Document:

esnd-ex103_69.htm

Exhibit 10.3

Execution Version

AMENDMENT NO. 4 TO NOTE PURCHASE AGREEMENT  

This AMENDMENT NO. 4 TO NOTE PURCHASE AGREEMENT, dated as of February 22, 2017 (this “Amendment”), is entered into by and among Essendant Co., an Illinois corporation (formerly known as United Stationers Supply Co.; the “Company”), Essendant Inc., a Delaware corporation (formerly known as United Stationers Inc.; the “Parent”), and the holders of Notes issued by the Company that are parties hereto (the “Noteholders”). 

RECITALS

A.Pursuant to a Note Purchase Agreement dated as of November 25, 2013, among the Company, the Parent and the purchasers listed on Schedule A thereto (as amended, supplemented or otherwise modified prior to the date hereof, the “Note Purchase Agreement”), the Company issued $150,000,000 of its 3.75% Secured Senior Notes due January 15, 2021 (the “Notes”).  Capitalized terms that are used herein without definition and that are defined in the Note Purchase Agreement shall have the same meanings herein as in the Note Purchase Agreement.

B.The parties hereto wish to amend the Note Purchase Agreement in the respects, but only in the respects, hereinafter set forth.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, effective as of the date first above written and subject to the satisfaction of the conditions precedent set forth in Section 3 below, the parties agree as follows:

1.Amendments to the Note Purchase Agreement.  (a)Section 1.2(b) of the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows:

(b)Collateral.  The Notes are ratably secured by the Noteholder L/C under the terms of the Collateral Trust Agreement and in accordance with Section 9.9 hereof.  

(b)Section 1.2(c) of the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows: 

(c)Collateral Trust Agreement.  The appointment of the Collateral Trustee, the enforcement of the rights and benefits of the holders of the Notes in respect of the Noteholder L/C and the allocation of proceeds described therein are subject to a Collateral Trust Agreement, dated as of February 22, 2017, entered into by the Collateral Trustee, the holders of the Notes, the Parent, and the Company, substantially in the form of Exhibit A to Amendment No. 4 (as the same may be further amended, supplemented or otherwise modified from time to time, the “Collateral Trust Agreement”).

(c)Section 1.3 of the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows: 

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Section 1.3.  [Intentionally Deleted]. 

(d)Section 8.1 of the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows:

Section 8.1.Required Prepayments.  (a)Except as set forth in Sections 8.1(b) and 8.1(c), no regularly scheduled prepayments are due on the Notes prior to their stated Maturity Date.  As provided therein, the entire unpaid principal balance of each Note shall be due and payable on the Maturity Date thereof.  

(b)Except in the case of a Par Letter of Credit Draw, the Notes shall become due and payable, at a price equal to 100% of the aggregate outstanding principal amount of the Notes, plus all accrued and unpaid interest, and the Make-Whole Amount, determined for the prepayment date with respect to such aggregate outstanding principal amount of the Notes, upon any rightfully submitted draw under the Noteholder L/C.

(c)In the case of a Par Letter of Credit Draw, the Notes specified in the applicable holder’s request under Section 4.2(g) of the Collateral Trust Agreement shall become due and payable, at a price equal to 100% of the aggregate outstanding principal amount of such Notes, plus all accrued and unpaid interest thereon, determined for the prepayment date with respect to such Notes, upon any rightfully submitted Par Letter of Credit Draw.  No Make-Whole Amount shall be included in the amount of any Par Letter of Credit Draw.  However, within ten (10) days following a Par Letter of Credit Draw made after the occurrence and during the continuance of a Rating Letter of Credit Event, the Company shall pay the holder or holders with respect to which such Par Letter of Credit Draw is made an amount equal to the Make-Whole Amount due under such Notes as of the day of such Par Letter of Credit Draw.  Except as set forth in the preceding sentence, notwithstanding any other provision of this Agreement or the Notes, no Make-Whole Amount shall be due in connection with any payment of the Notes in connection with a Par Letter of Credit Draw.  

 (e)Section 9.7(c) of the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows: 

(c)  [Intentionally Deleted]. 

(f)Section 9.8 of the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows: 

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Section 9.8.Pari Passu Ranking.  (a) The Indebtedness evidenced by the Notes will at all times until payment in full of the Notes, rank at least pari passu in right of payment, without preference or priority, with all of the Company’s other outstanding unsecured and unsubordinated obligations, except for those obligations that are mandatorily afforded priority by operation of law (and not by contract).

 (b)The Indebtedness of the Parent and the Subsidiary Guarantors in respect of the Parent Guaranty and the Subsidiary Guaranty will, upon the execution and delivery thereof, and will continue to, at all times until the termination thereof, rank at least pari passu in right of payment, without preference or priority, with all of the Parent’s and the Subsidiary Guarantors’ other outstanding unsecured and unsubordinated obligations, respectively, except for those obligations that are mandatorily afforded priority by operation of law (and not by contract).

(g)The Note Purchase Agreement is hereby amended by adding the following new Section 9.9 thereto:

Section 9.9.Noteholder L/C.  (a)The Company will maintain a Noteholder L/C in favor of the Collateral Trustee for the ratable benefit of the holders of the Notes at all times from and after February 22, 2017 to and including the earlier of (i) February 14, 2021 or (ii) the indefeasible repayment of the Notes in full, in the Required LC Amount and that entitles the Collateral Trustee to make draws under the Noteholder L/C in connection with any Noteholder Letter of Credit Event and as set forth in the Collateral Trust Agreement.  At least thirty (30) days prior to the expiration of any Noteholder L/C, the Company will deliver to the Collateral Trustee, with a copy to each holder of the Notes, an amendment to or renewal of such existing Noteholder L/C, or a replacement irrevocable Noteholder L/C in favor of the Collateral Trustee, in an amount that is at all times equal to or greater than the Required LC Amount and that entitles the Collateral Trustee to make draws under the Noteholder L/C in connection with any Noteholder Letter of Credit Event and as set forth in the Collateral Trust Agreement.  Failure of the Company to deliver an amendment, renewal or replacement Noteholder L/C at least thirty (30) days prior to the expiration of any Noteholder L/C required by this Section 9.9(a) shall constitute a Noteholder Letter of Credit Event and shall entitle the Collateral Trustee, without any further action on the part of the Collateral Trustee or any holder, to draw in full the Required LC Amount under the existing Noteholder L/C.  The amendment, renewal or replacement Noteholder L/C shall be in form and substance reasonably satisfactory to the Required Holders and shall 

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otherwise contain the same terms as set forth in Exhibit A to Amendment No. 4.

(b)In the event that, when taken together and at any time and from time to time, the amount available to be drawn by the Collateral Trustee under the Letter of Credit shall be an amount less than the Required LC Amount, then the Company shall, no later than 20 days after such date, cause an additional, irrevocable, Letter of Credit to be issued to the Collateral Trustee as beneficiary thereof, for the ratable benefit of the holders of the Notes, with a copy delivered to the holders of the Notes, in an amount such that the aggregate amount of the Letter of Credit shall be equal to or greater than the Required LC Amount.  Failure of the Company to deliver such additional Letter of Credit within such 20 day period, shall constitute a Noteholder Letter of Credit Event and shall entitle the Collateral Trustee as directed by any holder, without any further action on the part of the Collateral Trustee or any holder, to draw, in whole or in part, on the existing Letter of Credit.  The additional Letter of Credit shall be in form and substance satisfactory to the Required Holders.

(h)Section 10.1 of the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows: 

Section 10.1.[Intentionally Deleted]. 

(i)Section 10.4 of the Note Purchase Agreement is hereby amended as follows:

(1)Section 10.4(y) is replaced with “[Reserved];”;

(2)Section 10.4(z) is replaced with a “[Reserved]; and”;

(3)Section 10.4(aa) is hereby amended and restated in its entirety to read as follows:

“(aa) Liens securing Indebtedness not otherwise permitted by paragraphs (a) through (z) of this Section 10.4, provided that Priority Debt does not when incurred exceed 15% of Consolidated Total Assets as of the end of the most recently completed Fiscal Quarter.; and”

(4)The last paragraph of Section 10.4 of the Note Purchase Agreement is hereby deleted.

(j)Section 10.5(a) of the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows:

(a) Indebtedness of a Subsidiary that is a Guarantor of the Notes;

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(k)Section 10.8 of the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows: 

Section 10.8. Restriction on Dividends and Other Distributions. The Parent and the Company will not, nor will they permit any Subsidiary to, declare or pay any dividend or make any distribution on its Capital Stock (other than dividends payable in its own Capital Stock) or redeem, repurchase or otherwise acquire or retire any of its Capital Stock at any time outstanding, except that the foregoing shall not prohibit any such dividend, distribution, redemption, repurchase, acquisition or retirement to the extent that such dividend, distribution, redemption, repurchase, acquisition or retirement is not prohibited under the Credit Agreement as amended from time to time. Without limiting the foregoing, if the Credit Agreement is terminated and not replaced by a successor Credit Agreement, this Section 10.8 shall terminate and be of no further force or effect.

(l)Section 11(c) of the Note Purchase Agreement is hereby amended by changing the reference to “Section 10.1” contained therein to “Section 10.2”.  

(m)Section 11(m) of the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows: 

(m)the Parent or the Company defaults in the performance of or compliance with any term contained in the Collateral Trust Agreement.

(n)The phrase, “bound by this Agreement, the Collateral Documents and the Intercreditor Agreement”, is hereby deleted in Section 21 of the Note Purchase Agreement, and the phrase, “bound by this Agreement”, is substituted therefor.

(o)Section 22.8 of the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows: 

Section 22.8.Holders of Notes to be Secured by Noteholder L/C and the Collateral Trust Agreement.  Each holder of a Note, other than the holders of Notes that are direct parties of the Collateral Trust Agreement, by its acceptance of a Note issued pursuant to this Agreement (whether pursuant to Section 13.2 or 13.3) shall be entitled to the ratable benefits of the Noteholder L/C and the Collateral Trust Agreement and bound by the terms of the Collateral Trust Agreement and, upon request of the Collateral Trustee, agrees to provide written confirmation of its agreement to be so bound.  

(p)The Definition of “Change of Control” in Schedule B to the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows: 

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“Change of Control” means (i) the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock of the Parent having ordinary voting power for the election of directors; (ii) the Parent shall cease to own, directly or indirectly and free and clear of all Liens or other encumbrances (other than Liens permitted by Section 10.4), all of the outstanding shares of voting stock of the Company and, other than pursuant to a transaction otherwise permitted under this Agreement, the Subsidiary Guarantors, on a fully diluted basis; or (iii) the majority of the board of directors of the Parent fails to consist of Continuing Directors.

(q)The Definition of “Collateral Documents” in Schedule B to the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows: 

“Collateral Documents” means all agreements, instruments or documents entered into by the Parent or a Subsidiary creating Liens securing Indebtedness and other obligations payable by the Parent or any Subsidiary pursuant to the Credit Agreement, as such agreements or documents may hereafter be amended, modified or restated.

(r)The Definition of “Credit Agreement” in Schedule B to the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows: 

“Credit Agreement” means the Fifth Amended and Restated Credit Agreement dated as of February 22, 2017 among the Company, as borrower, the Parent, the other loan parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other lenders party thereto, as such agreement may be hereafter amended, modified, restated, supplemented, replaced, refinanced, increased or reduced from time to time, and any successor credit agreement or similar facility.

(s)The Definition of “Financing Documents” in Schedule B to the Note Purchase Agreement is hereby amended and restated in its entirety to read as follows: 

“Financing Documents” means this Agreement, the Notes, the Parent Guaranty, the Subsidiary Guaranties, and the Collateral Trust Agreement.

(t)The following shall be added as a new defined terms in alphabetical order to Schedule B to the Note Purchase Agreement: 

“Acceptable Bank” means a financial institution whose long term non credit enhanced senior debt securities are rated (a) “A-” or 

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better by S&P, (b) “A-” or better by Fitch, (c) “A-1” or better by Moody’s, or (d) the equivalent rating from another NRSRO and otherwise reasonably acceptable to the Required Holders.  For purposes of determining the rating of the Issuing Bank, if at any time the Issuing Bank holds ratings from (i) two NRSROs, then the lower of such two ratings shall be used, and (ii) three or more NRSROs, then the second lowest of such ratings shall be used.

“Amendment No. 4” means the Amendment No. 4 to Note Purchase Agreement dated February 22, 2017 among the Company, the Parent and the Holders.

“Collateral Trustee” means Wilmington Trust National Association, as collateral trustee pursuant to the Collateral Trust Agreement and any successor thereto.

“Collateral Trust Agreement” means that certain Collateral Trust Agreement among the Collateral Trustee, the Parent, the Company, and the holders of the Notes dated as of February 22, 2017 and any and all renewals, extensions and replacements thereof.

“Fitch” means Fitch Ratings Ltd., and its successors and assigns.

“Issuing Bank” means any bank which issues a Noteholder L/C pursuant to the requirements of this Agreement and the Collateral Trust Agreement.

“Noteholder L/C” means a letter of credit or similar instrument issued in support of the Company’s obligations under the Notes, including, but not limited to that certain irrevocable, direct-pay letter of credit issued by an Acceptable Bank, substantially in the form of Exhibit A to Amendment No. 4 in the Required LC Amount from the Company to the Collateral Trustee, for the ratable benefit of the holders of the Notes, dated as of February 22, 2017 and any and all renewals, extensions and replacements thereof.

“Noteholder Letter of Credit Event” shall have the meaning assigned thereto in Section 4.2 of the Collateral Trust Agreement.

“NRSRO” means a Nationally Recognized Statistical Rating Organization so designated by the SEC whose status has been confirmed by the SVO.

“Par Letter of Credit Draw” shall have the meaning assigned thereto in Section 4.2(g) of the Collateral Trust Agreement.

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“Principal and Interest LC Amount” means an amount drawn on the Noteholder L/C equal to the outstanding principal amount of any Note being paid in connection with such draw plus accrued interest on such Note through the date of such draw but excluding the Make-Whole Amount, if any.

“Rating Letter of Credit Event” means the failure of the Company to deliver to the Collateral Trustee, within thirty (30) days following the date of the public announcement of a rating change such that the Issuing Bank ceases to be an Acceptable Bank, a replacement irrevocable Noteholder L/C in favor of the Collateral Trustee, for the ratable benefit of the holders of the Notes, issued by an Acceptable Bank, containing the same terms as set forth in Exhibit A to Amendment No. 4, subject to such variations as the Company, the Collateral Trustee and the Required Holders shall agree.

“Required LC Amount” means an amount that is at all times equal to 110% of the aggregate principal amount of the Notes at the time outstanding.

(u)Schedule B to the Note Purchase Agreement is hereby amended and restated by deleting the following defined terms: “Collateral Agent”, “Covenant Holiday”, “Intercreditor Agreement”, “Leverage Ratio”, and “Transition Period”.

(v)The Company hereby agrees to pay an amendment fee (the “Noteholders’ Amendment Fee”) as set forth in Exhibit B hereto.  The holders hereby waive the requirements of the first sentence of Section 17.2(b) of the Note Purchase Agreement.

2.Release of Collateral and Withdrawal from the Intercreditor Agreement.  The holders of the Notes hereby authorize and direct JPMorgan Chase Bank, N.A., in its capacity as Collateral Agent (the “Collateral Agent”) under the Intercreditor Agreement dated as of October 15, 2007 among the Collateral Agent, JPMorgan Chase Bank, N.A., as agent for the lenders under the Credit Agreement and the holders of the Notes (the “Intercreditor Agreement”) to release any liens in favor of the holders of the Notes on the Collateral (as defined in the Intercreditor Agreement) and, the holders of the Notes hereby acknowledge and agree that as of the effective date hereof, such holders are no longer “Lenders” or “Secured Parties” under the Intercreditor Agreement and the Notes are no longer secured by the Collateral (as defined in the Intercreditor Agreement).   

3.Conditions of Effectiveness.  This Amendment shall become effective and be deemed effective as of the date hereof, if, and only if, each of the following conditions is satisfied:

(a)The warranties and representations of the Company and the Parent contained in Section 4 hereof shall be true and correct as of the date of this Amendment.

(b)Executed counterparts of this Amendment, duly executed by the Company, Parent, and the holders of 100% of the Notes and acknowledged and agreed to by the 

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Subsidiary Guarantors, shall have been delivered to Chapman and Cutler LLP, as special counsel to the holders of the Notes.

(c)Executed counterparts of the Collateral Trust Agreement, duly executed by the Company, Parent, the holders of 100% of the Notes, and the Collateral Trustee, as collateral trustee, shall have been delivered to Chapman and Cutler LLP, as special counsel to the holders of the Notes.

(d)The executed original irrevocable, direct-pay letter of credit issued by JPMorgan Chase Bank, N.A., dated as of February 21, 2017, substantially in the form of Exhibit A hereto from the Company shall have been delivered to Chapman and Cutler LLP or the Collateral Trustee, for the ratable benefit of the holders of the Notes.

(e)The holders of the Notes (or Chapman and Cutler LLP, on behalf of such holders) shall have received a true, complete and correct copy of the Fifth Amended and Restated Credit Agreement dated as of February 22, 2017 among the Company, as borrower, the Parent, as credit party, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other lenders party thereto (the “Credit Agreement”).

(f)The Company shall have paid the reasonable and documented fees and expenses of Chapman and Cutler LLP, special counsel to the holders, in connection with the preparation, execution and delivery of this Amendment, to the extent invoiced prior to the date hereof.

(g)The Company shall have paid the Noteholders’ Amendment Fee.  

4.Representations and Warranties.  Each of the Company and the Parent hereby represents and warrants (which representations shall survive the execution and delivery of this Amendment) to the holders that:

(a)the Collateral Trust Agreement, this Amendment and the Note Purchase Agreement as amended hereby, constitute legal, valid and binding obligations of the Company and the Parent and are enforceable against the Company and the Parent in accordance with their terms;

(b)the execution, delivery and performance by the Company and the Parent of this Amendment and the Collateral Trust Agreement (i) have been duly authorized by all necessary corporate action on the part of the Company and the Parent; (ii) do not require the consent, approval or authorization of any Governmental Authority, except for the filing of a Form 8-K with the SEC or any state blue sky laws; and (iii) do not and will not (A) contravene, result in any breach of, or constitute a default under, or, result in the creation of any Lien in respect of any property of the Parent, the Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, shareholders agreement or any other agreement or instrument to which the Parent, the Company or any Subsidiary is bound or by which the Parent, the Company or any Subsidiary or any of their respective properties may be bound, (B) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or 

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Governmental Authority applicable to the Parent, the Company or any Subsidiary, or (C) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Parent, the Company or any Subsidiary; and

(c)no Default or Event of Default has occurred which is continuing as of the date hereof or would exist after giving effect to this Amendment.

5.Reference to and Effect on the Note Purchase Agreement.

(a)Upon the effectiveness of Section 1 hereof, on and after the date hereof, each reference in the Note Purchase Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the Note Purchase Agreement, as amended hereby.

(b)Except as specifically amended above, the Financing Documents and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect, and are hereby ratified and confirmed.

(c)The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any of the holders of the Notes, nor constitute a waiver of any provision of any Financing Document or any other documents, instruments and agreements executed and/or delivered in connection therewith.

6.Governing Law.  This Amendment shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the state of New York excluding choice of law principles of the law of such state that would require the application of the laws of a jurisdiction other than such state.

7.Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

8.Counterparts; Electronic Execution.  This Amendment may be executed by one or more of the parties to the Amendment on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of an executed counterpart of a signature page hereto by facsimile or email transmission shall be as effective as delivery of a manually executed counterpart of this Amendment.

9.Entirety.  This Amendment embodies the entire agreement among the parties hereto and supersedes all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof.

 [signature pages begin on next page]

 

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.

ESSENDANT CO.

 

 

	
	
By: /s/Robert J. Kelderhouse

	
Name:  Robert J. Kelderhouse

	
Title:  Vice President and Treasurer

 

 

ESSENDANT INC.

 

 

	
	
By: /s/Robert J. Kelderhouse

	
Name:  Robert J. Kelderhouse

	
Title:  Vice President and Treasurer

 

 

 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

 

 

	
	
By:/s/Anthony Coletta

	
Name:  Anthony Coletta

	
Title:  Vice President

 

 

 

	
	
PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY

	
 

	
By: PGIM, Inc. 

	
   (as Investment Manager) 

	
 

	
 

	
By:/s/Anthony Coletta

	
Name:  Anthony Coletta

	
Title:  Vice President

 

	
	
THE PRUDENTIAL LIFE INSURANCE COMPANY, LTD.

	
 

	
By: Prudential Investment Management (Japan), Inc. (as Investment Manager)

	
 

	
By:  PGIM, Inc. (as Sub-Adviser)

	
 

	
 

	
By:/s/Anthony Coletta

	
Name:  Anthony Coletta

	
Title:  Vice President

 

 

 

 

	
	
FARMERS INSURANCE EXCHANGE 

	
MID CENTURY INSURANCE COMPANY 

	
FARMERS NEW WORLD LIFE INSURANCE COMPANY 

	
PHYSICIANS MUTUAL INSURANCE COMPANY 

	
 

	
By:  Prudential Private Placement Investors, L.P. (as Investment Advisor) 

	
 

	
By:  Prudential Private Placement Investors, Inc. 

	
(as its General Partner)

	
 

	
 

	
By:/s/Anthony Coletta

	
Name:  Anthony Coletta

	
Title:  Vice President

 

 

	
	
METROPOLITAN LIFE INSURANCE COMPANY

	
 

	
 

	
By /s/ John Wills                                                     

	
Name:  John Wills

	
Title:  Vice President and Managing Director

 

 

	
	
METLIFE INSURANCE COMPANY USA

	
f/k/a METLIFE INSURANCE COMPANY OF CONNECTICUT 

	
By MetLife Investment Advisors, LLC, its Investment Manager

	
By  /s/ C. Scott Inglis

	
Name:  C. Scott Inglis

	
Title:  Managing Director

 

 

	
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY 

	
 

	
By:  Barings LLC as Investment Adviser 

	
 

	
 

	
By: /s/John B. Wheeler

	
Name:  John B. Wheeler

	
Title:  Managing Director

 

 

 

	
	
MASSMUTUAL ASIA LIMITED 

	
 

	
By:  Barings LLC as Investment Adviser 

	
 

	
 

	
By:/s/John B. Wheeler

	
Name:  John B. Wheeler

	
Title:  Managing Director

 

 

 

 

 

	
	
WOODMEN OF THE WORLD LIFE INSURANCE SOCIETY

	
 

	
 

	
By: /s/Shawn Bengston

	
Name:  Shawn Bengston

	
Title:  Vice President Investment

 

 

 

	

	

 

 

	
Acknowledged and agreed to by:
	

	
	
SUBSIDIARY GUARANTORS:

	
 

	
ESSENDANT FINANCIAL SERVICES LLC

	
ESSENDANT MANAGEMENT SERVICES LLC

	
ESSENDANT INDUSTRIAL LLC

	
O.K.I. SUPPLY, LLC

	
CPO COMMERCE ACQUISITION, LLC

	
CPO COMMERCE, LLC

	
LIBERTY BELL EQUIPMENT CORPORATION

	
TRANSSUPPLY GROUP, LLC

	
LABEL INDUSTRIES, INC.

	
NESTOR HOLDING COMPANY

	
NESTOR SALES HOLDCO, LLC

	
NESTOR SALES LLC

	
 

	
 

	
By: /s/Robert J. Kelderhouse

	
Name:  Robert J. Kelderhouse

	
Title:  Vice President and Treasurer

 

 

 

 

EXHIBIT A

 

Collateral Trust Agreement

This Collateral Trust Agreement dated as of February __, 2017 (together with all exhibits, schedules, extensions, renewals, amendments, substitutions and replacements hereto and hereof, the “Agreement”) is among (i) Wilmington Trust, National Association, a national banking association (“Wilmington Trust”), in its capacity as collateral trustee (in such capacity, together with its successors and assigns, the “Collateral Trustee”) for the Holders (as hereinafter defined), (ii) the holders of the Notes described below (collectively, together with their successors and assigns, the “Holders”), (iii) Essendant Co., an Illinois corporation (formerly known as United Stationers Supply Co.; the “Company”), and (iv) Essendant Inc., a Delaware corporation (formerly known as United Stationers Inc.; the “Parent”).

Recitals

	

	
A.Pursuant to a Note Purchase Agreement dated as of November 25, 2013, among the Company, and the Parent and the purchasers listed on Schedule A thereto (as amended, supplemented or otherwise modified prior to the date hereof and as amended by Amendment No. 4 to Note Purchase Agreement dated as of the date hereof, the “Note Purchase Agreement”), the Company issued $150,000,000 of its 3.75% Secured Senior Notes due January 15, 2021 (the “Notes”).  Capitalized terms that are used herein without definition and that are defined in the Note Purchase Agreement shall have the same meanings herein as in the Note Purchase Agreement.

	

	
B.The Notes and other indebtedness of the Company were initially secured by a lien on certain assets of the Company and the Subsidiary Guarantors.

	

	
C.The Parent, the Company and the Holders will enter into Amendment No. 4 to Note Purchase Agreement dated as of the date hereof in the form attached hereto as Exhibit A (“Amendment No. 4”), pursuant to which the Note Purchase Agreement will be amended whereby, among other things, the Holders will release the liens on collateral previously securing the Notes in exchange for one or more letters of credit in the form attached hereto as Exhibit A (as such letters may be extended, replaced or modified from time to time, collectively, the “Letter of Credit”), to be issued to the Collateral Trustee, as beneficiary, for the benefit of the Holders in support of the Notes.

	

	
D.The Holders desire that Wilmington Trust, shall be the Collateral Trustee to act on behalf of all of the Holders regarding the Letter of Credit, and the Holders have entered into this Agreement to, among other things, further define the rights, duties, authority and responsibilities of the Collateral Trustee.

Now, Therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, and intending to be legally bound hereby, the parties hereto agree as follows:

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Essendant Co. and Essendant Inc.Collateral Trust Agreement

Article I
Recitals; Definitions and Other Conventions

	

	
Section 1.1.Recitals.  The foregoing recitals are hereby incorporated into and made a material part of this Agreement.

	

	
Section 1.2.Definitions.  (a) As used in this Agreement (including the preamble and recitals hereto), any capitalized term used herein which is not defined in the provisions of this Agreement shall have the meaning assigned thereto in the Note Purchase Agreement.

	

	
(b)The following terms shall have the following meanings:

“Collateral Trustee Documents” shall mean the Letter of Credit and this Agreement.  

“L/C Proceeds” means proceeds of a draw under the Letter of Credit.

“Maturity Event” shall mean the maturity of the Notes on the scheduled due date thereof or by acceleration pursuant to Section 12.1 of the Note Purchase Agreement, whether by declaration or otherwise.

“Note Documents” shall mean the Note Purchase Agreement (as amended to date, including but not limited to Amendment No. 4), the Notes, the Parent Guaranty, the Subsidiary Guaranties, and the Collateral Trustee Documents.

“Noteholder Letter of Credit Event” shall have the meaning assigned thereto in Section 4.2.

“Par Letter of Credit Draw” shall have the meaning assigned thereto in Section 4.2(g).

Article II
Appointment and Authorization of Collateral Trustee

	

	
Section 2.1.Appointment of Authority.  Each Holder, by execution hereof, designates and appoints Wilmington Trust, to act as the Collateral Trustee for it under this Agreement, and each Holder by execution hereof, authorizes the Collateral Trustee, as Collateral Trustee acting on behalf of and for such Holder’s benefit, to execute and enter into each of the Collateral Trustee Documents and all other instruments relating to the security for the Notes, to take such action under the provisions of the Collateral Trustee Documents, each other Note Document, as applicable, and all other instruments relating thereto, and to exercise such powers and perform such duties as are expressly delegated to the Collateral Trustee by the terms hereof, including, without limitation, to make drawings under the Letter of Credit, and thereof, together with such other powers as are reasonably incidental thereto, all subject to the terms of this Agreement.  The Company and the Parent acknowledge and consent to the foregoing designation and appointment of the Collateral Trustee by each Holder.  Each of the Holders, the Company and the Parent acknowledge and agree that (i) the Collateral Trustee Documents and other instruments relating to the Notes do, and may, also provide benefits to the Collateral Trustee and secure the 

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Essendant Co. and Essendant Inc.Collateral Trust Agreement

		
obligations owed to the Collateral Trustee pursuant to this Agreement and such documents and (ii) the Collateral Trustee shall hold the Letter of Credit for both the benefit of the Holders and the Collateral Trustee.

	

	
Section 2.2.Collateral Deposit Account.  The Collateral Trustee shall maintain the Collateral Deposit Account established pursuant to Section 4.5 hereof and take actions with respect thereto as provided in this Agreement and the other Collateral Trustee Documents.

Article III
Collateral Trustee Provisions

	

	
Section 3.1.Retain and Reliance on Experts.  (a) The Collateral Trustee may, at the Company’s cost and expense, appoint such agents and employ or retain such counsel, accountants, engineers, appraisers or other experts or advisers as it may reasonably require for the purpose of discharging its duties hereunder and, so long as they have been appointed with due care, shall not be responsible for any misconduct on the part of any of them.

	

	
(b)The Collateral Trustee may act and rely and shall be fully protected in acting in good faith on the opinion or advice of or information obtained from any agent, counsel, accountant, engineer, appraiser or other expert or adviser, whether retained or employed by the Company, the Parent, the Holders or the Collateral Trustee, in relation to any matter arising in the performance of its duties under this Agreement and each other Note Document, as applicable.

	

	
Section 3.2.Exculpatory Provisions.  The Collateral Trustee or any of its officers, directors, employees, representatives (including counsel, accountants, engineers, appraisers and other experts and advisers), agents, attorneys‐in‐fact or affiliates shall not be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or the other Note Documents (except for its or such Person’s personal liability for its own or such Person’s own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Holders for any recitals, statements, representations or warranties made by the Company, the Parent or any officer thereof contained in any Note Document or in any certificate, report, statement or other document referred to or provided for in, or received by, the Collateral Trustee under or in connection with this Agreement or any other Note Document, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of the Letter of Credit or the Note Documents, or for any failure of the Company or the Parent to perform its obligations thereunder.  The Collateral Trustee shall not be under any obligation to the Holders to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, the Note Documents.  The Collateral Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, director or employee unless it shall be proved that the Collateral Trustee was grossly negligent in ascertaining the pertinent facts.  The Collateral Trustee shall not be liable for any action or inaction taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement.  In no event shall the Collateral Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes 

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or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services.  In no event shall the Collateral Trustee be responsible or liable for any special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit), irrespective of whether the Collateral Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

	

	
Section 3.3.Reliance by Collateral Trustee.  Except for the gross negligence or willful misconduct of the Collateral Trustee, the Collateral Trustee shall be entitled to conclusively act and rely, and shall be fully protected in acting and relying, upon (i) any writing, resolution, notice, consent, certificate, affidavit, letter, email, telecopy, telex or facsimile message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and (ii) any advice and/or statements of legal counsel (including, without limitation, counsel to the Company or the Parent), independent accountants or other experts selected and retained with reasonable care by the Collateral Trustee; and the Collateral Trustee shall not be liable to any other person for any action taken or omitted under, in connection with, or pursuant to this Agreement or the other Note Documents in accordance with any such writing, resolution, notice, consent, certificate, letter, email, telecopy, telex or facsimile message, statement, order or other document or conversation or any advice or statement of legal counsel, independent accountants or other experts.  The Collateral Trustee shall be under no duty to confirm or investigate the accuracy of any mathematical calculation or any statement contained in any such instance, but may accept the same as conclusive evidence of the truth and accuracy of such calculation or statement or the correctness of such certificates or opinions.  The Collateral Trustee shall be fully justified in failing or refusing to take action under this Agreement or the other Note Documents, and shall suffer no liability for so doing, unless it shall first receive such advice or concurrence of the Holders as is contemplated by Article V hereof.  The Collateral Trustee, in all cases, shall be fully protected in acting, or in refraining from acting, under this Agreement and the other Note Documents in accordance with the provisions of Article V hereof, and any action taken or failure to act pursuant thereto shall be binding upon all the Holders.  The Collateral Trustee shall be at liberty to request and to accept as sufficient evidence a certificate signed or purported to be signed on behalf of the Required Holders to the effect that any particular dealing, transaction, step or thing is, in the opinion of the Required Holders, suitable or expedient or as to any other fact or matter upon which the Collateral Trustee may require to be satisfied and the Collateral Trustee shall be in no way bound to call for further evidence or to be responsible for any loss that may be occasioned by acting on any such certificate.

	

	
Section 3.4.Indemnification.  In addition to and without limiting any other protection of the Collateral Trustee hereunder or otherwise by law, each Holder, in proportion to the aggregate principal amount of the Notes held by each such Holder as a percentage of the aggregate principal amount of all Notes then outstanding, shall indemnify and hold the Collateral Trustee, its officers, directors, employees, representatives and agents harmless from and against its pro rata share of any and all liabilities, losses, claims, damages, penalties, actions, suits, demands, levies, costs, taxes, expenses and disbursements including any and all reasonable legal and adviser fees, expenses and disbursements of whatever kind or nature which may at any time be suffered by, imposed on, incurred by or asserted against the Collateral Trustee, whether groundless or otherwise, howsoever arising from or out of any act, omission or error of the 

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Collateral Trustee in connection with its acting as Collateral Trustee hereunder unless arising from the gross negligence or willful misconduct on the part of the Collateral Trustee or otherwise covered by the provisions of Section 5.10.  This Section 3.4 shall be expressly construed to include, but not be limited to, such indemnities, compensation, expenses, disbursements, advances, losses, liabilities, damages and the like, as may pertain or relate to any environmental law or environmental matter.  Notwithstanding any other provision hereof, this indemnity shall survive the removal, or resignation of the Collateral Trustee, satisfaction and discharge of the Note Purchase Agreement, payment in full of the Notes, and termination of this Agreement.

	

	
Section 3.5.Deduction from Proceeds.  The Collateral Trustee shall be entitled to deduct all amounts owing to it pursuant to any of Sections 3.3, 3.4 or 5.10 of this Agreement or any other indemnification provision granted to it pursuant to, or in connection with, this Agreement or the other Note Documents from any proceeds from enforcement of, or other realization upon, the Letter of Credit and any amounts distributed to, or received by, it pursuant to the terms of the Note Documents.

	

	
Section 3.6.Provision of Information.  The Holders (whether directly or through the Required Holders) shall provide the Collateral Trustee with all necessary written directions and information as it may reasonably require for the purposes of carrying out its duties and obligations under this Agreement and the other Collateral Trustee Documents, including, without limitation, administrative details and payment instructions as set forth on Schedule 1 hereto and applicable United States federal income tax forms.

Article IV
Letter of Credit; Collateral Deposit Account

	

	
Section 4.1.Letter of Credit.  As more fully provided in Section 9.9 of the Note Purchase Agreement, the Company will, at all times from and after February 22, 2017 to and including the earlier of (i) February 14, 2021 or (ii) the indefeasible repayment of the Notes in full, maintain a Letter of Credit in favor of the Collateral Trustee as beneficiary for the ratable benefit of the Holders of the Notes in an amount that is at all times equal to or greater than the Required L/C Amount as certified in writing by the Company to the Collateral Trustee from time to time.  The Collateral Trustee shall be entitled to make draws on such Letter of Credit as provided herein.

	

	
Section 4.2.Noteholder Letter of Credit Event.  A “Noteholder Letter of Credit Event” shall exist if any of the following conditions or events shall occur and be continuing:  

(a)if (i) any of (1) an existing Letter of Credit shall cease to be in full force and effect for any reason whatsoever, including, without limitation, a determination by any Governmental Authority that such Letter of Credit is invalid, void or unenforceable, (2) the Company or the Issuing Bank shall contest or deny in writing the validity or enforceability of any Letter of Credit, (3) the Issuing Bank shall fail to honor any Letter of Credit or drawing certificate in accordance with the terms thereof presented to it by the Collateral Trustee, or (4) any event occurs with respect to the Issuing Bank which under the laws of any jurisdiction is analogous to any of the Events of Default described in Section 11(g) or (h) of the Note Purchase Agreement, and

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(ii)the Company fails to deliver to the Collateral Trustee a replacement Letter of Credit in an amount such that the Letter of Credit equals or exceeds the Required L/C Amount within three (3) Business Days of the occurrence of any event described in subclauses (i)(1) through (i)(4) above; or

(b)the Company has failed to deliver to the Collateral Trustee an amendment or renewal to a letter of credit, or a replacement irrevocable letter of credit issued for the benefit of the Collateral Trustee pursuant to the requirements of Section 9.9(a) of the Note Purchase Agreement; or

(c)the amount which may be drawn by the Collateral Trustee under the Letter of Credit shall be less than the Required L/C Amount and Debtor has failed to deliver an additional Letter of Credit in form and substance satisfactory to the Collateral Trustee and the Required Holders within twenty (20) days after such deficiency occurs as required by Section 9.9(b) of the Note Purchase Agreement; or

(d)an Event of Default under Section 11(a), 11(b), 11(f), 11(g) or 11(h) of the Note Purchase Agreement shall have occurred; or 

(e)a Maturity Event shall have occurred; or  

(f)if one or more of the lenders or the administrative agent under the Credit Agreement accelerates the obligations due thereunder, or if the Credit Agreement terminates and is not renewed or replaced prior to the maturity date of the Notes, or any revolving loan commitment under the Credit Agreement expires or otherwise terminates or the Credit Agreement terminates in whole; or

(g)if any Holder makes a written request to the Collateral Trustee to draw an amount equal to the Principal and Interest L/C Amount with respect to the Notes held by such Holder (such draw under this clause (g), a “Par Letter of Credit Draw”).   

	

	
Section 4.3.Notice of Noteholder Letter of Credit Events.  Upon the occurrence of a Noteholder Letter of Credit Event, the Company shall, and the Required Holders may, deliver to the Collateral Trustee a notice of Noteholder Letter of Credit Event relating thereto.  Any Holder seeking a Par Letter of Credit Draw shall deliver its request therefor in writing to the Collateral Trustee and each other Holder of Notes no later than the fifth Business Day prior to the date of such Par Letter of Credit Draw.

	

	
Section 4.4.Actions with Respect to Letter of Credit.  (a) Except in the event of a Par Letter of Credit Draw as set forth in Section 4.4(c) below, upon the Collateral Trustee’s receipt of a written notice of Noteholder Letter of Credit Event and written instructions from the Required Holders, the Collateral Trustee shall draw upon the Letter of Credit in such manner as set forth in this Section 4.4 or as otherwise directed in writing by the Required Holders.  Whether before or after any Noteholder Letter of Credit Event, subject to the terms and conditions hereof, the Collateral Trustee shall follow the written instructions of the Required Holders with respect to the preservation, protection, collection or realization upon any Letter of 

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Credit.  If the Collateral Trustee has requested instructions from the Required Holders at a time when a notice of Noteholder Letter of Credit Event shall be outstanding and the Required Holders have not responded to such request within ten (10) Business Days thereafter (excluding a notification that the Required Holders have not agreed upon the actions to be taken by the Collateral Trustee, in which case, the Collateral Trustee shall take no action until written instructions of the Required Holders are received), the Collateral Trustee may take, but shall have no obligation to take, any and all actions under the Letter of Credit, as the Collateral Trustee, in good faith, shall determine; provided, however, that, if written instructions are thereafter received from the Required Holders, then any subsequent actions of the Collateral Trustee shall be subject to such written instructions.

	

	
(b)If a Noteholder Letter of Credit Event described in Section 4.2(a) through (f), inclusive, occurs and is continuing and the Required Holders so direct, then the Collateral Trustee shall draw on the Letter of Credit, in an amount equal to at least 100% of the aggregate principal amount of the Notes outstanding, together with all accrued and unpaid interest to but excluding the payment date plus the Make Whole Amount, such amounts as calculated and specified in detail in a writing by the Required Holders, plus any due and unpaid fees, costs and reasonable and documented expenses of the Collateral Trustee and its agents and attorneys (including any legal fees, expenses and disbursements) incurred in connection with the execution of its duties as Collateral Trustee.  Any L/C Proceeds so received by the Collateral Trustee shall be deposited by the Collateral Trustee in the Collateral Deposit Account and be applied in accordance with Section 5.5 hereof.  

	

	
(c)If at any time a Holder requests a Par Letter of Credit Draw, then the Collateral Trustee shall draw on the Letter of Credit an amount equal to the Principal and Interest L/C Amount applicable to such Holder plus any due and unpaid fees, costs and reasonable and documented expenses of the Collateral Trustee (including legal fees, expenses and disbursements) incurred in connection with the execution of its duties as Collateral Trustee.  Any L/C Proceeds so received by the Collateral Trustee shall be applied in accordance with Section 5.5 hereof.

	

	
Section 4.5.Collateral Deposit Account.  (a) The Company and the Holders hereby authorize and direct the Collateral Trustee to establish and at all times maintain a restricted deposit account (herein, the “Collateral Deposit Account”) with the Collateral Trustee or another state or national bank having a long-term senior debt rating no less than that of the Collateral Trustee or its holding company (the “Bank”).  The Collateral Deposit Account shall be established and maintained by the Collateral Trustee in the name of the Collateral Trustee, as Collateral Trustee for the Holders, to be held as a trust account and segregated from other assets of the Collateral Trustee and the Bank, and under the sole dominion and control of the Collateral Trustee for the benefit of the Collateral Trustee and the Holders, and designated the “Essendant Collateral Deposit Account”.  All monies which are received by the Collateral Trustee with respect to the Letter of Credit, or otherwise, and not otherwise distributed pursuant to Section 5.5 shall be deposited in the Collateral Deposit Account and thereafter shall be held, applied and disbursed by the Collateral Trustee in accordance with the terms of this Agreement. 

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(b)All amounts held by the Collateral Trustee in the Collateral Deposit Account shall be held for the ratable benefit of the Holders, and for application by the Collateral Trustee (to the extent available) in accordance with Section 5.5.  The Collateral Deposit Account shall be held in the name of and subject to the exclusive dominion and control of the Collateral Trustee for the ratable benefit of the Holders.  The Collateral Trustee is not liable to pay any interest or investment income on funds received by the Collateral Trustee except as otherwise agreed in writing.

	

	
Section 4.6.Security Procedures.  Any instructions for disbursements to or at the order of any Holders or other written directions made by any Holders pursuant to this Agreement shall be in writing, shall be delivered in accordance with Section 6.5 hereof and shall comply with the following security procedures:

(a)Attached as Schedule 1 hereto and made a part hereof is a list of those Persons entitled to give notices, instructions and other communications to the Collateral Trustee on behalf of each Holder hereunder and the respective payment instructions for each such Holder.

(b)Once delivered to the Collateral Trustee, Schedule 1 hereto may be revised or rescinded only by a written direction letter in form and substance satisfactory to the Collateral Trustee executed and delivered by the relevant Holder.  Such revisions or rescissions shall be effective only after actual receipt of such written direction letter by the Collateral Trustee.  If an amended Schedule 1 is delivered to the Collateral Trustee by an entity that is a successor-in-interest to a Holder, such document shall be accompanied by additional documentation satisfactory to the Collateral Trustee showing that such entity has succeeded to the rights and responsibilities of the Holder under this Agreement.

(c)Each Holder shall also provide an IRS Form W-9 or appropriate IRS Form W-8, as applicable, to the Collateral Trustee before the Collateral Trustee will make any payment or other distribution to such Holder.

Article V
Actions by Collateral Trustee

	

	
Section 5.1.Duties; Secured Obligations.  (a) The only duties and obligations which the Collateral Trustee shall have are those set forth in this Agreement and in the other Collateral Trustee Documents, and no implied covenants or obligations shall be read into this Agreement or into any Note Document against the Collateral Trustee.  All such duties and obligations are solely ministerial in nature and the Collateral Trustee shall not be deemed to have fiduciary obligations to any party.  The permissive right of the Collateral Trustee to do things enumerated in this Agreement or the Collateral Trustee Documents shall not be construed as a duty of the Collateral Trustee.  The Collateral Trustee shall not be required to take any action or exercise any rights, remedies, powers or discretions under or in connection with this Agreement or the other Collateral Trustee Documents beyond those which the Required Holders shall specifically instruct the Collateral Trustee in writing to take or exercise and then only to the extent stated in 

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the Required Holders’ specific instructions in writing (it being agreed that all actions expressly required to be taken by the Collateral Trustee or the Collateral Trustee Documents shall be deemed to be actions so instructed by the Required Holders).  Notwithstanding the foregoing, the Collateral Trustee may refrain from doing anything which would be in its reasonable opinion contrary to this Agreement or the other Collateral Trustee Documents, any law or regulation of any jurisdiction or any order or directive of any court, governmental agency or other regulatory body or which would otherwise render it liable to any Person and may do anything which is, in its reasonable opinion, necessary to comply with any such law, regulation, order or directive.

	

	
(b)The Collateral Trustee upon receipt of a notice of a Default or Event of Default furnished to the Collateral Trustee pursuant to the provisions of this Agreement or any Note Document shall promptly furnish copies of the same to all Holders.  The Collateral Trustee shall not be deemed to have notice of any Default, Event of Default, Noteholder Letter of Credit Event or transfer of Notes unless written notice of any event which is in fact such a Default, Event of Default, Noteholder Letter of Credit Event or transfer of Notes is received by the Collateral Trustee at the corporate trust office of the Collateral Trustee, and such notice references the Notes and this Agreement. 

	

	
(c)In the event that the Collateral Trustee shall receive any written notice, request for amendment, consent or waiver, or other writing from the Company or the Parent, the Collateral Trustee shall promptly furnish copies of the same to all Holders unless it is evident that such notice or writing shall have been furnished directly to the Holders and shall respond to any such request in accordance with the instructions of all of the Holders or the Required Holders, as the case may be.

	

	
(d)In the event that the Collateral Trustee also maintains the register of Notes, the Collateral Trustee will provide to any Holder upon written request, the names and addresses of all other Holders.  In addition, in the event that the Collateral Trustee shall receive any written notice or other written communication from a Holder accompanied by a written request to furnish the same to all Holders, the Collateral Trustee shall promptly furnish the same to all Holders.  Every Holder, by receiving and holding the same, agrees with the Company and the Collateral Trustee that neither the Company, the Parent, nor the Collateral Trustee, nor any of their agents will be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the provisions of this Agreement.

	

	
(e)In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver, consent or instruction, the Collateral Trustee shall be entitled to conclusively rely, and shall be fully protected in relying, on written information provided by such Holder stating such amount.

	

	
Section 5.2.Requesting Instructions.  The Collateral Trustee may at any time request written direction from the Holders as to any course of action or other matter relating to the performance of its duties under this Agreement or the other Collateral Trustee Documents and the Holders shall promptly comply with such request.  Directions given to the Collateral Trustee by all of the Holders or the Required Holders, as the case may be, shall be binding on each of the 

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Holders.  The Collateral Trustee shall be permitted to certify to third parties that actions it takes are pursuant to the direction of all of the Holders or the Required Holders, as the case may be.

	

	
Section 5.3.Administrative Actions.  The Collateral Trustee shall have the right (but not the obligation) to take such actions, or omit to take such actions, hereunder and under the other Collateral Trustee Documents not inconsistent with the instructions of the Holders or the terms of the Collateral Trustee Documents and this Agreement, necessary to comply with any law, regulation, order or directive, including without limitation actions necessary or appropriate to maintain the Letter of Credit.  The Collateral Trustee shall have no duty as to the collection or protection of the Letter of Credit or any income thereon, nor as to the preservation of rights against prior parties, nor as to the preservation of rights pertaining to the Letter of Credit beyond the safe custody of the Letter of Credit or any replacement thereof in the Collateral Trustee’s possession.

	

	
Section 5.4.Exercise of Remedies.  The Collateral Trustee shall only be authorized to take such actions under the Collateral Trustee Documents and to enforce or prepare to enforce the remedies available under such Collateral Trustee Documents as are directed in a written notice by the Required Holders.  In furtherance of the foregoing, the Collateral Trustee agrees to make such demands and give such notices under the Collateral Trustee Documents as may be requested by, and to take such action to enforce the Collateral Trustee Documents and to draw upon, collect and dispose of the Letter of Credit or any portion thereof as may be directed by the Required Holders; provided, however, that the Collateral Trustee shall not take any action that is in its reasonable opinion contrary to the terms of this Agreement or the law or regulation of any jurisdiction or any order or directive of any court, governmental agency or other regulatory body, and the Collateral Trustee shall not be required to take any action directed by the Holders unless indemnified by the Holders in accordance with the provisions of Section 3.3 or 3.4 hereof, as applicable.   

	

	
Section 5.5.Application of Proceeds.  (a)The Collateral Trustee and each of the Holders agree that (i) any and all L/C Proceeds, and (ii) any and all other amounts held in the Collateral Deposit Account, in all cases, shall be shared by the Holders (or, in the case of a Par Letter of Credit Draw, the Holders requesting such Par Letter of Credit Draw) and held in the Collateral Deposit Account until paid to and applied by the Collateral Trustee to the payment of the Notes in accordance with the priorities and at the times set forth below, with application against the outstanding amounts (excluding Make-Whole Amounts, if any, in the case of a Par Letter of Credit Draw, but including any Make-Whole Amount in the case of any draw other than a Par Letter of Credit Draw) owed each such Holder made in the manner determined by such Holder:

(A)First, upon such amounts becoming due in accordance with Section 5.10, to the payment of the fees, costs and reasonable and documented expenses of the Collateral Trustee (including legal fees, expenses and disbursements) incurred in connection with the execution of its duties as Collateral Trustee, in exercising or attempting to exercise any right or remedy hereunder or thereunder, including, without limitation, making any draw under the Letter of Credit, and all amounts against or for which the Collateral Trustee is to be indemnified or reimbursed hereunder (excluding any such costs, expenses or amounts which have theretofore been reimbursed);

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(B)Second, after payment in full of the amounts, if any, set forth in Item First, L/C Proceeds received in connection with a draw other than a Par Letter of Credit Draw, to payment of the outstanding principal and accrued interest to but excluding the payment date and any Make-Whole Amount under the Notes becoming due in accordance with Note Documents, to the Holders, ratably, in accordance with the respective outstanding amounts of Notes held by such Holder as directed in writing by such Holders; 

(C)Third, after payment in full of the amounts, if any, set forth in Item Second, L/C Proceeds received in connection with a Par Letter of Credit Draw, to payment of the outstanding principal and accrued interest to but excluding the payment date (without any Make-Whole Amount) due under the Notes held by the Holder or Holders making the request for such draw, to such Holders, ratably, in accordance with the respective outstanding amounts of Notes held by such Holders as directed in writing by such Holders; and

(D)Last, after the indefeasible payment in full of all amounts due under the Note Documents, to the payment of the surplus, if any, to the Company.

	

	
(b)In determining the amount owed to a Holder, the Collateral Trustee shall be entitled to rely, and shall be fully protected in relying, on written information provided by the Company or such Holder stating such amount.  A Holder may provide such information to the Collateral Trustee at any time and the Collateral Trustee may also request such information at any time.  If a Holder does not timely provide the Collateral Trustee a statement of any such amount owed, the Collateral Trustee may make distributions permitted or required hereunder based on the amount(s) owed as reflected in the books and records of the Company as certified to the Collateral Trustee in an Officer’s Certificate and, in that instance, the Collateral Trustee shall be fully protected in making distributions hereunder based on such books and records.

	

	
Section 5.6.Resignation or Termination of Collateral Trustee.  The Collateral Trustee may resign as Collateral Trustee upon not less than thirty (30) days’ written notice to each of the Holders (with a copy to the Company), such resignation to take effect upon the acceptance by a successor Collateral Trustee of its appointment as the Collateral Trustee hereunder.  In addition, the Required Holders may remove the Collateral Trustee, with or without cause, each by giving written notice thereof to the Collateral Trustee (with a copy to the Company) not less than thirty (30) days prior to the effective date of such removal (the “Removal Date”).  Upon any such resignation or removal, the Required Holders shall have the right to appoint a successor Collateral Trustee which meets the eligibility requirements of Section 5.8, which appointment, so long as no Default or Event of Default is then continuing, shall be approved by the Company, which approval shall not be unreasonably withheld.  If no successor Collateral Trustee shall have been so appointed and shall have accepted such appointment in writing within thirty (30) days after the retiring Collateral Trustee’s giving of notice of resignation or by the Removal Date, then the retiring Collateral Trustee may, on behalf of the Holders, appoint a successor Collateral Trustee which meets the eligibility requirements of Section 5.8 or apply to a court of competent jurisdiction for the appointment of a successor Collateral Trustee, and the Company and the Parent agree to pay such reasonable and documented fees and expenses described in Section 5.10 of any such appointee.  Upon acceptance of appointment as Collateral Trustee, such successor shall thereupon and forthwith succeed to and become vested with all the rights, powers 

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and privileges, immunities and duties of the retiring Collateral Trustee, and the retiring Collateral Trustee, upon the signing, transferring and setting over to such successor Collateral Trustee all rights, moneys and other collateral held by it in its capacity as Collateral Trustee, shall be discharged and released from its duties and obligations hereunder and under the other Collateral Trustee Documents.  After any retiring Collateral Trustee’s resignation or removal as Collateral Trustee, the provisions of Article III and Article V of this Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it acted as Collateral Trustee.  Notwithstanding the resignation or removal of the Collateral Trustee for any reason, to the extent that the Collateral Trustee was entitled to, and has not been paid, fees, indemnities and reimbursements for expenses and disbursements (including legal fees, expenses and disbursements) under this Agreement or the Collateral Trustee Documents, the Collateral Trustee shall remain entitled to and be paid all such fees, indemnities and reimbursements for all expenses and disbursements (including legal fees, expenses and disbursements) related to the duties, inactions and actions of the Collateral Trustee prior to its successor assuming its obligations as Collateral Trustee.  The retiring Collateral Trustee shall have no responsibility or liability for any action or inaction of any successor Collateral Trustee.

	

	
Section 5.7.Succession of Successor Collateral Trustee.  Any successor Collateral Trustee appointed hereunder shall execute, acknowledge and deliver to the Company, the Holders and the predecessor Collateral Trustee an instrument in a form acceptable to the Company, the Parent, the Holders and the predecessor Collateral Trustee accepting such appointment, and thereupon such successor Collateral Trustee, without any further act, deed, conveyance or transfer, shall become vested with title to the Letter of Credit as Collateral Trustee, and with all the rights, powers, duties and obligations of the predecessor Collateral Trustee in the trust hereunder, with like effect as if originally named as Collateral Trustee herein.

Upon the request of any such successor Collateral Trustee, however, the Holders and the predecessor Collateral Trustee shall, at the expense of the Company and the Parent, promptly execute and deliver such instruments of conveyance and further assurance reflecting terms consistent with the terms of the Collateral Trustee Documents then in effect and do such other things as may reasonably be required for more fully and certainly vesting and confirming in such successor Collateral Trustee its interest in the Letter of Credit and all such rights, powers, duties and obligations of the predecessor Collateral Trustee hereunder, and the predecessor Collateral Trustee shall also promptly assign and deliver to the successor Collateral Trustee the Letter of Credit then in its possession.

	

	
Section 5.8.Eligibility of Collateral Trustee.  Any successor Collateral Trustee shall:

(a)be a state or national bank or trust company in good standing, organized under the laws of the United States of America or any state thereof; 

(b)have no material conflict of interest with regard to the fulfillment of its covenants and obligations hereunder;

(c)have capital, surplus and undivided profits aggregating at least $100,000,000; and

(d)be willing and able to accept the duties hereunder upon reasonable and customary terms.

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Section 5.9.Successor Collateral Trustee by Merger.  Any corporation or other Person into which the Collateral Trustee may be merged or with which it may be consolidated or amalgamated, or any corporation or other Person resulting from any merger, amalgamation or consolidation to which the Collateral Trustee shall be a party, or any bank or trust company in any manner succeeding to the corporate trust business of the Collateral Trustee as a whole or substantially as a whole shall be the successor of the Collateral Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything to the contrary contained herein notwithstanding.

	

	
Section 5.10.Compensation and Reimbursement of Collateral Trustee.  Each of the Company and the Parent jointly and severally agree,  

(a)to pay to the Collateral Trustee all of its reasonable and documented expenses, including but not limited to fees and expenses of of the Collateral Trustee’s legal counsel and the reasonable and documented compensation and disbursements of all other advisors, agents and assistants not regularly in the Collateral Trustee’s employ, pursuant to the terms of this Agreement or the other Collateral Trustee Documents and/or resulting from or relating to its acting as Collateral Trustee pursuant to this Agreement including, for the avoidance of doubt, fees and expenses (including legal fees, expenses and disbursements) relating to its appointment as Collateral Trustee and the arrangements related thereto;

(b)to pay to the Collateral Trustee from time to time reasonable and documented compensation for all services rendered by it hereunder or under the other Collateral Trustee Documents as agreed to by the Company and the Collateral Trustee in writing;

(c)to reimburse the Collateral Trustee upon its request for all reasonable and documented expenses, disbursements and advances (including legal fees, expenses and disbursements) incurred or made by the Collateral Trustee in accordance with or pursuant to any provision of this Agreement or the other Collateral Trustee Documents, except any such expense, disbursement or advance as may be attributable solely to its gross negligence or willful misconduct; and

(d)in addition to and without limiting any other protection of the Collateral Trustee hereunder or otherwise by law, the Company and the Parent shall indemnify and hold the Collateral Trustee, its officers, directors, employees, representatives and agents harmless from and against any and all liabilities, losses, claims, damages, penalties, actions, suits, demands, levies, taxes, costs, expenses and disbursements including any and all reasonable and documented legal fees, expenses and disbursements of whatever kind or nature which may at any time be suffered by, imposed on, incurred by or asserted against the Collateral Trustee, whether groundless or otherwise, howsoever arising from or out of any act, omission or error of the Collateral Trustee in connection with its acting as Collateral Trustee hereunder and defending itself against or investigating any claim (whether asserted by the Company, the Parent, any Holder or any other Person), unless arising from the gross negligence or willful misconduct on the part of the Collateral Trustee.  Notwithstanding any other provision hereof, the obligations of the Company and the Parent to compensate, reimburse and indemnify pursuant to the provisions of this Section 5.10 shall survive the removal, or resignation of the Collateral Trustee, satisfaction and discharge of the Note Purchase Agreement, payment in full of the Notes, and termination of this Agreement.

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Essendant Co. and Essendant Inc.Collateral Trust Agreement

Notwithstanding any other provision of this Agreement or the other Collateral Trustee Documents, the Collateral Trustee shall in all cases be fully justified in failing or refusing to act hereunder unless it shall be indemnified to its satisfaction by the Company and the Parent or the Holders (or both) against any and all liability and expense that may be incurred by it by reason of taking, continuing to take, or not taking any such action other than any liability or expense resulting from the Collateral Trustee’s gross negligence or willful misconduct.  The Collateral Trustee shall provide each Holder with a copy of any demand for payment delivered to the Company or the Parent.

To secure the Company’s, the Parent’s and the Holders’ payment obligations pursuant to this Section 5.10, the Collateral Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Collateral Trustee.

	

	
Section 5.11.Representations and Warranties of Collateral Trustee.  The Collateral Trustee hereby represents and warrants that:

(a)the Collateral Trustee is a national banking association duly organized, validly existing, and in good standing under the laws of the United States;

(b)the Collateral Trustee has full power, authority and legal right under the laws of the United States pertaining to its banking and trust powers to execute, deliver, and perform this Agreement and has taken all necessary action to authorize the execution, delivery, and performance by it of the Collateral Trustee Documents;

(c)the execution, delivery and performance by the Collateral Trustee of the Collateral Trustee Documents will not contravene any law, rule or regulation of the State of New York or any United States governmental authority or agency regulating the Collateral Trustee’s banking or trust powers or any judgment or order applicable to or binding on the Collateral Trustee and will not contravene or result in any breach of, or constitute a default under, the Collateral Trustee’s articles of association or by‐laws or the provision of any indenture, mortgage, contract or other agreement to which it is a party or by which it or any of its properties is bound;

(d)the execution, delivery and performance by the Collateral Trustee of the Collateral Trustee Documents will not require the authorization, consent, or approval of, the giving of notice to, the filing or registration with, or the taking of any other action in respect of, any United States governmental authority or agency regulating the banking and trust activities of the Collateral Trustee; and

(e)the Collateral Trustee Documents have been duly executed and delivered by the Collateral Trustee and constitute the legal, valid, and binding agreements of the Collateral Trustee, enforceable in accordance with their respective terms, provided that enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and general principles of equity.

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Essendant Co. and Essendant Inc.Collateral Trust Agreement

Article VI
General Provisions

	

	
Section 6.1.Consents, Amendments, Waivers.  No amendment, waiver or consent, unless in writing and signed by the Collateral Trustee, the Required Holders, the Parent and the Company as set forth below required to take such action, shall affect the rights, duties or obligations of the Collateral Trustee under this Agreement.  No amendment, waiver or consent, unless the same shall be in writing and signed by all of the Holders, the Collateral Trustee, the Parent and the Company, shall amend any of Sections 3.2, 3.4, 4.1, 4.2, 4.4, 5.4, 5.5 or this Section 6.1.  No amendment or waiver of any other provision of this Agreement shall be effective unless the same shall be in writing and signed by the Required Holders, the Collateral Trustee, the Company and the Parent.  The Collateral Trustee shall not be deemed to have knowledge of any amendment, waiver or contract related to the Note Purchase Agreement unless the same shall be in writing and delivered to the Collateral Trustee. 

	

	
Section 6.2.Applicable Law; Consent to Jurisdiction; Jury Trial Waiver.  Each of the Collateral Trustee, the Holders, the Parent and the Company agree: 

(a)This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without regard to the principles thereof regarding conflicts of laws to the extent that they would require or permit the application of laws of another jurisdiction). 

(b) Each party irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes.  To the fullest extent permitted by applicable law, each party irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

(c)EACH OF COMPANY, PARENT, THE COLLATERAL TRUSTEE, AND EACH HOLDER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE NOTE DOCUMENTS.

	

	
Section 6.3.Counterparts.  This Agreement and any amendment hereof may be executed in several counterparts and by each party on a separate counterpart, each of which, when so executed and delivered, shall be an original, but all of which together shall constitute but one and the same instrument.  In proving this Agreement it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.  The exchange of copies of this Collateral Trust Agreement and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Collateral Trust Agreement as to the parties hereto and may be used in lieu of the original 

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Essendant Co. and Essendant Inc.Collateral Trust Agreement

		
Collateral Trust Agreement for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.  

	

	
Section 6.4.Headings.  The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part hereof.

	

	
Section 6.5.Notices.  All notices and communications provided for hereunder shall be in the English language and in writing and sent (a) by telefacsimile if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid).  Any such notice must be sent:

(i)if to a Holder, to the address listed for such Holder in Schedule 1 hereto, or at such other address as such Holder shall have specified to the Company and the Collateral Trustee in writing;

(ii)if to the Collateral Trustee, to Wilmington Trust, National Association at 1100 North Market Street, Wilmington, DE  19890, Attn:  Essendant Trust Administrator, or at such other address as the Collateral Trustee shall have specified to the Holders and the Company in writing; or

(iii)if to the Company or the Parent, to One Parkway North Blvd., Suite 100, Deerfield, IL 60015, to the attention of the Treasurer, with a copy to the General Counsel, or at such other address the Company shall have specified to the Holders and the Collateral Trustee in writing.

Notices under this Section 6.5 will be deemed given only when actually received if received on a Business Day during business hours of the recipient, or otherwise on the next Business Day; provided, however, that notices to the Collateral Trustee are deemed received only upon actual receipt by a responsible officer of the Collateral Trustee.

	

	
The Collateral Trustee may, in its sole discretion, agree to accept and act upon instructions or directions pursuant to this Agreement sent by telefacsimile transmission.  If the party elects to give the Collateral Trustee telefacsimile instructions and the Collateral Trustee in its discretion elects to act upon such instructions, the Collateral Trustee’s understanding of such instructions shall be deemed controlling. The Collateral Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Collateral Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing telefacsimile instructions agrees to assume all risks arising out of the use of such electronic method to submit instructions and directions to the Collateral Trustee, including without limitation the risk of the Collateral Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

	

	
Section 6.6.No Liability.  The Collateral Trustee shall not be liable for any action taken or omitted by it, or any action suffered by it to be taken or omitted, excepting only its own gross negligence or willful misconduct.

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Essendant Co. and Essendant Inc.Collateral Trust Agreement

	

	
Section 6.7.No Requirement to Expend Funds.  None of the provisions contained in this agreement or any supplement or any other Note Document shall require the Collateral Trustee to expend or risk its own funds or otherwise incur financial liability in performing its duties or in the exercise of any of its rights or powers.

	

	
Section 6.8.[Intentionally Deleted.]

	

	
Section 6.9.No Conflict.  With respect to the rights, duties, privileges, protections, indemnities, immunities or obligations of the Collateral Trustee, in the event of any conflict between the terms of this Agreement and the terms of any other Note Document or any other agreement, the terms of this Agreement shall govern.

	

	
Section 6.10.[Intentionally Deleted.]

	

	
Section 6.11.USA Patriot Act.  The Company, the Parent and the Holders acknowledge that in accordance with Section 326 of the U.S.A. PATRIOT Act, the Collateral Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Collateral Trustee, and agree that they will provide the Collateral Trustee with such information as it may reasonably request in order for the Collateral Trustee to satisfy the requirements of the U.S.A. PATRIOT Act.

	

	
Section 6.12.Relation of Holders.  This Agreement is entered into solely for the purposes set forth herein, and no Holder assumes any responsibility to any other party hereto to advise such other party of information known to such other party regarding the financial condition of the Company or the Parent or of any other circumstances bearing upon the risk of nonpayment of any Obligation.  Each of the Company, the Parent and the Holders specifically acknowledges and agrees that nothing contained in this Agreement is or is intended to limit or in any way modify any of the obligations of the Company or the Parent to the Holders.

	

	
Section 6.13.Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto, whether so expressed or not, including, without limitation, any future holder or holders of any Notes, and the term “Holder” shall include any such subsequent holder of Notes, wherever the context permits.  Without limiting the foregoing, the rights and obligations of any Holder under this Agreement shall be assigned automatically, without the need for the execution of any document or any other action, to, and the term “Holder” as used in this Agreement shall include, any assignee, transferee or successor of such Holder under the Note Purchase Agreement and any such assignee, transferee or successor shall automatically become a party to this Agreement; provided, the assignee, transferee or successor, if it is not a Holder, shall deliver a written direction letter in form and substance satisfactory to the Collateral Trustee revising Schedule 1 hereto to provide the Collateral Trustee with such assignee’s notice address, administrative contact information and payment instructions, and provide such other information or documentation as may be requested by the Collateral Trustee (including without limitation IRS Form W-9 or W-8, as applicable).  If required by any party to this Agreement, such assignee, transferee or successor shall execute and deliver to the other parties to this Agreement a written 

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Essendant Co. and Essendant Inc.Collateral Trust Agreement

		
confirmation of its assumption of the obligations of the assignor or transferor hereunder.  Each of the parties agrees that it shall deliver a complete copy of this Agreement to any assignee, transferee or successor of a party prior to or substantially concurrently with the execution of any such assignment or transfer.

	

	
Section 6.14.Further Assurances, Etc.  Each party hereto shall execute and deliver such other documents and instruments, in form and substance reasonably satisfactory to the other parties hereto, and shall take such other action, in each case as any other party hereto may reasonably have requested (at the cost and expense of the Company and the Parent which costs and expenses the Company and the Parent, by countersigning this Agreement, agree to pay), to effectuate and carry out the provisions of this Agreement, including, by recording or filing in such places as the requesting party may deem desirable, this Agreement or such other documents or instruments.  Notwithstanding anything herein to the contrary, the Collateral Trustee shall have no duty (i) to see to any recording, filing, or depositing of this Agreement, the Letter of Credit or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, refiling or redepositing of any thereof, (ii) to see to any insurance, or (iii) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind.

	

	
Section 6.15.Cancellation of Letter of Credit.  Upon written request of the Company, and at the written direction of the Required Holders at any time following the indefeasible payment of the Notes (other than the Make-Whole Amount, if any, due in connection with a Par Letter of Credit Draw) and any amounts payable under Section 5.10 in full other than contingent obligations, the Collateral Trustee shall, without any further draw under the Letter of Credit, deliver the Letter of Credit to the Issuing Bank with instructions to cancel the Letter of Credit.

[Remainder of Page Intentionally Blank]

 

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Essendant Co. and Essendant Inc.Collateral Trust Agreement

 

In Witness Whereof, intending to be legally bound hereby, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the date first written above.

 

Wilmington Trust, National Association, not in its individual capacity but solely as Collateral Trustee for the Holders 

 

 

	
	
By:

	
Name:

	
Title:

 

Essendant Co. and Essendant Inc.Collateral Trust Agreement

 

 

	
	
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

	
 

	
 

	
By:

	
Name:

	
Title: 

 

 

 

	
	
PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY

	
 

	
By: PGIM, Inc. 

	
   (as Investment Manager) 

 

 

	
	
By:

	
Name:

	
Title: 

 

	
	
THE PRUDENTIAL LIFE INSURANCE COMPANY, LTD.

	
 

	
By: Prudential Investment Management (Japan), Inc. (as Investment Manager)

	
 

	
By:  PGIM, Inc. (as Sub-Adviser)

 

 

	
	
By:

	
Name:

	
Title: 

 

 

Essendant Co. and Essendant Inc.Collateral Trust Agreement

 

	
	
FARMERS INSURANCE EXCHANGE 

	
MID CENTURY INSURANCE COMPANY 

	
FARMERS NEW WORLD LIFE INSURANCE COMPANY 

	
PHYSICIANS MUTUAL INSURANCE COMPANY 

	
 

	
By:  Prudential Private Placement Investors, L.P. (as Investment Advisor) 

	
 

	
By:  Prudential Private Placement Investors, Inc. 

	
(as its General Partner)

 

 

	
	
By:

	
Name:

	
Title: 

 

 

Essendant Co. and Essendant Inc.Collateral Trust Agreement

 

	
	
METROPOLITAN LIFE INSURANCE COMPANY

	
 

	
 

	
 

	
By

	
Name:  

	
Title:  

 

	
	
METLIFE INSURANCE COMPANY USA

	
f/k/a METLIFE INSURANCE COMPANY OF CONNECTICUT 

	
by

MetLife Investment Advisors, LLC, its Investment Manager

	
By

	
Name:  

	
Title:  

 

 

Essendant Co. and Essendant Inc.Collateral Trust Agreement

 

	
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY 

	
 

	
By:  Barings LLC as Investment Adviser 

	
 

	
 

	
By:

	
Name:

	
Title: 

 

 

	
	
MASSMUTUAL ASIA LIMITED 

	
 

	
By:  Barings LLC as Investment Adviser 

	
 

	
 

	
By:

	
Name:

	
Title: 

 

 

 

Essendant Co. and Essendant Inc.Collateral Trust Agreement

 

	
	
WOODMEN OF THE WORLD LIFE INSURANCE SOCIETY

	
 

	
 

	
By:

	
Name:

	
Title: 

 

 

 

 

Essendant Co. and Essendant Inc.Collateral Trust Agreement

 

	
	
ESSENDANT CO.

	
 

	
 

	
By:

	
Name:  

	
Title:  

 

 

	
	
ESSENDANT INC.

	
 

	
 

	
By:

	
Name: 

	
Title: 

 

 

 

 

 

Schedule I

 

Administrative and Payment Information

 

Information Relating to Purchasers

 

 

 

 

 

 

 

EXHIBIT B - NOTEHOLDERS’ AMENDMENT FEES

 

			
	
AMOUNT
	
PAYABLE TO
	
WIRING INSTRUCTIONS

	
$5,000
	
(Prudential as Admin Agent - see wiring instructions)

 
	
Currency:USD

Instructions:Remit Payment on Effective Date (aka Due Date)

Beneficiary Name:U.S. Bank as Paying Agent for Prudential as Admin Agent

Beneficiary Address:214 N. Tryon St 26th Floor Charlotte, NC 28201

Primary Bank Name:U.S. Bank as Paying Agent for Prudential as Admin Agent

Primary ABA Number:091000022

Account Name:Paying Agent DDA - Essendant Inc.

Account Number:104791306624

FFC:183542-700

 

	
$5,000
	
Metropolitan Life Insurance Company
	
Bank Name:         JPMorgan Chase Bank 

ABA Routing #:   021-000-021

Account No.:        002-2-410591

Account Name:    Metropolitan Life Insurance Company

Ref:  Amendment Fee - United Stationers Supply Co. 3.75% due 1/15/2021

 

	
$5,000
	
Massachusetts Mutual Life Insurance Company
	
MassMutual

Citibank

New York, New York

ABA # 021000089

Acct #  30510685

RE:  Essendant Amendment Fee

 

	
$5,000
	
Woodmen of the World Life Insurance Society
	
Northern CHGO/Trust

ABA # 071000152

Credit Wire Account #5186041000

Account #26-58056

Account Name:  Woodmen of the World Life Insurance Society-General

Swift# CNORUS44

RE: United Stationers Supply Co., 3.75% Secured Senior Notes due January 15, 2021, PPN 913008 A@7 -- Amendment Feeesnd-ex104_70.htm

 

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

 
 

 

“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.

 

2

 

 

“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.

 

3

 

 

“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.

 

4

 

 

“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)
	

5

 

 

	
 
	
(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.

6

 

 

 

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 

7

 

 

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 

8

 

 

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)

9

 

 

(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 

10

 

 

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. 

11

 

 

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 

12

 

 

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 

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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 

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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 

28

 

 

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

 

 

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

 

 

 

 

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:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00270-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00270-of-00352.parquet"}]]