or is of
record in any jurisdiction except for financing statements or security
agreements (a) naming the Administrative Agent on behalf of the Secured Parties
as the secured party and (b) in respect to Liens permitted under Section 4.1(e).

 

3.13.Pledged Collateral.

 

(a)As of the most recent Exhibit Effective Date, Exhibit G sets forth a complete
and accurate list of all Pledged Stock, and to the extent (x) the same do not
constitute Permitted Investments or Settlement Notes and have a value in excess
of $5,000,000 individually or $10,000,000 in the aggregate and (y) the same
constitute Settlement Notes and have an outstanding principal amount in excess
of $1,000,000 individually or $10,000,000 in the aggregate, all other Pledged
Collateral owned by such Grantor. Such Grantor is the direct, sole beneficial
owner and sole holder of record of the Pledged Collateral listed on Exhibit G as
being owned by it, free and clear of any Liens, except for any Liens permitted
by Section 4.1(e). Such Grantor further represents and warrants that (i) all
Pledged Collateral owned by it constituting an Equity Interest in any Subsidiary
has been (to the extent such concepts are relevant with respect to such Pledged
Collateral) duly authorized, validly issued, and is fully paid and
non-assessable, (ii) with respect to any certificates delivered to

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the Administrative Agent representing an Equity Interest, except as disclosed by
the Borrower to the Administrative Agent, such certificates are Securities as
defined in Article 8 of the UCC as a result of actions by the issuer or
otherwise, (iii) all such Pledged Collateral held by a securities intermediary
(other than in connection with any Securities Account that is an Excluded
Account) is covered by a control agreement among such Grantor, the securities
intermediary and the Administrative Agent pursuant to which the Administrative
Agent has Control, and (iv) all Pledged Collateral which represents Indebtedness
owed to such Grantor has, to such Grantor’s actual knowledge, been duly
authorized, authenticated or issued and delivered by the issuer of such
Indebtedness, is the legal, valid and binding obligation of such issuer and such
issuer is not in default thereunder.

 

(b)In addition, (i) none of the Pledged Collateral owned by it has been issued
or transferred in violation of the securities registration, securities
disclosure or similar laws of any jurisdiction to which such issuance or
transfer may be subject, (ii) no options, warrants, calls or commitments of any
character whatsoever

(A)exist relating to such Pledged Collateral or (B) obligate the issuer of any
Equity Interest included in the Pledged Collateral to issue additional Equity
Interests, and (iii) no consent, approval, authorization, or other

action by, and no giving of notice, filing with, any governmental authority or
any other Person is required for the

pledge by such Grantor of such Pledged Collateral pursuant to this Security
Agreement or for the execution, delivery and performance of this Security
Agreement by such Grantor, or for the exercise by the Administrative Agent of
the voting or other rights provided for in this Security Agreement or for the
remedies in respect of the Pledged Collateral pursuant to this Security
Agreement, except as may be required in connection with such disposition by laws
affecting the offering and sale of securities generally.

 

(c)Except as set forth in Exhibit G, as of the most recent Exhibit Effective
Date, such Grantor owns 100% of the issued and outstanding Equity Interests
which constitute Pledged Collateral owned by it.   Except as set forth in
Exhibit G, none of the Pledged Collateral that is set forth in Exhibit G which
represents Indebtedness owed to such Grantor is subordinated in right of payment
to other Indebtedness or subject to the terms of an indenture; provided that in
no event shall any Receivable owed to such Grantor be subordinated in right of
payment to other Indebtedness or subject to the terms of an indenture.

 

 

 

ARTICLE IV

COVENANTS

 

From the date of this Security Agreement and thereafter until this Security
Agreement is terminated pursuant to the terms hereof, each Grantor party hereto
as of the date hereof agrees, and from and after the effective date of any
Security Agreement Supplement applicable to any Grantor (and after giving effect
to supplements, if any, to each of the Exhibits hereto with respect to such
subsequent Grantor as attached to such Security Agreement Supplement or as the
Exhibits are otherwise updated from time to time in accordance with this
Security Agreement) and thereafter until this Security Agreement is terminated
pursuant to the terms hereof, each such additional Grantor agrees that:

 

4.1.General.

 

(a)Organizational and Identification Numbers; Mailing Address. Promptly upon
request by the Administrative Agent therefor, such Grantor agrees to furnish any
of the following information to the Administrative Agent:

(i)the organizational number issued to such Grantor by its state of organization
and its federal employer identification number;

 

(ii)such Grantor’s mailing address, or the location of its records concerning
the Collateral as set forth in this Security Agreement; and

(i)

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(iii)such Grantor’s location of its place of business (if it has only one) or
its chief executive office (if it has more than one place of business),

 

(b)Authorization to File Financing Statements; Ratification.     Such Grantor  
hereby authorizes the Administrative Agent to file, and if requested will
deliver to the Administrative Agent, all financing statements and other
documents and take such other actions as may from time to time be requested by
the Administrative Agent in order to maintain a first priority perfected
security interest in and, if applicable, Control of, the Collateral owned by
such Grantor, in each case to the extent required to ensure the accuracy of the
representation set forth in Section 3.16 of the Credit Agreement.   Any
financing statement filed by the Administrative Agent may be filed in any filing
office in any UCC jurisdiction and may (i) indicate such Grantor’s Collateral
(1) as all assets of the Grantor or words of similar effect, regardless of
whether any particular asset comprised in the Collateral falls within the scope
of Article 9 of the UCC of such jurisdiction, or

(2) by  any  other description which  reasonably  approximates the description
contained  in this Security Agreement, and (ii) contain any other information
required by part 5 of Article 9 of the UCC for the sufficiency or filing office
acceptance of any financing statement or amendment, including (A) whether such
Grantor is an organization, the type of organization and any organization
identification number issued to such Grantor, and

(B)in the case of a financing statement filed as a fixture filing or indicating
such Grantor’s Collateral as as- extracted collateral or timber to be cut, a
sufficient description of real property to which the Collateral relates.

Such Grantor also agrees to furnish any such information described in the
foregoing sentence to the

Administrative Agent promptly upon request. Such Grantor also ratifies its
authorization for the Administrative Agent to have filed in any UCC jurisdiction
any initial financing statements or amendments thereto if filed prior to the
date hereof.

 

(c)Further Assurances.   Such Grantor agrees to take any and all actions
necessary to defend its ownership interests in the Collateral against all
persons, and to defend the security interest of the Administrative Agent in its
Collateral and the priority thereof against any Lien not expressly permitted
under the Credit Agreement or hereunder.

 

(d)Disposition of Collateral. Such Grantor will not sell, lease or otherwise
dispose of the Collateral owned by it except for dispositions permitted pursuant
to Section 6.05 of the Credit Agreement.

 

(e)Liens. Such Grantor will not create, incur, or suffer to exist any Lien on
the Collateral owned by it except (i) the security interest created by this
Security Agreement, and (ii) Liens permitted pursuant to Section 6.02 of the
Credit Agreement.

 

(f)Other Financing Statements.  Such Grantor will not authorize the filing of
any financing statement naming it as debtor covering all or any portion of the
Collateral owned by it, except for financing statements (i) naming the
Administrative Agent on behalf of the Secured Parties as the secured party, and
(ii) perfecting Liens permitted by Section 4.1(e). Such Grantor acknowledges
that it is not authorized to file any financing statement or amendment or
termination statement with respect to any financing statement filed in favor of
the Administrative Agent pursuant to this Security Agreement or any other Loan
Document without the prior written consent of the Administrative Agent, subject
to such Grantor’s rights under Section 9-509(d)(2) of the UCC.

 

(g)Locations. Such Grantor will not (i) maintain (A) any Collateral that
constitutes Eligible Inventory with a market value in excess of $250,000 in the
aggregate or (B) any other Collateral with a market value in excess of
$1,000,000 in the aggregate, in each case, other than Collateral in transit in
the ordinary course of business, at any location other than those locations
listed on Exhibit A, or (ii) otherwise change, or add to, such locations other
than as permitted by Section 4.15.

 

(h)Compliance with Terms. Such Grantor will perform and comply with all
obligations in respect of the Collateral owned by it and all agreements to which
it is a party or by which it is bound relating to such Collateral except where
the failure to perform or comply would be reasonably likely to result in
Material

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Adverse Effect.

 

4.2.Receivables.

 

(a)Certain Agreements on Receivables. Such Grantor will not make or agree to
make any discount, credit, rebate or other reduction in the original amount
owing on a Receivable or accept in satisfaction of a Receivable less than the
original amount thereof, except that such Grantor may take any such action
listed above in accordance with its reasonable business judgment.

 

(b)Collection of Receivables. Except as otherwise provided in this Security
Agreement, such Grantor will collect and enforce, at such Grantor’s sole expense
and to the extent determined appropriate in accordance with its reasonable
business judgment, all amounts due or hereafter due to such Grantor under the
Receivables owned by it.

 

(c)Delivery of Invoices. After the occurrence and during the continuance of an
Event of Default or during any Liquidity Condition Period, each Grantor will
deliver to the Administrative Agent promptly upon its request (which request
shall be made in its Permitted Discretion) duplicate invoices with respect to
each Account owned by it.

 

(d)Disclosure of Counterclaims on Receivables.   If to the knowledge of any
Grantor (i) any discount, credit or agreement to make a rebate or to otherwise
reduce the amount owing on any Receivable owned by such Grantor exists in an
amount in excess of $5,000,000 or (ii) if, to the knowledge of such Grantor, any
dispute, setoff, claim, counterclaim or defense exists or has been asserted or
threatened with respect to any such Receivable in an amount in excess of
$5,000,000, such Grantor will promptly disclose such fact to the Administrative
Agent in writing.   Such Grantor shall send the Administrative Agent a copy of
each credit memorandum in excess of $5,000,000 as soon as issued, and such
Grantor shall promptly report each credit memorandum and each of the facts
required to be disclosed to the Administrative Agent in accordance with this
Section 4.2(d) on the Revolving Borrowing Base Certificates and FILO Borrowing
Base Certificates submitted by it.

 

(e)Electronic Chattel Paper.   Such Grantor shall take all steps necessary to
grant the Administrative Agent Control of all electronic chattel paper if (i)
the face amount thereof is in excess of

$5,000,000 or (ii) the face amount thereof, when taken together with all other
electronic chattel paper to which

the Administrative Agent was not previously granted Control is in excess of
$10,000,000 in the aggregate (with all such electronic chattel paper then being
required to be made subject to the Administrative Agent’s Control), in
accordance with the UCC and all “transferable records” as defined in each of the
Uniform Electronic Transactions Act and the Electronic Signatures in Global and
National Commerce Act.

 

4.3.Inventory and Equipment.

 

(a)[Reserved].

 

(b)Returned Inventory. If, to the knowledge of any Grantor, an Account Debtor
returns any Inventory to such Grantor, then such Grantor shall immediately
report to the Administrative Agent any return involving an amount in excess of
$10,000,000. Each such report shall indicate the reasons for the returns and the
locations and condition of the returned Inventory. In the event any Account
Debtor returns Inventory to such Grantor when an Event of Default exists, such
Grantor, upon the request of the Administrative Agent, shall, in the event that
either (x) such Inventory was returned due to a product recall   or (y) such
Grantor determines in its reasonable business judgment that such Inventory is
unfit for sale: (i) hold the returned Inventory in trust for the Administrative
Agent; (ii) segregate all returned Inventory from all of its other property;
(iii) dispose of  the returned Inventory  solely  according  to the
Administrative Agent’s written instructions; and (iv) not issue any credits or
allowances with respect thereto without the Administrative Agent’s prior written
consent. All returned Inventory shall be subject to the Administrative Agent’s
Liens thereon.

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Whenever any Inventory is returned, the related Account shall be deemed
ineligible to the extent of the amount owing by the Account Debtor with respect
to such returned Inventory.

 

(c)Inventory Count. Such Grantor will conduct a physical count of its Inventory
at least once per fiscal year (which may be on a “cycle count” basis consistent
with the Borrower’s historical practice), and after and during the continuation
of an Event of Default, at such other times as the Administrative Agent
requests. Such Grantor, at its own expense, shall deliver to the Administrative
Agent the results of each physical verification, which such Grantor has made, or
has caused any other Person to make on its behalf, of all or any portion of its
Inventory in such form and detail as the Administrative Agent may request in its
Permitted Discretion.

 

(d)Equipment.   Such Grantor shall promptly inform the Administrative Agent of
any deletions from its Eligible Equipment subject to a certificate of title
(other than forklifts) which individually or in the aggregate exceed
$1,000,000.   Such Grantor will not, without the Administrative Agent’s prior
written consent, alter or remove any identifying symbol or number on any of such
Grantor’s Equipment constituting Collateral.

 

(e)Titled Equipment. On and after the first date on which Revolving Availability
is less than $100,000,000, the Administrative Agent may request that its Lien on
all Equipment subject to a certificate of title (such as, but not limited to,
vehicles) be noted thereon. The Grantors, promptly upon receipt of such request,
shall take all steps reasonably requested by the Administrative Agent to cause
such Lien to be noted on such certificate, including, without limitation,
delivering such certificates of title to the Administrative Agent and/or
delivering such certificates to the applicable secretaries of state (or other
applicable governmental entities) in order to have such Lien officially noted on
such certificates by such secretaries of state or other governmental entities.

 

4.4.Delivery of Instruments, Securities, Chattel Paper and Documents. Such
Grantor will (a) deliver to the Administrative Agent immediately upon execution
of this Security Agreement (or with respect to Pledged Stock, in any event,
during the time period provided in Section 5.14 of the Credit Agreement) (x) all
Chattel Paper, Securities and Instruments (other than Pledged Stock or
Settlement Notes) constituting Collateral owned by it (if any then exist and
other than those constituting Permitted Investments) if (i) the amount thereof
is in excess of $5,000,000 or (ii) the amount thereof, when taken together with
all other Chattel Paper, Securities and Instruments not previously delivered to
the Administrative Agent is in excess of $10,000,000 in the aggregate (with all
such Chattel Paper,   Securities and Instruments then being required to be
delivered to the Administrative Agent), (y) Settlement Notes if the outstanding
principal amount is in excess of $1,000,000 individually or $10,000,000 in the
aggregate and (z) all Pledged Stock; provided, that an original copy of an
Instrument shall not be required to be delivered if such Grantor only possesses
a duplicate copy thereof; provided, further, that if requested by the
Administrative Agent while an Event of Default is outstanding, such Grantor
shall use reasonable efforts to obtain the original thereof, (b) hold in trust
for the Administrative Agent upon receipt and immediately thereafter deliver to
the Administrative Agent any such Pledged Stock, Chattel Paper, Securities and
Instruments constituting Collateral required to be delivered pursuant to clause
(a) above,

(c) upon the Administrative Agent’s request, deliver to the Administrative Agent
(and thereafter hold in trust for the Administrative Agent upon receipt and
immediately deliver to the Administrative Agent) any Document evidencing or
constituting Collateral and (d) promptly upon the Administrative Agent’s
request, deliver to the Administrative Agent a duly executed amendment to this
Security Agreement, in the form of Exhibit I hereto (the “Amendment”), pursuant
to which such Grantor will pledge such additional Collateral required to be
delivered pursuant to clauses (a), (b) or (c) above. Such Grantor hereby
authorizes the Administrative Agent to attach each Amendment to this Security
Agreement and agrees that all additional Collateral owned by it set forth in
such Amendments shall be considered to be part of the Collateral.

 

4.5.Uncertificated Pledged Collateral.   Such Grantor will permit the
Administrative Agent from time to time to cause the appropriate issuers (and, if
held with a securities intermediary,  such securities intermediary) of
uncertificated securities or other types of Pledged Collateral owned by it not
represented by certificates to mark their books and records with the numbers and
face amounts of all such uncertificated

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securities or other types of Pledged Collateral not represented by certificates
and all rollovers and replacements therefor to reflect the Lien of the
Administrative Agent granted pursuant to this Security Agreement.   With respect
to any Pledged Collateral owned by it, such Grantor will take any actions
necessary to cause (a) the issuers of uncertificated securities which are
Pledged Collateral and (b) any securities intermediary (other than in connection
with any   Securities Account that is an Excluded Account) which is the holder
of any such Pledged Collateral, to cause the Administrative Agent to have and
retain Control over such Pledged Collateral. Without limiting the foregoing,
such Grantor will, with respect to any such Pledged Collateral held with a
securities intermediary (other than in connection with any Securities Account
that is an Excluded Account), cause such securities intermediary to enter into a
control agreement with the Administrative Agent, in form and substance
satisfactory to the Administrative Agent in its Permitted Discretion, giving the
Administrative Agent Control.

 

4.6.Pledged Collateral.

 

(a)Changes in Capital Structure of Issuers. Such Grantor will not (i) permit or
suffer any issuer of an Equity Interest constituting Pledged Collateral owned by
it to dissolve, merge, liquidate, retire any of its Equity Interests or other
Instruments or Securities evidencing ownership, reduce its capital, sell or
encumber all or substantially all of its assets (except for Liens permitted
pursuant to Section 4.1(e) and sales of assets permitted pursuant to Section
4.1(d)) or merge or consolidate with any other entity (except, with respect to
each of the foregoing in this clause (a), as permitted by the Credit Agreement),
or (ii) vote any such Pledged Collateral in favor of any of the foregoing.

 

(b)Issuance of Additional Securities. Such Grantor will not permit or suffer the
issuer of an Equity Interest constituting Pledged Collateral owned by it to
issue additional Equity Interests, any right to receive the same or any right to
receive earnings, except to such Grantor and as otherwise permitted by the
Credit Agreement.

 

(c)Registration of Pledged Collateral. Such Grantor will permit any registerable
Pledged Collateral owned by it to be registered in the name of the
Administrative Agent or its nominee at any time in the Permitted Discretion of
the Administrative Agent.

 

(d)Exercise of Rights in Pledged Collateral.

 

(i)Without in any way limiting the foregoing and subject to clause (ii) below,
such Grantor shall have the right to exercise all voting rights or other rights
relating to the Pledged Collateral owned by it for all purposes not inconsistent
with this Security Agreement, the Credit Agreement or any other Loan Document;
provided however, that no vote or other right shall be exercised or action taken
which would have the effect of impairing the rights of the Administrative Agent
in respect of such Pledged Collateral.

 

(ii)Such Grantor will permit the Administrative Agent or its nominee at any time
after the occurrence and during the continuance of an Event of Default, without
notice, to exercise all voting rights or other rights relating to the Pledged
Collateral owned by it, including, without limitation, exchange, subscription or
any other rights, privileges, or options pertaining to any Equity Interest or
Investment Property constituting such Pledged Collateral as if it were the
absolute owner thereof.

 

(iii)Such Grantor shall be entitled to collect and receive for its own use all
cash dividends and interest paid in respect of the Pledged Collateral owned by
it to the extent not in violation of the Credit Agreement other than any of the
following distributions and payments (collectively referred to as the “Excluded
Payments”): (A) dividends and interest paid or payable other than in cash in
respect of such Pledged Collateral, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Pledged Collateral;   (B) dividends and other distributions paid or payable in
cash in respect of such Pledged Collateral in connection with a partial or

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total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in capital of an issuer; and (C) cash paid, payable or
otherwise distributed, in respect of principal of, or in redemption of, or in
exchange for, such Pledged Collateral; provided however, that until actually
paid, all rights to such distributions shall remain subject to the Lien created
by this Security Agreement; provided, however, that no payment by one Grantor to
another Grantor or by a Subsidiary of a Grantor to a Grantor shall be deemed an
Excluded Payment; and

 

(iv)Upon request of the Administrative Agent after the occurrence and during the
continuance of an Event of Default, all Excluded Payments and all other
distributions in respect of any Pledged Collateral owned by such Grantor,
whenever paid or made, shall be delivered to the Administrative Agent to hold as
Pledged Collateral and shall, if received by such Grantor, be received in trust
for the benefit of the Administrative Agent, be segregated from the other
property or funds of such Grantor, and be forthwith delivered to the
Administrative Agent as Pledged Collateral in the same form as so received (with
any necessary endorsement).

 

(v)Such Grantor hereby authorizes and instructs each issuer of any Investment
Property pledged by such Grantor hereunder to, and each Grantor that is an
issuer of Investment Property pledged by another Grantor agrees and consents to,
after the occurrence and during the continuance of an Event of Default, (i)
comply with any instruction received by it from the Administrative Agent in
writing (and any other issuer from time to time hereby agrees to comply with
such instruction) that (x) states that an Event of Default has occurred and is
continuing and (y) is otherwise in accordance with the terms of this Security
Agreement,  without any other or further instructions from such Grantor, and
each Grantor agrees that each issuer shall be fully protected in so complying,
and (ii) unless otherwise expressly permitted hereby, pay any dividends or other
payments with respect to the Investment Property directly to the Administrative
Agent.

 

(e)Interests in Limited Liability Companies and Limited Partnerships.   Each
Grantor agrees that no ownership interests in a limited liability company or a
limited partnership which are included within the Collateral owned by such
Grantor shall at any time constitute a Security under Article 8 of the UCC of
the applicable jurisdiction unless such Grantor takes all actions necessary to
pledge such Security in accordance with the Credit Agreement and this Security
Agreement (including, without limitation, Section 4.4).

 

4.7.Intellectual Property.

 

(a)Such Grantor will use its best efforts to secure all consents and approvals
necessary or appropriate for the assignment to or benefit of the Administrative
Agent of any License held by such Grantor and to enforce the security interests
granted hereunder.

 

(b)Such Grantor shall notify the Administrative Agent immediately if it knows or
has reason to know that any application or registration relating to any material
Patent, Trademark or Copyright (now or hereafter existing) may become abandoned
or dedicated, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any court) regarding such Grantor’s ownership of any Patent, Trademark
or Copyright, its right to register the same, or to keep and maintain the same.

 

(c)In the event such Grantor, either directly or through any agent, employee,
licensee or designee, file an application for the registration of any Patent,
Trademark or Copyright with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency such Grantor
shall provide written notice thereof to the Administrative Agent concurrently
with the delivery of the certificate of a Financial Officer of the Borrower as
required by Section 5.01(c) of the Credit Agreement, and, upon request of the
Administrative Agent, such Grantor shall execute and deliver any and all
security agreements as the Administrative Agent may request to evidence the
Administrative Agent’s first priority security interest on such

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Patent, Trademark or Copyright, and the General Intangibles of such Grantor
relating thereto or represented thereby.

 

(d)Such Grantor shall take all actions necessary or requested by the
Administrative Agent to maintain and pursue each application, to obtain the
relevant registration and to maintain the registration of each of its Patents,
Trademarks and Copyrights (now or hereafter existing), including the filing of
applications for renewal, affidavits of use, affidavits of noncontestability and
opposition and interference and cancellation proceedings   provided that no such
actions shall be required in connection with any applications or Patents,
Trademarks and Copyrights that such Grantor reasonably determines are no longer
necessary or cost effective for its business or operations.

 

(e)Such Grantor shall, unless it shall (x) reasonably determine that such
Patent, Trademark or Copyright is not material to the conduct of its business or
operations or (y) determine in its reasonable business judgment that such
infringement, misappropriation or dilution shall not materially impact its
business or financial condition, promptly sue for infringement, misappropriation
or dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and shall take such other actions as the
Administrative Agent shall deem appropriate under the circumstances to protect
such Patent, Trademark or Copyright. In the event that such Grantor institutes
suit because any of its Patents, Trademarks or Copyrights constituting
Collateral is infringed upon, or misappropriated or diluted by a third party,
such Grantor shall comply with Section 4.8.

 

4.8       Commercial Tort Claims. If, after the date hereof, any Grantor
identifies the existence of a Commercial Tort Claim belonging to such Grantor
that it reasonably determines to be worth in excess of

$10,000,000 and that has arisen in the course of such Grantor’s business in
addition to the Commercial Tort

Claims described in Exhibit J, which are all of such Grantor’s Commercial Tort
Claims as of the Effective Date that it reasonably determines to be worth in
excess of $10,000,000, such Grantor shall within thirty (30) days after the same
is acquired by it (i) notify the Administrative Agent of such Commercial Tort
Claim and (ii) unless the Administrative Agent otherwise consents, promptly
enter into an amendment to this Security Agreement, in the form of Exhibit I
hereto, granting to Administrative Agent a first priority security interest such
Commercial Tort Claim.

 

4.9.Letter-of-Credit Rights. If such Grantor is or becomes the beneficiary of a
letter of credit in excess of $5,000,000, it shall promptly, and in any event
within thirty (30) days after becoming a beneficiary, notify the Administrative
Agent thereof and shall use commercially reasonable efforts to cause the issuer
and/or confirmation bank to (i) consent to the assignment of any
Letter-of-Credit Rights to the Administrative Agent and (ii) agree to direct all
payments thereunder to a Deposit Account at the Administrative Agent or subject
to a Deposit Account Control Agreement for application to the Secured
Obligations, in accordance with Section 2.18 of the Credit Agreement, all in
form and substance reasonably satisfactory to the Administrative Agent in its
Permitted Discretion.

 

4.10.Federal, State or Municipal Claims. Such Grantor will promptly notify the
Administrative Agent of any Collateral represented by the Borrower as an
Eligible Account which constitutes a claim against the United States government
or any state or local government or any instrumentality or agency thereof, the
assignment of which claim is restricted by federal, state or municipal law.

 

4.11.No Interference.  Such Grantor agrees that it will not interfere with any
right, power and remedy of the Administrative Agent provided for in this
Security Agreement or now or hereafter existing at law or in equity or by
statute or otherwise, or the exercise or beginning of the exercise by the
Administrative Agent of any one or more of such rights, powers or remedies.

 

4.12.Insurance.  (a)   In the event any Collateral is located in any area that
has been designated by the Federal Emergency Management Agency as a “Special
Flood Hazard Area”, such Grantor shall purchase and maintain flood insurance on
such Collateral (including any personal property which is located on any real

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property leased by such Loan Party within a “Special Flood Hazard Area”). The
amount of flood insurance required by this Section shall comply with applicable
law, including Flood Laws.

 

(b)All commercial general liability, umbrella and property insurance policies
required hereunder and under Section 5.10 of the Credit Agreement shall name the
Administrative Agent (for the benefit of the Administrative Agent and the
Lenders) as an additional insured or as lender loss payee, as applicable, and
all such property insurance policies shall contain lender loss payable clauses
through endorsements in form and substance satisfactory to the Administrative
Agent in its Permitted Discretion,  which provide that: (i) all proceeds
thereunder with respect to any Collateral shall be payable to the Administrative
Agent following notice from the Administrative Agent (which notice the
Administrative Agent may provide only following the occurrence and during the
continuation of an Event of Default); (ii) no such insurance shall be affected
by any act or neglect of the insured or owner of the property described in such
policy; and (iii) such policy and lender loss payable clauses may be canceled,
amended, or terminated by the applicable insurer only upon at least thirty

(30) days’ prior written notice from such insurer (or, for cancelation or
termination as a result of non-payment, ten (10) days’ prior written notice from
such insurer) given to the Administrative Agent.

 

(c)Upon the request of the Administrative Agent, the Borrower shall execute and
deliver, and cause each other applicable Loan Party to execute and deliver, and
take commercially reasonable efforts to cause the applicable insurance carrier
to execute and deliver, to Administrative Agent a collateral assignment, in form
and substance satisfactory to Administrative Agent, of each business
interruption insurance policy maintained by the Loan Parties.

 

(d)All premiums on any such insurance shall be paid when due by such Grantor.  
If such Grantor fails to obtain any insurance as required by this Section and
such failure continues for five (5) Business Days following notice by the
Administrative Agent to the Borrower, the Administrative Agent may obtain such
insurance at the Borrower’s expense.   By purchasing such insurance, the
Administrative Agent shall not be deemed to have waived any Default arising from
the Grantor’s failure to maintain such insurance or pay any premiums therefor.

 

(e)The Administrative Agent acknowledges that the insurance policies delivered
to the Administrative Agent on or prior to the date hereof are sufficient and
acceptable to the Administrative Agent to satisfy the conditions set forth in
this Section 4.12 on the Effective Date.

 

4.13.Collateral Access Agreements.       Such Grantor shall use commercially
reasonable efforts to obtain a Collateral Access Agreement, from the lessor of
the leased or sub-leased property or mortgagee of the owned property where such
Grantor’s principal place of business is located, which agreement or letter
shall provide access rights, contain a waiver or subordination of all Liens or
claims that the landlord or mortgagee may assert against the Collateral at that
location, and shall otherwise be reasonably satisfactory in form and substance
to the Administrative Agent. The Grantors shall have the reasonable discretion
to determine (i) if it is commercially reasonable to pursue a Collateral Access
Agreement at a specific location and (ii) if it has made commercially reasonable
efforts to obtain an effective, fully executed Collateral Access Agreement with
respect to any of its locations.

 

4.14.Deposit Account Control Agreements. Subject to Section 7.2, such Grantor
will provide to the Administrative Agent upon the Administrative Agent’s
request, a Deposit Account Control Agreement duly executed on behalf of each
financial institution holding a Collateral Deposit Account of such Grantor as
set forth in Exhibit B of this Security Agreement.

 

 

4.15.Change of Name or Location . Such Grantor shall not (a) change its name as
it appears in official filings in the state of its incorporation or
organization, (b) change its chief executive office or principal place of
business to the extent such change would adversely affect the validity,  
perfection or priority of the Administrative Agent’s security interest in the
Collateral, (c) change corporate offices or warehouses or locations at which (A)
any Collateral that constitutes Eligible Inventory with a market value in excess
of

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$250,000 in the aggregate or (B) any other Collateral with a market value in
excess of $1,000,000 in the aggregate is held or stored, (d) change the type of
entity that it is, or (e) change its state of incorporation or organization, in
each case, unless the Administrative Agent shall have received at least ten (10)
Business Days (or such shorter period as the Administrative Agent may agree in
its sole discretion) prior written notice of such change and the Administrative
Agent shall have acknowledged in writing that either (1) such change will not
adversely affect the validity, perfection or priority of the Administrative
Agent’s security interest in the Collateral, or (2) any reasonable action
requested by the Administrative Agent in connection therewith has been completed
or taken (including any action to continue the perfection of any Liens in favor
of the Administrative Agent, on behalf of the Secured Parties, in any
Collateral), provided that, any new location shall be in the continental U.S.  
Notwithstanding the foregoing, no notice hereunder shall be required for the
merger of Essendant Receivables LLC into Essendant Financial Services LLC, or
the concurrent or subsequent renaming of Essendant Financial Services LLC to
“Essendant Receivables LLC”; provided that after such merger and re- naming is
consummated, the Borrower shall promptly (and in any event within five (5)
Business Days) provide the Administrative Agent written notice thereof.

 

4.16 Updating of Exhibits to the Security Agreement. The Borrower will provide
to the Administrative Agent, (i) concurrently with the delivery of the
certificate of a Financial Officer of the Borrower as required by Section
5.01(c) of the Credit Agreement regarding financial statements required by
Section 5.01(a) of the Credit Agreement (and,  if  an Event of Default
has  occurred  and  is  continuing, Section 5.01(b) of  the Credit Agreement),
updated versions of the Exhibits to this Security Agreement (provided that if
there have been no changes to any such Exhibits since the previous updating
thereof required hereby, the Borrower shall indicate that there has been “no
change” to the applicable Exhibit(s)) or (ii) with respect to each of Exhibits A
and B as often as the Borrower deems appropriate or required to make its
representations and warranties materially true and accurate, updated versions of
such Exhibits A and B to this Security Agreement delivered with an officer’s
certificate of the Borrower reasonably satisfactory to the Administrative Agent,
that certifies that the updated versions of the Exhibits are true and correct as
of the date such officer’s certificate is delivered. Notwithstanding the
foregoing, to the extent any action or inaction resulting in a change to the
information contained in any Exhibit to this Security Agreement required
compliance with any other provision of this Security Agreement, the Credit
Agreement or any other Loan Document, then the updating of the relevant Exhibit
shall not relieve, waive or excuse the Default arising from such Grantor’s
non-compliance with any such provision pertaining to the underlying action or
inaction.

 

 

 

 

ARTICLE V

EVENTS OF DEFAULT AND REMEDIES

 

5.1.Events of Default. The occurrence of any one or more of the following events
shall constitute an Event of Default hereunder:

 

(a)Any representation or warranty made by or on behalf of any Grantor under or
in connection with this Security Agreement shall be materially false as of the
date on which made.

 

(b)Any Grantor shall fail to observe or perform any of the terms or provisions
of Sections 4.1(b), 4.1(f), 4.4, 4.5, 4.6, 4.11, 4.15 (other than 4.15(c)),
7.1(a), 7.1(b) and 7.2.

 

(c)Any Grantor shall fail to observe or perform any of the terms or provisions
of Sections 4.1(g) and 4.15(c) and such failure shall continue unremedied for a
period of five (5) Business Days after the earlier of knowledge of such breach
or notice thereof from the Administrative Agent.

 

(d)Any Grantor shall fail to observe or perform any of the terms or provisions
of this Security Agreement (other than a breach which constitutes an Event of
Default under any other Section of this Article V) and such failure shall
continue unremedied for a period of thirty (30) days after the earlier of

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knowledge of such breach or notice thereof from the Administrative Agent.

 

 

 

Agreement.

 

(e)

 

The occurrence of any “Event of Default” under, and as defined in, the Credit

 

(a)

 

 

 

5.2.

Remedies.

 

(a)After the occurrence and during the continuance of an Event of   Default, the
Administrative Agent may or at the direction of the Required Lenders, shall
exercise any or all of the following rights and remedies:

 

(i)those rights and remedies provided in this Security Agreement, the Credit
Agreement, or any other Loan Document; provided that, this Section 5.2(a) shall
not be understood to limit any rights or remedies available to the
Administrative Agent and the other Secured Parties prior to an Event of Default;

 

(ii)those rights and remedies available to a secured party under the UCC
(whether or not the UCC applies to the affected Collateral) or under any other
applicable law (including, without limitation, any law governing the exercise of
a bank’s right of setoff or bankers’ lien) when a debtor is in default under a
security agreement;

 

(iii)give notice of sole control or any other instruction under any Deposit
Account Control Agreement or any other control agreement with any securities
intermediary and take any action therein with respect to such Collateral;

 

(iv)without notice (except as specifically provided in Section 8.1 or elsewhere
herein), demand or advertisement of any kind to any Grantor or any other Person,
enter the premises of any Grantor where any Collateral is located (through
self-help and without judicial process) to collect, receive, assemble, process,
appropriate, sell, lease, assign, grant an option or options to purchase or
otherwise dispose of, deliver, or realize upon, the Collateral or any part
thereof in one or more parcels at public or private sale or sales (which sales
may be adjourned or continued from time to time with or without notice and may
take place at any Grantor’s premises or elsewhere), for cash, on credit or for
future delivery without assumption of any credit risk, and upon such other terms
as the Administrative Agent may deem commercially reasonable; and

 

(v)concurrently with written notice to the applicable Grantor, transfer and
register in its name or in the name of its nominee the whole or any part of the
Pledged Collateral, to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations, exercise the voting and all other rights as a holder with
respect thereto, to collect and receive all cash dividends, interest, principal
and other distributions made thereon and to otherwise act with respect to the
Pledged Collateral as though the Administrative Agent was the outright owner
thereof.

 

(b)The Administrative Agent, on behalf of the Secured Parties, may comply with
any applicable state or federal law requirements in connection with a
disposition of the Collateral and such compliance will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.

 

(c)The Administrative Agent shall have the right upon any such public sale or
sales and, to the extent permitted by law, upon any such private sale or sales,
to purchase for the benefit of the Administrative

(a)

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Agent and the other Secured Parties, the whole or any part of the Collateral so
sold, free of any right of equity redemption, which equity redemption the
Grantor hereby expressly releases.

 

(d)Subject to applicable law, after the occurrence and during the continuance of
an Event of Default, until the Administrative Agent is able to effect a sale,
lease, or other disposition of Collateral, the Administrative Agent shall have
the right to hold or use Collateral, or any part thereof, to the extent that it
deems appropriate for the purpose of preserving Collateral or its value or for
any other purpose deemed appropriate by the Administrative Agent.   After the
occurrence and during the continuance of an Event of Default, the Administrative
Agent may, if it so elects, seek the appointment of a receiver or keeper to take
possession of Collateral and to enforce any of the Administrative Agent’s
remedies (for the benefit of the Administrative Agent and the other Secured
Parties), with respect to such appointment without prior notice or hearing as to
such appointment.

 

(e)If, after the Credit Agreement has terminated by its terms and all of the
Obligations have been paid in full, there remain Swap Agreement Obligations or
Banking Services Obligations outstanding, the Secured Parties holding in the
aggregate at a least a majority of the aggregate net early termination payments
and all other amounts then due and unpaid under outstanding Swap Agreements and
agreements evidencing Banking Services may exercise the remedies provided in
this Section 5.2 upon the occurrence and during the continuance of any event
which would allow or require the termination or acceleration of any Swap
Agreement Obligations pursuant to the terms of the Swap Agreement or any Banking
Services Obligations pursuant to the terms of any agreement evidencing Banking
Services.

 

(f)Notwithstanding the foregoing, neither the Administrative Agent nor any other
Secured Party shall be required to (i) make any demand upon, or pursue or
exhaust any of its rights or remedies against, any Grantor, any other obligor,
guarantor, pledgor or any other Person with respect to the payment of the
Secured Obligations or to pursue or exhaust any of its rights or remedies with
respect to any Collateral therefor or any direct or indirect guarantee thereof,
(ii) marshal the Collateral or any guarantee of the Secured Obligations or to
resort to the Collateral or any such guarantee in any particular order, or (iii)
effect a public sale of any Collateral.

 

(g)Each Grantor recognizes that the Administrative Agent may be unable to effect
a public sale of any or all the Pledged Collateral and may be compelled to
resort to one or more private sales thereof in accordance with clause (a) above.
Each Grantor also acknowledges that any private sale may result in prices and
other terms less favorable to the seller than if such sale were a public sale
and, notwithstanding such circumstances, agrees that any such private sale shall
not be deemed to have been made in a commercially unreasonable manner solely by
virtue of such sale being private. The Administrative Agent shall be under no
obligation to delay a sale of any of the Pledged Collateral for the period of
time necessary to permit any Grantor or the issuer of the Pledged Collateral to
register such securities for public sale under the Securities Act of 1933, as
amended, or under applicable state securities laws, even if the applicable
Grantor and the issuer would agree to do so.

 

5.3.Grantor’s Obligations Upon Default. Upon the request of the Administrative
Agent following the occurrence and during the continuance of an Event of
Default, each Grantor will:

 

(a)assemble and make available to the Administrative Agent the Collateral and
all books and records relating thereto at any place or places specified by the
Administrative Agent, whether at such Grantor’s premises or elsewhere; and

 

(b)permit the Administrative Agent, by the Administrative Agent’s
representatives and agents, to enter, occupy and use any premises where all or
any part of the Collateral, or the books and records relating thereto, or both,
are located, to take possession of all or any part of the Collateral or the
books and records relating thereto, or both, to remove all or any part of the
Collateral or the books and records relating thereto, or both, and to conduct
sales of the Collateral, without any obligation to pay the Grantor for such use

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and occupancy.

 

5.4.Grant of Intellectual Property License. For the purpose of enabling the
Administrative Agent to exercise the rights and remedies under this Article V
after and during the continuance of an Event of Default at such time as the
Administrative Agent shall be lawfully entitled to exercise such rights and
remedies, each Grantor hereby (a) grants to the Administrative Agent, for the
benefit of the Administrative Agent and the other Secured Parties, an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to any Grantor) to use, license or sublicense any
intellectual property rights now owned or hereafter acquired by such Grantor,
and wherever the same may be located, and including in such license access to
all media in which any of the licensed items may be recorded or stored and to
all computer software and programs used for the compilation or printout thereof
and (b) irrevocably agrees that the Administrative Agent may sell any of such
Grantor’s Inventory directly to any person, including without limitation persons
who have previously purchased the Grantor’s Inventory from such Grantor and in
connection with any such sale or other enforcement of the Administrative Agent’s
rights under this Security Agreement, may sell Inventory which bears any
Trademark owned by or licensed to such Grantor and any Inventory that is covered
by any Copyright owned by or licensed to such Grantor and the Administrative
Agent may finish any work in process and affix any Trademark owned by or
licensed to such Grantor and sell such Inventory as provided herein, in each
case whether under clause (a) or clause (b), to the extent allowed under the
terms or limitation of any such license or other agreement.

 

ARTICLE VI

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

 

6.1.Account Verification. The Administrative Agent may at any time in its
Permitted Discretion, in the name of a nominee of the Administrative Agent or
other pseudonym that will not readily identify the Administrative Agent as a
financial institution (or during the continuation of an Event of Default, in the
Administrative Agent’s own name), in the name of any Grantor communicate (by
mail, telephone, facsimile or otherwise) with the Account Debtors of any such
Grantor, parties to contracts with any such Grantor and obligors in respect of
Instruments of any such Grantor to verify with such Persons, to the
Administrative Agent’s satisfaction, the existence, amount, terms of, and any
other matter relating to, Accounts, Instruments, Chattel Paper, payment
intangibles and/or other Receivables. Other than after the occurrence and during
the continuation of an Event of Default or during any field examination of a
Grantor permitted under the Credit Agreement (including under Section 5.06 of
the Credit Agreement), not less than ten (10) Business Days prior to engaging in
such communication, the Administrative Agent shall give the Borrower notice of
any such communications, identifying the persons with whom the Administrative
Agent intends to communicate.

 

6.2.Authorization for Administrative Agent to Take Certain Action.

 

(a)Each Grantor irrevocably authorizes the Administrative Agent at any time and
from time to time in the Permitted Discretion of the Administrative Agent and
appoints the Administrative Agent as its attorney in fact (i) to execute on
behalf of such Grantor as debtor and to file financing statements necessary or
desirable in the Administrative Agent’s Permitted Discretion to perfect and to
maintain the perfection and priority of the Administrative Agent’s security
interest in the Collateral, (ii) after the occurrence and during the continuance
of an Event of Default, to endorse and collect any cash proceeds of the
Collateral, (iii) to file a carbon, photographic or other reproduction of this
Security Agreement or any financing statement with respect to the Collateral as
a financing statement and to file any other financing statement or amendment of
a financing statement (which does not add new collateral or add a debtor) in
such offices as the Administrative Agent in its Permitted Discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of
the Administrative Agent’s security interest in the Collateral, (iv) to contact
and enter into one or more agreements with the issuers of uncertificated
securities which are Pledged Collateral or with securities intermediaries
holding Pledged Collateral as may be necessary or advisable to give the
Administrative Agent Control over such Pledged Collateral, (v) to apply, the
proceeds of any Collateral received by the Administrative Agent to the Secured
Obligations as provided in Section 7.3, (vi) to discharge past due taxes,
assessments, charges, fees or

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Liens on the Collateral (except for such Liens that are permitted by Section
4.1(e)), (vii) after the occurrence and during the continuance of an Event of
Default, to contact Account Debtors for any reason, (viii) after the occurrence
and during the continuance of an Event of Default, to demand payment or enforce
payment of the Receivables in the name of the Administrative Agent or such
Grantor and to endorse any and all checks, drafts, and other instruments for the
payment of money relating to the Receivables, (ix) after the occurrence and
during the continuance of an Event of Default, to sign such Grantor’s name on
any invoice or bill of lading relating to the Receivables, drafts against any
Account Debtor of the Grantor, assignments and verifications of Receivables, (x)
after the occurrence and during the continuance of an Event of Default, to
exercise all of such Grantor’s rights and remedies with respect to the
collection of the Receivables and any other Collateral, (xi) after the
occurrence and during the continuance of an Event of Default, to settle, adjust,
compromise, extend or renew the Receivables, (xii) after the occurrence and
during the continuance of an Event of Default, to settle, adjust or compromise
any legal proceedings brought to collect Receivables, (xiii) to prepare, file
and sign such Grantor’s name on a proof of claim in bankruptcy or similar
document against any Account Debtor of such Grantor, (xiv) after the occurrence
and during the continuance of an Event of Default, to prepare, file and sign
such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with the Receivables, and (xv) after the
occurrence and during the continuance of an Event of Default, to change the
address for delivery of mail addressed to such Grantor to such address as the
Administrative Agent may designate and to receive, open and dispose of all mail
addressed to such Grantor; and such Grantor agrees to reimburse the
Administrative Agent on demand for any payment made or any expense incurred by
the Administrative Agent in connection with any of the foregoing; provided that,
this authorization shall not relieve such Grantor of any of its obligations
under this Security Agreement or under the Credit Agreement.

 

(b)All acts of said attorney or designee are hereby ratified and approved. The
powers conferred on the Administrative Agent, for the benefit of the
Administrative Agent and the other Secured Parties, under this Section 6.2 are
solely to protect the Administrative Agent’s interests in the Collateral and
shall not impose any duty upon the Administrative Agent or any other Secured
Party to exercise any such powers.

 

6.3.Proxy. EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS
THE  ADMINISTRATIVE  AGENT AS ITS  PROXY  AND ATTORNEY-IN-FACT (AS  SET
FORTH  IN SECTION 6.2 ABOVE) WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING
THE RIGHT TO VOTE ANY OF THE PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION
TO DO SO; PROVIDED, THAT THE ADMINISTRATIVE AGENT SHALL ONLY ACT IN SUCH ROLE
DURING THE CONTINUANCE OF AN EVENT OF DEFAULT. IN ADDITION TO THE RIGHT TO VOTE
ANY OF THE PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS
PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS,
POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF ANY OF THE PLEDGED
COLLATERAL   WOULD   BE   ENTITLED   (INCLUDING   GIVING   OR   WITHHOLDING  
WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL   MEETINGS OF SHAREHOLDERS AND
VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND
WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY OF THE
PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON
(INCLUDING THE   ISSUER OF THE PLEDGED COLLATERAL OR ANY OFFICER OR AGENT
THEREOF), AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF A DEFAULT.

 

6.4.Nature   of   Appointment;   Limitation   of   Duty.      
THE    APPOINTMENT   OF   THE ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT
IN THIS   ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL
THE DATE ON WHICH THIS SECURITY   AGREEMENT     IS   TERMINATED     IN    
ACCORDANCE     WITH   SECTION   8.14. NOTWITHSTANDING ANYTHING CONTAINED HEREIN,
NONE OF THE ADMINISTRATIVE AGENT, ANY LENDER, ANY OTHER SECURED PARTY, ANY OF
THEIR AFFILIATES, OR ANY OF THEIR OR THEIR   AFFILIATES’     RESPECTIVE  
OFFICERS,   DIRECTORS,   EMPLOYEES,   AGENTS   OR REPRESENTATIVES SHALL HAVE ANY
DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED

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HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY
FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES
ATTRIBUTABLE SOLELY TO ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY
DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT
SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL
DAMAGES.

 

ARTICLE VII

COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS

 

7.1.Collection of Receivables.

 

(a)On or before the Effective Date (or, solely with respect to the Nestor Sales
Account, the 30th day after the Effective Date (or such later date as may be
agreed to by the Administrative Agent in its sole discretion)), each Grantor
shall execute and deliver to the Administrative Agent Deposit Account Control
Agreements for each Deposit Account (other than Liberty Bell BAML Receivables
Accounts) maintained by such Grantor into which all cash, checks or other
similar payments relating to or constituting payments made in respect of
Receivables and proceeds resulting from the sale or disposition of Collateral
are required to be deposited (each, a “Collateral Deposit Account”), which
Collateral Deposit Accounts are identified as such on Exhibit B.   Operating
Accounts and Excluded Accounts shall not be subject to this requirement as they
shall not be Deposit Accounts in which cash, checks or other similar payments
relating to or constituting payments made in respect of Receivables and proceeds
resulting from the sale or disposition of Collateral shall be initially
deposited.  After the Effective Date, each Grantor will comply with the terms of
Section 7.2.

 

(b)Each Grantor shall direct all of its Account Debtors to forward payments in
respect of Receivables directly to a Collateral Deposit Account (or shall have
implemented policies and procedures designed to ensure the prompt deposit of
payments made by Account Debtors directly to a Grantor into a Collateral Deposit
Account),  or solely in accordance with the following sentence, a Liberty Bell
BAML Receivables Account. No cash, checks or other similar payments relating to
or constituting payments made in respect of Receivables and proceeds resulting
from the sale or disposition of Collateral will be deposited in any Operating
Account, Excluded Account or other Deposit Account other than a Collateral
Deposit Account; provided, however, that (i) Account Debtors that are members of
the buying group known as “Affiliated Distributors” may make payments to such
buying group so long as such buying group complies with this requirement as if
it were the Account Debtor with respect thereto, and (ii) until April 30, 2017
(as such date may be extended by the Administrative Agent in its sole
discretion), Account Debtors of Liberty Bell Equipment Corporation may continue
to forward payments to, and cash, checks and other similar payments received
from such Account Debtors may continue to be deposited in, the Liberty Bell BAML
Receivables Account. Prior to a Cash Dominion Period, the Grantors shall only
transfer funds from Collateral Deposit Accounts, the Funding Account or the
Liberty Bell BAML Receivables Accounts to Operating Accounts. No amounts shall
be remitted to or otherwise remain on deposit in Operating Accounts other than
those amounts transferred from Collateral Deposit Accounts or Liberty Bell BAML
Receivables Accounts. At no time after the occurrence and during the continuance
of an Event of Default or during a Cash Dominion Period shall any Grantor remove
any item from a Collateral Deposit Account without the Administrative Agent’s
prior written consent.   If any Grantor should refuse or neglect to notify any
Account Debtor to forward payments directly to a Collateral Deposit Account
then, after notice from the Administrative Agent, the Administrative Agent shall
be entitled to make such notification directly to such Account Debtor. If any
Grantor should refuse or neglect to implement policies and procedures designed
to ensure the prompt deposit of payments made by Account Debtors directly to a
Grantor into a Collateral Deposit Account then, after notice from the
Administrative Agent, the Administrative Agent shall be entitled to make such
notification directly to such Account Debtor or shall be entitled to take other
reasonable actions as the Administrative Agent reasonably determines is
necessary to ensure the prompt deposit of such payments directly to a Collateral
Deposit Account. If notwithstanding the foregoing instructions, any Grantor
receives any proceeds of any Receivables or proceeds resulting from the sale or
disposition of any Collateral, such Grantor shall receive such payments as the
Administrative Agent’s trustee, and shall promptly

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deposit all cash, checks or other similar payments related to or constituting
payments made in respect of Receivables and proceeds resulting from the sale or
disposition of Collateral received by it to a Collateral Deposit Account. At all
times after the occurrence and during the continuance of an Event of Default or
during a Cash Dominion Period (x) unless the Administrative Agent shall have
waived such requirement in writing, the Grantors shall promptly cause all funds
deposited into an Operating Account or a Liberty Bell BAML Receivables Account
to be swept into a Collateral Deposit Account and (y) all funds deposited into a
Collateral Deposit Account will be swept on a daily basis into a concentration
account (the “Collection Account”) maintained by such Grantor at a bank or banks
satisfactory to the Administrative Agent in its sole discretion (which, at the
discretion of the Administrative Agent may be an account maintained by such
Grantor with the Administrative Agent) which Collection Account shall be in the
sole Control of the Administrative Agent.   No Grantor shall have any Control
whatsoever over the Collection Account. The Administrative Agent shall have sole
access to the Collection Account at all times and each Grantor shall take all
actions necessary to grant the Administrative Agent such sole access. The
Administrative Agent shall hold and apply funds received into the Collection
Account as provided by the terms of Section 7.3.

 

(c)Notwithstanding anything to the contrary set forth in this Section 7.1,   if
any Receivables or proceeds resulting from the sale or disposition of Collateral
are inadvertently deposited by a Grantor or an Account Debtor of a Grantor in a
Deposit Account that is not a Collateral Deposit Account, such failure to comply
with the agreements set forth in this Article VII shall not constitute an Event
of Default so long as promptly (and in any event within five (5) Business Days
of such inadvertent deposit) (x) such Receivables or proceeds are transferred to
a Collateral Deposit Account and (y) such Grantor promptly notifies the
Administrative Agent in writing of such inadvertent deposit (which notice shall
include a reasonably detailed description of the actions taken to remedy such
breach and of the policies and procedures that shall be promptly implemented by
such Grantor to ensure compliance with the provisions set forth in Section
7.1(b) with respect to payments made in respect of Receivables and proceeds
resulting from the sale or disposition of Collateral).

 

7.2.Covenant Regarding New Deposit Accounts; Lock Boxes; Liberty Bell BAML
Receivables Accounts.   Before opening or replacing any Collateral Deposit
Account or Operating Account, each Grantor shall (a) deliver written notice
thereof to the Administrative Agent, which notice shall include an updated
Exhibit B with respect to such new Deposit Account, and (b) cause each bank or
financial institution in which it seeks to open a Collateral Deposit Account to
enter into a Deposit Account Control Agreement with the Administrative Agent in
order to give the Administrative Agent Control of such Collateral Deposit
Account. In the case of Deposit Accounts maintained with Lenders, the terms of
such letter shall be subject to the provisions of the Credit Agreement regarding
setoffs.   After opening or replacing any Excluded Account, each Grantor shall
promptly, but in any event within thirty (30) days of opening such Excluded
Account, deliver written notice thereof to the Administrative Agent, which
notice shall include an updated Exhibit B with respect to such new Excluded
Account. Not later than April 30, 2017 (as such date may be extended by the
Administrative Agent in its sole discretion), all payments to, and cash, checks
and other similar payments received from Account Debtors that are deposited in
any Liberty Bell BAML Receivables Account shall be deposited in a Collateral
Deposit Account subject to a Deposit Account Control Agreement and the Liberty
Bell BAML Receivables Accounts shall be closed.

 

7.3.Application of Proceeds; Deficiency. All amounts deposited in the Collection
Account shall be deemed received by the Administrative Agent in accordance with
Section 2.18 of the Credit Agreement and shall, after having been credited to
the Collection Account, be applied (and allocated) by Administrative Agent in
accordance with Section 2.10(b) of the Credit Agreement at all times when a Cash
Dominion Period is in effect, and in accordance with Section 2.18(b) at all
times when an Event of Default exists; provided that, so long as no Cash
Dominion Period (with the understanding that a Cash Dominion Period may be
discontinued no more than five (5) times during the term of the Credit
Agreement) or Event of Default exists, collections which are received into the
Collection Account shall be deposited into the Borrower’s Funding Account rather
than being used to reduce amounts owing under the Credit Agreement.   After the
occurrence and during the continuance of an Event of Default, the Administrative
Agent shall require all other cash proceeds of the Collateral, which are not
required to be applied to the Obligations pursuant to Section 2.11 of the Credit

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Agreement, to be deposited in a special non-interest bearing cash collateral
account with the Administrative Agent and held there as security for the Secured
Obligations. No Grantor shall have any control whatsoever over said cash
collateral account. Any such proceeds of the Collateral shall be applied in the
order set forth in Section 2.18(b) of the Credit Agreement unless a court of
competent jurisdiction shall otherwise direct. The balance, if any, after all of
the Secured Obligations have been satisfied, shall be deposited by the
Administrative Agent into the Borrower’s Funding Account. The Grantors shall
remain liable, jointly and severally, for any deficiency if the proceeds of any
sale or disposition of the Collateral are insufficient to pay all Secured
Obligations as and when due in accordance with the terms of the Loan Documents,
including any attorneys’ fees and other expenses incurred by Administrative
Agent or any other Secured Party to collect such deficiency.

 

ARTICLE VIII GENERAL PROVISIONS

 

8.1.Waivers. Each Grantor hereby waives notice of the time and place of any
public sale or the time after which any private sale or other disposition of all
or any part of the Collateral may be made. To the extent such notice may not be
waived under applicable law, any notice made shall be deemed reasonable if sent
to the Grantors, addressed as set forth in Article IX, at least ten (10) days
prior to (i) the date of any such public sale or (ii) the time after which any
such private sale or other disposition may be made. To the maximum extent
permitted by applicable law, each Grantor waives all claims, damages, and
demands against the Administrative Agent or any other Secured Party arising out
of the repossession, retention or sale of the Collateral, except such as arise
solely out of the gross negligence or willful misconduct of the Administrative
Agent or such other Secured Party as finally determined by a court of competent
jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and
irrevocably waives and relinquishes the benefit and advantage of, and covenants
not to assert against the Administrative Agent or any other Secured Party, any
valuation, stay, appraisal, extension, moratorium, redemption or similar laws
and any and all rights or defenses it may have as a surety now or hereafter
existing which, but for this provision, might be applicable to the sale of any
Collateral made under the judgment, order or decree of any court,  or privately
under the power of sale conferred by this Security Agreement, or otherwise.  
Except as otherwise specifically provided herein,  each Grantor hereby waives
presentment, demand, protest or any notice (to the maximum extent permitted by
applicable law) of any kind in connection with this Security Agreement or any
Collateral.

 

8.2.Limitation on Administrative Agent’s and Other Secured Parties’ Duty with
Respect to the Collateral. The Administrative Agent shall have no obligation to
clean-up or otherwise prepare the Collateral for sale. The Administrative Agent
and each other Secured Party shall use reasonable care with respect to the
Collateral in its possession or under its control. Neither the Administrative
Agent nor any other Secured Party shall have any other duty as to any Collateral
in its possession or control or in the possession or control of any agent or
nominee of the Administrative Agent or such other Secured Party, or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. To the extent that applicable law imposes duties on
the Administrative Agent to exercise remedies in a commercially reasonable
manner, each Grantor acknowledges and agrees that it is commercially reasonable
for the Administrative Agent (i) to fail to incur expenses deemed significant by
the Administrative Agent to prepare Collateral for disposition or otherwise to
transform raw material or work in process into finished goods or other finished
products for disposition, (ii) to fail to obtain third party consents for access
to Collateral to be disposed of, or to obtain or, if not required by other law,
to fail to obtain governmental or third party consents for the collection or
disposition of Collateral to be collected or disposed of, (iii) to fail to
exercise collection remedies against Account Debtors or other Persons obligated
on Collateral or to remove Liens on or any adverse claims against Collateral,
(iv) to exercise collection remedies against Account Debtors and other Persons
obligated on Collateral directly or through the use of collection agencies and
other collection specialists, (v) to advertise dispositions of Collateral
through publications or media of general circulation, whether or not the
Collateral is of a specialized nature, (vi) to contact other Persons, whether or
not in the same business as such Grantor, for expressions of interest in
acquiring all or any portion of the Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the Collateral is of a specialized nature, (viii) to dispose of Collateral
by utilizing internet sites that provide for the auction of assets of the types
included in the Collateral or that have

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the reasonable capacity of doing so, or that match buyers and sellers of assets,
(ix) to dispose of assets in wholesale rather than retail markets, (x) to
disclaim disposition warranties, such as title, possession or quiet enjoyment,
(xi) to purchase insurance or credit enhancements to insure the Administrative
Agent against risks of loss, collection or disposition of Collateral or to
provide to the Administrative Agent a guaranteed return from the collection or
disposition of Collateral, or (xii) to the extent deemed appropriate by the
Administrative Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist the Administrative Agent
in the collection or disposition of any of the Collateral.   Each Grantor
acknowledges that the purpose of this Section 8.2 is to provide non-exhaustive
indications of what actions or omissions by the Administrative Agent would be
commercially reasonable in the Administrative Agent’s exercise of remedies
against the Collateral and that other actions or omissions by the Administrative
Agent shall not be deemed commercially unreasonable solely on account of not
being indicated in this Section 8.2.  Without limitation upon the foregoing,
nothing contained in this Section 8.2 shall be construed to grant any rights to
any Grantor or to impose any duties on the Administrative Agent that would not
have been granted or imposed by this Security Agreement or by applicable law in
the absence of this Section 8.2.

 

8.3.Compromises and Collection of Collateral.   The Grantors and the
Administrative Agent recognize that setoffs, counterclaims, defenses and other
claims may be asserted by obligors with respect to certain of the Receivables,
that certain of the Receivables may be or become uncollectible in whole or in
part and that the expense and probability of success in litigating a disputed
Receivable may exceed the amount that reasonably may be expected to be recovered
with respect to a Receivable.   In view of the foregoing, each Grantor agrees
that the Administrative Agent may at any time and from time to time, if an Event
of Default has occurred and is continuing, compromise with the obligor on any
Receivable, accept in full payment of any Receivable such amount as the
Administrative Agent in its sole discretion shall determine or abandon any
Receivable, and any such action by the Administrative Agent shall be
commercially reasonable so long as the Administrative Agent acts in good faith
based on information known to it at the time it takes any such action.

 

8.4.Secured Party Performance of Debtor Obligations. Without having any
obligation to do so, the Administrative Agent may perform or pay any obligation
which any Grantor has agreed to perform or pay in this Security Agreement and
the Grantors shall reimburse the Administrative Agent for any amounts paid by
the Administrative Agent pursuant to this Section 8.4. The Grantors’ obligation
to reimburse the Administrative Agent pursuant to the preceding sentence shall
be a Secured Obligation payable on demand.

 

8.5.Specific Performance of Certain Covenants.   Each Grantor acknowledges and
agrees that a breach of any of the covenants contained in Sections 4.1(d),
4.1(e), 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.14, 4.15, 5.3, or 8.7
or in Article VII 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 breaches and therefore
agrees, without limiting the right of the Administrative Agent or the other
Secured Parties to seek and obtain specific performance of other obligations of
the Grantors contained in this Security Agreement, that the covenants of the
Grantors contained in the Sections referred to in this Section 8.5 shall be
specifically enforceable against the Grantors.

 

8.6.Dispositions Not Authorized.   No Grantor is authorized to sell or otherwise
dispose of the Collateral except as set forth in Section 4.1(d) and
notwithstanding any course of dealing between any Grantor and the Administrative
Agent or other conduct of the Administrative Agent, no authorization to sell or
otherwise dispose of the Collateral (except as set forth in Section 4.1(d))
shall be binding upon the Administrative Agent or the other Secured Parties
unless such authorization is in writing signed by the Administrative Agent with
the consent or at the direction of the Required Lenders.

 

8.7.No Waiver; Amendments; Cumulative Remedies. No delay or omission of the
Administrative Agent or any other Secured Party to exercise any right or remedy
granted under this Security Agreement shall impair such right or remedy or be
construed to be a waiver of any Default or an acquiescence therein, and any
single or partial exercise of any such right or remedy shall not preclude any
other or further exercise thereof or the exercise of any other right or remedy.
No waiver, amendment or other variation of the terms, conditions or

25

 

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provisions of this Security Agreement whatsoever shall be valid unless in
writing signed by the Administrative Agent with the concurrence or at the
direction of the Lenders required under Section 9.02 of the Credit Agreement and
then only to the extent in such writing specifically set forth. All rights and
remedies contained in this Security Agreement or by law  afforded shall be
cumulative and all shall be available to the Administrative Agent and the other
Secured Parties until the Secured Obligations have been paid in full.

 

8.8.Limitation by Law; Severability of Provisions. All rights, remedies and
powers provided in this Security Agreement may be exercised only to the extent
that the exercise thereof does not violate any applicable provision of law, and
all the provisions of this Security Agreement are intended to be subject to all
applicable mandatory provisions of law that may be controlling and to be limited
to the extent necessary so that they shall not render this Security Agreement
invalid, unenforceable or not entitled to be recorded or registered, in whole or
in part. Any provision in this Security Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the
provisions of this Security Agreement are declared to be severable.

 

8.9.Reinstatement. This Security Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against any
Grantor for liquidation or reorganization, should any Grantor become insolvent
or make an assignment for the benefit of any creditor or creditors or should a
receiver or trustee be appointed for all or any significant part of any
Grantor’s assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Secured Obligations,
or any part thereof (including a payment effected through exercise of a right of
setoff), is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Secured Obligations,
whether as a “voidable preference,” “fraudulent conveyance,” or otherwise
(including pursuant to any settlement entered into by a Secured Party in its
discretion), all as though such payment or performance had not been made.   In
the event that any payment, or any part thereof (including a payment effected
through exercise of a right of setoff), is rescinded, reduced, restored or
returned, the Secured Obligations shall be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.

 

8.10.Benefit of Agreement. The terms and provisions of this Security Agreement
shall be binding upon and inure to the benefit of the Grantors, the
Administrative Agent and the other Secured Parties and their respective
permitted successors and assigns (including all persons who become bound as a
debtor to this Security Agreement), except that no Grantor shall have the right
to assign its rights or delegate its obligations under this Security Agreement
or any interest herein (other than pursuant to a transaction permitted by the
Credit Agreement), without the prior written consent of the Administrative
Agent. No sales of participations, assignments, transfers, or other dispositions
of any agreement governing the Secured Obligations or any portion thereof or
interest therein shall in any manner impair the Lien granted to the
Administrative Agent, for the benefit of the Administrative Agent and the other
Secured Parties, hereunder.

 

8.11.Survival of Representations.   All representations and warranties of the
Grantors contained in this Security Agreement shall survive the execution and
delivery of this Security Agreement.

 

8.12.Expenses.   The Grantors, jointly and severally, shall pay (i) reasonable
and documented out-of-pocket expenses incurred by the Administrative Agent,
including the reasonable and documented fees, charges and disbursements of
counsel for the Administrative Agent, in connection with the preparation and
administration of this Security Agreement and any amendments, modifications or
waivers of the provisions of this Security Agreement (whether or not the  
transactions contemplated hereby or thereby shall be consummated), including,
without limitation, the reasonable and documented fees, disbursements and other
charges of the Administrative Agent’s primary counsel and any special and local
counsel reasonably retained by the Administrative Agent and (ii) the
Administrative Agent for any and all reasonable and documented fees,
disbursements and other charges of the Administrative Agent’s primary counsel
and any special and local counsel reasonably retained by the Administrative
Agent and all documented out-of-pocket expenses incurred by the Administrative
Agent in connection with the enforcement, collection or protection of its rights
in

26

 

--------------------------------------------------------------------------------

 

connection with this Security Agreement, including its rights under this Section
8.12, including all such documented out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of this Security Agreement;
provided, however, that the Borrower’s obligations to pay fees, disbursements
and charges of counsel under this Section 8.12 shall be limited to one primary
counsel for the Administrative Agent, together with any local counsel and
special counsel reasonably required by the Administrative Agent, and, solely in
the case of an actual or perceived conflict of interest between the
Administrative Agent and one or more of the Secured Parties, one additional
counsel for each set of similarly affected Secured Parties in respect of such
actual or perceived conflict (together with any local and special counsel
reasonably required by such Secured Parties). All amounts due under this Section
8.12 shall be payable after written demand therefor.

 

8.13.Headings. The title of and section headings in this Security Agreement are
for convenience of reference only, and shall not govern the interpretation of
any of the terms and provisions of this Security Agreement.

 

8.14.Termination.

 

(a)This Security Agreement shall continue in effect (notwithstanding the fact
that from time to time there may be no Secured Obligations outstanding) until
all of the Commitments under the Credit Agreement have terminated and all of the
Secured Obligations have been indefeasibly paid and performed in full (or with
respect to any outstanding Letters of Credit, such Letter of Credit has been
cash collateralized as required by Section 2.06(j) of the Credit Agreement)
other than contingent indemnification obligations as to which no claim has been
made in writing and no commitments of the Administrative Agent or the other
Secured Parties which would give rise to any Secured Obligations are
outstanding.

 

 

 

Agreement.

 

(b)

 

Liens on the Collateral will be released in accordance with Section 9.02(c) of
the Credit

 

(a)

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--------------------------------------------------------------------------------

 

 

8.15.Entire Agreement. This Security Agreement together with the other Loan
Documents embodies the entire agreement and understanding between the Grantors
and the Administrative Agent relating to the Collateral and supersedes all prior
agreements and understandings among the Grantors and the Administrative Agent
relating to the Collateral.

 

8.16.CHOICE OF LAW.   THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

 

8.17.CONSENT TO JURISDICTION.     EACH GRANTOR HEREBY   IRREVOCABLY SUBMITS TO
THE EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING
IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND  EACH GRANTOR  HEREBY
IRREVOCABLY AND  UNCONDITIONALLY AGREES  THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND
EFFECTIVELY DO SO, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN
THE COURTS OF ANY OTHER JURISDICTION.

 

8.18.WAIVER OF JURY TRIAL. EACH GRANTOR, THE ADMINISTRATIVE  AGENT AND   EACH  
LENDER   HEREBY   WAIVE,   TO   THE   FULLEST   EXTENT   PERMITTED   BY
APPLICABLE LAW, ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY
AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).

 

8.19.[Reserved].

 

8.20.Counterparts. This Security Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Security Agreement by signing any
such counterpart. Delivery of an executed counterpart of a signature page of
this Security Agreement by facsimile or other electronic transmission shall be
effective as delivery of a manually executed counterpart of this Security
Agreement.

 

8.21.Subordination of Intercompany Indebtedness. Each Grantor agrees that any
and all claims of such Grantor against any other Grantor (each an “Obligor”)
with respect to any “Intercompany Indebtedness” (as hereinafter defined), any
endorser, obligor or any other guarantor of all or any part of the Secured
Obligations, or against any of its properties shall be subordinate and subject
in right of payment to the prior payment, in full and in cash, of all Secured
Obligations, provided that, and not in contravention of the foregoing, so long
as no Event of Default has occurred and is continuing, such Grantor may receive
payments in the ordinary course of business with respect to such Intercompany
Indebtedness from each such Obligor to the extent not prohibited by the terms of
this Security Agreement and the other Loan Documents. Notwithstanding any right
of any Grantor to ask, demand, sue for, take or receive any payment from any
Obligor, all rights, liens and security interests of such Grantor, whether now
or hereafter arising and howsoever existing, in any assets of any other Obligor
shall be and are subordinated to the rights of the Secured Parties and the
Administrative Agent in those assets. Except pursuant to any transaction
permitted under the Credit Agreement, no Grantor shall have any right to
possession of any such asset, unless and until this Security Agreement has
terminated in accordance

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with Section 8.14. No Grantor shall have any right to foreclose upon any such
asset, whether by judicial action or otherwise, without the Administrative
Agent’s prior written consent or unless and until this Security Agreement has
terminated in accordance with Section 8.14. If all or any part of the assets of
any Obligor, or the proceeds thereof, are subject to any distribution, division
or application to the creditors of such Obligor, whether partial or complete,
voluntary or involuntary, and whether by reason of liquidation, bankruptcy,
arrangement, receivership, assignment for the benefit of creditors or any other
action or proceeding, or if the business of any such Obligor is dissolved or if
substantially all of the assets of any such Obligor are sold, then, and in any
such event (such events being herein referred to as an “Insolvency Event”), any
payment or distribution of any kind or character, either in cash, securities or
other property, which shall be payable or deliverable upon or with respect to
any Indebtedness of any Obligor to any Grantor (“Intercompany Indebtedness”)
shall be paid or delivered directly to the Administrative Agent for application
on any of the Secured Obligations, due or to become due, until such Secured
Obligations (other than contingent indemnity obligations) shall have first been
fully paid and satisfied (in cash). Should any payment, distribution, security
or instrument or proceeds thereof be received by the applicable Grantor upon or
with respect to the Intercompany Indebtedness after any Insolvency Event and
prior to the termination of this Security Agreement in accordance with Section
8.14, such Grantor shall receive and hold the same in trust, as trustee, for the
benefit of the Secured Parties and shall forthwith deliver the same to the
Administrative Agent, for the benefit of the Secured Parties, in precisely the
form received (except for the endorsement or assignment of the Grantor where
necessary), for application to any of the Secured Obligations, due or not due,
and, until so delivered, the same shall be held in trust by the Grantor as the
property of the Secured Parties. If any such Grantor fails to make any such
endorsement or assignment to the Administrative Agent, the Administrative Agent
or any of its officers or employees is irrevocably authorized to make the same.
Each Grantor agrees that until the termination of this Security Agreement in
accordance with Section 8.14, except pursuant to any transaction permitted under
the Credit Agreement, no Grantor will assign or transfer to any Person (other
than the Administrative Agent or the Borrower or another Grantor) any claim any
such Grantor has or may have against any Obligor.

8.22.AMENDMENT AND RESTATEMENT.

 

(a)No Novation. It is the express intent of the parties hereto that this
Security Agreement be merely an amendment and restatement of the Existing
Security Agreement and not constitute a novation of the obligations thereunder.

 

(b)References to this Security Agreement In Loan Documents. Upon the
effectiveness of this Security Agreement, on and after the date hereof, each
reference in any other Loan Document to the Existing Security Agreement
(including any reference therein to “the Security Agreement,” “thereunder,”
“thereof,” “therein” or words of like import referring thereto) shall mean and
be a reference to this Security Agreement.

 

 

ARTICLE IX NOTICES

 

9.1.Sending Notices. Any notice required or permitted to be given under this
Security Agreement shall be sent in accordance with Section 9.01 of the Credit
Agreement. Any notice delivered to the Borrower shall be deemed to have been
delivered to all of the Grantors.

 

9.2.Change in Address for Notices.   Each of the Grantors, the Administrative
Agent and the Lenders may change the address for service of notice upon it by a
notice in writing to the other parties.

 

ARTICLE X

THE ADMINISTRATIVE AGENT

 

JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the other
Secured Parties hereunder pursuant to Article VIII of the Credit Agreement. It
is expressly understood and agreed by the parties to this Security Agreement
that any authority conferred upon the Administrative Agent hereunder is subject
to the terms of the delegation of authority made by the Secured Parties to the
Administrative Agent pursuant to the

29

 

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Credit Agreement, and that the Administrative Agent has agreed to act (and any
successor Administrative Agent shall act) as such hereunder only on the express
conditions contained in such Article VIII of the Credit Agreement. Any successor
Administrative Agent appointed pursuant to Article VIII of the Credit Agreement
shall be entitled to all the rights, interests and benefits of the
Administrative Agent hereunder.

 

[Signature Page Follows]

 

30

 

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IN WITNESS WHEREOF, the Grantors and the Administrative Agent have executed this
Security Agreement as of the date first above written.

 

GRANTORS:

 

ESSENDANT CO.

ESSENDANT INC.

ESSENDANT FINANCIAL SERVICES LLC

ESSENDANT MANAGEMENT SERVICES LLC

ESSENDANT INDUSTRIAL LLC

ESSENDANT RECEIVABLES LLC

O.K.I. SUPPLY, LLC

NESTOR SALES LLC

NESTOR SALES HOLDCO, LLC

NESTOR HOLDING COMPANY

LIBERTY BELL EQUIPMENT CORPORATION

LABEL INDUSTRIES, INC.

TRANSSUPPLY GROUP, LLC

CPO COMMERCE ACQUISITION, LLC

CPO COMMERCE, LLC

 

By: /s/Robert J. Kelderhouse

Name: Robert J. Kelderhouse

Title: Vice President and Treasurer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page to

Second Amended and Restated Pledge and Security Agreement

 

 

 

--------------------------------------------------------------------------------

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

By: /s/Hilda C. Carbajal

Name:  Hilda C. Carbajal

Title:  Authorized Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page to

Second Amended and Restated Pledge and Security Agreement

 

 

 

--------------------------------------------------------------------------------

 

EXHIBIT A

(See Sections 3.2, 3.3, 3.4, 3.9 and 9.1 of Security Agreement)

 

NOTICE ADDRESS FOR ALL GRANTORS c/o Essendant Co.

One Parkway North Boulevard Deerfield, IL 60015

Attention: Brendan McKeough, Deputy General Counsel

 

 

 

INFORMATION AND COLLATERAL LOCATIONS OF ESSENDANT CO.

 

 

 

 

I.

Name of Grantor: Essendant Co.

 

 

II.

State of Incorporation or Organization: Illinois

 

 

III.

Type of Entity: Corporation

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization:
1648-748-1

 

 

V.

Federal Identification Number: 36-2431718

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

One Parkway North Blvd.

Deerfield, IL 60015

 

 

 

 

VII.

Locations of Collateral:

 

 

(a)

Properties Owned by the Grantor:

 

CURRENT OWNER

 

STATE

 

COUNTY

 

FACILITY

Essendant Co.

IL

Bond County

2000 Wolf Business Park

Greenville, IL 62246

Essendant Co.

IN

Marion County

5345 West 81st Street

Indianapolis, IN  46268

Essendant Co.

MA

Middlesex County

415 Wildwood Avenue

Woburn, MA 01801

Essendant Co.

MD

Anne Arundel County

7441 Candlewood Road

Hanover, MD 21076

 

 

--------------------------------------------------------------------------------

 

 

CURRENT

OWNER

 

STATE

 

COUNTY

 

FACILITY

Essendant Co.

MN

Hennepin County

7509 Boone Ave. North

Brooklyn Park, MN  55428

Essendant Co.

MN

Dakota County

1720 Alexander Rd

Eagan, MN  55121

Essendant Co.

NY

Greene County

Hwy 9 West & Wolf Road

Coxsackie, NY 12051

Essendant Co.

NY

Erie County

13 Centre Drive

Orchard Park, NY 14127

Essendant Co.

OH

Summit County

2100 Highland Rd

Twinsburg, OH 44087

Essendant Co.

OK

Tulsa County

1870 N. 109th East Avenue

Tulsa, OK 74116

 

 

 

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name):

 

 

 

 

LESSEE

 

 

 

STATE

 

 

 

FACILITY

 

 

 

LANDLORD

 

 

Essendant Co.

 

 

AZ

 

1002 South 63rd Avenue, Phoenix, AZ 85043

 

Exeter 1002 S. 63rd, LLC

 

 

Essendant Co.

 

 

AZ

 

1013 West Alameda Drive Tempe, AZ 85282

 

DCT West Alameda LLC

 

 

Essendant Co.

 

 

 

AZ

2910 S. Hardy, Building No. 2,

Suite 101

Tempe, AZ 85282

 

DCT South Hardy LLC

 

 

Essendant Co.

 

 

CA

 

918 S. Stimson Ave

City of Industry, CA 91745

 

LBA/PPF Industrial III-A, LP

 

 

Essendant Co.

 

 

 

CA

 

7021 Roseville Rd., Sacramento, CA 95842

Tisha Land Company

LLC/PDC Properties, Inc.

 

 

Essendant Co.

 

 

CA

 

21508 Ferrero Pkwy, Building A City of Industry, CA  91789

 

Grand Avenue Venture LLC

 

 

Essendant Co.

 

 

CA

 

5440 Stationers Way, Sacramento, CA 95842

 

Stationers Way Management

 

 

Essendant Co.

 

 

 

CA

3963 Workman Mill Road,

Building A

Whittier, CA 90001

 

Gateway Pointe Investors, LLC

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

LESSEE

 

 

 

STATE

 

 

 

FACILITY

 

 

 

LANDLORD

 

 

Essendant Co.

 

 

CA

 

4100 Whipple Road, Building E Union City, CA 94587

 

Rreef America Reit II Corp. R

 

 

Essendant Co.

 

 

CA

 

30336 Whipple Road, Building F Union City, CA 94587

 

Rreef America Reit II Corp. R

 

 

Essendant Co.

 

 

CO

 

9910 E. 47th Avenue, Denver, CO 80238

 

PAC Operating LTD Partners

 

 

Essendant Co.

 

 

 

FL

2405 Commerce Park Drive, Suite

100

Orlando, FL 32819

 

 

EastGroup Properties

 

 

Essendant Co.

 

 

FL

 

10801 Northwest 103rd St, Suite 21

Medley, FL 33178

 

CPT Flagler Station II, LLC

 

 

Essendant Co.

 

 

FL

 

9945 Currie Davis Drive Tampa, FL 33619

 

Liberty Property Limited Partnership

 

 

 

Essendant Co.

 

 

 

GA

 

2200 Thornton Road, Suite 100

Lithia Springs, GA 30122

 

CRP-3 2200 Thornton, LLC

 

 

 

Essendant Co.

 

 

 

GA

3800 Camp Creek Parkway, Suite 100,

E. Pointe, GA 30331

 

Duke Secured Financing 2006, LLC

 

 

Essendant Co.

 

 

GA

 

125 Horizon Drive Suwanee, GA 30024

 

 

KTR ATL Three LLC

 

 

Essendant Co.

 

 

IL

 

810 Kimberly Drive Carol Stream, IL 60188

 

PRIM 810 Kimberly LLC

 

 

Essendant Co.

 

 

IL

230 E. Lies Road

Carol Stream, IL 60188

MM Industrial Lies Road, LLC

 

 

Essendant Co.

 

 

IL

 

One Parkway North Blvd.

Deerfield, IL 60015

 

Long Ridge Office Portfolio, L.P.

 

 

Essendant Co.

 

 

MA

 

33 Suffolk Road Mansfield, MA 02048

 

SSI PR II OWNER, LLC

 

Essendant Co.

 

MD

7090 Troy Hill Drive

Elkridge, MD 21075

PRLHC Troy Hill

Center I 086700

 

 

Essendant Co.

 

 

MD

 

7481 Coca Cola Drive, Suite 100

Hanover, MD 21076

 

Crossroads DC I (GLP)

 

 

Essendant Co.

 

 

MI

 

2640 Northridge Dr. NW Walker, MI 49544

 

 

Stag GI Walker, LLC

 

Essendant Co.

 

MO

1606 Linn St.,

Kansas City, MO 64116

 

Northtown Devco

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

LESSEE

 

 

 

STATE

 

 

 

FACILITY

 

 

 

LANDLORD

 

 

Essendant Co.

 

 

MO

 

1202-1222 Atlantic Street North Kansas City, MO 64116

 

 

Northtown Devco

 

 

 

 

Essendant Co.

 

 

 

 

NC

 

 

10800 Withers Cove Park Dr.

Charlotte, NC 28278

Lee & Keiter

Development Co./ Pacific Coast Industries

 

 

 

 

Essendant Co.

 

 

 

 

NC

 

 

3071 Business Park Drive Raleigh, NC 27610

 

 

 

 

Duke Realty LP

 

 

Essendant Co.

 

 

NJ

 

60 Saw Mill Pond Road Edison, NJ 08817

 

Heller Industrial Parks, Inc.

 

 

Essendant Co.

 

 

NJ

 

100 Liberty Way, Cranbury, NJ 08512

 

 

Cransud One, LLC

 

 

Essendant Co.

 

 

 

OH

 

2479 Edison Blvd, Twinsburg, OH 44087

Great Lakes Industrial

Portfolio AB Biynah, LLC

 

 

Essendant Co.

 

 

 

OH

 

1634 Westbelt Dr., Columbus, OH 43228

Icon Owner Pool 3

Midwest/Southeast, LLC(GLP)

 

 

Essendant Co.

 

 

 

OH

 

2477 Edison Blvd, Building I Twinsburg, OH 44087

Great Lakes Industrial

Portfolio AB Biynah, LLC

 

 

Essendant Co.

 

 

OR

 

14330 North Lombard Street Portland, OR 97203

 

MEPT Rivergate III LLC

 

 

 

Essendant Co.

 

 

 

PA

 

 

270 48th Street Pittsburgh, PA 15201

 

 

The Buncher Company

 

Essendant Co.

 

PA

125 Greentree Road

Phoenixville, PA 19456

Green Tree Owner

LLC

 

 

Essendant Co.

 

 

TN

 

5300 Hickory Hill Dr., Suite 105

Memphis, TN 38141

 

 

WPT East Park I, LP

 

 

Essendant Co.

 

 

TN

 

455 Industrial Blvd Lavergne, TN 37086

 

MidSouth Bldg I- 253910

 

 

Essendant Co.

 

 

TX

 

4500 NE Loop 410, Suite 100

San Antonio, TX 78218

 

ProLogis NA2 Texas LP

 

 

Essendant Co.

 

 

 

TX

 

5425 FAA Blvd.

Irving, TX 75061

Prologis USLV

Operating Partnership LP

 

Essendant Co.

 

TX

7677 Pinemont Drive

Houston, TX 77040

 

CMDS Houston LLC

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

LESSEE

 

 

 

STATE

 

 

 

FACILITY

 

 

 

LANDLORD

 

 

Essendant Co.

 

 

 

TX

 

8518 West Little York Road Houston, TX 77040

LIT Industrial Texas,

LP (Cole Creek Bldg.6)

 

 

Essendant Co.

 

 

TX

 

410 West Trinity Blvd.

Grand Prairie, TX 75050

 

 

Prologis M&L, LLC

 

 

Essendant Co.

 

 

UT

 

4625 West 1730 South Street Salt Lake City, UT 84104

 

Commerical Building Investment, LLC

 

 

Essendant Co.

 

 

 

WA

18351 Cascade Ave. South,

Building 255

Tukwila, WA 98188

 

LIT Industrial Limited Partnership

 

 

Essendant Co.

 

 

WA

 

18300 South Center Pkwy Tukwila, WA 98188

 

LIT Industrial Limited Partnership

 

 

Essendant Co.

 

 

 

WA

 

3703 I Street NW, Auburn, WA 98002

TIAA-CREF

Benaroya Industrial Portfolio

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

Locations

 

 

IT Data Centers

 

IT Data Center #1

350 E. Cermak Drive-5th Floor Chicago, IL 60616

 

IT Data Center #2 5515 Nobel Drive Fitchburg, WI 53711

 

 

 

 

Third Party Packaging Locations

 

 

Winterborne, Inc. 20650 Prairie Street Chatsworth, CA  91311

 

Website Hosting Location

 

 

--------------------------------------------------------------------------------

 

Locations

 

ORS Nasco #1

1695 Indian Wood Circle Maumee OH 43537

Hanson Inc.

629 N. High Street, 4th Floor Columbus, OH 43215

 

CPO #1

Internap – LAX014

3690 Redondo Beach Ave Redondo Beach, CA 90278

 

Offsite Storage of Books and Records

 

Access

1200 Humbract Circle Bartlett, IL 60103

 

 

 

 

Printers

 

Catalogs Printed, Bound and/or Stored

 

CP Solutions/RR Donnelley 2757 S Memorial Dr,

Tulsa, OK 74129

Heritage

P.O. Box 1457

El Reno, OK 73036

 

Meeks Group

6913 E. 13th Street Tulsa, OK 74112

 

Pemcor, LLC 2100 State Road Lancaster, PA 17601

 

LSC Communications 100 Banta Road

Long Prairie, MN 56347

 

LSC Communications 830 Midway Rd. Menasha, WI 54952

 

LSC Communications 321 Wilson Drive

Jefferson City, MO  65109

 

 

--------------------------------------------------------------------------------

 

Locations

 

 

Vision

605 Territorial Dr.

Bolingbrook, IL  60440

 

Vision Integrated Graphics 1701 Northwind Parkway Hobart, Indiana 46342

 

Walsworth

306 N. Kansas Ave.

Marceline, MO 64658

 

Public Warehouses for Overflow Product Storage

 

 

A. Duie Pyle

209 Garfield Ave.

West Chester, PA 19380

 

Genesis Engineering Services, Inc.

33580 Central Ave.

Union City, CA

 

JIT Services

5136 West 81st Street Indianapolis, IN 46268

 

Tighe Logistics Group 481 Wildwood Ave. Woburn, MA

 

Genesis Engineering Services, Inc.

32550 Central Ave.

Union City, CA 94587

National Distribution Centers, LLC 200 Saw Mill Pond Rd.

Edison, NJ 08817

 

 

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
Trade Name: Lagasse Sweet; United Stationers Supply Co. (name amended to
Essendant Co. effective on 6/1/2015); Lagasse, Inc. (merged into Lagasse Target,
LLC effective 1/1/2013); Lagasse Target, LLC (change of name to Lagasse, LLC
effective 1/1/2013); Lagasse, LLC (Merged into Essendant Co. effective
6/29/2015)

 

INFORMATION AND COLLATERAL LOCATIONS OF ESSENDANT INC.

 

 

 

 

--------------------------------------------------------------------------------

 

 

I.

Name of Grantor: Essendant Inc.

 

 

II.

State of Incorporation or Organization: Delaware

 

 

III.

Type of Entity: Corporation

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization:
0920601

 

 

V.

Federal Identification Number: 36-3141189

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

One Parkway North Blvd.

Deerfield, IL 60015

 

 

VII.

Locations of Collateral:

 

 

(a)

Properties Owned by the Grantor: None.

 

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name): None.

 

 

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

See Section VII (c) of Disclosures for Essendant Co.

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
United Stationers Inc. (name amended to Essendant Inc. filed 5/18/2015)

 

INFORMATION AND COLLATERAL LOCATIONS OF ESSENDANT FINANCIAL SERVICES LLC

 

 

 

 

I.

Name of Grantor: Essendant Financial Services LLC

 

 

II.

State of Incorporation or Organization: Illinois

 

 

III.

Type of Entity: Limited Liability Company

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization:
0054-307-1

 

 

V.

Federal Identification Number: 36-4428313

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

One Parkway North Blvd.

Deerfield, IL 60015

 

VII.

Locations of Collateral:

 

 

(a)

Properties Owned by the Grantor: None.

 

--------------------------------------------------------------------------------

 

 

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name): None.

 

 

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

See Section VII (c) of Disclosures for Essendant Co.

 

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
Trade Name: EFS; United Stationers Financial Services LLC (name amended to
Essendant Financial Services LLC effective on 6/1/2015)

 

 

INFORMATION AND COLLATERAL LOCATIONS OF ESSENDANT MANAGEMENT SERVICES LLC

 

 

 

 

I.

Name of Grantor: Essendant Management Services LLC

 

 

II.

State of Incorporation or Organization: Illinois

 

 

III.

Type of Entity: Limited Liability Company

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization:
0056-416-8

 

 

V.

Federal Identification Number: 52-2323076

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

One Parkway North Blvd.

Deerfield, IL 60015

 

 

VII.

Locations of Collateral:

 

 

(a)

Properties Owned by the Grantor: None.

 

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name): None.

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

See Section VII (c) of Disclosures for Essendant Co.

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
Trade Name: EMS; United Stationers Technology Services LLC (name amended to
United Stationers Management Services LLC effective on 1/13/2013); United
Stationers Management Services LLC (name amended to Essendant Management
Services LLC effective on 6/1/2015)

 

--------------------------------------------------------------------------------

 

 

INFORMATION AND COLLATERAL LOCATIONS OF ESSENDANT INDUSTRIAL LLC

 

 

 

 

I.

Name of Grantor: Essendant Industrial LLC

 

 

II.

State of Incorporation or Organization: Illinois

 

 

III.

Type of Entity: Limited Liability Company

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization:
0409-295-3

 

 

V.

Federal Identification Number: 73-0958050

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

907 S. Detroit Avenue Tulsa, OK 74120

 

 

VII.

Locations of Collateral:

 

 

(a)

Properties Owned by the Grantor:

 

CURRENT OWNER

 

STATE

 

COUNTY

 

FACILITY

Essendant Industrial

LLC

OK

Muskogee

432 South G. Street

Muskogee, OK 74403

Essendant Industrial

LLC

OK

Muskogee

900 S. Cherokee Street

Muskogee, OK 74403

 

 

--------------------------------------------------------------------------------

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name):

 

 

LESSEE

 

STATE

 

FACILITY

 

LANDLORD

Essendant

Industrial LLC

AL

2545 US Hwy 78, Suite 100 Moody,

AL 35004

GCP-Moody Two, LLC

Essendant

Industrial LLC

CA

2234 N. Plaza Drive

Visalia, CA 93291

 

A & B Properties, Inc.

(Midstate Hayes Bldg 1)

Essendant

Industrial LLC

MA

574 West Street

Mansfield, MA 02048

SSI PR II OWNER,

LLC

Essendant

Industrial LLC

OK

907 S. Detroit, Suite 400

Tulsa OK 74120

 

Oklahoma Property Investors III, LLC

Essendant

Industrial LLC

PA

1400 AIP Drive

Middletown, PA 17057

Big Box Core Industrial

REIT I, LLC

Essendant

Industrial LLC

OH

9901 Princeton-Glendale Road

Cincinnati, OH 45246

Bestwelds Realty, LLC

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

See Section VII (c) of Disclosures for Essendant Co.

 

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
ORS Nasco Target, LLC (Merger with ORS Nasco, Inc. (Survivor) effective
1/1/2013); ORS Nasco LLC (Merger with Oklahoma Rig, Inc. and Oklahoma Rig and
Supply Co. Trans., Inc. effective 5/15/2015 (ORS Nasco, LLC, Survivor); ORS
Nasco, LLC  (name amended to Essendant Industrial LLC effective on 6/1/2015)

 

INFORMATION AND COLLATERAL LOCATIONS OF CPO COMMERCE, LLC

 

 

 

 

I.

Name of Grantor: CPO Commerce, LLC

 

 

II.

State of Incorporation or Organization: Illinois

 

 

III.

Type of Entity: Limited Liability Company

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization:
04781023

 

 

V.

Federal Identification Number: 20-0331439

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

One Parkway North Blvd. (Principal Place of Business) Deerfield, IL 60015

 

--------------------------------------------------------------------------------

 

 

120 W. Bellevue Drive (Chief Executive Office) Pasadena, CA 91105

 

 

VII.

Locations of Collateral:

 

 

(a)

Properties Owned by the Grantor: None.

 

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name):

 

 

LESSEE

 

STATE

 

FACILITY

 

LANDLORD

CPO Commerce,

LLC

CA

110 & 120 W. Bellevue Drive

Pasadena, CA 91105

Essendant Co.

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

See Section VII (c) of Disclosures for Essendant Co.

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
Trade Names: CPO, CPO Commerce; CPO Commerce Target, LLC (Merger with CPO
Commerce, Inc., a Delaware corporation with Name of Surviving Entity: CPO
Commerce, LLC effective as of 5/30/2014)

 

INFORMATION AND COLLATERAL LOCATIONS OF CPO COMMERCE ACQUISITION, LLC

 

 

 

 

I.

Name of Grantor: CPO Commerce Acquisition, LLC

 

 

II.

State of Incorporation or Organization: Delaware

 

 

III.

Type of Entity: Limited Liability Company

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization:
4964498

 

 

V.

Federal Identification Number: None.

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

One Parkway North Blvd. (Principal Place of Business) Deerfield, IL 60015

 

120 W. Bellevue Drive (Chief Executive Office) Pasadena, CA 91105

 

 

 

 

VII.

Locations of Collateral:

 

--------------------------------------------------------------------------------

 

 

 

(a)

Properties Owned by the Grantor: None.

 

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name): None.

 

 

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

See Section VII (c) of Disclosures for Essendant Co.

 

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
Trade Names: CPO, CPO Commerce

 

 

 

INFORMATION AND COLLATERAL LOCATIONS OF LIBERTY BELL EQUIPMENT CORPORATION

 

 

 

 

I.

Name of Grantor: Liberty Bell Equipment Corporation

 

 

II.

State of Incorporation or Organization: Pennsylvania

 

 

III.

Type of Entity: Corporation

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization: 729836

 

 

V.

Federal Identification Number: 23-1870869

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

3201 South 76th Street Philadelphia, PA 19153

 

 

 

 

VII.

Locations of Collateral:

 

 

(a)

Properties Owned by the Grantor: None.

 

 

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name):

 

 

LESSEE

 

STATE

 

FACILITY

 

LANDLORD

Liberty Bell

Equipment Corporation

CA

2843 S East Avenue

Fresno, CA  93725

 

Fresno Industrial Center, LP

 

--------------------------------------------------------------------------------

 

Liberty Bell

Equipment Corporation

GA

5362 Royal Woods Parkway

Tucker, GA 30084

 

Liberty Bell GA, LLC

Liberty Bell

Equipment Corporation

IL

2143 International Parkway

Woodridge, IL 60517

IIT-HSA PARK 355

II JV, LLC c/o GLP US Management LLC

Liberty Bell

Equipment Corporation

MA

572 West Street

Mansfield, MA 02048

 

JARSAM, LLC

Liberty Bell

Equipment Corporation

MD

1018 Wilso Drive

Baltimore, MD 21223

 

The Realty Associate Fund X, LP

Liberty Bell

Equipment Corporation

MO

810 North Jefferson Street

St. Louis, MO 63106

 

DALB, LLC

 

 

--------------------------------------------------------------------------------

 

 

 

LESSEE

 

STATE

 

FACILITY

 

LANDLORD

Liberty Bell

Equipment Corporation

OH

21548 Alexander Road,

Alexander Industrial Park Oakwood Village, OH 44146

Alexander Road,

LLC c/o Carnegie Companies, Inc.

Liberty Bell

Equipment Corporation

PA

3201 South 76th Street

Philadelphia, PA 19153

 

Bell Real Estate Trust

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

See Section VII (c) of Disclosures for Essendant Co.

 

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
Trade Names: LBEC, Liberty Bell; Liberty Bell Equipment Company, its
subsidiaries and its sister companies, Label Industries, Inc. and XL Champion
Holdings, LLC (a Missouri LLC) were acquired in October 2014. XL Champion
Holdings, LLC (a Missouri LLC) was dissolved 01/18/2017. Certificate of Merger
with Medco Tool of Chicago, Inc. and Medco Tool of Baltimore, Inc. effective
11/1/2014 with Liberty Bell Equipment Corporation (Survivor); Certificate of
Merger with Medco Tool of Ohio, Inc. effective 2/2/2015 with Liberty Bell
Equipment Corporation (Survivor); Certificate of Merger with Medco Tool of St.
Louis, Inc. effective 2/2/2015 with Liberty Bell Equipment Corporation
(Survivor); Certificate of Merger with Medco Tool of Nevada, Inc. effective
12/31/2015 with Liberty Bell Equipment Corporation (Survivor); Certificate
Merger with AJS Group, LLC effective 12/29/16 with Liberty Bell Equipment
Corporation (Survivor))

 

 

I.

 

 

--------------------------------------------------------------------------------

 

INFORMATION AND COLLATERAL LOCATIONS OF NESTOR HOLDING COMPANY

 

 

 

 

I.

Name of Grantor: Nestor Holding Company

 

 

II.

State of Incorporation or Organization: Delaware

 

 

III.

Type of Entity: Corporation

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization:
3998782

 

 

V.

Federal Identification Number: 20-3171336

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

201 N. Tryon Street, Suite 2450

Charlotte, NC 28202

 

 

 

 

VII.

Locations of Collateral:

 

 

(a)

Properties Owned by the Grantor: None.

 

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name): None.

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

See Section VII (c) of Disclosures for Essendant Co.

 

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
Trade Names: Nestor, Nestor Sales; Certificate of Amendment of Certificate of
Incorporation effective 7/31/2015 changing the name from MROP Blocker Corp. to
Nestor Holding Company

 

 

I.

 

 

--------------------------------------------------------------------------------

 

INFORMATION AND COLLATERAL LOCATIONS OF NESTOR SALES HOLDCO, LLC

 

 

 

 

I.

Name of Grantor: Nestor Sales Holdco, LLC

 

 

II.

State of Incorporation or Organization: Delaware

 

 

III.

Type of Entity: Limited Liability Company

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization:
4006200

 

 

V.

Federal Identification Number: 20-3304548

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

201 N. Tryon Street, Suite 2450

Charlotte, NC 28202

 

 

 

 

VII.

Locations of Collateral:

 

 

(a)

Properties Owned by the Grantor: None.

 

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name): None.

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

See Section VII (c) of Disclosures for Essendant Co.

 

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
Trade Names: Nestor, Nestor Sales

 

 

I.

 

 

--------------------------------------------------------------------------------

 

INFORMATION AND COLLATERAL LOCATIONS OF NESTOR SALES LLC

 

 

 

 

I.

Name of Grantor: Nestor Sales LLC

 

 

II.

State of Incorporation or Organization: Georgia

 

 

III.

Type of Entity: Limited Liability Company

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization:
K843354

 

 

V.

Federal Identification Number: 58-2430752

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

7337 Bryan Dairy Road Largo, FL 33777-1507

 

 

VII.

Locations of Collateral:

 

 

(a)

Properties Owned by the Grantor: None.

 

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name):

 

 

LESSEE

 

STATE

 

FACILITY

 

LANDLORD

Nestor Sales LLC

CO

14200 East 35th Place, Suite 103

Aurora, CO 88011

 

PLDSPE, LLC

Nestor Sales LLC

FL

7337 Bryan Dairy Road

Largo, FL 33777

Robert G. Nestor

Family Trust

Nestor Sales LLC

IA

2408 East 22nd Street

Des Moines, IA 50317

 

J. Douglas Brown

Nestor Sales LLC

IN

205 County Road 17

Elkhart, IN 46516

 

Lea-Jo, LLC

Nestor Sales LLC

MA

35 Industrial Parkway

Woburn, MA 01801

MDG Realty LLC

DBA Maggiore Development

Group

Nestor Sales LLC

NC

3301 Woodpark Boulevard, 3301-

J,

Charlotte, NC 28206

The Realty

Associate Fund V, LP (Evergreen

Property Co.)

 

 

--------------------------------------------------------------------------------

 

 

 

LESSEE

 

STATE

 

FACILITY

 

LANDLORD

Nestor Sales LLC

OH

211 Hayes Drive, Suite A,

Brooklyn Heights, OH 44131

Weston, Inc.

Nestor Sales LLC

TN

3344 Democrat Drive

Memphis, TN 38118

 

BELZ Investco GP

Nestor Sales LLC

WA

18360 Olympic Avenue South

Tukwila, WA 98188

Gateway Olympia, Inc.

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

See Section VII (c) of Disclosures for Essendant Co.

 

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
Trade Names: Nestor, Nestor Sales

 

 

I.

 

 

--------------------------------------------------------------------------------

 

INFORMATION AND COLLATERAL LOCATIONS OF O.K.I. SUPPLY, LLC

 

 

 

 

I.

Name of Grantor: O.K.I. Supply, LLC

 

 

II.

State of Incorporation or Organization: Illinois

 

 

III.

Type of Entity: Limited Liability Company

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization:
0417-020-2

 

 

V.

Federal Identification Number: 31-0621548

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

One Parkway North Blvd.

Deerfield, IL 60015

 

 

VII.

Locations of Collateral:

 

 

(a)

Properties Owned by the Grantor: None.

 

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name): None.

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

See Section VII (c) of Disclosures for Essendant Co.

 

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
Trade Names: ORS, ORS NASCO; Articles of Merger effective 1/1/2013 merging
O.K.I. Supply Co., an Ohio corporation with O.K.I. Supply Target, LLC (Survivor)
and name change to O.K.I. Supply, LLC; Articles of Merger effective 8/13/2015
merging O.K.I. Data, Inc., an Ohio corporation with O.K.I. Supply, LLC
(Survivor); Articles of Merger effective 10/3/2016 merging OKI Middle East
Holding Co., an Ohio corporation with O.K.I. Supply, LLC (Survivor)

 

 

I.

 

 

--------------------------------------------------------------------------------

 

INFORMATION AND COLLATERAL LOCATIONS OF LABEL INDUSTRIES, INC.

 

 

 

 

I.

Name of Grantor: Label Industries, Inc.

 

 

II.

State of Incorporation or Organization: Missouri

 

 

III.

Type of Entity: Corporation

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization:
00632588

 

 

V.

Federal Identification Number: 73-1724607

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

221 West 4th Street, Suite 4

Carthage, MO 64836

 

 

VII.

Locations of Collateral:

 

 

(a)

Properties Owned by the Grantor: None.

 

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name): None.

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

See Section VII (c) of Disclosures for Essendant Co.

 

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
Trade Name: Label

 

 

I.

 

 

--------------------------------------------------------------------------------

 

INFORMATION AND COLLATERAL LOCATIONS OF TRANSSUPPLY GROUP, LLC

 

 

 

 

I.

Name of Grantor: TransSupply Group, LLC

 

 

II.

State of Incorporation or Organization: Illinois

 

 

III.

Type of Entity: Limited Liability Company

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization:
0493952-2

 

 

V.

Federal Identification Number: 27-3989446

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

One Parkway North Blvd.

Deerfield, IL 60015

 

 

VII.

Locations of Collateral:

 

 

(a)

Properties Owned by the Grantor: None.

 

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name): None.

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

See Section VII (c) of Disclosures for Essendant Co.

 

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
Trade Name: TransSupply

 

 

I.

 

 

--------------------------------------------------------------------------------

 

INFORMATION AND COLLATERAL LOCATIONS OF ESSENDANT RECEIVABLES LLC

 

 

 

 

I.

Name of Grantor: Essendant Receivables LLC

 

 

II.

State of Incorporation or Organization: Illinois

 

 

III.

Type of Entity: Limited Liability Company

 

 

IV.

Organizational Number assigned by State of Incorporation or Organization:
0275-7958

 

 

V.

Federal Identification Number: 26-4146967

 

 

VI.

Place of Business (if it has only one) or Chief Executive Office (if more than
one place of business) and Mailing Address:

 

 

One Parkway North Blvd.

Deerfield, IL 60015

 

 

VII.

Locations of Collateral:

 

 

(a)

Properties Owned by the Grantor: None.

 

 

 

(b)

Properties Leased by the Grantor (Include Landlord’s Name): None.

 

 

 

(c)

Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements   (include name of Warehouse Operator or other Bailee or
Consignee):

 

 

See Section VII (c) of Disclosures for Essendant Co.

 

 

VIII.

Former or fictitious Name of Grantor/Mergers, Consolidations and Acquisitions:
Trade Name: USR ; Articles of Amendment effective 6/1/2015 from United
Stationers Receivables, LLC to Essendant Receivables LLC

 

 

I.

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B

(See Sections 3.5 and 7.1 of Security Agreement)

 

DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS See Disclosure Side Letter.

 

 

--------------------------------------------------------------------------------

 

EXHIBIT C

(See Section 3.7 of Security Agreement)

 

LETTER OF CREDIT RIGHTS AND CHATTEL PAPER None.

 

 

--------------------------------------------------------------------------------

 

EXHIBIT D

(See Section 3.10 and 3.11 of Security Agreement)

 

INTELLECTUAL PROPERTY RIGHTS Patent Applications and Issued Patents None.

Pending and Registered Trademarks

 

Mark

Status

Reg. No. /

Application No.

Owner

Registration

Date/ Application

Filing Date

ALERA

Registered

3,234,856

ESSENDANT CO.

4/24/2007

ANCHOR

Registered

4,643,660

ESSENDANT

INDUSTRIAL LLC

11/25/2014

AZERTY

Registered

1,496,309

ESSENDANT CO.

7/12/1988

BEST WELDS

Registered

3,241,886

ESSENDANT

INDUSTRIAL LLC

5/15/2007

BEST WELDS

Registered

2,577,149

ESSENDANT

INDUSTRIAL LLC

6/11/2002

BEST WELDS & DESIGN (Spark Logo)

Registered

3,241,888

ESSENDANT

INDUSTRIAL LLC

5/15/2007

BEST WELDS & Design

(Spark Logo)

Registered

2,549,518

ESSENDANT

INDUSTRIAL LLC

3/19/2002

BEYOND

ESSENTIAL

Pending

86/538467

ESSENDANT CO.

2/18/2015

B FLEX

Registered

2,492,668

ESSENDANT

INDUSTRIAL LLC

9/25/2001

B FLEX

Registered

2,390,033

ESSENDANT

INDUSTRIAL LLC

9/26/2000

B-LINE

Registered

2,387,946

ESSENDANT

INDUSTRIAL LLC

9/19/2000

B-LINE & Design

(Honey Bee Logo)

Registered

2,387,947

ESSENDANT

INDUSTRIAL LLC

9/19/2000

BOARDWALK

Registered

3,397,269

ESSENDANT CO.

3/18/2008

BOARDWALK

Registered

3,687,043

ESSENDANT CO.

9/22/2009

BOARDWALK

Pending

86/480848

ESSENDANT CO.

12/15/2014

BOARDWALK

Pending

86/884356

ESSENDANT CO.

1/23/2016

BOARDWALK

Registered

4,994,926

ESSENDANT CO.

7/5/2016

BOARDWALKand

Design

Registered

2,429,442

ESSENDANT CO.

2/20/2001

COMFORT

Registered

2,566,483

ESSENDANT

INDUSTRIAL LLC

5/7/2002

COMFORT

Registered

2,566,484

ESSENDANT

INDUSTRIAL LLC

5/7/2002

 

 

--------------------------------------------------------------------------------

 

 

Mark

Status

Reg. No. /

Application No.

Owner

Registration

Date/ Application Filing Date

COMFORT GRIP

Registered

2,116,492

ESSENDANT CO.

11/25/1997

CPO

Registered

3,638,023

CPO COMMERCE

LLC

6/16/2009

DESIGN

Registered

3,814,089

LABEL

INDUSTRIES, INC.

7/6/2010

DESIGN

Registered

2,461,182

ESSENDANT

INDUSTRIAL LLC

6/19/2001

EAGLE

Registered

1,437,761

ESSENDANT

INDUSTRIAL LLC

4/28/1987

EAGLE

Registered

2,404,097

ESSENDANT

INDUSTRIAL LLC

11/14/2000

EAGLE

Registered

2,613,747

ESSENDANT

INDUSTRIAL LLC

9/3/2002

ELUSION

Pending

87/033700

ESSENDANT CO.

5/11/2016

ENVELOPEDesign

Only

Registered

2,492,017

ESSENDANT CO.

9/25/2001

ESSENDANT

Registered

4,818,382

ESSENDANT CO.

9/22/2015

ESSENDANT

Stylized A

Pending

86/568623

ESSENDANT CO.

3/18/2015

ESSENDANT

Word Mark

Pending

86/568664

 

ESSENDANT CO.

3/18/2015

FINISH PRO

Pending

87/142022

LIBERTY BELL

EQUIPMENT CORPORATION

8/17/2016

FINISH PRO & Design

Pending

87/142063

LIBERTY BELL

EQUIPMENT CORPORATION

8/17/2016

GALAXY

Registered

3,247,619

ESSENDANT CO.

5/29/2007

HANDS   AND BOX

Design Only

Registered

2,571,420

ESSENDANT CO.

5/21/2002

I LOVE COPY PAPER

Registered

4,385,500

ESSENDANT CO.

8/13/2013

INNOVERA

Registered

3,326,145

ESSENDANT CO.

10/30/2007

JAGUAR PLASTICS

Registered

3,324,456

ESSENDANT CO.

10/30/2007

LAGASSE

Pending

86/798115

ESSENDANT CO.

10/23/2015

LAGASSE

Registered

2,619,155

ESSENDANT CO.

9/10/2002

MECHANICS

TOOLS WAREHOUSE

Registered

3,846,780

LABEL

INDUSTRIES, INC.

9/7/2010

MEDCO & Device

Registered

2,496,093

LIBERTY BELL

EQUIPMENT CORPORATION

10/9/2001

NATIONAL TOOL

WAREHOUSE

Registered

4,149,606

LABEL

INDUSTRIES, INC.

5/29/2012

 

 

--------------------------------------------------------------------------------

 

 

Mark

Status

Reg. No. /

Application No.

Owner

Registration

Date/ Application Filing Date

NATIONAL TOOL WAREHOUSE

Registered

3,012,392

LABEL

INDUSTRIES, INC.

11/1/2005

NED

Registered

2,587,795

ESSENDANT CO.

7/2/2002

NERATOLI

Registered

4,998,314

ESSENDANT CO.

7/12/2016

NESCO

Registered

2,570,562

NESTOR SALES LLC

5/21//2002

OFFICE IMPRESSIONS

Registered

3,348,288

ESSENDANT CO.

12/4/2007

OKI BERING

Registered

2,404,096

ESSENDANT

INDUSTRIAL LLC

11/14/2000

OKI BERING

Registered

2,616,298

ESSENDANT

INDUSTRIAL LLC

9/10/2002

OKI BERING

Registered

2,406,111

ESSENDANT

INDUSTRIAL LLC

11/21/2000

OKI BERING

Registered

2,404,098

ESSENDANT

INDUSTRIAL LLC

11/14/2000

OKI BERING

Registered

2,404,099

ESSENDANT

INDUSTRIAL LLC

11/14/2000

OKI BERING

Registered

2,404,100

ESSENDANT

INDUSTRIAL LLC

11/14/2000

ORS NASCO

Pending

86/798136

ESSENDANT CO.

10/23/2015

ORS NASCO PURE

WHOLESALE. PURE VALUE

Registered

3,305,657

ESSENDANT

INDUSTRIAL LLC

10/9/2007

PAINTERS PRIDE PRODUCTS

Registered

2,644,896

LIBERTY BELL

EQUIPMENT CORPORATION

11/5/2002

PAPER FOR THE PEOPLE

Registered

4,404,631

ESSENDANT CO.

9/17/2013

PAPERRAP

Registered

3,062,671

ESSENDANT CO.

2/28/2006

PERFECTLY

PRACTICAL

Registered

3,306,730

ESSENDANT CO.

10/9/2007

PERFORMANCE 1

Registered

3,212,093

NESTOR SALES LLC

2/27/2007

PREMIERE PADS

Registered

3,256,063

ESSENDANT CO.

6/26/2007

POWERING POSSIBILITIES

Pending

87/264003

ESSENDANT CO.

12/9/2016

QUIPALL

Registered

4,993,809

LIBERTY BELL

EQUIPMENT CORPORATION

7/5/2016

QUIPALL

Pending

87/203829

LIBERTY BELL

EQUIPMENT CORPORATION

10/14/2016

THE BIGGEST

BOOK

Registered

2,614,572

ESSENDANT CO.

9/3/2002

The UNCOMMON

PLATFORM

Pending

86/859270

ESSENDANT CO.

12/28/2015

Uand Design

Registered

3,306,757

ESSENDANT CO.

10/9/2007

 

 

--------------------------------------------------------------------------------

 

 

Mark

Status

Reg. No. /

Application No.

Owner

Registration

Date/ Application Filing Date

UStylized Letters

Registered

3,306,731

ESSENDANT CO.

10/9/2007

UNISAN

Registered

2,004,776

ESSENDANT CO.

10/1/1996

UNISAN

Registered

2,010,540

ESSENDANT CO.

10/22/1996

UNITED STATIONERS

Pending

86/798095

ESSENDANT CO.

10/23/2015

UNITED STATIONERS

Registered

2,486,918

ESSENDANT CO.

9/11/2001

UNITED STATIONERSand Design

Registered

1,118,921

ESSENDANT CO.

5/22/1979

UNITED STATIONERSand

Design

Registered

1,249,235

ESSENDANT CO.

8/23/1983

UNITED STATIONERSand

Design

Registered

1,514,147

ESSENDANT CO.

11/22/1988

UNIVERSAL

Registered

3,250,457

ESSENDANT CO.

6/12/2007

UNIVERSAL

Registered

3,357,434

ESSENDANT CO.

12/18/2007

UNIVERSAL ONE

Registered

4,617,934

ESSENDANT CO.

10/7/2014

WINDSOFT

Registered

2,544,665

ESSENDANT CO.

3/5/2002

UNILINK

Registered

1,637,064

ESSENDANT CO.

3/5/1991

WEBSCORE

Registered

2,609,037

ESSENDANT CO.

8/20/2002

 

State Trademark Registrations

 

Mark

Status

Reg. No. /

Application No.

Owner

Registration Date/

Application Filing Date

ORS NASCO

Registered –

Alabama

115818

ESSENDANT

INDUSTRIAL LLC

12/8/2015

ORS NASCO AN ESSENDANT

COMPANY

Registered –

South Carolina

N/A

ESSENDANT

INDUSTRIAL LLC

11/19/2015

 

 

Registered Copyrights

 

Title

Status

Reg. No.

Owner

I. S. S. Matchbook: a complete guidebook for matching

information systems supplies to office machines & computerized equipment.

 

 

Registered

 

 

TX1064590

 

 

Essendant Co.

 

 

--------------------------------------------------------------------------------

 

 

Title

Status

Reg. No.

Owner

I. S. S. Matchbook: a complete guidebook for matching

information systems supplies to office machines & computerized equipment.

 

 

Registered

 

 

TX1168772

 

 

Essendant Co.

Office products catalog/ United Stationers.

 

Registered

 

TX1301077

 

Essendant Co.

Office products pocket pricing guide: current list prices of

office products shown in our ...

catalog.

 

 

Registered

 

 

TX1301126

 

 

Essendant Co.

Office products pocket pricing guide: current list prices of

office products shown in our ...

catalog.

 

 

Registered

 

 

TX1301127

 

 

Essendant Co.

Basic office needs/ United Stationers.

 

Registered

 

TX1301129

 

Essendant Co.

Information systems supplies: [catalog] : for data processing,

word processing, microfiche.

 

Registered

 

TX1301130

 

Essendant Co.

Basic office needs/ United

Stationers.

 

Registered

 

TX1301131

 

Essendant Co.

Product list: wholesale

distributors of office equipment

& supplies / United Stationers.

 

Registered

 

TX1301133

 

Essendant Co.

Product list: wholesale distributors of office equipment

& supplies / United Stationers.

 

Registered

 

TX1301134

 

Essendant Co.

Office furnishings catalog.

Registered

TX1301135

Essendant Co.

Added emphasis.

Registered

TX1301136

Essendant Co.

Price tag sale of office products.

Registered

TX1301137

Essendant Co.

Red tag sale of office products!.

Registered

TX1301138

Essendant Co.

Added emphasis.

Registered

TX1301139

Essendant Co.

Office furnishings catalog.

Registered

TX1301140

Essendant Co.

Dealer net pricer: [wholesale distributors of office equipment

& supplies] / United Stationers.

 

Registered

 

TX1301141

 

Essendant Co.

Dealer net pricer: [wholesale distributors of office equipment

& supplies] / United Stationers.

 

Registered

 

TX1301142

 

Essendant Co.

The ... retail loose leaf catalog

pricing service.

 

Registered

 

TX1301143

 

Essendant Co.

I S S matchbook 1984 : v. one.

Registered

TX1324271

Essendant Co.

I S S matchbook 1984 : v. two.

Registered

TX1324272

Essendant Co.

Store fixtures and accessories

catalog price list.

 

Registered

 

TX1394624

 

Essendant Co.

Store fixtures & accessories.

Registered

TX1394662

Essendant Co.

Unitape pricing service

Registered

TX1406478

Essendant Co.

 

 

--------------------------------------------------------------------------------

 

 

Title

Status

Reg. No.

Owner

Information systems supplies: [catalog] : for data processing,

word processing, microfiche.

 

Registered

 

TX1429825

 

Essendant Co.

Office products catalog/ United

Stationers.

 

Registered

 

TX1430423

 

Essendant Co.

Office products pocket pricing

guide: current list prices of office products shown in our ... catalog.

 

 

Registered

 

 

TX1433311

 

 

Essendant Co.

I. S. S. Matchbook: a complete guidebook for matching

information systems supplies to office machines & computerized

equipment.

 

 

Registered

 

 

TX1451858

 

 

Essendant Co.

Basic office needs/ United

Stationers.

 

Registered

 

TX1454413

 

Essendant Co.

Cost 'n' sell pricing guide: for

office products / United Stationers.

 

Registered

 

TX1461458

 

Essendant Co.

Price busters.

Registered

TX1463710

Essendant Co.

Price tag sale of office products.

Registered

TX1463711

Essendant Co.

Office furniture catalog/ United Stationers.

 

Registered

 

TX1471117

 

Essendant Co.

The New Johnson & Staley catalog ....

 

Registered

 

TX1575872

 

Essendant Co.

Computer Supplies Matchbook: the complete guide for matching information systems
supplies to office machines & computerized equipment.

 

 

Registered

 

 

TX1576366

 

 

Essendant Co.

The Computer products catalog

....

 

Registered

 

TX1596538

 

Essendant Co.

File under savings! : ending date Feb. 28, 1985.

 

Registered

 

TX1596539

 

Essendant Co.

Super savings on computer products : sale ends June 30,

1985.

 

Registered

 

TX1596540

 

Essendant Co.

Impact!: office products sale

news.

 

Registered

 

TX1596541

 

Essendant Co.

Terrific buys on computer

supplies : diskettes, paper, ribbons, furniture, computer accessories : sale
ends June 30, 1985.

 

 

Registered

 

 

TX1596542

 

 

Essendant Co.

Red tag sale.

Registered

TX1596543

Essendant Co.

Red tag sale of office products.

Registered

TX1596544

Essendant Co.

Basic office needs/ United

Stationers.

 

Registered

 

TX1705156

 

Essendant Co.

 

 

--------------------------------------------------------------------------------

 

 

Title

Status

Reg. No.

Owner

Office furniture catalog/ United Stationers.

 

Registered

 

TX1711405

 

Essendant Co.

Office products catalog/ United Stationers.

 

Registered

 

TX1714547

 

Essendant Co.

Office products catalog/ United Stationers.

 

Registered

 

TX1917621

 

Essendant Co.

The Computer products catalog

....

 

Registered

 

TX1918408

 

Essendant Co.

Information systems supplies: [catalog] : for data processing, word processing,
microfiche.

 

Registered

 

TX1918409

 

Essendant Co.

The Computer products catalog

....

 

Registered

 

TX1929215

 

Essendant Co.

Office furniture ....

Registered

TX1929216

Essendant Co.

Get ready for a New Year sale!

Registered

TX1929453

Essendant Co.

Price tag sale : office products.

Registered

TX1929579

Essendant Co.

Office products pocket pricing guide: current list prices of

office products shown in our ...

catalog.

 

 

Registered

 

 

TX1930529

 

 

Essendant Co.

Cost 'n' sell pricing guide: for office products / United Stationers.

 

Registered

 

TX1934044

 

Essendant Co.

Basic office needs/ United Stationers.

 

Registered

 

TX1938655

 

Essendant Co.

Red tag office supply sale.

Registered

TX1941094

Essendant Co.

The Computer products catalog

....

 

Registered

 

TX1941449

 

Essendant Co.

Computer products sale!

Registered

TX1972211

Essendant Co.

Office products sale.

Registered

TX1979469

Essendant Co.

Red tag sale! on office supplies.

Registered

TX2025635

Essendant Co.

Office products price tag sale.

Registered

TX2026206

Essendant Co.

Computer Supplies Matchbook: the complete guide for matching

information systems supplies to office machines and computerized equipment.

 

 

Registered

 

 

TX2076889

 

 

Essendant Co.

Cost & sell dealer net pricer: corresponds to ... general line

catalog / United Stationers Supply Company.

 

 

Registered

 

 

TX2077011

 

 

Essendant Co.

Price tag sale--a harvest of fall savings.

 

Registered

 

TX2167491

 

Essendant Co.

The Computer products catalog

....

 

Registered

 

TX2167492

 

Essendant Co.

Computer accessories/ United Stationers Supply Company.

 

Registered

 

TX2167493

 

Essendant Co.

Basic office needs/ United Stationers.

 

Registered

 

TX2172284

 

Essendant Co.

 

 

--------------------------------------------------------------------------------

 

 

Title

Status

Reg. No.

Owner

Office furniture ....

Registered

TX2179060

Essendant Co.

United Stationers impact flyer

Registered

TX2179837

Essendant Co.

United Stationers red tag

Registered

TX2179838

Essendant Co.

Office products catalog/ United

Stationers.

 

Registered

 

TX2204237

 

Essendant Co.

Office products catalog/ United

Stationers.

 

Registered

 

TX2382245

 

Essendant Co.

Office products catalog/ United

Stationers.

 

Registered

 

TX2738376

 

Essendant Co.

Office products catalog/ United

Stationers.

 

Registered

 

TX2900077

 

Essendant Co.

United selling skills : v. 1.

Registered

TX2950470

Essendant Co.

 

Accounts receivable quick reference manual.

 

Registered

 

TX3000835

Essendant Co. (assigned to

United Business Computers, Inc.)

United Stationers, Inc., A/R

system training instructor guide.

 

Registered

 

TX3000879

Essendant Co. (assigned to

United Business Computers, Inc.)

A/R system accounts receivable participant guide.

 

Registered

 

TX3049219

 

Essendant Co.

Office innovations.

Registered

TX3050497

Essendant Co.

Office showcase: ... supplement.

Registered

TX3050498

Essendant Co.

Today's workplace. -- Spring 1991-.

 

Registered

 

TX3050499

 

Essendant Co.

9 to 5.

Registered

TX3050500

Essendant Co.

Dealer net pricer/ United

Stationers Supply Company.

 

Registered

 

TX3060108

 

Essendant Co.

Office products catalog/ United

Stationers.

 

Registered

 

TX3299391

 

Essendant Co.

 

COPAS.

 

Registered

 

TX3313950

Essendant Co. (assigned to

United Business Computers, Inc.)

Office products catalog/ United Stationers.

 

Registered

 

TX3433966

 

Essendant Co.

Matchbook: computer supplies and accessories : matching

supplies to computer equipment and office machines.

 

 

Registered

 

 

TX3443908

 

 

Essendant Co.

Matchbook: computer supplies and accessories : matching supplies to computer
equipment and office machines.

 

 

Registered

 

 

TX3443909

 

 

Essendant Co.

The Computer products catalog

....

 

Registered

 

TX3443910

 

Essendant Co.

Sanitary & maintenance supply.

Registered

TX3720944

Essendant Co.

Office furniture ....

Registered

TX3720945

Essendant Co.

Payment by receipt :

implementation guide.

 

Registered

 

TX3730184

 

Essendant Co.

 

 

--------------------------------------------------------------------------------

 

 

Title

Status

Reg. No.

Owner

Office products catalog/ United Stationers.

 

Registered

 

TX3735855

 

Essendant Co.

Office products catalog/ United Stationers.

 

Registered

 

TX3735859

 

Essendant Co.

United customer label system : user guide.

 

Registered

 

TX3756732

 

Essendant Co.

The Computer products catalog

....

 

Registered

 

TX3757483

 

Essendant Co.

Uniterm : user guide for United Stationers' terminal emulation software.

 

Registered

 

TX3783441

 

Essendant Co.

Dealer net pricer.

Registered

TX3844164

Essendant Co.

Dealer net pricer.

Registered

TX3844165

Essendant Co.

Dealer net pricer.

Registered

TX3859313

Essendant Co.

Electronic management systems

: your complete business advantage.

 

Registered

 

TX3859397

 

Essendant Co.

Dealer net pricer.

Registered

TX3913103

Essendant Co.

Office products catalog/ United Stationers.

 

Registered

 

TX3936741

 

Essendant Co.

Purchase to payment guide.

Registered

TX4084723

Essendant Co.

Dealer net pricer/ United

Stationers Supply Company.

 

Registered

 

TX4092344

 

Essendant Co.

Dealer net pricer/ United

Stationers Supply Company.

 

Registered

TX4092355

 

Essendant Co.

Micro United Computer

Products: quarterly sourcebook.

 

Registered

 

TX4112533

 

Essendant Co.

Micro United Computer Products: quarterly sourcebook.

 

Registered

 

TX4366726

 

Essendant Co.

Office products, 1996.

Registered

TX4122825

Essendant Co.

Office products catalog/ United Stationers.

 

Registered

 

TX4122915

 

Essendant Co.

1996 catalog quick find directory.

 

Registered

 

TX4132788

 

Essendant Co.

Office products 1999.

Registered

TX4258463

Essendant Co.

1996 computer products.

Registered

TX4366724

Essendant Co.

Office products, 1997.

Registered

TX4377282

Essendant Co.

1997 office products.

Registered

TX4377283

Essendant Co.

Micro United Computer Products: quarterly

sourcebook.

 

Registered

 

TX4402446

 

Essendant Co.

Micro United Computer

Products: quarterly sourcebook.

 

Registered

 

TX4366727

 

Essendant Co.

Dealer net pricer/ United Stationers Supply Company.

 

Registered

 

TX4415515

 

Essendant Co.

 

 

--------------------------------------------------------------------------------

 

 

Title

Status

Reg. No.

Owner

The Computer products catalog

....

 

Registered

 

TX4418869

 

Essendant Co.

United Stationers Supply Company dealer net pricer,

Apr.-Jun. 97.

 

Registered

 

TX4504833

 

Essendant Co.

Micro United price book.

Registered

TX4530609

Essendant Co.

Dealer net pricer/ United Stationers Supply Company.

 

Registered

 

TX4562705

 

Essendant Co.

Micro United price book.

Registered

TX4670664

Essendant Co.

Business products ....

Registered

TX4690436

Essendant Co.

The Computer products catalog

....

 

Registered

 

TX4690950

 

Essendant Co.

 

Micro United price book.

 

Registered

TX4690959

 

Essendant Co.

Micro United price book.

Registered

TX4092354

Essendant Co.

Essendant Co., 97 Oct.-Dec.

dealer net pricer.

 

Registered

 

TX4691004

 

Essendant Co.

Dealer net pricer/ United

Stationers Supply Company.

 

Registered

TX4694647

 

Essendant Co.

Office furniture ....

Registered

TX4818476

Essendant Co.

Micro United price book.

Registered

TX4819062

Essendant Co.

Matchbook: computer supplies

and accessories : matching supplies to computer equipment and office machines.

 

 

Registered

 

 

TX4819378

 

 

Essendant Co.

Essendant Co., dealer net pricer

: Oct.-Dec. 98.

 

Registered

 

TX4857522

 

Essendant Co.

Dealer net pricer/ United

Stationers Supply Company.

 

Registered

 

TX5187186

 

Essendant Co.

Price tag sale of office products.

Registered

TX840051

Essendant Co.

Red tag sale of office products.

Registered

TX840052

Essendant Co.

Office furnishings ...: [office

products for the 80's].

 

Registered

 

TX840053

 

Essendant Co.

Information systems supplies:

[catalog] : for data processing, word processing, microfiche.

 

Registered

 

TX840054

 

Essendant Co.

Basic office needs/ United Stationers.

 

Registered

 

TX840055

 

Essendant Co.

Information systems supplies: [catalog] : for data processing,

word processing, microfiche.

 

Registered

 

TX840056

 

Essendant Co.

Office furniture catalog/ United

Stationers.

 

Registered

 

TX840057

 

Essendant Co.

Office products catalog/ United

Stationers.

 

Registered

 

TX840058

 

Essendant Co.

Office products catalog/ United Stationers.

 

Registered

 

TX840059

 

Essendant Co.

 

 

--------------------------------------------------------------------------------

 

 

Title

Status

Reg. No.

Owner

Product list: wholesale distributors of office equipment

& supplies / United Stationers.

 

Registered

 

TX840060

 

Essendant Co.

Product list: wholesale

distributors of office equipment

& supplies / United Stationers.

 

Registered

 

TX840061

 

Essendant Co.

Basic office needs/ United Stationers.

 

Registered

 

TX840062

 

Essendant Co.

Dealer net pricer: [wholesale distributors of office equipment

& supplies] / United Stationers.

 

Registered

 

TX840063

 

Essendant Co.

Price tag sale of office products.

Registered

TX849570

Essendant Co.

I. S. S. matchbook: a complete

guidebook for matching information systems supplies to office machines &
computerized equipment : magnetic media, ribbons, copier supplies

 

 

 

Registered

 

 

 

TX910208

 

 

 

Essendant Co.

Consumer Sales marketing Program

 

Registered

 

TXu548226

 

Essendant Co.

1995 MU computer products dealer net pricer Jan-Mar

 

 

 

Essendant Co.

Information systems supplies: [catalog]: for data processing,

word processing, mircrofiche

 

Registered

 

TX1301128

 

Essendant Co.

Office products catalog

Registered

TX1301132

Essendant Co.

1983 information systems supplies catalog

 

Registered

 

TX1391130

 

Essendant Co.

Oklahoma Rig and Supply Company : wholesale

oilfield/industrial supplies.

 

Registered

 

TX1384157

 

Essendant Industrial LLC

The Comfort line; brochure

Registered

RE0000440158

O.K.I. Supply, LLC

Wholesaler/distributor accounting system

 

Registered

 

TXu000113369

 

O.K.I. Supply, LLC

Wholesaler/distributor inventory control system

 

Registered

 

TXu000113368

 

O.K.I. Supply, LLC

ETW Catalog supplement to “Equipment and tools…catalog

 

Registered

 

TX0001479649

 

Nestor Sales LLC

 

 

--------------------------------------------------------------------------------

 

 

 

 

--------------------------------------------------------------------------------

 

EXHIBIT E

(See Section 3.11 of Security Agreement)

 

TITLE DOCUMENTS

 

 

I.

Vehicles/Equipment subject to certificates of title: See Disclosure Side Letter.

 

 

 

II.

Aircraft/engines/parts, ships, railcars and other vehicles governed by federal
statute: None.

 

 

I.

 

 

--------------------------------------------------------------------------------

 

EXHIBIT F

 

(See Section 3.11 of Security Agreement) RESERVED.

 

 

--------------------------------------------------------------------------------

 

EXHIBIT G

(See Section 3.13 of Security Agreement and Definition of “Pledged Collateral”)

 

LIST OF PLEDGED COLLATERAL, SECURITIES AND OTHER INVESTMENT PROPERTY

 

 

 

I. PLEDGED STOCK

See Disclosure Side Letter

II. BONDS

None

III. GOVERNMENT SECURITIES

None

IV. OTHER SECURITIES OR OTHER INVESTMENT PROPERTY (CERTIFICATED AND
UNCERTIFICATED)

None

V. OTHER PLEDGED COLLATERAL

See disclosure Side Letter

 

 

I.

 

 

--------------------------------------------------------------------------------

 

EXHIBIT H

(See Section 3.1 of Security Agreement)

 

FINANCING STATEMENT FILING LOCATIONS

 

 

 

 

Companies

Filing Jurisdiction

 

CPO Commerce, LLC

Illinois

 

CPO Commerce Acquisition, LLC

Delaware

 

Essendant Inc.

Delaware

 

Essendant Co.

Illinois

 

Essendant Financial Services LLC

Illinois

 

Essendant Management Services LLC

Illinois

 

Essendant Industrial LLC

 

Illinois

 

Label Industries, Inc.

 

Missouri

 

Liberty Bell Equipment Corporation

 

Pennsylvania

 

Nestor Holding Company

 

Delaware

 

Nestor Sales LLC

 

Georgia

 

Nestor Sales Holdco, LLC

 

Delaware

 

O.K.I. Supply, LLC

 

Illinois

 

TransSupply Group, LLC

 

Illinois

 

Essendant Receivables LLC

 

Illinois

 

 

--------------------------------------------------------------------------------

 

EXHIBIT I

(See Section 4.4 and 4.8 of Security Agreement)

 

AMENDMENT

 

 

 

 

This Amendment, dated                                ,      is delivered
pursuant to Section 4.8 of the Security Agreement referred to below. All defined
terms herein shall have the meanings ascribed thereto or incorporated by
reference in the Security Agreement.   The undersigned further agrees that this
Amendment may be attached to that certain Second Amended and Restated Pledge and
Security Agreement, dated [                        ] [    ], 2017, between the
undersigned, as the Grantors, and JPMorgan Chase Bank, N.A., as the
Administrative Agent (as amended,  restated,  supplemented  or otherwise
modified from time to time prior to the date hereof, the “Security Agreement”)
and that the Collateral listed on Schedule I to this Amendment shall be and
become a part of the Collateral referred to in said Security Agreement and shall
secure all Secured Obligations referred to in the Security Agreement.

 

 

 

 

 

 

By:

Name: Title:

 

 

--------------------------------------------------------------------------------

 

SCHEDULE I TO AMENDMENT

 

STOCKS

 

 

Name of Grantor

 

 

Issuer

 

Certificate Number(s)

 

Number of Shares

 

 

Class of Stock

Percentage of

Outstanding Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BONDS

 

Name of

Grantor

Issuer

Number

Face Amount

Coupon Rate

Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GOVERNMENT SECURITIES

 

Name of

Grantor

Issuer

Number

Type

Face Amount

Coupon Rate

Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER SECURITIES OR OTHER INVESTMENT PROPERTY (CERTIFICATED AND UNCERTIFICATED)

 

Name of Grantor

Issuer

Description of Collateral

Percentage Ownership

Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Add description of custody accounts or arrangements with securities
intermediary, if applicable]

 

COMMERCIAL TORT CLAIMS

 

Name of Grantor

Description of Claim

Parties

Case Number; Name of

Court where Case was Filed

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

EXHIBIT J

COMMERCIAL TORT CLAIMS None.

 

 

--------------------------------------------------------------------------------

 

ANNEX I TO SECOND AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT

 

Reference is hereby made to the Second Amended and Restated Pledge and Security
Agreement (as amended, restated, supplemented or otherwise modified from time to
time, the “Security Agreement”), dated as of [                       ], 2017 by
and among Essendant Co., an Illinois corporation (“Borrower”), Essendant Inc., a
Delaware corporation (“Holdings”), the entities listed on the signature pages
thereto (Borrower, Holdings and such listed entities, collectively, the “Initial
Grantors”) and certain other entities which become parties to the Security
Agreement from time to time, including, without limitation, those that become
party thereto by executing a Security Agreement Supplement in substantially the
form hereof (such parties, including the undersigned, together with the Initial
Grantors, the “Grantors”), in favor of JPMorgan Chase Bank, N.A., as
Administrative Agent (the “Administrative Agent”), for the benefit of the
Secured Parties under the Credit Agreement. Each capitalized terms used herein
and not defined herein shall have the meanings given to it in the Security
Agreement.

 

By   its   execution   below,   the   undersigned,   [NAME   OF   NEW  
GRANTOR],   a [                                                    ]
[corporation] [partnership] [limited liability company] (the “New Grantor”),
agrees to become, and does hereby become, a Grantor under the Security Agreement
and agrees to be bound by such Security Agreement as if originally a party
thereto. The New Grantor hereby pledges, assigns and grants to the
Administrative Agent, on behalf of and for the ratable benefit of the Secured
Parties, a security interest in all of the New Grantor’s right, title and
interest in and to the Collateral, whether now owned by or owing to, or
hereafter acquired by or arising in favor of the New Grantor (including under
any trade name or derivations thereof), and whether owned or consigned by or to,
or leased from or to, the New Grantor, and regardless of where located, but
excluding Excluded Assets, to secure the prompt and complete payment and
performance of the Secured Obligations.

 

By its execution below, the New Grantor represents and warrants as to itself
that all of the representations and warranties contained in the Security
Agreement are true and correct in all respects as of the date hereof. The New
Grantor represents and warrants that the supplements to the Exhibits to the
Security Agreement attached hereto are true and correct in all respects and such
supplements set forth all information required to be scheduled under the
Security Agreement. The New Grantor shall take all steps necessary to perfect,
in favor of the Administrative Agent, a first-priority security interest in and
lien against the New Grantor’s Collateral, including, without limitation,
delivering all certificated Pledged Collateral to the Administrative Agent and
other Collateral, in each case to the extent required to be delivered under the
Security Agreement, and taking all steps necessary to properly perfect the
Administrative Agent’s interest in any uncertificated Pledged Collateral to the
extent required in the Security Agreement.

 

IN WITNESS WHEREOF, [NAME OF NEW GRANTOR], a
[                                    ] [corporation] [partnership] [limited
liability company] has executed and delivered this Annex I counterpart to the
Security Agreement as of this                      day of
                        ,        .

 

[NAME OF NEW GRANTOR]

 

By:

Name: Title: