Subsidiary Security Agreement - ORC Teleservice Corp., Macro International Inc., Quantum Research Corp. and Heller Financial Inc.
SUBSIDIARY SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement") is dated as of _________, 1999
among ORC TELESERVICE CORP., a Delaware corporation ("TeleServices"), ORC
PROTEL, INC., a Delaware corporation ("ProTel"), MACRO INTERNATIONAL, INC., a
Delaware corporation ("Macro") , QUANTUM RESEARCH CORPORATION, a Maryland
corporation ("Quantum") and HELLER FINANCIAL, INC., a Delaware corporation, as
agent ("Agent") for the benefit of all Lenders. TeleServices, ProTel, Macro and
Quantum are sometimes individually referred to herein as a "Debtor" and
collectively as the "Debtors".
W I T N E S S E T H :
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WHEREAS, Opinion Research Corporation, a Delaware corporation ("Parent")
has entered into a Credit Agreement of even date herewith (as the same may
hereafter be amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement") with ORC Inc., the Lenders and Agent, for the
benefit of Agent and all Lenders thereunder, providing for extensions of credit
and other financial accommodations to be made to Parent and ORC, Inc. by Agent
and Lenders; and
WHEREAS, Parent is the legal and beneficial owner, directly or indirectly,
of all of the issued and outstanding capital stock of each Debtor (other than
Macro, with respect to which Parent owns at least 99.7% of the issued and
outstanding capital stock); and
WHEREAS, each Debtor acknowledges that as such a subsidiary of Parent, it
will receive substantial direct and indirect benefits by reason of the making of
Loans to Parent and ORC, Inc. as provided in the Credit Agreement; and
WHEREAS, each Debtor has guaranteed the Obligations pursuant to that
certain Guaranty of even date herewith (the "Guaranty") made by Debtors to
Agent, for the benefit of Agent and Lenders; and
WHEREAS, it is a condition precedent to the obligations of Agent and the
Lenders under the Credit Agreement that Debtors shall have granted the Liens
contemplated by this Agreement;
NOW, THEREFORE, in consideration of the foregoing and in order to induce
Agent and the Lenders to extend credit and make other financial accommodations
under the Credit Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, each Debtor hereby
agrees with Agent, on behalf of and for the benefit of Agent and Lenders, as
follows:
SECTION 1. Definitions
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1.1 Certain Defined Terms. Unless otherwise defined herein, all
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capitalized terms used herein shall have the respective meanings given to such
terms in the Credit Agreement. The following terms, as used herein, have the
meanings set forth below:
"Accounts" means all "accounts" (as defined in the UCC) now owned or
hereafter created or acquired by each Debtor including, without limitation, all
of the following now owned or hereafter created or acquired by each Debtor: (a)
accounts receivable, contract rights, book debts, notes, drafts, chattel paper
and other obligations or indebtedness owing to each Debtor arising from the
sale, lease or exchange of goods or other property and/or the performance of
services; (b) each Debtor's rights in, to and under all purchase orders for
goods, services or other property; (c) each Debtor's rights to any goods,
services or other property represented by any of the foregoing (including
returned or repossessed goods and unpaid sellers' rights of rescission,
replevin, reclamation and rights of stoppage in transit); (d) monies due to or
to become due to each Debtor under all contracts for the sale, lease or exchange
of goods or other property and/or the performance of services (whether or not
yet earned by performance on the part of such Debtor); (e) uncertificated
securities; and (f) Proceeds of any of the foregoing and all collateral security
and guaranties of any kind given by any Person with respect to any of the
foregoing.
"Blocked Accounts" has the meaning assigned to that term in Section 7.
"Collateral" has the meaning assigned to that term in Section 2.
"Collecting Banks" has the meaning assigned to that term in Section 7.
"Copyright License" means any written agreement now or hereafter in
existence granting to any Debtor any right to use any Copyright including,
without limitation, the agreements described in Schedule 1 of the Copyright
Security Agreement.
"Copyrights" means collectively all of the following: (a) all copyrights,
rights and interests in copyrights, works that may be protected by copyright,
copyright registrations and copyright applications now owned or hereafter
created or acquired by each Debtor, including, without limitation, those listed
on Schedule 1 of the Copyright Security Agreement; (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 of any of the foregoing;
(d) the right to sue for past, present and future infringements of any of the
foregoing; (e) all rights corresponding to any of the foregoing throughout the
world; and (f) all goodwill associated with and symbolized by any of the
foregoing.
"Copyright Security Agreement" means a copyright security agreement to be
executed and delivered by a Debtor to Agent, substantially in the form of
Exhibit A, as such agreement may hereafter be amended, supplemented or otherwise
modified from time to time.
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"Depositary Account" has the meaning assigned to that term in Section 7.
"Documents" means all "documents" (as defined in the UCC) or other receipts
covering, evidencing or representing goods now owned or hereafter acquired by a
Debtor.
"Equipment" means all "equipment" (as defined in the UCC) now owned or
hereafter acquired by any Debtor including, without limitation, all machinery,
motor vehicles, trucks, trailers, vessels, aircraft and rolling stock and all
parts thereof and all additions and accessions thereto and replacements
therefor.
"Fixtures" means all of the following now owned or hereafter acquired by
any Debtor: plant fixtures; business fixtures; other fixtures and storage
facilities, wherever located; and all additions and accessions thereto and
replacements therefor.
"General Intangibles" means all "general intangibles" (as defined in the
UCC) now owned or hereafter acquired by any Debtor including, without
limitation, all right, title and interest of any Debtor in and to: (a) all
agreements, leases, licenses and contracts to which such Debtor is or may become
a party; (b) all obligations or indebtedness owing to such Debtor (other than
Accounts) from whatever source arising; (c) all tax refunds; (d) Intellectual
Property; and (e) all trade secrets and other confidential information relating
to the business of such Debtor including by way of illustration and not
limitation: systems and techniques for the analysis, diagnosis and correction
of malfunctions of products used by such Debtor's customers; the names and
addresses of, and credit and other business information concerning, such
Debtor's past, present or future customers; the prices which such Debtor obtains
for its services or at which it sells or leases merchandise; estimating and cost
procedures; profit margins; policies and procedures pertaining to the sale and
design of equipment, components, devices and services furnished by such Debtor;
information concerning suppliers of such Debtor; and information concerning the
manner of operation, business plans, pledges, projections, and all other
information of any kind or character, whether or not reduced to writing, with
respect to the conduct by such Debtor of its business not generally known by the
public.
"Instruments" means all "instruments", "chattel paper" or "letters of
credit" (each as defined in the UCC) including, but not limited to, promissory
notes, drafts, bills of exchange and trade acceptances, now owned or hereafter
acquired by any Debtor.
"Intellectual Property" shall mean collectively all of the following:
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks and
Trademark Licenses.
"Inventory" means all "inventory" (as defined in the UCC), now owned or
hereafter acquired by any Debtor, wherever located including, without
limitation, finished goods, raw materials, work in process and other materials
and supplies (including packaging and shipping materials) used or consumed in
the manufacture or production thereof and goods which are returned to or
repossessed by such Debtor.
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"Investment Property" means all "investment property" (as defined in the
UCC) now owned or hereafter acquired by a Debtor.
"Patent License" means any written agreement now or hereafter in existence
granting to any Debtor any right to use any invention on which a Patent is in
existence including, without limitation, the agreements described in Schedule 1
of the Patent Security Agreement.
"Patents" means collectively all of the following: (a) all patents and
patent applications now owned or hereafter created or acquired by each Debtor
including, without limitation, those listed on Schedule 1 of the Patent Security
Agreement and the inventions and improvements described and claimed therein; (b)
the reissues, divisions, continuations, renewals, extensions and continuations-
in-part of any of the foregoing; (c) all patentable inventions now owned or
hereafter created or acquired by each Debtor; (d) all income, royalties, damages
or payments now and hereafter due and/or payable under any of the foregoing with
respect to any of the foregoing, including, without limitation, damages or
payments for past or future infringements of any of the foregoing; (e) the right
to sue for past, present and future infringements of any of the foregoing; (f)
all rights corresponding to any of the foregoing throughout the world; and (g)
all goodwill associated with any of the foregoing.
"Patent Security Agreement" means a patent security agreement executed and
delivered by a Debtor to Agent, substantially in the form of Exhibit B, as such
agreement may hereafter be amended, supplemented or otherwise modified from time
to time.
"Proceeds" means all proceeds of, and all other profits, rentals or
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or realization upon, any
Collateral including, without limitation, all claims of any Debtor against third
parties for loss of, damage to or destruction of, or for proceeds payable under,
or unearned premiums with respect to, policies of insurance with respect to any
Collateral, and any condemnation or requisition payments with respect to any
Collateral, in each case whether now existing or hereafter arising.
"Secured Obligations" has the meaning assigned to that term in Section 3.
"Security Interests" means the security interests granted pursuant to
Section 2, as well as all other security interests created or assigned as
additional security for the Secured Obligations pursuant to the provisions of
this Agreement.
"Trademark License" means any written agreement now or hereafter in
existence granting to a Debtor any right to use any Trademark, including,
without limitation, the agreements described in Schedule 1 of the Trademark
Security Agreement.
"Trademarks" means collectively all of the following now owned or hereafter
created or acquired by each Debtor: (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, logos, other business
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identifiers, prints and labels on which any of the foregoing have appeared or
appear, all registrations and recordings thereof, and all applications in
connection therewith including registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any State thereof or any other country or any political
subdivision thereof, including, without limitation, those described in Schedule
1 of the Trademark Security Agreement; (b) all reissues, extensions or renewals
thereof; (c) all income, royalties, damages and payments now or hereafter due
and/or payable under any of the foregoing or with respect to any of the
foregoing including damages or payments for past or future infringements of any
of the foregoing; (d) the right to sue for past, present and future
infringements of any of the foregoing; (e) all rights corresponding to any of
the foregoing throughout the world; and (f) all goodwill associated with and
symbolized by any of the foregoing.
"Trademark Security Agreement" means the trademark security agreement
executed and delivered by a Debtor to Agent substantially in the form of
Exhibit C, as such agreement may hereafter be amended, supplemented or otherwise
modified from time to time.
"UCC" means the Uniform Commercial Code as in effect on the date hereof in
the State of Illinois, provided that if by reason of mandatory provisions of
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law, the perfection or the effect of perfection or non-perfection of the
Security Interests in any Collateral or the availability of any remedy hereunder
is governed by the Uniform Commercial Code as in effect on or after the date
hereof in any other jurisdiction, "UCC" means the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such perfection or effect of perfection or non-perfection or availability of
such remedy.
1.2 Other Definition Provisions. References to "Subsections",
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"subsections", "Exhibits" and "Schedules" shall be to Sections, subsections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in subsection 1.1 may, unless
the context otherwise requires, be used in the singular or the plural depending
on the reference. All references to statutes and related regulations shall
include (unless otherwise specifically provided herein) any amendments of same
and any successor statutes and regulations.
SECTION 2. Grant of Security Interests
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In order to secure the prompt and complete payment and performance of the
Secured Obligations in accordance with the terms thereof, each Debtor hereby
grants to Agent, for the benefit of Agent and the Lenders, a continuing security
interest in and to all right, title and interest of such Debtor in the following
property, whether now owned or existing or hereafter acquired or arising and
regardless of where located (all being collectively referred to as the
"Collateral"):
(A) Accounts;
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(B) Inventory;
(C) General Intangibles, other than those agreements, leases, licenses and
contracts to which a Debtor is or may be a party which by their terms prohibit
the assignment thereof without the consent of the other party thereto to the
extent any necessary consents shall not have been obtained (collectively, "Non-
Assignable Contracts");
(D) Documents;
(E) Instruments;
(F) Equipment, other than Equipment subject to purchase money Liens
permitted by the Credit Agreement which prohibit the granting of subordinate
Liens;
(G) Fixtures;
(H) Investment Property;
(I) Any Depositary Account and all other deposit accounts of such Debtor
maintained with any bank or financial institution;
(J) All cash deposited therein from time to time and other monies and
property of such Debtor in the possession or under the control of Agent or any
Lender;
(K) All books, records, ledger cards, files, correspondence, computer
programs, tapes, disks and related data processing software that at any time
evidence or contain information relating to any of the property described in
subparts (A) - (J) above or are otherwise necessary or helpful in the collection
thereof or realization thereon; and
(L) Proceeds of all or any of the property described in subparts (A) - (K)
above.
Notwithstanding the foregoing, so long as no Event of Default has occurred and
is continuing, such Debtor shall have the exclusive, non-transferable right and
license to use the Intellectual Property and the exclusive right to grant to
other Persons licenses and sublicenses with respect to the Intellectual
Property.
SECTION 3. Security for Secured Obligations
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This Agreement secures the prompt and complete payment and performance of
the obligations of Debtors under the Guaranty and all other Loan Documents to
which a Debtor is a party, including all obligations of Debtors now or hereafter
existing under this Agreement and all renewals, extensions, restructurings and
refinancings of any of the above (all such debts,
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obligations and liabilities of Debtors being collectively referred to herein as
the "Secured Obligations").
SECTION 4. Debtor Remains Liable
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Anything herein to the contrary notwithstanding: (a) each Debtor shall
remain liable under the contracts and agreements included in the Collateral to
the extent set forth therein to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed; (b)
the exercise by Agent of any of the rights granted hereunder shall not release
any Debtor from any of its duties or obligations under the contracts and
agreements included in the Collateral; and (c) Agent shall not have any
obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement, nor shall Agent be obligated to perform
any of the obligations or duties of any Debtor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.
SECTION 5. Representations and Warranties
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Each Debtor represents and warrants as follows:
5.1 Binding Obligation. This Agreement is the legally valid and binding
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obligation of such Debtor, enforceable against such Debtor in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, or similar laws or equitable principles relating to
or limiting creditor's rights generally.
5.2 Location of Equipment and Inventory. All of the Equipment and
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Inventory of such Debtor is located at the places specified on Schedule I.
5.3 Ownership of Collateral. Except for the Permitted Encumbrances
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disclosed on Schedule II and the Security Interests, each Debtor owns its
Collateral free and clear of any Lien. No effective financing statement or
other form of lien notice covering all or any part of the Collateral is on file
in any recording office, except for those in favor of Agent and as disclosed on
Schedule II. Except as disclosed on Schedule II, none of the Collateral is in
the possession of any bailee, warehouseman, agent, processor or consignee.
5.4 Office Locations; Fictitious Names. The chief place of business, the
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chief executive office and the office where such Debtor keeps its books and
records are located at the places specified on Schedule I. Such Debtor does not
do business and has not done business during the past five years under any
trade-name or fictitious business name except as disclosed on Schedule III.
5.5 Perfection. This Agreement, and the filing of appropriate financing
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statements and delivery of those documents and instruments required to perfect
the Liens granted hereunder, create a valid, perfected and, except for the
Permitted Encumbrances, first priority security interest in its Collateral
located in the United States , securing the payment of the Secured Obligations,
and all filings and other actions necessary or desirable to perfect and protect
such
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security interest have been duly taken other than registering the Lien on
certificates of title for titled vehicles.
5.6 Governmental Authorizations; Consents. Except for the filing of the
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financing statements referred to in Section 5.5 hereof and the registration of
Liens on certificates of title for titled vehicles, no authorization, approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body or consent of any other Person (including without limitation
any licensor of Intellectual Property or any party to the Purchase Agreement) is
required either (a) the execution, delivery or performance of this Agreement by
such Debtor, (b) for the grant by such Debtor of the security interest granted
hereby or (c) for the perfection of such Security Interests in Collateral
located in the United States or the exercise by Agent of its rights and remedies
hereunder, other than as may be required by the Federal Assignment of Claims
Act.
5.7 Accounts. Each Account constitutes the legally valid and binding
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obligation of the customer obligated to pay the same. The amount represented by
such Debtor to Agent as owing by each customer is the correct amount actually
and unconditionally owing, except for normal cash discounts and allowances where
applicable. No customer has any defense, set-off, claim or counterclaim against
such Debtor that can be asserted against Agent, whether in any proceeding to
enforce Agent's rights in the Collateral or otherwise except defenses, set-offs,
claims or counterclaims that are not, in the aggregate, material to the value of
the Accounts. None of the Accounts is evidenced by a promissory note or other
instrument other than a check.
5.8 Intellectual Property. The Copyrights, Copyright Licenses, Patents,
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Patent Licenses, Trademarks and Trademark Licenses listed on the respective
schedules to each of the Copyright Security Agreement, the Patent Security
Agreement and the Trademark Security Agreement constitute all of the
Intellectual Property owned by the applicable Debtor. The execution, delivery
and performance of this Agreement by such Debtor will not violate or cause a
default under any of the Intellectual Property or any agreement in connection
therewith.
5.9 Accurate Information. All information heretofore, herein or hereafter
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supplied to Agent by or on behalf of such Debtor with respect to the Collateral
is and will be accurate and complete in all material respects.
5.10 Non-Assignable Contracts. Failure to obtain consents to the
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assignment or granting of a security interest in the Non-Assignable Contracts
will not have, and will not reasonably be expected to have, a Material Adverse
Effect. The Non-Assignable Contracts are not material to Parent and its
Subsidiaries taken as a whole.
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SECTION 6. Further Assurances; Covenants
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6.1 Other Documents and Actions. Subject to the provisions of subsection
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2.5 of the Credit Agreement, each Debtor will, from time to time, at its
expense, promptly execute and deliver all further instruments and documents and
take all further action that may be necessary or desirable, or that Agent may
reasonably request, in order to perfect and protect the Security Interests
granted or purported to be granted hereby or to enable Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Debtor will: (a) execute
and file such financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary or desirable, or as Agent
may reasonably request, in order to perfect and preserve the Security Interests
granted or purported to be granted hereby; (b) at any reasonable time, upon
demand by Agent exhibit the Collateral to allow inspection of the Collateral by
Agent or persons designated by Agent; and (c) upon Agent's request, appear in
and defend any action or proceeding that may affect such Debtor's title to or
the Security Interests of the Agent in the Collateral.
6.2 Agent Authorized. Each Debtor hereby authorizes Agent to file one or
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more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without the signature of such Debtor to the
extent permitted by law.
6.3 Corporate or Name Change. Each Debtor will notify Agent promptly in
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writing prior to any change in such Debtor's name, identity or corporate
structure.
6.4 Business Locations. Except for the sale of Inventory in the ordinary
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course of business and dispositions expressly permitted in the Credit Agreement,
each Debtor will keep the Collateral at the locations specified on Schedule I
and those referred to in the next sentence. Each Debtor will give Agent thirty
(30) days prior written notice of any change in such Debtor's chief place of
business, of any new location of business, and of any new location for any of
the Collateral. With respect to any new location (which in any event shall be
within the continental United States), each Debtor will execute such documents
and take such actions as Agent deems necessary to perfect and protect the
Security Interests.
6.5 Bailees. If any Collateral is at any time in the possession or
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control of any warehouseman, bailee, consignee or any of a Debtor's agents or
processors, such Debtor shall, upon the request of Agent, notify such
warehouseman, bailee, consignee, agent or processor of the Security Interests
created hereby and shall instruct such Person to hold all such Collateral for
Agent's account subject to Agent's instructions.
6.6 Instruments. Each Debtor will deliver and pledge to Agent all
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Instruments duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to Agent. Each
Debtor will mark conspicuously all chattel paper with a legend, in form and
substance satisfactory to Agent, indicating that such chattel paper is subject
to the Security Interests and will, upon Agent's request from time to time,
deliver possession thereof to Agent, for the benefit of Agent and the Lenders.
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6.7 Certificates of Title. Upon Agent's request, each Debtor shall
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promptly deliver to Agent any and all certificates of title, applications for
title or similar evidence of ownership of all Equipment and shall cause Agent to
be named as lienholder on any such certificate of title or other evidence of
ownership. Each Debtor shall promptly inform Agent of any acquisitions or
dispositions of Equipment and shall not permit any Equipment to become a fixture
to real estate other than real estate encumbered by the Mortgages.
6.8 Account Covenants. Except as otherwise provided in this subsection
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6.8, each Debtor shall continue to collect, at its own expense, all amounts due
or to become due Debtor under the Accounts. In connection with such
collections, each Debtor may take (and after the occurrence and during the
continuance of an Event of Default, at Agent's direction, shall take) such
action as such Debtor or Agent may deem necessary or advisable to enforce
collection of the Accounts; provided, that Agent shall have the right at any
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time after the occurrence of a Default or an Event of Default to: (a) notify the
customers or obligors under any Account of the assignment of such Account to
Agent, for the benefit of Agent and the Lenders, and to direct such customers or
obligors to make payment of all amounts due or to become due directly to Agent;
(b) enforce collection of any such Accounts; and (c) adjust, settle or
compromise the amount or payment of such Accounts. After the occurrence of a
Default or an Event of Default (I) all amounts and proceeds (including
Instruments) received by each Debtor with respect to the Accounts shall be
received in trust for the benefit of Agent (on behalf of Lenders), shall be
segregated from other funds of such Debtor and shall be forthwith paid over to
Agent in the same form as so received (with any necessary endorsement) pursuant
to Section 7 and (ii) no Debtor shall adjust, settle or compromise the amount or
payment of any Account, or release wholly or partially any customer or obligor
thereof, or allow any credit or discount thereon without the prior consent of
Agent.
6.9 Intellectual Property Covenants. Each Debtor shall concurrently
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herewith deliver to Agent the Copyright Security Agreement, the Patent Security
Agreement and the Trademark Security Agreement and all other documents,
instruments and other items as may be necessary for Agent to file such
agreements with the United States Copyright Office, United States Patent and
Trademark Office and any similar domestic or foreign office, department or
agency. If, before the Secured Obligations are paid in full, any Debtor obtains
any new Intellectual Property or rights thereto or becomes entitled to the
benefit of any Intellectual Property not listed on the respective schedules to
such security agreements, such Debtor shall give to Agent prompt written notice
thereof, and shall amend the respective security agreement to include any such
new Intellectual Property. Each Debtor shall: (a) prosecute diligently any
copyright, patent, trademark or license application at any time pending; (b)
make application on all new copyrights, patents and trademarks as reasonably
deemed appropriate by such Debtor; (c) preserve and maintain all rights in the
Intellectual Property including, without limitation, the prosecution of
infringement actions with respect to the Intellectual Property; and (d) use its
best efforts to obtain any consents, waivers or agreements necessary to enable
Agent to exercise its remedies with respect to the Intellectual Property. No
Debtor shall abandon any right to file a copyright, patent or trademark
application nor shall any Debtor abandon any pending copyright,
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patent or trademark application, or Copyright, Copyright License, Patent, Patent
License, Trademark or Trademark License without the prior written consent of
Agent. Notwithstanding the foregoing, this Section 6.9 shall not apply to any
Intellectual Property which is not material to the operation or financial
condition of a Debtor's business.
6.10 Equipment Covenants. Each Debtor shall cause the Equipment which is
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material to the operations and business of such Debtor to be maintained and
preserved in the same condition, repair and working order as when new, ordinary
wear and tear excepted, and in accordance with any manufacturer's manual, and
shall promptly make or cause to be made all repairs, replacements, and other
improvements in connection therewith that are necessary or desirable to such
end.
6.11 Insurance. Each Debtor shall maintain insurance with respect to the
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Collateral in accordance with the terms of the Credit Agreement.
6.12 Taxes and Claims. Each Debtor will pay promptly when due all property
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and other taxes, assessments and governmental charges or levies imposed upon,
and all claims against, the Collateral (including claims for labor, materials
and supplies), except to the extent the validity thereof is being contested in
good faith.
6.13 Collateral Description. Each Debtor will furnish to Agent, from time
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to time, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as Agent may
reasonably request, all in reasonable detail.
6.14 Use of Collateral. No Debtor will use or permit any Collateral to be
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used unlawfully or in violation of any provision of this Agreement or any
applicable statute, regulation or ordinance or any policy of insurance covering
any of the Collateral.
6.15 Records of Collateral. Each Debtor shall keep full and accurate
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books and records relating to the Collateral and shall stamp or otherwise mark
such books and records in such manner as Agent may reasonably request indicating
that the Collateral is subject to the Security Interests.
6.16 Other Information. Each Debtor will, promptly upon Agent's
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reasonable request, provide to Agent all information and evidence it may
reasonably request concerning the Collateral, and in particular the Accounts, to
enable Agent to enforce the provisions of this Agreement.
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SECTION 7. Bank Accounts; Collection of Accounts and Payments
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On or prior to the Closing Date, Agent and Debtor shall enter into an
Assignment of Deposit Accounts and Bank Agency Agreement with each financial
institution with which such Debtor maintains from time to time any deposit
accounts (general or special). Pursuant to the Assignment of Deposit Accounts
and Bank Agency Agreement(s) and pursuant hereto, each Debtor grants, sells,
conveys, assigns, transfers, pledges and sets over unto Agent, for the benefit
of Agent and the Lenders, all of such Debtor's right, title and interest in and
to such accounts and all funds at any time paid, deposited, credited or held in
such accounts (whether for collection, provisionally or otherwise) or otherwise
in the possession of such financial institutions, and each such financial
institution shall act as agent and pledgee-in-possession for Agent in connection
therewith. Following the Closing Date, no Debtor shall establish any deposit
account with any financial institution except in accordance with the terms of
the Credit Agreement.
Upon the request of Agent from time to time after the occurrence and during
the continuance of an Event of Default, each Debtor shall promptly establish
lock box or blocked accounts (collectively, "Blocked Accounts") in such Debtor's
name with such banks as are acceptable to Agent ("Collecting Banks"), subject to
irrevocable instructions in the form of Exhibit D hereto, to which the obligors
on all Accounts shall directly remit all payments on Accounts and in which such
Debtor will immediately deposit all cash payments made for Inventory or in
respect of Accounts or other cash payments constituting proceeds of Collateral
in the identical form in which such payment was made, whether by cash or check.
In addition, Agent, for the benefit of Agent and the Lenders, may establish one
or more depository accounts at each Collecting Bank or at a centrally located
bank (collectively, the "Depository Account"). Without limitation of the terms
and provisions of the Assignment of Deposit Accounts and Bank Agency
Agreement(s), from and after receipt by any Collecting Bank of written notice
from Agent to such Collecting Bank that an Event of Default has occurred, all
amounts held or deposited in the Blocked Accounts held by such Collecting Bank
shall be transferred to the Depository Account; provided that, prior to such
Collecting Bank's receipt of such notice, such amounts shall be automatically
transferred to such Debtor's operating account for unrestricted use by such
Debtor, provided that any such use is not prohibited by the Credit Agreement.
Subject to the foregoing, each Debtor hereby agrees that all payments received
by Agent or any Lender, whether by cash, check, wire transfer or any other
instrument, whether made to such Blocked Accounts or otherwise received by Agent
or any Lender and whether representing payments on the Accounts or proceeds of
other Collateral, will be the sole and exclusive property of Lenders. Each
Debtor, and any of its Affiliates, employees, agents or other Persons acting for
or in concert with such Debtor, shall, acting as trustee for Agent and Lenders,
receive, as the sole and exclusive property of Lenders, any monies, checks,
notes, drafts or any other payments relating to and/or representing proceeds of
Accounts or other Collateral which come into the possession or under the control
of such Debtor or any Affiliates, employees, agents or other Persons acting for
or in concert with such Debtor, and immediately upon receipt thereof, such
Debtor or such Persons shall deposit the same or cause the same to be deposited,
in kind, in a Blocked Account. Notwithstanding the foregoing, any amounts
contained in Agent's Depository Account or the Blocked Accounts or otherwise
received by Agent in excess of the Secured Obligations then due
12
<PAGE>
and payable shall be the property of the applicable Debtor and shall promptly be
paid over to such Debtor.
SECTION 8. Agent Appointed Attorney-in-Fact
--------------------------------
Each Debtor hereby irrevocably appoints Agent as such Debtor's attorney-in-
fact, with full authority in the place and stead of such Debtor and in the name
of such Debtor, Agent or otherwise, from time to time after the occurrence and
during the continuance of an Event of Default, in Agent's discretion to take any
action and to execute any instrument that Agent may deem necessary or advisable
to accomplish the purposes of this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to Agent;
(b) to ask, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(c) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clauses (a)
and (b) above;
(d) to file any claims or take any action or institute any
proceedings that Agent may deem necessary or desirable for the collection
of any of the Collateral or otherwise to enforce the rights of Agent with
respect to any of the Collateral;
(e) to pay or discharge taxes or Liens, levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Agent in its
sole discretion;
(f) to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, assignments, verifications
and notices in connection with Accounts and other documents (including
without limitation financing statements, continuation statements and other
documents necessary or advisable to perfect the Security Interests)
relating to the Collateral; and
(g) generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though Agent were the absolute owner thereof for all
purposes, and to do, at Agent's option and such Debtor's expense, at any
time or from time to time, all acts and things that Agent deems necessary
to protect, preserve or realize upon the Collateral.
Each Debtor hereby ratifies and approves all acts of Agent made or taken
pursuant to this Section 8. Neither Agent nor any person designated by Agent
shall be liable for any acts or omissions or
13
<PAGE>
for any error of judgment or mistake of fact or law. This power, being coupled
with an interest, is irrevocable so long as this Agreement shall remain in
force.
SECTION 9. Transfers and Other Liens
-------------------------
Except as otherwise permitted by the Credit Agreement, no Debtor shall:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Collateral,
except that each Debtor may sell Inventory in the ordinary course of
business; or
(b) create or suffer to exist any lien, security interest or other
charge or encumbrance upon or with respect to any of the Collateral to
secure indebtedness of any Person except for the Security Interests created
by this Agreement and Permitted Encumbrances disclosed on Schedule II.
SECTION 10. Remedies
--------
If any Event of Default shall have occurred and be continuing, Agent may
exercise in respect of the Collateral, in addition to all other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party on default under the UCC (whether or not the UCC
applies to the affected Collateral) and also may: (a) require any Debtor to, and
each Debtor hereby agrees that it will, at its expense and upon request of Agent
forthwith, assemble all or part of the Collateral as directed by Agent and make
it available to Agent at a place to be designated by Agent which is reasonably
convenient to both parties; (b) withdraw all cash in any of any Debtor's
accounts and apply such monies in payment of the Secured Obligations in the
manner provided in Section 14; (c) without notice or demand or legal process,
enter upon any premises of any Debtor and take possession of the Collateral; and
(d) without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the Agent's
offices or elsewhere, at such time or times, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as Agent may
deem commercially reasonable. Each Debtor agrees that, to the extent notice of
sale shall be required by law, at least ten days notice to such Debtor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute commercially reasonable notification. At any sale of
the Collateral, if permitted by law, Agent may bid (which bid may be, in whole
or in part, in the form of cancellation of indebtedness) for the purchase of the
Collateral or any portion thereof for the account of Agent (on behalf of Agent
and the Lenders). Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. To the extent permitted by law, each Debtor
hereby specifically waives all rights of redemption, stay or appraisal which it
has or may have under any law now existing or hereafter enacted.
14
<PAGE>
SECTION 11. License of Intellectual Property
--------------------------------
Each Debtor hereby assigns, transfers and conveys to Agent, effective upon
the occurrence and during the continuance of any Event of Default, the
nonexclusive right and license to use all Intellectual Property owned or used by
such Debtor together with any goodwill associated therewith, all to the extent
necessary to enable Agent to realize on the Collateral and any successor or
assign to enjoy the benefits of the Collateral. This right and license shall
inure to the benefit of Agent and all of its successors, assigns and
transferees, whether by voluntary conveyance, operation of law, assignment,
transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right and
license is granted free of charge, without requirement that any monetary payment
whatsoever be made to any Debtor by Agent.
SECTION 12. Intentionally Omitted
---------------------
SECTION 13. Limitation on Duty of Agent with Respect to Collateral
------------------------------------------------------
Beyond the safe custody thereof, Agent shall have no duty with respect to
any Collateral in its possession or control (or in the possession or control of
any agent or bailee of Agent) or with respect to any income thereon or the
preservation of rights against prior parties or any other rights pertaining
thereto. Agent shall be deemed to have exercised reasonable care in the custody
and preservation of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which it accords its own
property. Agent shall not be liable or responsible for any loss or damage to
any of the Collateral, or for any diminution in the value thereof, by reason of
the act or omission of any warehouseman, carrier, forwarding agency, consignee
or other agent or bailee selected by Agent in good faith.
SECTION 14. Application of Proceeds
-----------------------
Upon the occurrence and during the continuance of an Event of Default, the
proceeds of any sale of, or other realization upon, all or any part of the
Collateral and any cash held in any of any Debtor's accounts shall be applied:
first, to all fees, costs and expenses incurred by Agent or any Lender with
-----
respect to the Credit Agreement, the other Loan Documents or the Collateral
including, without limitation, those described in subsections 1.3(C), 6.4 and
9.1 of the Credit Agreement and in Section 15 hereof; second, to accrued and
------
unpaid interest on the Secured Obligations (including any interest which but for
the provisions of the Bankruptcy Code, would have accrued on such amounts);
third, to the principal amounts of the Secured Obligations outstanding; and
-----
fourth, to any other indebtedness or obligations of any Debtor owing to Agent or
------
any Lender.
SECTION 15. Expenses
--------
Each Debtor, shall pay all insurance expenses and all expenses of
protecting, storing, warehousing, appraising, insuring, handling, maintaining
and shipping the Collateral, all costs, fees and expenses of perfecting and
maintaining the Security Interests, and any and all excise,
15
<PAGE>
property, sales and use taxes imposed by any state, federal or local authority
on any of the Collateral, or with respect to periodic appraisals and inspections
of the Collateral, or with respect to the sale or other disposition thereof. If
any Debtor fails promptly to pay any portion of the above expenses when due or
to perform any other obligation of such Debtor under this Agreement, Agent or
any other Lender may, at its option, but shall not be required to, pay or
perform the same and charge such Debtor's account for all costs and expenses
incurred therefor and shall provide subsequent notice to such Debtor or Parent
of any amounts so paid, and such Debtor agrees to reimburse Agent or such Lender
therefor on demand. All sums so paid or incurred by Agent or any other Lender
for any of the foregoing, any and all other sums for which any Debtor may become
liable hereunder and all costs and expenses (including attorneys' fees, legal
expenses and court costs) incurred by Agent or any other Lender in enforcing or
protecting the Security Interests or any of their rights or remedies under this
Agreement shall be payable on demand, shall constitute Secured Obligations,
shall bear interest until paid at the highest rate provided in the Credit
Agreement and shall be secured by the Collateral.
SECTION 16. Termination of Security Interests; Release of Collateral
--------------------------------------------------------
Upon payment in full of all Secured Obligations (other than contingent
indemnification obligations to the extent no unsatisfied claim giving rise
thereto has been asserted) and the termination of all Commitments, Risk
Participation Agreements and Lender Letters of Credit, the Security Interests
shall terminate and all rights to the Collateral shall revert to applicable
Debtor. Upon such termination of the Security Interests or release of any
Collateral, Agent will, at the expense of Debtors, execute and deliver to
Debtors such documents as Debtors shall reasonably request to evidence the
termination of the Security Interests or the release of such Collateral, as the
case may be.
SECTION 17. Notices
-------
All notices, approvals, requests, demands and other communications
hereunder shall be given in accordance with the notice provisions of the Credit
Agreement.
SECTION 18. Waivers, Non-Exclusive Remedies
-------------------------------
No failure on the part of Agent to exercise, and no delay in exercising and
no course of dealing with respect to, any right under the Credit Agreement or
this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise by Agent of any right under the Credit Agreement or this
Agreement preclude any other or further exercise thereof or the exercise of any
other right. The rights in this Agreement and the Credit Agreement are
cumulative and are not exclusive of any other remedies provided by law.
SECTION 19. Successors and Assigns
----------------------
This Agreement is for the benefit of Agent and Lenders and their successors
and assigns, and in the event of an assignment of all or any of the Secured
Obligations, the rights hereunder,
16
<PAGE>
to the extent applicable to the Secured Obligations so assigned, may be
transferred with such Secured Obligations. This Agreement shall be binding on
each Debtor and its successors and assigns.
SECTION 20. Changes in Writing
------------------
No amendment, modification, termination or waiver of any provision of this
Agreement or consent to any departure by any Debtor therefrom, shall in any
event be effective without the written concurrence of Agent and such Debtor.
SECTION 21. Applicable Law
--------------
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
SECTION 22. Failure or Indulgence Not Waiver; Remedies Cumulative
-----------------------------------------------------
No failure or delay on the part of Agent or any Lender in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or any other right, power or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 23. Headings
--------
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
SECTION 24. Counterparts
------------
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument and any of the
parties hereto may execute this Agreement by signing any such counterpart.
[remainder of this page intentionally left blank]
17
<PAGE>
Witness the due execution hereof by the respective duly authorized officers
of the undersigned as of the day first above written.
QUANTUM RESEARCH CORPORATION, HELLER FINANCIAL, INC., as Agent
a Maryland corporation
By: /s/ Douglas L. Cox By: /s/ Karen E. Rode
-------------------------- -------------------------------
Name: Douglas L. Cox Name: Karen Rode
Title: Vice President Title: Vice President
FEIN: 03-1320503
------------------------
ORC TELESERVICE CORP., a
Delaware corporation
By: /s/ John F. Short
--------------------------
Name: John F. Short
Title: President
FEIN: 22-3504695
------------------------
ORC PROTEL, INC., a Delaware
corporation
By: /s/ John F. Short
--------------------------
Name: John F. Short
Title: President
FEIN: 52-2069926
------------------------
MACRO INTERNATIONAL INC., a
Delaware corporation
By: /s/ Douglas L. Cox
--------------------------
Name: Douglas L. Cox
Title: Vice President
FEIN: 52-0955232
------------------------
18
<PAGE>
SCHEDULE I
Locations of Equipment, Inventory, Books and
Records, Chief Executive Office, Other Locations
<PAGE>
SCHEDULE II
Other Liens, Security Interests and
Financing Statements; Bailees
<PAGE>
SCHEDULE III
Trade-names and Fictitious Names
(Present and Past Five Years)
<PAGE>
EXHIBIT A
COPYRIGHT SECURITY AGREEMENT
----------------------------
WHEREAS, ____________________, a ____________ corporation ("Grantor") owns
the Copyright registrations and Copyright applications listed on Schedule 1
annexed hereto, and is a party to the Copyright Licenses listed on Schedule 1
annexed hereto; and
WHEREAS, ____________, a __________ corporation ("Parent") has entered into
a Credit Agreement dated as of _______________, 1999 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") with Heller Financial, Inc., as agent ("Agent") for the
benefit of all financial institutions that from time to time become lenders
under the Credit Agreement ("Lenders"), and the Lenders parties thereto,
providing for extensions of credit and other financial accommodations to be made
to Parent by Agent and the Lenders; and
WHEREAS, Grantor is a wholly owned subsidiary of Parent and has guaranteed
the payment and performance of Parent's Obligations pursuant to that certain
Guaranty dated _________, 1999 (the "Guaranty"); and
WHEREAS, pursuant to the terms of a Security Agreement dated as of
_______________, 1999 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "Security Agreement"), among Grantor,
certain other debtors and Agent (in such capacity, "Grantee"), Grantor has
granted to Grantee, for the benefit of Agent and the Lenders a security interest
in substantially all the assets of Grantor including all right, title and
interest of Grantor in, to and under all now owned and hereafter acquired
Copyrights (as defined in the Security Agreement), Copyright registrations,
Copyright applications and Copyright Licenses (as defined in the Security
Agreement), together with the goodwill of the business symbolized by Grantor's
Copyrights and all proceeds thereof, to secure the payment of all amounts owing
by Grantor under the Guaranty and the other Loan Documents to which it is a
party;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee, for the benefit of Grantee and the Lenders a continuing security
interest in all of Grantor's right, title and interest in, to and under the
following (all of the following items or types of property being herein
collectively referred to as the "Copyright Collateral"), whether presently
existing or hereafter created or acquired:
(1) each Copyright, Copyright application and Copyright registration,
together with any reissues, extensions or renewals thereof, including,
without limitation, the Copyright,
<PAGE>
Copyright registrations and Copyright applications referred to in Schedule
1 annexed hereto, and all of the goodwill of the business connected with
the use of, and symbolized by, each Copyright, Copyright registration and
Copyright application;
(2) each Copyright License and all of the goodwill of the business
connected with the use of, and symbolized by, each Copyright License; and
(3) all products and proceeds of the foregoing, including, without
limitation, any claim by Grantor against third parties for past, present or
future (a) infringement or dilution of any Copyright or Copyright
registration including, without limitation, the Copyright and Copyright
registrations referred to in Schedule 1 annexed hereto, the Copyright
registrations issued with respect to the Copyright applications referred in
Schedule 1 and the Copyright licensed under the Copyright License, or (b)
injury to the goodwill associated with any Copyright, Copyright
registration or Copyright licensed under any Copyright License.
This security interest is granted in conjunction with the security interests
granted to Grantee pursuant to the Security Agreement. Grantor hereby
acknowledges and affirms that the rights and remedies of Grantee with respect to
the security interest in the Copyright Collateral made and granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated by reference herein as if fully set forth herein.
IN WITNESS WHEREOF, Grantor has caused this Copyright Security Agreement to
be duly executed by its duly authorized officer as of the ______ day of
___________, 1999.
Acknowledged:
HELLER FINANCIAL, INC., _________________________
as Agent
By:___________________________ By:______________________
Title:_________ Vice President Title:___________________
2
<PAGE>
ACKNOWLEDGEMENT
STATE OF ____________ )
) ss.
COUNTY OF ___________ )
On the ____ day of ____________, 1999 before me personally appeared
______________, to me personally known or proved to me on the basis of
satisfactory evidence to be the person described in and who executed the
foregoing instrument as _____________ of ___________________________, who being
by me duly sworn, did depose and say that he is ______________ of
__________________, the corporation described in and which executed the
foregoing instrument; that the said instrument was signed on behalf of said
corporation by order of its Board of Directors; and that he acknowledged said
instrument to be the free act and deed of said corporation.
_____________________
Notary Public
{Seal}
My commission expires:
_____________________
3
<PAGE>
Schedule 1
to Copyright
Security Agreement
------------------
COPYRIGHT REGISTRATIONS
-----------------------
REG. NO. DATE
-------- ----
COPYRIGHT APPLICATIONS
----------------------
COPYRIGHT LICENSES
------------------
Name of Agreement Parties Date of Agreement
----------------- ------- -----------------
4
<PAGE>
EXHIBIT B
PATENT SECURITY AGREEMENT
-------------------------
_____WHEREAS,_____________________, a _____________ corporation ("Grantor") owns
the Patents and Patent Applications listed on Schedule 1 annexed hereto, and is
a party to the Patent Licenses listed on Schedule 1 annexed hereto; and
WHEREAS, _______________, a ____________ corporation ("Parent") has entered
into a Credit Agreement dated as of _______________, 1999 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") with Heller Financial, Inc., as agent ("Agent") for the
benefit of all financial institutions that from time to time become lenders
under the Credit Agreement ("Lenders"), as the Lenders parties thereto,
providing for extensions of credit and other financial accommodations to be made
to Parent by Agent and the Lenders; and
WHEREAS, Grantor is a wholly owned subsidiary of Parent and has guaranteed
the payment and performance of Parent's Obligations pursuant to that certain
Guaranty dated ____________, 1999 (the "Guaranty"); and
WHEREAS, pursuant to the terms of a Security Agreement dated as of
__________________, 1999 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "Security Agreement"), among Grantor,
certain other debtors and Agent (in such capacity, together with its successors
in such capacity, the "Grantee"), Grantor has granted to Grantee, for the
benefit of Agent and the Lenders a security interest in substantially all the
assets of Grantor including all right, title and interest of Grantor in, to and
under all now owned and hereafter acquired Patents (as defined in the Security
Agreement), Patent applications and Patent Licenses (as defined in the Security
Agreement), and all products and proceeds thereof, to secure the payment of all
amounts owing by Grantor under the Guaranty and other Loan Documents to which it
is a party;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee, for the benefit of Grantee and the Lenders a continuing security
interest in all of Grantor's right, title and interest in, to and under the
following (all of the following items or types of property being herein
collectively referred to as the "Patent Collateral"), whether presently existing
or hereafter created or acquired:
1
<PAGE>
(1) each Patent and Patent application, including, without limitation,
each Patent and Patent application referred to in Schedule 1 annexed
hereto, together with any reissues, continuations or extensions thereof;
(2) each Patent License, including, without limitation, each Patent
License listed on Schedule 1 annexed hereto; and
(3) all products and proceeds of the foregoing, including, without
limitation, any claim by Grantor against third parties for past, present or
future infringement of any Patent, including, without limitation, any
Patent referred to in Schedule 1 annexed hereto, any Patent issued pursuant
to a Patent Applications referred to in Schedule 1 and any Patent licensed
under any Patent License listed on Schedule 1 annexed hereto.
This security interest is granted in conjunction with the security
interests granted to Grantee pursuant to the Security Agreement. Grantor hereby
acknowledges and affirms that the rights and remedies of Grantee with respect to
the security interest in the Patent Collateral made and granted hereby are more
fully set forth in the Security Agreement, the terms and provision of which are
incorporated by reference herein as if fully set forth herein.
IN WITNESS WHEREOF, Grantor has caused this Patent Security Agreement to be
duly executed by its duly authorized officer thereunto as of the ______ day of
_____________, 1999.
Acknowledged:
HELLER FINANCIAL, INC., ____________________
as Agent
By:___________________________ By:_______________________
Title:________ Vice President Title:____________________
2
<PAGE>
ACKNOWLEDGEMENT
STATE OF ____________ )
)ss.
COUNTY OF ___________ )
On the ____ day of ____________, 1999 before me personally appeared
______________, to me personally known or proved to me on the basis of
satisfactory evidence to be the person described in and who executed the
foregoing instrument as _____________ of __________________________________, who
being by me duly sworn, did depose and say that he is ______________ of
___________________________, the corporation described in and which executed the
foregoing instrument; that the said instrument was signed on behalf of said
corporation by order of its Board of Directors; and that he acknowledged said
instrument to be the free act and deed of said corporation.
________________________
Notary Public
{Seal}
My commission expires:
_____________________
3
<PAGE>
Schedule 1
to Patent
Security Agreement
------------------
PATENTS
-------
U.S. Patent No. Date Issued Related Foreign Patents
--------------- ----------- -----------------------
PATENT APPLICATIONS
-------------------
PATENT LICENSES
---------------
Name of Agreement Parties Date of Agreement
----------------- ------- -----------------
4
<PAGE>
EXHIBIT C
TRADEMARK SECURITY AGREEMENT
----------------------------
WHEREAS, ____________________, a ____________ corporation ("Grantor"), owns
the Trademarks, Trademark registrations, and Trademark applications listed on
Schedule 1 annexed hereto, and is a party to the Trademark Licenses listed on
Schedule 1 annexed hereto; and
WHEREAS, _______________, a ____________ corporation ("Parent") has entered
into a Credit Agreement dated as of _______________, 1999 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") with Heller Financial, Inc., as agent ("Agent") for the
benefit of all financial institutions that from time to time become lenders
under the Credit Agreement ("Lenders"), and the Lenders parties thereto,
providing for extensions of credit and other financial accommodations to be made
to Parent by Agent and the Lenders; and
WHEREAS, Grantor is a wholly owned subsidiary of Parent and has guaranteed
the payment and performance of Parent's Obligations pursuant to that certain
Guaranty dated ___________, 1999 (the "Guaranty"); and
WHEREAS, pursuant to the terms of a Security Agreement dated as of
__________, 1999 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "Security Agreement"), among Grantor,
certain other debtors and Agent (in such capacity, "Grantee"), Grantor has
granted to Grantee, for the benefit of Agent and the Lenders a security interest
in substantially all the assets of Grantor including all right, title and
interest of Grantor in, to and under all now owned and hereafter acquired
Trademarks (as defined in the Security Agreement), Trademark registrations,
Trademark applications and Trademark Licenses (as defined in the Security
Agreement), together with the goodwill of the business symbolized by Grantor's
Trademarks, and all proceeds thereof, to secure the payment of all amounts owing
by Grantor under the Guaranty and other Loan Documents to which it is a party;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee, for the benefit of Grantee and the Lenders a continuing security
interest in all of Grantor's right, title and interest in, to and under the
following (all of the following items or types of property being herein
collectively referred to as the "Trademark Collateral"), whether presently
existing or hereafter created or acquired:
1
<PAGE>
(1) each Trademark, Trademark registration and Trademark application,
including, without limitation, the Trademarks, Trademark registrations
(together with any reissues, continuations or extensions thereof) and
Trademark applications referred to in Schedule 1 annexed hereto, and all of
the goodwill of the business connected with the use of, and symbolized by,
each Trademark, Trademark registration and Trademark application;
(2) each Trademark License and all of the goodwill of the business
connected with the use of, and symbolized by, each Trademark License; and
(3) all products and proceeds of the foregoing, including, without
limitation, any claim by Grantor against third parties for past, present or
future (a) infringement or dilution of any Trademark or Trademark
registration including, without limitation, the Trademarks and Trademark
registrations referred to in Schedule 1 annexed hereto, the Trademark
registrations issued with respect to the Trademark applications referred in
Schedule 1 and the Trademarks licensed under any Trademark License, or (b)
injury to the goodwill associated with any Trademark, Trademark
registration or Trademark licensed under any Trademark License.
This security interest is granted in conjunction with the security interests
granted to Grantee pursuant to the Security Agreement. Grantor hereby
acknowledges and affirms that the rights and remedies of Grantee with respect to
the security interest in the Trademark Collateral made and granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated by reference herein as if fully set forth herein.
IN WITNESS WHEREOF, Grantor has caused this Trademark Security Agreement to
be duly executed by its duly authorized officer thereunto as of the ____ day of
___________, 1999.
Acknowledged:
HELLER FINANCIAL, INC., ____________________
as Agent
By:___________________________ By:_______________________
Title:________ Vice President Title:____________________
2
<PAGE>
ACKNOWLEDGEMENT
STATE OF ____________ )
)ss
COUNTY OF ___________ )
On the ____ day of ____________, 1999 before me personally appeared
______________, to me personally known or proved to me on the basis of
satisfactory evidence to be the person described in and who executed the
foregoing instrument as _____________ of _______________________________, who
being by me duly sworn, did depose and say that he is ______________ of
___________________________, the corporation described in and which executed the
foregoing instrument; that the said instrument was signed on behalf of said
corporation by order of its Board of Directors; and that he acknowledged said
instrument to be the free act and deed of said corporation.
________________________
Notary Public
{Seal}
My commission expires:
_____________________
3
<PAGE>
Schedule 1
to Trademark
Security Agreement
------------------
TRADEMARK REGISTRATIONS
-----------------------
MARK REG. NO. DATE
---- -------- ----
TRADEMARK APPLICATIONS
----------------------
TRADEMARK LICENSES
------------------
Name of Agreement Parties Date of Agreement
----------------- ------- -----------------
4
<PAGE>
EXHIBIT D
[FORM OF LOCKBOX LETTER]
______________________, 19___
[Name and Address of
Lockbox Bank]
RE: [name of transaction]
---------------------
Gentlemen:
We hereby notify you that effective ____________________, 19___, we have
transferred to Heller Financial, Inc., a Delaware corporation, as Agent for the
benefit of our Lenders ("Agent"), exclusive ownership and control of our lock-
box account No. ____________________ (the "Lockbox Account") maintained with you
under the terms of the Lockbox Agreement attached hereto as Exhibit A.
We hereby irrevocably instruct you to make all payments to be made by you
out of or in connection with the Lockbox Account as you may be instructed by
Agent.
We also hereby notify you that Agent shall be irrevocably entitled to
exercise any and all rights and to receive from you all information requested by
Agent in respect of or in connection with the Lockbox Account, including,
without limitation, the right to specify when payments are to be made out of or
in connection with the Lockbox Account.
All funds deposited into the Lockbox Account will not be subject to any
deduction, set-off, banker's lien or any other right in favor of any person
other than Agent, except that you may set-off against the Lockbox Account the
face amount of any check deposited in and credited to such Lockbox Account which
is subsequently returned for any reason. Your compensation for providing the
services contemplated herein shall be as mutually agreed between you and us from
time to time and we will continue to pay such compensation.
Please confirm your acknowledgement of and agreement to the foregoing
instructions by signing in the space provided below.
Sincerely yours, Acknowledged and Agreed:
_____________________ [BANK]
By:_________________________ By:_________________________
Title:______________________ Title:______________________
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