Subsidiary Guaranty - ORC inc., ORC Teleservice Corp., ORC Protel Inc., Quantum Research Corp., Macro International Inc., Allied Capital Corp. and Allied Investment Corp.
THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE
IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AND
INTERCREDITOR AGREEMENT (THE "SUBORDInaTION AGREEMENT") DATED AS OF MAY ____,
1999 AMONG THE HOLDERS OF SUBORDINATED DEBENTURES, OPINION RESEARCH CORPORATION
("COMPANY") AND HELLER FINANCIAL, INC. ("AGENT"), TO THE INDEBTEDNESS (INCLUDING
INTEREST) OWED BY THE COMPANY AND ITS AFFILIATES PURSUANT TO THAT CERTAIN CREDIT
AGREEMENT DATED AS OF MAY ___, 1999 AMONG THE COMPANY, AGENT AND THE LENDERS
FROM TIME TO TIME PARTY THERETO, AS SUCH CREDIT AGREEMENT HAS BEEN AND HEREAFTER
MAY BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME; AND EACH
HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE
PROVISIONS OF THE SUBORDINATION AGREEMENT.
SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY (the "Guaranty") is made as of the ___ day of May,
1999, by ORC, INC., a Delaware corporation, ORC TELESERVICE CORP., a Delaware
corporation, ORC PROTEL, INC., a Delaware corporation, QUANTUM RESEARCH
CORPORATION, a Maryland corporation, and MACRO INTERNATIONAL, INC., a Delaware
corporation (collectively, the "Guarantors") in favor OF ALLIED CAPITAL
CORPORATION and ALLIED INVESTMENT CORPORATION, each a Maryland corporation
having an address at 1919 Pennsylvania Avenue, N.W., Washington, D.C. 20006-3434
(collectively, "Allied").
Recitals
A. Allied has agreed to make an investment (the "Investment") in Opinion
Research Corporation, a Delaware corporation (the "Company") in the original
principal amount of FIFTEEN MILLION and 00/100 Dollars ($15,000,000.00),
pursuant to the terms of a certain Investment Agreement of even date herewith by
and among the Company and Allied (the "Investment Agreement"), certain
Subordinated Debentures of even date herewith (collectively, the "Debentures"),
and certain other agreements and instruments described in the Investment
Agreement.
B. The Company is the legal and beneficial owner, directly or indirectly,
of all of the issued and outstanding capital stock of the Guarantors.
C. Allied requires, as a condition of making the Investment, that the
Guarantors enter into this Guaranty.
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D. The Guarantors desire to induce Allied to make the Investment, and the
Guarantors acknowledge that they will receive substantial direct and indirect
benefits by reason of the making of the Investment by Allied.
NOW, THEREFORE, in consideration of the foregoing Recitals, the making of
the Investment by Allied in the Company, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Guarantors hereby jointly and severally agree with Allied and the successors and
assigns of Allied (collectively, the "Holder") as follows:
1. Guaranty. In consideration of the making of the Investment in the
Company and other good and valuable consideration, the Guarantors hereby jointly
and severally undertake and guarantee, the collection of all debts, obligations
and liabilities of the Company to the Holder arising pursuant to the Debentures,
the Investment Agreement and the other Investment Documents, whether now due or
hereafter falling due, falling due at maturity or upon acceleration (including,
without limitation, the payment of principal, interest and late charges under
the Debentures), together with all costs of collection, compromise or
enforcement, including, without limitation, reasonable attorneys' fees and
disbursements incurred with respect to any such debts, obligations or
liabilities or with respect to this or any other guaranty or any of them, or
with respect to a proceeding under the federal bankruptcy laws or any
moratorium, insolvency, receivership arrangement or reorganization law, or an
assignment for the benefit of creditors concerning the Company or the
Guarantors, together with interest on all such costs of collection, compromise
or enforcement from the date arising (all of the foregoing, collectively, the
"Guaranteed Obligations"). Each Guarantor agrees that this Guaranty is a present
and continuing guaranty of payment and not of collectability.
2. Irrevocable Guaranty. This Guaranty is irrevocable and shall continue
until terminated in accordance with Section 3.
3. Covenants. The Guarantors hereby jointly and severally covenant and
agree with the Holder as follows:
(a) That this Guaranty shall not be impaired by any modification,
supplement, extension or amendment of the Debentures, Investment Agreement, or
any of the other Investment Documents, nor by any modification, release or other
alteration of any of the Guaranteed Obligations, nor by any agreements or
arrangements whatsoever made with the Company, or anyone else;
(b) That the Guarantors shall have no right of subrogation,
reimbursement or indemnity whatsoever from the Company, unless and until all of
the Guaranteed Obligations have been fully paid and performed;
(c) That, if any payment or transfer to Holder that has been credited
against any of the Guaranteed Obligations under the Debentures or Investment
Agreement, is voided or rescinded or required to be returned by the Holder, this
Guaranty shall continue in effect and
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shall be reinstated with respect to all such voided, rescinded or returned
payments, transfers or recoveries as though such payment, transfer or recovery
had not been made;
(d) That the Holder's books and records showing the account between
the Holder and the Company shall be admissible in any action or proceeding,
shall, absent demonstrable error, be binding upon each of the Guarantors for the
purpose of establishing the items therein set forth and shall constitute prima
facie proof thereof; provided, however, that the Holder will furnish, from time
to time, copies of such books and records to the Guarantors upon the Guarantors'
written request;
(e) That this Guaranty shall be construed as a continuing obligation
of each of the Guarantors without regard to the regularity, validity or
enforceability of any of the Guaranteed Obligations, and without regard to
whether any of the Guaranteed Obligations are limited, modified, voided,
released or discharged in any proceeding under the federal bankruptcy laws or in
any moratorium, insolvency, receivership, arrangement or reorganization
proceeding;
(f) That this Guaranty shall not be discharged and the Guarantors
shall not be released from liability until all Guaranteed Obligations have been
satisfied in full, and that if all or any portion of the Guaranteed Obligations
are satisfied and the Holder is required for any reason to pay to any Person all
or any part of the sums used to satisfy the Guaranteed Obligations, the
Guaranteed Obligations shall remain in effect and enforceable to the extent
thereof;
(g) That this Guaranty shall remain in full force and effect
notwithstanding any failure, omission or delay on the part of Company, any
Guarantor or the Holder to conform or comply with any term of any of the
Investment Documents or any failure of the Holder to give notice of any Default
or Event of Default;
(h) That this Guaranty shall remain in full force and effect
notwithstanding any action or inaction by the Holder under or in respect of any
of the Investment Documents, any failure, lack of diligence, omission or delay
on the part of the Holder to enforce, assert or exercise any right, power or
remedy conferred on it any of the Investment Documents, or any other action or
inaction on the part of the Holder; and
(i) That any and all present and future debts and obligations of the
Company to any of the Guarantors are subordinated to the full payment and
performance of the Guaranteed Obligations.
4. Representations and Warranties. Each Guarantor represents and warrants
to the Holder as follows:
(a) Organization and Qualification. Each Guarantor is a corporation
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duly organized, validly existing and in good standing under the laws of the
State of its organization, has all requisite corporate power and authority to
own its property and to carry on its business as now conducted and as proposed
to be conducted, and is in good standing and authorized to do
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business in each jurisdiction in which the failure so to qualify would have a
Material Adverse Effect.
(b) Power and Authority. Each Guarantor has the corporate power and
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authority to enter into, execute, deliver and carry out the terms of this
Guaranty and the other Investment Documents to which it is a party and to incur
the obligations provided for herein and therein, all of which have been duly
authorized by all proper and necessary action and are not prohibited by the
organizational instruments of such Guarantor.
(c) Binding Obligation. This Guaranty and the other Investment
------------------
Documents to which a Guarantor is a party, when executed and delivered, will
constitute the valid and legally binding obligations of such Guarantor,
enforceable against such Guarantor in accordance with their respective terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and equitable principles.
(d) No Conflict. The execution, delivery and performance by such
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Guarantor of this Guaranty and each of the other Investment Documents to which
it is a party and the consummation of the transactions contemplated thereby do
not and will not: (1) violate any provision of law applicable to such Guarantor,
the certificate of incorporation or bylaws of such Guarantor, or any order,
judgment or decree of any court or other agency of government binding on such
Guarantor; (2) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any contractual obligation of
such Guarantor; (3) result in or require the creation or imposition of any
material lien upon any of the properties or assets of such Guarantor; or (4)
require any approval or consent of any person under any contractual obligation
of such Guarantor, except for (a) such approvals or consents obtained on or
before the Closing Date and (b) such violations, conflicts, breaches, liens and
defaults which would not have, and such approvals and consents the absence of
which would not have, either individually or in the aggregate, a Material
Adverse Effect.
(e) Government Consents. The execution, delivery and performance by
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such Guarantor of this Guaranty and each of the other Investment Documents to
which it is a party, and the consummation of the transactions contemplated
thereby do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by any federal, state or other
governmental authority or regulatory body except filings, authorizations,
consents and approvals, all of which have been made or obtained or the absence
of which would not have, either individually or in the aggregate, a Material
Adverse Effect.
(f) Litigation; Adverse Facts. Except as set forth in Schedule 4.14
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to the Investment Agreement, there are no judgments outstanding against such
Guarantor or affecting any of its property nor is there any action, charge,
claim, demand, suit, proceeding, petition, governmental investigation or
arbitration now pending or, to the best knowledge of such Guarantor after due
inquiry, threatened against or affecting such Guarantor and/or any of its
property. Such Guarantor has not received any opinion or memorandum or legal
advice from legal counsel to the effect that it is exposed to any liability or
disadvantage which could
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reasonably be expected to result in any Material Adverse Effect. The actions,
charges, claims, demand, suits, proceedings, petitions, investigations and
arbitrations set forth on such subschedule will not, if adversely determined,
either individually or in the aggregate, result in any Material Adverse Effect
and no not relate to and will not affect the consummation of the transactions
contemplated by the Investment Documents to which such Guarantor is a party.
(g) Payment of Taxes. All material tax returns and reports required
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to be filed by such Guarantor have been timely filed, and all taxes,
assessments, fees and other governmental charges upon such Guarantor and upon
its properties, assets, income and franchises which are shown on such returns as
due and payable have been paid when due and payable. None of the United States
income tax returns of such Guarantor are under audit. No tax liens have been
filed and no claims are being asserted with respect to any such taxes. The
charges, accruals and reserves on the books of such Guarantor in respect of any
taxes or other governmental charges are in accordance with GAAP.
(h) Burdensome Obligations; Solvency. After giving effect to the
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transactions contemplated by this Guaranty and the other Investment Documents to
which such Guarantor is a party, such Guarantor (i) will not be a party to or be
bound by any franchise, agreement, deed, lease or other instrument, or be
subject to any restriction, which is so unusual or burdensome, so as to cause,
in the foreseeable future, a Material Adverse Effect, (ii) does not intend to
incur, and does not believe that it will incur, debts beyond its ability to pay
such debts as they become due, (iii) owns and will own property, the fair
saleable value of which is (I) greater than the total amount of its liabilities
(including contingent liabilities) and (II) greater than the amount that will be
required to pay the probable liabilities of its then existing debts as they
become absolute and matured, and (iv) has and will have capital that is not
unreasonably small in relation to its business as presently conducted and as
proposed to be conducted. Such Guarantor does not presently anticipate that
future expenditures needed to meet the provisions of federal or state statutes,
orders, rules or regulations will be so burdensome so as to have, either
individually or in the aggregate, a Material Adverse Effect.
5. Waivers. The Guarantors hereby jointly and severally expressly waive
to the extent permitted by applicable law: (a) notice of acceptance of this
Guaranty by the Holder; (b) presentment, demand, notice of dishonor, protest,
and any and all notices and demands of every kind that may be required to be
given by any statute or rule or law, except as required by the express terms of
the Debentures, Investment Agreement or other Investment Documents; (c) any
defense arising by reason of any disability or other defense of the Company; (d)
except as provided herein, any right to participate in any security now or later
held by the Holder; (e) any right to enforce any remedies the Holder now has, or
later may have, against the Company as a result of making payments hereunder,
except as set forth in Section 3(b); and (f) diligence in collection or
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protection of, or realization upon, any of the Guaranteed Obligations or any
other obligation hereunder, or any security for or guaranty of any of the
foregoing, and any and all formalities that otherwise might be legally required
to charge any of the Guarantors with liability to the extent provided hereunder.
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6. Successive Actions. Each Guarantor agrees that one or more successive
actions may be brought against any Guarantor, as often as the Holder deems
advisable, until all of the Guaranteed Obligations are paid and performed in
full.
7. No Waiver of Rights. No delay or failure on the part of the Holder to
exercise any right, power or privilege under this Guaranty or any of the other
Investment Documents shall operate as a waiver thereof, and no single or partial
exercise of any right, power or privilege shall preclude any other or further
exercise thereof or the exercise of any other power or right, or be deemed to
establish a custom or course of dealing or performance between the parties
hereto.
8. No Modification Without Writing. This Guaranty may not be modified,
amended, revised, revoked, terminated, changed or varied in any way whatsoever,
except by the express terms of a writing signed by the party or parties sought
to be bound thereby.
9. Severability. Whenever possible, each provision of this Guaranty shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty shall be held invalid or ineffective, such
ineffectiveness or invalidity shall not affect any other provisions of this
Guaranty, and this Guaranty shall be construed as if such ineffective or invalid
provision had never been contained therein.
10. Capitalized Terms. Any term capitalized but not defined herein, which
is capitalized and defined in the Investment Agreement shall have the same
meaning for purposes of this Guaranty as it has for purposes of the Investment
Agreement.
11. Successors and Assigns. This Guaranty shall inure to the benefit of
the Holder, and shall bind each of the Guarantors and their respective heirs,
legal representatives, successors and assigns.
12. Costs and Expenses. Each Guarantor agrees to pay on demand all costs
and expenses incurred by or on behalf of the Holder (including, without
limitation attorneys' fees and expenses) in enforcing the obligations of such
Guarantor under this Guaranty.
13. Joinder. Each Guarantor agrees that any action to enforce this
Guaranty may be brought against Guarantor without any reimbursement or joinder
of Company or any other guarantor of the Guaranteed Obligations in such action.
14. Notice. Notice shall be given under this Guaranty in accordance with
Section 8.1 of the Investment Agreement. The address of the Company shall be
deemed the address of each of the Guarantors for purposes of delivering notice
under this Guaranty and under any of the Investment Documents.
15. Governing Law. This Guaranty shall be deemed to have been made in the
State of Maryland. This Guaranty shall be governed and controlled as to
interpretation, enforcement, validity, construction, effect and in all other
respects by the laws, statutes and decisions of the State of Maryland (excluding
conflicts of
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laws provisions). The undersigned, in order to induce the Holder to accept this
Guaranty, and for other good and valuable consideration, the receipt and
sufficiency of which hereby is acknowledged, agree that all actions or
proceedings arising directly, indirectly or otherwise in connection with or
related to this Guaranty shall be litigated, at Holder's sole discretion and
election, only in courts having a situs within the State of Maryland. The
GuarantorS hereby consent and submit to the jurisdiction of any local, state or
federal court located within Maryland. The undersigned hereby agree that service
of process hereunder may be accomplished and shall constitute personal service
of such process upon the undersigned if notice is mailed by certified mail to
the undersigned at the address set forth below after the signature of the
undersigned. The undersigned hereby waive any right they may have to transfer or
change the venue of any litigation brought against them by the Holder on this
Guaranty in accordance with this paragraph. The undersigned hereby knowingly,
voluntarily, and intentionally waive the rights they may have to a trial by jury
in any litigation based hereon, or arising out of, under or in connection with
this Guaranty. This provision is a material inducement for the Holder to enter
into the contemplated transactions. The Holder hereby waives the right to jury
trial to the same extent as such right is waived by the undersigned.
16. Waiver of Rights Against Company. Notwithstanding anything to the
contrary which may be contained herein except as set forth in Section 3(b)
hereof, each Guarantor hereby unconditionally and irrevocably agrees that such
Guarantor (i) will not assert against the Company any right or claim, at law or
in equity, to indemnification, reimbursement, contribution, restitution or
payment for or with respect to any and all amounts such Guarantor may pay or be
obligated to pay to the Holder, including, without limitation, the Guaranteed
Obligations, and any and all other obligations which such Guarantor may perform,
satisfy or discharge, under or with respect to this Guaranty, (ii) waives and
releases all such rights and claims, at law or in equity, to indemnification,
reimbursement, contribution, restitution or payment which such Guarantor may
have now or at any time against Company and (iii) will not assign or otherwise
transfer any such right or claims to any other person. Each Guarantor further
unconditionally and irrevocably agrees that such Guarantor shall have no right
of subrogation, and waives any right to enforce any remedy which the Holder now
have or hereafter may have against Company and waives any defense based upon an
election of remedies by the Holder, which destroys or otherwise impairs any
subrogation rights of such Guarantor and/or the right of such Guarantor to
proceed against Company for reimbursement.
17. Incorporation of Recitals. The Recitals are incorporated herein by
reference.
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IN WITNESS WHEREOF, this Guaranty has been executed and delivered under
seal by the undersigned as of the date first above written.
ATTEST/WITNESS: ORC, INC.,
a Delaware corporation
/s/ Douglas L. Cox By: /s/ Douglas L. Cox (SEAL)
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Name: Douglas L. Cox
Title: Secretary
ORC TELESERVICE CORP.,
a Delaware corporation
/s/ Douglas L. Cox By: /s/ John F. Short (SEAL)
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Name: John F. Short
Title: President
ORC PROTEL, INC.,
a Delaware corporation
/s/ Douglas L. Cox By: /s/ John F. Short (SEAL)
------------------------- -------------------------
Name: John F. Short
Title: President
MACRO INTERNATIONAL, INC.,
a Delaware corporation
/s/ Douglas L. Cox By: /s/ Douglas L. Cox (SEAL)
------------------------- -------------------------
Name: Douglas L. Cox
Title: Vice President
QUANTUM RESEARCH CORPORATION,
a Maryland corporation
/s/ Douglas L. Cox By: /s/ Douglas L. Cox (SEAL)
------------------------- -------------------------
Name: Douglas L. Cox
Title: Vice President
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STATE OF Pennsylvania)
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) SS:
CITY/COUNTY OF Philadelphia)
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I HEREBY CERTIFY that on this 25/th/ day of May, 1999, before me, the
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undersigned officer, personally appeared Douglas L. Cox, who acknowledged
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himself/herself to be the Secretary of ORC, Inc., and that (s)he, in such
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capacity, being authorized to do so, executed the foregoing instrument for the
purposes therein contained, by signing the name of corporation, as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
/s/ N. James Peljae
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Notary Public
My Commission expires:
STATE OF Pennsylvania )
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) SS:
CITY/COUNTY OF Philadelphia )
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I HEREBY CERTIFY that on this 25/th/ day of May, 1999, before me, the
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undersigned officer, personally appeared John F. Short, who acknowledged
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himself/herself to be the President of ORC Teleservice Corp., and that (s)he,
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in such capacity, being authorized to do so, executed the foregoing instrument
for the purposes therein contained, by signing the name of the corporation, as
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such officer.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
/s/ N. James Peljae
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Notary Public
My Commission expires:
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STATE OF Pennsylvania)
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) SS:
CITY/COUNTY OF Philadelphia)
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I HEREBY CERTIFY that on this 25/th/ day of May, 1999, before me, the
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undersigned officer, personally appeared John F. Short, who acknowledged
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himself/herself to be the President of ORC Protel, Inc., and that (s)he, in such
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capacity, being authorized to do so, executed the foregoing instrument for the
purposes therein contained, by signing the name of the corporation as such
officer.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
/s/ N. James Peljae
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Notary Public
My Commission expires:
STATE OF Pennslvania )
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) SS:
CITY/COUNTY OF Philadelphia )
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I HEREBY CERTIFY that on this 25/th/ day of May, 1999, before me, the
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undersigned officer, personally appeared Douglas L. Cox, who acknowledged
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himself/herself to be the Vice President of Macro International, Inc., and that
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(s)he, in such capacity, being authorized to do so, executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation, as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
/s/ N. James Peljae
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Notary Public
My Commission expires:
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STATE OF Pennsylvania)
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) SS:
CITY/COUNTY OF Philadelphia)
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I HEREBY CERTIFY that on this 25/th/ day of May, 1999, before me, the
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undersigned officer, personally appeared Douglas L. Cox, who acknowledged
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himself/herself to be the Vice President of Quantum Research Corporation, and
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that (s)he, in such capacity, being authorized to do so, executed the foregoing
instrument for the purposes therein contained, by signing the name of the
partnership, as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
/s/ N. James Peljae
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Notary Public
My Commission expires:
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