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▇▇▇▇▇▇▇ Corporate Resources, Inc.
SEC File No. 0-23170
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") dated as of March
19, 1998 is made between HEADWAY CORPORATE RESOURCES, INC., a
Delaware corporation (the "Borrower"), and EACH OF THE
UNDERSIGNED SUBSIDIARIES OF THE BORROWER (each a "Guarantor", and
collectively with the Borrower, the "Grantors"), and NATIONSBANK,
NATIONAL ASSOCIATION, a national banking association organized
and existing under the laws of the United States, as agent (the
"Agent") for each of the lenders (the "Lenders" and collectively
with the Agent, the "Secured Parties") now or hereafter party to
the Credit Agreement (as defined below). All capitalized terms
used but not otherwise defined herein shall have the respective
meanings assigned thereto in the Credit Agreement (as defined
below);
W I T N E S S E T H:
WHEREAS, the Secured Parties have agreed to provide to the
Borrower a certain revolving credit facility with a letter of
credit sublimit pursuant to the Credit Agreement dated as of
March 19, 1998 among the Borrower, the Agent and the Lenders (as
from time to time amended, revised, modified, supplemented or
amended and restated, the "Credit Agreement"); and
WHEREAS, as collateral security for payment and performance
of its Obligations, the Borrower is willing to grant to the Agent
for the benefit of the Secured Parties a security interest in all
of its personal property and assets pursuant to the terms of this
Agreement; and
WHEREAS, each Guarantor will materially benefit from the
Loans and Advances to be made, and the Letters of Credit to be
issued, under the Credit Agreement and each Guarantor is a party
to that certain Guaranty Agreement (the "Guaranty") dated as of
the date hereof pursuant to which each Guarantor guaranteed the
Obligations of the Borrower; and
WHEREAS, as collateral security for payment and performance
of its Guarantors' Obligations, as defined in the Guaranty, each
Guarantor is willing to grant to the Agent for the benefit of the
Secured Parties a security interest in all of its personal
property and assets; and
WHEREAS, the Secured Parties are unwilling to enter into the
Loan Documents unless the Borrower and the Guarantors enter into
this Agreement;
NOW, THEREFORE, in order to induce the Secured Parties to
enter into the Loan Documents and to make Loans and Advances and
issue Letters of Credit and in consideration of the premises and
the mutual covenants contained herein, the parties hereto agree
as follows:
1. Grant of Security Interest. As collateral security for
the payment, performance, and satisfaction of all Guarantors'
Obligations of the Guarantors under the Guaranty Agreement and
all of the Borrower's Obligations (collectively, the "Secured
Obligations"), each Grantor hereby grants to the Agent for the
benefit of the Secured Parties a continuing first priority
security interest in and to, and collectively assigns to the
Agent for the benefit of the Secured Parties all of the property
of such Grantor, whether now owned or existing or hereafter
acquired or arising and wheresoever located, including without
limitation the following:
(a) All accounts, accounts receivable, contracts,
notes, bills, acceptances, choses in action, chattel paper,
instruments, documents and other forms of obligations at any
time owing to each Grantor arising out of goods sold or
leased or for services rendered by such Grantor, the
proceeds thereof and all of such Grantor's rights with
respect to any goods represented thereby, whether or not
delivered, goods returned by customers and all rights as an
unpaid vendor or lienor, including rights of stoppage in
transit and of recovering possession by proceedings
including replevin and reclamation, together with all
customer lists, books and records, ledger and account cards,
computer tapes, software, disks, printouts and records,
whether now in existence or hereafter created, relating
thereto (collectively referred to hereinafter as
"Accounts");
(b) All inventory of each Grantor wherever located in
the United States of America and any state, district,
territory or other political subdivision thereof, including
without limitation, all goods manufactured or acquired for
sale or lease, and any piece goods, raw materials, work in
process and finished merchandise, findings or component
materials, and all supplies, goods, incidentals, office
supplies, packaging materials and any and all items used or
consumed in the operation of the business of such Grantor or
which may contribute to the finished product or to the sale,
promotion and shipment thereof, in which such Grantor now or
at any time hereafter may have an interest, whether or not
the same is in transit or in the constructive, actual or
exclusive occupancy or possession of such Grantor or is held
by such Grantor or by others for such Grantor's account
(collectively referred to hereinafter as "Inventory");
(c) All goods of each Grantor, including without
limitation, all machinery, equipment, motor vehicles, parts,
supplies, apparatus, appliances, tools, patterns, molds,
dies, blueprints, fittings, furniture, furnishings and
articles of tangible personal property of every description
now or hereafter owned by such Grantor or in which such
Grantor may have or may hereafter acquire any interest, at
any location (collectively referred to hereinafter as
"Equipment");
(d) All general intangibles of each Grantor in which a
Grantor now has or hereafter acquires any rights, including
but not limited to, causes of action, corporate or business
records, inventions, designs, goodwill, trade names, trade
secrets, trade processes, licenses, permits, franchises,
customer lists, computer programs, all claims under
guaranties, tax refund claims, rights and claims against
carriers and shippers, leases, claims under insurance
policies, all rights to indemnification and all other
intangible personal property and intellectual property of
every kind and nature (collectively referred to hereinafter
as "General Intangibles");
(e) All rights now or hereafter accruing to each
Grantor under contracts, leases, agreements or other
instruments to perform services, to hold and use land and
facilities, and to enforce all rights thereunder
(collectively referred to hereinafter as "Contract Rights");
(f) All books and records relating to any of the
Collateral (as hereinafter defined) (including without
limitation, customer data, credit files, computer programs,
printouts, and other computer materials and records of each
Grantor pertaining to any of the foregoing); and
(g) All accessions to, substitutions for and all
replacements, products and proceeds of the foregoing,
including without limitation proceeds of insurance policies
insuring the Collateral (as hereinafter defined).
All of the property and interests in property described in
subsections (a) through (g) and all other property and interests
in personal property which shall, from time to time, secure the
Secured Obligations are herein collectively referred to as the
"Collateral."
2. Financing Statements. At the time of execution of this
Agreement, each Grantor shall have furnished the Agent with
properly executed financing statements, registrar's certificates,
amendments and assignments as prescribed by the Uniform
Commercial Code as presently in effect in the states where the
Collateral is located, prepared and approved by the Agent in form
and number sufficient for filing wherever required with respect
to the Collateral, in order that the Agent, for the benefit of
the Secured Parties, shall have a duly perfected security
interest of record in the Collateral, to the extent a security
interest in such Collateral can be perfected by filing a
financing statement, following the filing of such financing
statements with the appropriate local and state governmental
authorities, subject only to Permitted Liens. Each Grantor shall
execute as reasonably required by the Agent any additional
financing statements or other documents to effect the same,
together with any necessary continuation statements so long as
this Agreement remains in effect.
3. Maintenance of Security Interest. Each Grantor will,
from time to time, upon the request of the Agent, deliver
specific assignments of Collateral, together with such other
instruments and documents, financing statements, amendments
thereto, assignments or other writings as the Agent may request
to carry out the terms of this Agreement or to protect or enforce
the Agent's security interest in the Collateral.
With respect to any and all Collateral to be secured and
conveyed under this Agreement, each Grantor agrees to do and
cause to be done, upon the Agent's request, all things
determined by the Agent to be necessary to perfect and keep in
full force the security interest granted in favor of the Agent
for the benefit of the Secured Parties, including, but not
limited to, the prompt payment of all fees and expenses incurred
in connection with any filings made to perfect or continue a
security interest in the Collateral in favor of the Agent for the
benefit of the Secured Parties.
Each Grantor agrees to make appropriate entries upon its
financial statements and books and records disclosing the
security interest granted hereunder to the Agent for the benefit
of the Secured Parties.
4. Receipt of Payment. In the event an Event of Default
shall occur and be continuing and a Grantor (or any of its
affiliates, subsidiaries, stockholders, directors, officers,
employees or agents) shall receive any proceeds of Collateral,
including without limitation monies, checks, notes, drafts or any
other items of payment, each Grantor shall hold all such items of
payment in trust for the Agent, for the benefit of the Secured
Parties, and as the property of the Agent, for the benefit of the
Secured Parties, separate from the funds of such Grantor, and no
later than the first Business Day following the receipt thereof,
at the election of the Agent, such Grantor shall cause the same
to be forwarded to the Agent for its custody and possession on
behalf of the Lenders as additional Collateral.
5. Covenants. Each Grantor covenants with the Agent that
from and after the date of this Agreement until termination
hereof in accordance with Section 27 hereof:
(a) Inspection. The Agent (by any of its officers,
employees and agents), on behalf of the Lenders, shall have
the right upon prior notice to an executive officer of the
Borrower, and at any reasonable times during such Grantor's
usual business hours, to inspect the Collateral, all records
related thereto (and to make extracts or copies from such
records), and the premises upon which any of the Collateral
is located, to discuss such Grantor's affairs and finances
with any Person (other than Persons obligated on Accounts
(hereinafter referred to as "Account Debtors")) and to
verify with any Person other than Account Debtors the
amount, quality, quantity, value and condition of, or any
other matter relating to, the Collateral and, if an Event of
Default has occurred and is continuing, to discuss such
Grantor's affairs and finances with such Grantor's Account
Debtors and to verify the amount, quality, value and
condition of, or any other matter relating to, the
Collateral and such Account Debtors. Upon or after the
occurrence and during the continuation of an Event of
Default, the Agent may at any time and from time to time
employ and maintain on such Grantor's premises a custodian
selected by the Agent who shall have full authority to do
all acts necessary to protect the Agent's (for the benefit
of the Secured Parties) interest. All expenses incurred by
the Agent, on behalf of the Secured Parties, by reason of
the employment of such custodian shall be paid by such
Grantor, added to the Secured Obligations and secured by the
Collateral. The right of the Agent under this subsection
(a) to inspect the Collateral and all records related
thereto and the premises upon which any Collateral shall be
located (A) prior to the occurrence and continuation of an
Event of Default, shall be limited to two inspections per
year at the respective Grantor's expense, and (B) after the
occurrence and during the continuation of an Event of
Default, shall be unlimited at the respective Grantor's
expense.
(b) Assignments, Records and Schedules of Accounts.
Each Grantor shall keep accurate and complete records of its
Accounts ("Account Records") and from time to time at
intervals designated by the Agent (but not more frequently
than monthly) such Grantor shall provide the Agent with a
schedule of Accounts in form and substance acceptable to the
Agent describing all Accounts created or acquired by such
Grantor ("Schedule of Accounts"); provided, however, that
such Grantor's failure to execute and deliver any such
Schedule of Accounts shall not affect or limit the Agent's
security interest or other rights in and to any Accounts for
the benefit of the Secured Parties. If requested by the
Agent, each Grantor shall furnish the Agent with copies of
proof of delivery and other documents relating to the
Accounts so scheduled, including without limitation
repayment histories and present status reports
(collectively, "Account Documents") and such other matter
and information relating to the status of then existing
Accounts as the Agent shall request. No Grantor shall
remove any Account Records or Account Documents or change
its chief executive offices from the locations set forth in
Exhibit A hereto without 30 days prior written notice to the
Agent as provided in Section 28 hereof and delivery to the
Agent by the applicable Grantor prior to such removal of
executed financing statements, amendments and other
documents necessary in the determination of the Agent to
maintain the security interests granted hereunder.
(c) Notice Regarding Disputed Accounts. In the event
any amounts due and owing in excess of $500,000
individually, or $1,200,000 in the aggregate amount, are in
dispute between any Account Debtor and a Grantor (which
shall include without limitation any dispute in which an
offset claim or counterclaim may result), such Grantor shall
provide the Agent with written notice thereof as soon as
practicable, explaining in detail the reason for the
dispute, all claims related thereto and the amount in
controversy.
(d) Change of Trade Styles. No Grantor shall change,
amend, alter, terminate, or cease using its material trade
names or styles under which it sells Inventory as of the
date of this Agreement ("Trade Styles"), or use additional
Trade Styles, without giving the Agent at least 30 days'
prior written notice and delivery to the Agent by the
applicable Grantor prior to such removal, change, amendment,
alteration, or use, of executed financing statements,
amendments and other documents necessary in the
determination of the Agent to maintain the security
interests granted hereunder.
(e) Safekeeping of Inventory. Each Grantor shall be
responsible for the safekeeping of its Inventory, and in no
event shall the Agent have any responsibility for:
(i) Any loss or damage to Inventory or
destruction thereof occurring or arising in any manner
or fashion from any cause;
(ii) Any diminution in the value of Inventory; or
(iii) Any act or default of any carrier,
warehouseman, bailee or forwarding agency thereof or
other Person in any way dealing with or handling
Inventory.
(f) Location, Records and Schedules of Inventory.
Each Grantor shall keep correct and accurate records
itemizing and describing the kind, type, location and
quantity of Inventory, its cost therefor and the selling
price of Inventory held for sale, and the daily withdrawals
therefrom and additions thereto, and shall furnish to the
Agent from time to time at reasonable intervals designated
by the Agent, a current schedule of Inventory ("Schedule of
Inventory") based upon its most recent physical inventory
and its daily inventory records. Each Grantor shall conduct
a physical inventory, no less than annually, and shall
furnish to the Agent such other documents and reports
thereof as the Agent shall reasonably request with respect
to the Inventory. Subject to compliance at all times with
Sections 8(c), (d) and (e), no Grantor shall, other than in
the ordinary course of business in connection with its sale,
remove any material amount of Inventory from the locations
set forth on Exhibit B hereto to a location not also set
forth on Exhibit B hereto, each of such locations being
owned by a Grantor unless otherwise indicated, without 30
days prior written notice to the Agent as provided in
Section 28 hereof and delivery to the Agent by the
applicable Grantor prior to such removal of executed
financing statements, amendments and other documents
necessary in the determination of the Agent to maintain the
security interests granted hereunder.
(g) Returns of Inventory. If any Account Debtor
returns any Inventory to a Grantor after shipment thereof,
and such return generates a credit in excess of $500,000 on
any individual Account or $1,200,000 in the aggregate on any
Accounts of such Account Debtor, such Grantor shall notify
the Agent in writing of the same as soon as practicable.
(h) Evidence of Ownership of Equipment. The Grantors,
as soon as practicable following a request therefor by the
Agent, shall deliver to the Agent any and all evidence of
ownership of any of the Equipment (including without
limitation certificates of title and applications for
title).
(i) Location, Records and Schedules of Equipment. The
Grantors shall maintain accurate, itemized records itemizing
and describing the kind, type, quality, quantity and value
of its Equipment and shall furnish the Agent upon request
with a current schedule containing the foregoing
information, but, other than during the continuance of an
Event of Default, not more often than once per fiscal year.
No Grantor shall remove any material portion of the
Equipment from the locations set forth in Exhibit C hereto
to a location not also set forth on Exhibit C hereto without
at least 30 days' prior written notice to the Agent as
provided in Section 28 hereof and delivery to the Agent by
the applicable Grantor prior to such removal of executed
financing statements, amendments and other documents
necessary to maintain the security interests granted
hereunder.
(j) Sale or Mortgage of Equipment. Except as
permitted by the Credit Agreement prior to the occurrence
and continuance of an Event of Default, no Grantor shall
sell, exchange, lease, mortgage, encumber, pledge or
otherwise dispose of or transfer any of the Equipment or any
part thereof without the prior written consent of the Agent.
(k) Maintenance of Equipment. Each Grantor shall keep
and maintain its Equipment in good operating condition and
repair, ordinary wear and tear excepted. No Grantor shall
permit any such items to become a fixture to real property
(unless such Grantor has granted the Agent for the benefit
of the Secured Parties a lien on such real property) or
accessions to other personal property.
(l) Transfers and Other Liens. Each Grantor shall not
(i) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of, or grant any option with
respect to, the Collateral, except for dispositions
permitted under the Credit Agreement and Section 5(j)
hereof, (ii) create or suffer to exist any Lien, security
interest or other charge or encumbrance upon or with respect
to any of the Collateral except for the security interests
created by this Agreement or other Permitted Liens; or (iii)
take any other action in connection with any of the
Collateral that would materially impair the value of the
interest or rights of such Grantor in the Collateral taken
as a whole or that would materially impair the interest or
rights of the Agent for the benefit of the Secured Parties.
6. Warranties and Representations Regarding Collateral
Generally. Each Grantor warrants and represents that:
(a) It is and, except as permitted by the Credit
Agreement and Section 5(m) hereof, will continue to be the
owner of the Collateral hereunder, now owned and upon the
acquisition of the same, free and clear of all Liens,
claims, encumbrances and security interests other than the
security interest in favor of the Agent for the benefit of
the Secured Parties hereunder and Permitted Liens, and that
it will defend such Collateral and any products and proceeds
thereof against all claims and demands of all Persons (other
than holders of Permitted Liens) at any time claiming the
same or any interest therein adverse to the Secured Parties.
(b) It has the unqualified right to enter into this
Agreement and to perform its terms.
(c) No authorization, consent, approval or other
action by, and no notice to or filing with, any governmental
authority or regulatory body or any other Person is required
either (i) for the grant by such Grantor of the security
interests granted hereby or for the execution, delivery or
performance of this Agreement by such Grantor, or (ii) for
the perfection of or the exercise by the Agent, on behalf of
the Secured Parties, of its rights and remedies hereunder,
except for the filings required by the Uniform Commercial
Code of the State in which such Grantor maintains its chief
executive office.
(d) No effective financing statement or other
instrument similar in effect covering all or any part of the
Collateral purported to be granted by such Grantor hereunder
is on file in any recording office, except such as may have
been filed in favor of the Agent, for the benefit of the
Secured Parties, other than lease financing statements or
other instruments relating to that certain $50,000,000
Senior Credit Facilities dated as of September 15, 1997
between the Borrower, ING (U.S.) Capital Corporation and
various lenders party thereto (the "ING Facility"), which
such financing statements and instruments are being
terminated on the date hereof.
7. Account Warranties and Representations. With respect
to its Accounts, each Grantor warrants and represents to the
Agent for the benefit of the Secured Parties, that the Agent and
each Lender may rely, on the Closing Date and thereafter until
this Agreement is terminated pursuant to Section 8 hereof, on
all statements or representations made by such Grantor on or with
respect to any Schedule of Accounts prepared and delivered by it
and, with respect to all Accounts, now or hereafter existing,
that:
(a) All Account Records and Account Documents are
located only at such Grantor's locations as set forth on
Exhibit A attached hereto and incorporated herein by
reference or at such other locations as to which the Grantor
has complied with Section 5(b) hereof;
(b) The Accounts are genuine, are in all respects what
they purport to be, are not evidenced by an instrument or
document or, if evidenced by an instrument or document, are
only evidenced by one original instrument or document;
(c) The Accounts cover the rendition by such Grantor
of services to an Account Debtor in the ordinary course of
business;
(d) The amounts of the face value shown on any
Schedule of Accounts or invoice statement delivered to the
Agent with respect to any Account, are actually owing to
such Grantor and are not contingent for any reason; and
there are no setoffs, discounts, allowances, claims,
counterclaims or disputes of any kind or description in an
amount greater than $1,200,000 in the aggregate, or greater
than $500,000 individually, existing or asserted with
respect thereto and such Grantor has not made any agreement
with any Account Debtor thereunder for any deduction
therefrom, except as may be stated in the Schedule of
Accounts and reflected in the calculation of the face value
of each respective invoice related thereto;
(e) Except for conditions generally applicable to such
Grantor's industry and markets, there are no facts, events,
or occurrences known to such Grantor pertaining particularly
to any Accounts which are reasonably expected to materially
impair in any way the validity, collectibility or
enforcement of Accounts that would reasonably be likely, in
the aggregate, to be of material economic value;
(f) The goods or services giving rise thereto are not,
and were not at the time of the sale or performance thereof,
subject to any Lien, claim, encumbrance or security
interest, except those of the Agent for the benefit of
Secured Parties and Permitted Liens and except for those
Liens arising in connection with the ING Facility, which
such Liens are being terminated on the date hereof;
(g) The Accounts have not been pledged to any Person
other than to the Agent for the benefit of the Secured
Parties under this Agreement and will be owned by such
Grantor free and clear of any Liens, claims, encumbrances or
security interests except Permitted Liens except for those
Liens arising in connection with the ING Facility, which
such Liens are being terminated on the date hereof.;
(h) The Agent's and the Lenders' security interest
therein will not be subject to any offset, deduction,
counterclaim, Lien or other adverse condition, other than
Permitted Liens; and
(i) The location of its chief executive office and any
state in which it (i) has a place of business in only one
county of such state or (ii) resides (within the meaning of
the applicable Uniform Commercial Code) but does not have
any place of business, is set forth on Exhibit A attached
hereto and incorporated herein by reference and each Grantor
shall deliver to the Agent not less than 30 days written
notice prior to any change of such location or status of
places of business or residency.
8. Inventory Warranties and Representations. With respect
to its Inventory, each Grantor warrants and represents to the
Agent for the benefit of the Secured Parties that the Secured
Parties may rely on the Closing Date and thereafter until this
Agreement is terminated pursuant to Section 27 hereof, on all
statements or representations made by such Grantor with respect
to any Inventory and that:
(a) All Inventory, other than Inventory having a value
of less than $1,200,000 in the aggregate for all locations,
is or will be located only at such Grantor's locations as
set forth on Exhibit B attached hereto and incorporated
herein by reference;
(b) None of its Inventory is or will be subject to any
Lien, claim, encumbrance or security interest whatsoever,
except for the security interest of the Agent for the
benefit of the Secured Parties hereunder and Permitted
Liens;
(c) No Inventory of such Grantor that would reasonably
be likely, in the aggregate with the Inventory of all
Grantors, to be of value in excess of $1,200,000 is, and
shall not at any time or times hereafter be, stored with a
bailee, warehouseman, or similar party without the Agent's
prior written consent and, if the Agent gives such consent,
such Grantor will concurrently therewith cause any such
bailee, warehouseman, or similar party to consent to the
security interest granted in such Inventory for the benefit
of the Secured Parties and waive its statutory and
consensual liens and rights in such Inventory in form and
substance acceptable to the Agent and, upon request
therefor, issue and deliver to the Agent, in form and
substance reasonably acceptable to the Agent, warehouse
receipts therefor in the Agent's name and take such other
action and be party to such document as deemed necessary or
prudent by the Agent to maintain the security interest of
the Secured Parties in such Inventory;
(d) No Inventory is, and shall not at any time or
times hereafter be, under consignment to any Person, the
value of which, when aggregated with all other Inventory
under consignment of such Grantor and all other Material
Subsidiaries, would exceed $1,200,000; and
(e) No Inventory is at or shall be kept at any
location that is leased by such Grantor from any other
Person, the value of which, when aggregated with all other
Inventory kept at any location which is leased by all
Grantors, would exceed $1,200,000, unless such location and
lessee is set forth on Exhibit B hereto and such lessee
waives its statutory and consensual liens and rights with
respect to such Inventory in form and substance acceptable
to the Agent and delivered in writing to the Agent prior to
such amount of Inventory being at such one or more
locations.
9. Equipment Representations and Warranties. With respect
to its Equipment, each Grantor warrants and represents to the
Agent for the benefit of the Secured Parties that the Secured
Parties may rely, on the Closing Date and thereafter until this
Agreement is terminated pursuant to Section 27 hereof, on all
statements or representations made by such Grantor with respect
to any Equipment and that:
(a) All Equipment is or will be located only at such
Grantor's locations set forth in Exhibit C hereto or at such
other locations as to which such Grantor has complied with
Section 5(j) hereof prior to such relocation and has
provided to the Agent executed financing statements for such
location satisfying the requirements of Section 2 hereof;
(b) None of its Equipment is or will be subject to any
Lien, claim, encumbrance or security interest whatsoever,
except for the security interest of the Agent, for the
benefit of the Secured Parties, hereunder and Permitted
Liens.
10. Casualty and Liability Insurance Required.
(a) Each Grantor will keep the Collateral continuously
insured against such risks as are customarily insured
against by businesses of like size and type engaged in the
same or similar operations including, without limiting the
generality of any other covenant herein contained:
(i) casualty insurance on the Inventory and the
Equipment in an amount not less than the full insurable
value thereof, against loss or damage by theft, fire
and lightning and other hazards ordinarily included
under uniform broad form standard extended coverage
policies, limited only as may be provided in the
standard broad form of extended coverage endorsement at
the time in use in the states in which the Collateral
is located;
(ii) comprehensive general liability insurance
against claims for bodily injury, death or property
damage occurring with or about such Collateral (such
coverage to include provisions waiving subrogation
against the Secured Parties), with Agent and Lenders as
additional insured parties, in amounts as shall be
reasonably satisfactory to Agent;
(iii) employer's liability and workers'
compensation insurance in required statutory amounts of
the states in which such Collateral is located; and
(iv) business interruption insurance.
(b) Each insurance policy obtained in satisfaction of
the requirements of Section 10(a) hereof:
(i) may be provided by blanket policies now or
hereafter maintained by each Grantor or the Borrower;
(ii) shall be issued by such insurer (or insurers)
as shall be financially responsible, of recognized
standing and reasonably acceptable to the Agent;
(iii) shall be in such form and have such
provisions (including without limitation the loss
payable clause, the waiver of subrogation clause, the
deductible amount, if any, and the standard mortgagee
endorsement clause), as are generally considered
standard provisions for the type of insurance involved
and are reasonably acceptable in all respects to the
Agent;
(iv) shall prohibit cancellation or substantial
modification, termination or lapse in coverage by the
insurer without at least 30 days' prior written notice
to the Agent, except for non-payment of premium, in
which case such policies shall provide ten (10) days'
prior written notice;
(v) without limiting the generality of the
foregoing, all insurance policies where applicable
under Section 10(a)(i) carried on the Collateral shall
name the Agent, for the benefit of the Secured Parties,
as loss payee and the Agent and Lenders as parties
insured thereunder in respect of any claim for payment.
(c) Prior to expiration of any such policy, such
Grantor shall furnish the Agent with evidence satisfactory
to the Agent that the policy or certificate has been renewed
or replaced or is no longer required by this Agreement.
(d) Each Grantor hereby irrevocably makes, constitutes
and appoints the Agent (and all officers, employees or
agents designated by the Agent), for the benefit of the
Secured Parties, effective upon the occurrence and during
the continuance of an Event of Default, as such Grantor's
true and lawful attorney (and agentinfact) for the purpose
of making, settling and adjusting claims under such policies
of insurance, endorsing the name of such Grantor on any
check, draft, instrument or other item or payment for the
proceeds of such policies of insurance and for making all
determinations and decisions with respect to such policies
of insurance.
(e) In the event such Grantor shall fail to maintain,
or fail to cause to be maintained, the full insurance
coverage required hereunder or shall fail to keep any of its
Collateral in good repair and good operating condition, the
Agent may (but shall be under no obligation to), without
waiving or releasing any Secured Obligation or Event of
Default by such Grantor hereunder, contract for the required
policies of insurance and pay the premiums on the same or
make any required repairs, renewals and replacements; and
all sums so disbursed by Agent, including reasonable
attorneys' fees, court costs, expenses and other charges
related thereto, shall be payable on demand by such Grantor
to the Agent and shall be additional Secured Obligations
secured by the Collateral.
(f) Each Grantor agrees that to the extent that it
shall fail to maintain, or fail to cause to be maintained,
the full insurance coverage required by Section 10(a)
hereof, it shall in the event of any loss or casualty pay
promptly to the Agent, for the benefit of the Secured
Parties, to be held in a separate account for application in
accordance with the provisions of Section 10(h) hereof, such
amount as would have been received as Net Proceeds (as
hereinafter defined) by the Agent, for the benefit of the
Secured Parties, under the provisions of Section 10(h)
hereof had such insurance been carried to the extent
required.
(g) The Net Proceeds of the insurance carried pursuant
to the provisions of Sections 10(a)(ii) and 10(a)(iii)
hereof shall be applied by such Grantor toward
extinguishment of the defect or claim or satisfaction of the
liability with respect to which such insurance proceeds may
be paid.
(h) The Net Proceeds of the insurance carried with
respect to the Collateral pursuant to the provisions of
Section 10(a)(i) hereof shall be paid to such Grantor and
held by such Grantor in a separate account and applied as
follows: (i) as long as no Event of Default shall have
occurred and be continuing, after any loss under any such
insurance and payment of the proceeds of such insurance,
each Grantor shall have a period of 30 days after payment of
the insurance proceeds with respect to such loss to elect to
either (x) repair or replace the Collateral so damaged, (y)
deliver such Net Proceeds to the Agent, for the benefit of
the Secured Parties, as additional Collateral or (z) apply
such Net Proceeds to the acquisition of tangible assets used
or useful in the conduct of the business of such Grantor,
subject to the provisions of this Agreement. If such
Grantor elects to repair or replace the Collateral so
damaged, such Grantor agrees the Collateral shall be
repaired to a condition substantially similar to its
condition prior to damage or replaced with Collateral in a
condition substantially similar to the condition of the
Collateral so replaced prior to damage; and (ii) at all
times during which an Event of Default shall have occurred
and be continuing, after any loss under such insurance and
payment of the proceeds of such insurance, such Grantor
shall immediately deliver such Net Proceeds to such Agent,
for the benefit of the Secured Parties, as additional
Collateral.
(i) "Net Proceeds" when used with respect to any
insurance proceeds shall mean the gross proceeds from such
proceeds, award or other amount, less all taxes, fees and
expenses (including attorneys' fees) incurred in the
realization thereof.
(j) In case of any material damage to or destruction
of all or any part of the Collateral pledged hereunder by a
Grantor, such Grantor shall give prompt notice thereof to
the Agent. Each such notice shall describe generally the
nature and extent of such damage, destruction, taking, loss,
proceeding or negotiations. Each Grantor is hereby
authorized and empowered to adjust or compromise any loss
under any such insurance.
11. Rights and Remedies Upon Event of Default. Upon and
after an Event of Default, the Agent shall have the following
rights and remedies on behalf of the Lenders in addition to any
rights and remedies set forth elsewhere in this Agreement, all of
which may be exercised with or, if allowed by law, without notice
to a Grantor:
(a) All of the rights and remedies of a secured party
under the Uniform Commercial Code of the state where such
rights and remedies are asserted, or under other applicable
law, all of which rights and remedies shall be cumulative,
and none of which shall be exclusive, to the extent
permitted by law, in addition to any other rights and
remedies contained in this Agreement, the Guaranty or any
other Loan Document;
(b) The right to foreclose the Liens and security
interests created under this Agreement by any available
judicial procedure or without judicial process;
(c) The right to (i) enter upon the premises of a
Grantor through selfhelp and without judicial process,
without first obtaining a final judgment or giving such
Grantor notice and opportunity for a hearing on the validity
of the Agent's claim and without any obligation to pay rent
to such Grantor, or any other place or places where any
Collateral is located and kept, and remove the Collateral
therefrom to the premises of the Agent or any agent of the
Agent, for such time as the Agent may desire, in order
effectively to collect or liquidate the Collateral, and (ii)
require such Grantor to assemble the Collateral and make it
available to the Agent at a place to be designated by the
Agent that is reasonably convenient to both parties;
(d) The right to (i) demand payment of the Accounts;
(ii) enforce payment of the Accounts, by legal proceedings
or otherwise; (iii) exercise all of a Grantor's rights and
remedies with respect to the collection of the Accounts and
General Intangibles; (iv) settle, adjust, compromise, extend
or renew the Accounts, General Intangibles and Contract
Rights; (v) settle, adjust or compromise any legal
proceedings brought to collect the Accounts; (vi) if
permitted by applicable law, sell or assign the Accounts,
General Intangibles and Contract Rights upon such terms, for
such amounts and at such time or times as the Agent deems
advisable; (vii) discharge and release the Accounts; (viii)
take control, in any manner, of any item of payment or
proceeds referred to in Section 4 above; (ix) prepare, file
and sign a Grantor's name on a Proof of Claim in bankruptcy
or similar document against any Account Debtor; (x) prepare,
file and sign a Grantor's name on any notice of Lien,
assignment or satisfaction of Lien or similar document in
connection with the Accounts; (xi) endorse the name of a
Grantor upon any chattel paper, document, instrument,
invoice, freight ▇▇▇▇, ▇▇▇▇ of lading or similar document or
agreement relating to the Accounts, Inventory or Equipment;
(xii) use the information recorded on or contained in any
data processing equipment and computer hardware and software
relating to any Collateral to which a Grantor has access;
(xiii) to open such Grantor's mail and collect any and all
amounts due to such Grantor from Account Debtors; (xiv) to
take over such Grantor's post office boxes or make other
arrangements as the Agent, on behalf of the Secured Parties,
deems necessary to receive such Grantor's mail, including
notifying the post office authorities to change the address
for delivery of such Grantor's mail to such address as the
Agent, on behalf of the Secured Parties, may designate; and
(xv) to notify any or all Account Debtors that the Accounts
have been assigned to the Agent for the benefit of the
Secured Parties and that Agent has a security interest
therein for the benefit of the Secured Parties (provided
that the Agent may at any time give such notice to an
Account Debtor that is a department, agency or authority of
the United States government); each Grantor hereby agrees
that any such notice, in the Agent's sole discretion, may be
sent on such Grantor's stationery, in which event such
Grantor shall cosign such notice with the Agent; and (xvi)
do all acts and things and execute all documents necessary,
in Agent's sole discretion, to collect the Accounts and
General Intangibles; and
(e) The right to sell, assign, lease or to otherwise
dispose of all or any Collateral in its then existing
condition, or after any further manufacturing or processing
thereof, at public or private sale or sales, with such
notice as may be required by law, in lots or in bulk, for
cash or on credit, with or without representations and
warranties, all as the Agent, in its sole discretion, may
deem advisable. The Agent shall have the right to conduct
such sales on a Grantor's premises or elsewhere and shall
have the right to use a Grantor's premises without charge
for such sales for such time or times as the Agent may see
fit. The Agent may, if it deems it reasonable, postpone or
adjourn any sale of the Collateral from time to time by an
announcement at the time and place of such postponed or
adjourned sale, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
Each Grantor agrees that the Agent has no obligation to
preserve rights to the Collateral against prior parties or
to ▇▇▇▇▇▇▇▇ any Collateral for the benefit of any Person.
The Agent is hereby granted a license or other right to use,
without charge, each Grantor's labels, patents, copyrights,
rights of use of any name, trade secrets, trade names,
trademarks and advertising matter, or any property of a
similar nature, as it pertains to the Collateral, in
completing production of, advertising for sale and selling
any Collateral and a Grantor's rights under any license and
any franchise agreement shall inure to the Agent's benefit.
If any of the Collateral shall require repairs, maintenance,
preparation or the like, or is in process or other
unfinished state, the Agent shall have the right, but shall
not be obligated, to perform such repairs, maintenance,
preparation, processing or completion of manufacturing for
the purpose of putting the same in such saleable form as the
Agent shall deem appropriate, but the Agent shall have the
right to sell or dispose of the Collateral without such
processing and no Guarantor shall have any claim against the
Agent for the value that may have been added to such
Collateral with such processing. In addition, each Grantor
agrees that in the event notice is necessary under
applicable law, written notice mailed to such Grantor in the
manner specified herein seven (7) days prior to the date of
public sale of any of the Collateral or prior to the date
after which any private sale or other disposition of the
Collateral will be made shall constitute commercially
reasonable notice to such Grantor. All notice is hereby
waived with respect to any of the Collateral which threatens
to decline speedily in value or is of a type customarily
sold on a recognized market. The Agent may purchase all or
any part of the Collateral at public or, if permitted by
law, private sale, free from any right of redemption which
is hereby expressly waived by such Grantor and, in lieu of
actual payment of such purchase price, may set off the
amount of such price against the Secured Obligations. The
net cash proceeds resulting from the collection,
liquidation, sale, lease or other disposition of the
Collateral shall be applied first to the expenses (including
all attorneys' fees) of retaking, holding, storing,
processing and preparing for sale, selling, collecting,
liquidating and the like, and then to the satisfaction of
all Secured Obligations in accordance with the terms of
Section 10.5 of the Credit Agreement. Any sale or other
disposition of the Collateral and the possession thereof by
the Agent shall be in compliance with all provisions of
applicable law (including applicable provisions of the
Uniform Commercial Code). Each Grantor shall be liable to
the Agent, for the benefit of the Secured Parties, and shall
pay to the Agent, for the benefit of the Secured Parties, on
demand any deficiency which may remain after such sale,
disposition, collection or liquidation of the Collateral.
12. AntiMarshalling Provisions. The right is hereby given
by each Grantor to the Agent, for the benefit of the Secured
Parties, to make releases (whether in whole or in part) of all or
any part of the Collateral agreeable to the Agent without notice
to, or the consent, approval or agreement of other parties and
interests, including junior lienors, which releases shall not
impair in any manner the validity of or priority of the Liens and
security interests in the remaining Collateral conferred under
such documents, nor release such Grantor from personal liability
for the Secured Obligations hereby secured. Notwithstanding the
existence of any other security interest in the Collateral held
by the Agent, for the benefit of the Secured Parties, the Agent
shall have the right to determine the order in which any or all
of the Collateral shall be subjected to the remedies provided in
this Agreement. The proceeds realized upon the exercise of the
remedies provided herein shall be applied by the Agent, for the
benefit of the Secured Parties, in the manner provided in Section
10.5 of the Credit Agreement. Each Grantor hereby waives any and
all right to require the marshalling of assets in connection with
the exercise of any of the remedies permitted by applicable law
or provided herein.
13. Indemnity and Expenses.
(a) Each Grantor agrees to indemnify the Agent, for
the benefit of the Secured Parties, from and against any and
all claims, losses and liabilities growing out of or
resulting from this Agreement that are incurred by the Agent
(including without limitation enforcement of this
Agreement), except claims, losses or liabilities directly
resulting from the Agent's gross negligence or willful
misconduct.
(b) Each Grantor will upon demand pay to the Agent,
for the benefit of the Secured Parties, the amount of any
and all reasonable expenses, including the reasonable fees
and disbursements of its counsel and of any experts and
agents, that the Agent, for the benefit of the Secured
Parties, may incur in connection with (i) the administration
of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from or other
realization upon, any of the Collateral, (iii) the exercise
or enforcement of any of the rights of the Secured Parties,
or (iv) the failure by such Grantor to perform or observe
any of the provisions hereof.
14. Appointment of Agent as Grantor's Lawful Attorney.
Without limitation of any other provision of this Agreement, each
Grantor irrevocably designates, makes, constitutes and appoints
the Agent (and all Persons designated by the Agent), for the
benefit of the Secured Parties, as the Grantor's true and lawful
attorney (and agent-in-fact) at all times on and after the
occurrence and during the continuation of an Event of Default, to
take all actions and to do all things required to be taken or
done by the Grantor under this Agreement, including without
limitation:
(a) to ask, demand, collect, ▇▇▇ for, recover,
compromise, receive and give acquittance and receipts for
moneys due and to become due under or in respect of any of
the Collateral;
(b) to receive, endorse and collect any drafts or
other instruments, documents and chattel paper in connection
with clause (a) above;
(c) to endorse such Grantor's name on any checks,
notes, drafts or any other payment relating to or
constituting proceeds of the Collateral which comes into the
Agent's possession or Agent's control, and deposit the same
to the account of the Agent, for the benefit of the Secured
Parties, on account and for payment of the Secured
Obligations.
(d) to file any claims or take any action or institute
any proceedings that the Agent may deem necessary or
desirable for the collection of any of the Collateral or
otherwise to enforce the rights of the Agent, for the
benefit of the Secured Parties, with respect to any of the
Collateral; and
(e) to execute, in connection with the sale provided
for in Section 11, any endorsement, assignments, or other
instruments of conveyance or transfer with respect to the
Collateral.
All acts of the Agent or its designee taken pursuant to this
Section 14 are hereby ratified and confirmed by each Grantor and
the Agent or its designee shall not be liable for any acts of
omission or commission nor for any error of judgment or mistake
of fact or law, other than as a result of its gross negligence or
willful misconduct. This power, being coupled with an interest,
is irrevocable by such Grantor until this Agreement has been
terminated in accordance with Section 27 hereof.
15. Waivers. In addition to the other waivers contained
herein, each Grantor hereby expressly waives, to the extent
permitted by law: presentment for payment, demand, protest,
notice of demand, notice of protest, notice of default or
dishonor, notice of payments and nonpayments and all other
notices and consents to any action taken by the Agent unless
expressly required by this Agreement.
16. Trade Names. Each Grantor represents that the only
trade name(s) or style(s) used by such Grantor are as set forth
on Exhibit D, next to the name of such Grantor.
17. Absolute Rights and Obligations. All rights of the
Secured Parties in the Security Interests granted hereunder, and
each of the Secured Obligations, shall be absolute and
unconditional irrespective of:
(a) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured
Obligations, or any other amendment or waiver of or any
consent to departure from, the Credit Agreement or any other
Loan Document, including, but not limited to, (i) an
increase or decrease in the Secured Obligations and (ii) an
amendment of any Loan Document to permit the Agent or the
Lenders or any one or more of them to extend further or
additional credit to the Borrower in any form including
credit by way of loan, purchase of assets, guarantee or
otherwise, which credit shall thereupon be and become
subject to the Credit Agreement and the other Loan Documents
as a Secured Obligation;
(b) any taking and holding of collateral or guarantees
(including without limitation any collateral pledged as
security for the Secured Obligations under the other
Security Instruments) for all or any of the Secured
Obligations; or any amendment, alteration, exchange,
substitution, transfer, enforcement, waiver, subordination,
termination or release of any such collateral or guarantees,
or any nonperfection of any such collateral, or any consent
to departure from any such guaranty;
(c) any manner of application of collateral, or
proceeds thereof, securing payment or enforcement of all or
any of the Secured Obligations, or the manner of sale of any
such collateral;
(d) any consent by the Secured Parties to the change,
restructure or termination of the corporate structure or
existence of the Borrower or any Grantor and any
corresponding restructure of the Secured Obligations, or any
other restructure or refinancing of the Secured Obligations
or any portion thereof;
(e) any modification, compromise, settlement or
release by the Secured Parties, by operation of law or
otherwise, collection or other liquidation of the Secured
Obligations or the liability of the Borrower, any Grantor or
any Guarantor, or of any collateral for the Secured
Obligation (including without limitation any collateral
pledged as security for the Secured Obligations under the
other Security Instruments), in whole or in part, and any
refusal of payment by the Agent or any Lender in whole or in
part, from any obligor or Guarantor in connection with any
of the Secured Obligations, whether or not with notice to,
or further assent by, or any reservation of rights against,
any Grantor; or
(f) any other circumstance (including without
limitation any statute of limitations) that might otherwise
constitute a defense available to, or a discharge of, the
Borrower, any Guarantor or a Grantor.
The granting of a Security Interest in the Collateral shall
continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Secured Obligations is
rescinded or must otherwise be returned by any Secured Party,
upon the insolvency, bankruptcy or reorganization of the Borrower
or any Grantor or otherwise, all as though such payment had not
been made.
18. Definitions. All terms used herein shall be defined in
accordance with the appropriate definitions appearing in the
Uniform Commercial Code as in effect in New York, and such
definitions are hereby incorporated herein by reference and made
a part hereof.
19. Entire Agreement. This Agreement, together with the
Credit Agreement, the Guaranty Agreement and other Loan
Documents, constitutes and expresses the entire understanding
between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings,
inducements, commitments or conditions, express or implied, oral
or written, except as herein contained. The express terms hereof
control and supersede any course of performance or usage of the
trade inconsistent with any of the terms hereof. Neither this
Agreement nor any portion or provision hereof may be changed,
altered, modified, supplemented, discharged, canceled,
terminated, or amended orally or in any manner other than by an
agreement, in writing signed by the parties hereto.
20. Further Assurances. Each Grantor agrees at its own
expense to do such further acts and things, and to execute and
deliver such additional conveyances, assignments, financing
statements, agreements and instruments, as the Agent may at any
time reasonably request in connection with the administration or
enforcement of this Agreement or related to the Collateral or any
part thereof or in order better to assure and confirm unto the
Agent its rights, powers and remedies for the benefit of the
Secured Parties hereunder. Each Grantor hereby consents and
agrees that the issuers of or obligors in respect of the
Collateral shall be entitled to accept the provisions hereof as
conclusive evidence of the right of the Agent, on behalf of the
Secured Parties, to exercise its rights hereunder with respect to
the Collateral, notwithstanding any other notice or direction to
the contrary heretofore or hereafter given by any Grantor or any
other Person to any of such issuers or obligors. Each Grantor
agrees that a carbon, photographic, photostatic, or other
reproduction of this Agreement or a financing statement is
sufficient as a financing statement and may be filed by the Agent
in any filing office.
21. Binding Agreement; Assignment. This Agreement, and the
terms, covenants and conditions hereof, shall be binding upon and
inure to the benefit of the parties hereto, and to their
respective successors and assigns, except that, subject to the
provisions of Section 9.7 of the Credit Agreement, no Grantor
shall be permitted to assign this Agreement or any interest
herein or in the Collateral, or any part thereof, or otherwise
pledge, encumber or grant any option with respect to the
Collateral, or any part thereof, or any cash or property held by
the Agent as Collateral under this Agreement. All references
herein to the Agent shall include any successor thereof, each
Lender and any other obligees from time to time of the
Obligations.
22. Swap Agreements. All obligations of the Borrower under
Swap Agreements to which any Lender or its affiliates are a party
shall be deemed to be Secured Obligations secured hereby, and
each Lender or affiliate of a Lender party to any such Swap
Agreement shall be deemed to be a Secured Party hereunder.
23. Severability. The provisions of this Agreement are
independent of and separable from each other. If any provision
hereof shall for any reason be held invalid or unenforceable,
such invalidity or unenforceability shall not affect the validity
or enforceability of any other provision hereof, but this
Agreement shall be construed as if such invalid or unenforceable
provision had never been contained herein.
24. Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of each Grantor, and the
right, remedies, powers, and privileges of the Agent hereunder
shall inure to the benefit of the successors and assigns of the
Agent; provided, however, subject to the provisions of Section
9.7 of the Credit Agreement, that no Grantor shall make any
assignment hereof without the prior written consent of the Agent.
25. Counterparts. This Agreement may be executed in any
number of counterparts and all the counterparts taken together
shall be deemed to constitute one and the same instrument.
26. Remedies Cumulative. All remedies hereunder are
cumulative and are not exclusive of any other rights and remedies
of the Agent provided by law or under the Credit Agreement, the
other Loan Documents, or other applicable agreements or
instruments. The making of the Loans to, and issuing of Letters
of Credit for the benefit of, the Borrower pursuant to the Credit
Agreement and the extension of the Revolving Credit Facility to
the Borrower pursuant to the Credit Agreement shall be
conclusively presumed to have been made or extended,
respectively, in reliance upon each Grantor's grant of the
security interests created under this Agreement.
27. Termination. This Agreement and all obligations of
each Grantor hereunder shall terminate on the Collateral
Termination Date, at which time the Liens and rights granted to
the Agent for the benefit of the Secured Parties hereunder shall
automatically terminate and no longer be in effect, and the
Collateral shall automatically be released from the Liens created
hereby. Upon such termination of this Agreement, the Agent
shall, at the sole expense of the Grantors, reassign and
redeliver to each applicable Grantor such Collateral then held by
or for the Agent and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request and take such
further actions as may be necessary to effect the same and as
shall be reasonably acceptable to the Agent.
28. Notices. Any notice required or permitted hereunder
shall be given, (a) with respect to the Borrower or any Grantor,
at the Borrower's address indicated in Section 12.2 of the Credit
Agreement and (b) with respect to the Agent or a Lender, at the
Agent's address indicated in Section 12.2 of the Credit
Agreement. All such notices shall be given and shall be
effective as provided in Section 12.2 of the Credit Agreement.
29. Governing Law; Venue; Waiver of Trial by Jury.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED,
IN SUCH STATE NOTWITHSTANDING ITS EXECUTION AND DELIVERY
OUTSIDE SUCH STATE.
(b) EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY
AGREES AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY
STATE OR FEDERAL COURT SITTING IN THE ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE IN, OR TO THE EXERCISE OF JURISDICTION
OVER IT AND ITS PROPERTY BY, ANY SUCH COURT IN ANY SUCH
SUIT, ACTION OR PROCEEDING, AND IRREVOCABLY SUBMITS
GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) EACH GRANTOR AGREES THAT SERVICE OF PROCESS MAY BE
MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND
COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE
PREPAID) TO THE ADDRESS OF THE BORROWER PROVIDED BY SECTION
12.2 OF THE CREDIT AGREEMENT, OR BY ANY OTHER METHOD OF
SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN
THE STATE OF NEW YORK.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF
SHALL PRECLUDE ANY SECURED PARTY FROM BRINGING ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT IN THE COURTS OF ANY
JURISDICTION WHERE ANY GRANTOR OR ANY OF SUCH GRANTOR'S
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT
PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION,
EACH GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY
SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE
OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY OTHER COURT
OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE UNDER
APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED
OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH
THE FOREGOING, EACH GRANTOR AND THE AGENT ON BEHALF OF THE
SECURED PARTIES HEREBY AGREE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY WAIVE,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH
PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION OR
PROCEEDING.
IN WITNESS WHEREOF, the parties have duly executed this
Security Agreement on the day and year first written above.
GRANTORS:
HEADWAY CORPORATE RESOURCES, INC.
By: (Signature)
WHITNEY PARTNERS, L.L.C.
HEADWAY CORPORATE STAFFING SERVICES,
INC.
CERTIFIED TECHNICAL STAFFING, INC.
CORPORATE STAFFING ALTERNATIVES, INC.
HEADWAY CORPORATE STAFFING SERVICES
OF NEW YORK, INC.
HEADWAY PERSONNEL, INC.
HEADWAY CORPORATE STAFFING SERVICES
OF NORTH CAROLINA, INC.
HEADWAY CORPORATE STAFFING SERVICES
OF CONNECTICUT, INC.
ASA PERSONNEL SERVICES, L.L.C.
E.D.R. ASSOCIATES, INC.
HCSS WEST, INC.
HCSS HOLDINGS, INC.
HCSS EAST, INC.
▇▇▇▇▇▇ ASSOCIATES, L.L.C.
By: (signature)
AGENT:
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By: (Signature)