E-445
Exhibit No. 16
Form 8-K
Headway Corporate Resources, Inc.
SEC File No. 0-23170
INTELLECTUAL PROPERTY SECURITY AGREEMENT
THIS INTELLECTUAL PROPERTY SECURITY AGREEMENT (this
"Agreement") dated as of March 19, 1998 is made between HEADWAY
CORPORATE RESOURCES, INC.
a Delaware corporation (the "Borrower"), EACH OF THE UNDERSIGNED
SUBSIDIARIES OF THE BORROWER (each a "Grantor" and together with
the Borrower, the "Grantors") in favor of NATIONSBANK, NATIONAL
ASSOCIATION, a national banking association organized and
existing under the laws of the United States, as agent (the
"Agent") for each of the lenders (the "Lenders" and collectively
with the Agent, the "Secured Parties") now or hereafter party to
the Credit Agreement (as defined below). All capitalized terms
used but not otherwise defined herein shall have the respective
meanings assigned thereto in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Secured Parties have agreed to provide to the
Borrower a certain revolving credit facility with a letter of
credit sublimit pursuant to the Credit Agreement dated as of
March 19, 1998 among the Borrower, the Agent and the Lenders (as
from time to time amended, revised, modified, supplemented, or
amended and restated the "Credit Agreement"); and
WHEREAS, each of the Grantors other than the Borrower is,
directly or indirectly, a wholly-owned Subsidiary of the
Borrower; and
WHEREAS, each Grantor other than the Borrower has entered
into that certain Guaranty Agreement dated as of the date hereof
(the "Guaranty") pursuant to which it has jointly and severally
guaranteed payment and performance of the Borrower's Obligations
under the Credit Agreement; and
WHEREAS, each Grantor will materially benefit from the
Loans and Advances to be made, and the Letter of Credit to be
issued, under the Credit Agreement; and
WHEREAS, as collateral security for payment and performance
of the Borrower's Obligations under the Credit Agreement and each
other Grantor's Guarantors' Obligations, as defined in the
Guaranty, each Grantor is willing to grant to the Agent for the
benefit of the Secured Parties a security interest in the assets
described herein; and
WHEREAS, the Secured Parties are unwilling to enter into
the Loan Documents unless the Grantors enter into this Agreement;
NOW, THEREFORE, in order to induce the Secured Parties to
enter into the Loan Documents and to make Loans and Advances and
issue Letters of Credit and in consideration of the premises and
the mutual covenants contained herein, the parties hereto agree
as follows:
1. Grant of Security Interest. Each Grantor hereby grants
a security interest in and collaterally assigns to the Agent, for
the benefit of the Secured Parties, all of the following
(collectively, the "Collateral"):
(a) all of such Grantor's right, title and interest,
whether now owned or hereafter acquired, in and to all
United States and foreign trademarks, trade names, trade
dress, service marks, trademark and service mark
registrations, and applications for trademark or service
mark registration and any renewals thereof (including
without limitation each trademark, trade name, trade dress,
registration and application identified in Schedule I
attached hereto and incorporated herein by reference) and
including all income, royalties, damages and payments now
and hereafter due and/or payable with respect thereto
(including without limitation damages for past or future
infringements thereof), the right to sue or otherwise
recover for all past, present and future infringements
thereof, all rights corresponding thereto throughout the
world (but only such rights as now exist or may come to
exist under applicable local law) and all other rights of
any kind whatsoever of each Grantor accruing thereunder or
pertaining thereto, together in each case with the goodwill
of the business connected with the use of, and symbolized
by, each such trademark and service mark, excluding,
however, the trademarks "Viva," "On-Line" and "Delinko"
(collectively, the "Trademarks"); and
(b) all license agreements regarding Trademarks with
any other party, whether such Grantor is a licensor or
licensee under any such license agreement (including without
limitation the licenses listed on Schedule II attached
hereto and incorporated herein by reference), and the right
to prepare for sale, sell and advertise for sale, all
Inventory (as defined in the Security Agreement) now or
hereafter owned by such Grantor and now or hereafter covered
by such licenses (collectively, the "Licenses")); and
(c) all proceeds of any of the foregoing.
In addition, each Grantor has executed in blank and
delivered to the Agent an assignment of licenses and federally
registered trademarks (the "IP Assignment") owned by it in the
form of Exhibit A hereto. Each Grantor hereby authorizes the
Agent to complete as Assignee and record with the United States
Patent and Trademark Office (the "Patent and Trademark Office")
each IP Assignment upon the occurrence of an Event of Default
that is continuing at the time of filing.
2. Security for Obligations. The security interests
granted under this Agreement (the "Security Interests") by each
Grantor secure the payment of all obligations of such Grantor
under, in respect of or in connection with this Agreement, the
Credit Agreement (including without limitation the Borrower's
Obligations thereunder) or the Guaranty (including without
limitation its joint and several "Guarantors' Obligations"
thereunder), respectively, and each other Loan Document to which
such Grantor is or becomes a party (all such obligations being
the "Secured Obligations").
The Security Interests granted by this Agreement are granted
in conjunction with the security interests granted to the Agent,
for the benefit of the Secured Parties, in other assets of each
Grantor pursuant to the other Loan Documents.
3. Collateral Assignment. In addition to, and not in
limitation of, the grant of the Security Interests in the
Trademarks and Licenses in Section 1 above, each Grantor hereby
grants, assigns, transfers, conveys and sets over to the Agent,
for the benefit of the Lenders, the Assignor's entire right,
title and interest in and to the Trademarks and Licenses;
provided, that such grant, assignment, transfer and conveyance
shall become effective only at the election of the Agent after
the occurrence of an Event of Default that is continuing at the
time of such election. The Grantor hereby agrees that after the
effectiveness of such grant, assignment, transfer and conveyance
of any of the Trademarks and Licenses, the use by the Agent of
any of such Trademarks and Licenses shall be without any
liability for royalties or other related charges from the Agent
to any Grantor.
4. Further Assurances.
(a) Each Grantor agrees that from time to time, at the
expense of such Grantor, such Grantor will promptly execute
and deliver all further instruments and documents and take
all further action that may be necessary or desirable in the
Agent's determination, or that the Agent may reasonably
request, in order to (i) continue, perfect and protect any
Security Interest granted or purported to be granted hereby,
(ii) upon the Agent's request, perfect the Agent's (for the
benefit of the Secured Parties) Security Interest in and
assign to the Agent, for the benefit of the Secured Parties,
as security for the repayment and satisfaction of the
Secured Obligations, all Collateral located in any foreign
jurisdiction, and (iii) enable the Agent, for the benefit of
the Lenders, to exercise and enforce its rights and remedies
hereunder with respect to any part of the Collateral.
Without limiting the generality of the foregoing, each
Grantor will execute and file (with the appropriate
governmental offices, authorities, agencies and regulatory
bodies in the United States and, upon the Agent's request,
any applicable foreign jurisdiction) such supplements to
this Agreement and such financing or continuation
statements, or amendments thereto, and such other
instruments or notices, including executed IP Assignments,
with the Patent and Trademark Office, as may be necessary or
desirable, or as the Agent, on behalf of the Secured
Parties, may reasonably request, in order to perfect and
preserve the Security Interests granted hereby.
(b) Each Grantor hereby authorizes the Agent, on
behalf of the Secured Parties, upon the occurrence and
during the continuation of an Event of Default, to file,
where permitted by law, one or more financing or
continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of
such Grantor. A carbon, photographic or other reproduction
of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
(c) Each Grantor will furnish to the Agent, on behalf
of the Secured Parties, from time to time statements and
schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as
the Agent, on behalf of the Secured Parties, may reasonably
request, all in reasonable detail.
(d) Each Grantor agrees that, should it have or obtain
an ownership interest in any trademark or trademark
application that is not now identified on Schedule I or any
license agreement in respect of any trademark that is not
now identified on Schedule II: (i) the provisions of this
Agreement shall automatically apply to such item, and such
item shall automatically become part of the Collateral; and
(ii) such Grantor shall, within three months after acquiring
or becoming aware of such ownership interest, (A) give
written notice thereof to the Agent and, (B) with respect to
Trademarks cause the ownership of such Collateral with
respect to Trademarks and Licenses, prepare, execute and
file in the Patent and Trademark Office or, upon the Agent's
request, in the equivalent agencies in any foreign
jurisdiction, within the requisite time period, all
documents that are known by such Grantor to be necessary or
that the Agent, on behalf of the Secured Parties, reasonably
requests in order to perfect the Security Interest of the
Agent, on behalf of the Secured Parties, therein. Each
Grantor authorizes the Agent, on behalf of the Secured
Parties, to execute and file such a document in the name of
such Grantor if such Grantor fails to do so.
(e) Each Grantor agrees that should any of its
Subsidiaries (other than a corporation which is a party
hereto and whether now or hereafter existing) obtain any
ownership interest in any United States or foreign
intellectual property of a nature that would be Collateral
hereunder if owned by such Grantor, such Grantor shall
either cause such corporation, but with respect to foreign
intellectual property only upon the Agent's request, (i) to
become a party to the Guaranty and a party hereto, or (ii)
to transfer and assign all such corporation's ownership
interests therein to such Grantor, whereupon the provisions
of subsection (d) of this Section 4 shall be applicable
thereto.
(f) Each Grantor agrees: (i) to take all necessary
steps in any proceeding before the Patent and Trademark
Office or any similar office or agency in any other country
or any political subdivision thereof or in any court, to
maintain each trademark now or hereafter included in the
Collateral, including the filing of divisional,
continuation, continuation-inpart and substitute
applications, the filing of applications for reissue,
renewal or extensions, the payment of maintenance fees, and
the participation in interference, reexamination, opposition
and infringement proceedings; (ii) to bear any expenses
incurred in connection with such activities; and (iii) not
to abandon any material pending application with respect to
any of the Collateral, without the prior written consent of
the Agent.
(g) Notwithstanding subsection (f) above, Grantor
shall do any act or omit to do any act whereby any of the
Collateral may become dedicated or abandoned, except where
such dedication or abandonment (i) will not materially
adversely affect the business, condition (financial or
otherwise), operations, performance, or properties of such
Grantor individually or of such Grantor and its Subsidiaries
taken as a whole, and (ii) is in the ordinary course of such
Grantor's business. Each Grantor agrees to notify the Agent
promptly and in writing if it learns that any of the
Collateral may become abandoned or dedicated or of any
adverse determination or any development (including without
limitation the institution of any proceeding in the Patent
and Trademark Office or in the equivalent agencies in any
foreign jurisdiction, or any court) regarding any part of
the Collateral.
(h) In the event that any of the Collateral as to
which it has granted the Security Interests is infringed or
misappropriated by a third party, such Grantor shall
promptly notify the Agent and shall take all reasonable
steps to terminate the infringement or misappropriation, and
take such other actions as such Grantor shall deem
appropriate under the circumstances to protect such
Collateral. Any expense incurred in connection with such
activities shall be borne by such Grantor.
(i) Each Grantor agrees (i) to maintain the quality of
any and all products in connection with which the Collateral
is used, consistent with the quality standards established
by such Grantor for said products as of the date of
determination, and (ii) to provide the Agent, on behalf of
the Secured Parties, at least quarterly, with a certificate
of an officer of such Grantor certifying such Grantor's
compliance with the foregoing subsections (a) through (h).
(j) Each Grantor shall protect its products with
markings or such other measures as are required by statute.
5. General Representations and Warranties. Each Grantor
represents and warrants as follows:
(a) It has the unqualified right to enter into this
Agreement and to perform its terms.
(b) No authorization, consent, approval or other
action by, and no notice to or filing with, any governmental
authority or regulatory body or any other Person is required
either (i) for the grant by such Grantor of the Security
Interests granted hereby (excluding such licenses which, by
their terms, require the consent of the licensor to assign
the license but as to which such Grantor represents and
warrants such consent has been made in writing, copies of
which have been delivered to the Secured Parties) or for the
execution, delivery or performance of this Agreement by such
Grantor, or (ii) for the perfection of or the exercise by
the Agent, on behalf of the Secured Parties, of its rights
and remedies hereunder, except for the filing of this
Agreement with the Patent and Trademark Office and with the
equivalent offices in any foreign jurisdiction with respect
to each Trademark, and the filings required by the Uniform
Commercial Code of the State in which such Grantor maintains
its chief executive office, and except to the extent that
the exercise of rights and remedies may be limited by any
applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors rights
generally or by general principles of equity.
(c) Set forth on Schedule II is a list, which is
complete and accurate in all material respects as of the
date hereof, of Licenses of such Grantor necessary for the
conduct of its business as currently conducted or utilized
and material in such Grantor's commercial operations or
materially used in the performance of executive search,
temporary staffing, pay-rolling and strategic advisory
services, including the expiration date of such Licenses.
(d) Each License of such Grantor identified on
Schedule II is validly subsisting and has not been adjudged
invalid or unenforceable, in whole or in part, and is, to
such Grantor's knowledge, valid and enforceable. No action
or proceeding is pending or threatened seeking to limit,
cancel or question the validity of Collateral.
(e) It has notified the Agent in writing of all uses
of any Trademark prior to such Grantor's use, of which
such Grantor is aware, which would in the reasonable
judgment of such Grantor lead to such item becoming invalid
or unenforceable, including prior unauthorized uses by third
parties and uses that were not supported by the goodwill of
the business connected with such item.
(f) It has not granted any release, covenant not to
sue, or nonassertion assurance to any third person, nor
allowed any shop right to arise with respect to any third
person, with respect to any part of the Collateral.
(g) It has protected its Collateral with markings or
as otherwise required by statute.
(h) The actions contemplated under or in connection
with the Loan Documents will not impair the legal right of
such Grantor to use any of the Collateral.
(i) Except as disclosed to the Lenders in writing
prior to the date of this Agreement, such Grantor has no
knowledge of the existence of any right under any patent,
trademark, license agreement, trade name, trade secret,
knowhow, confidential research, development and commercial
information, or other proprietary information held by any
other Person that would preclude such Grantor from providing
executive search, temporary staffing, pay-rolling and
strategic advisory services (except, in each case, to the
extent that such Grantor has granted an exclusive license to
another Person), or materially interfere with the ability of
such Grantor to carry on its business as currently carried
on, and such Grantor has no knowledge of any claim to the
contrary that is likely to be made.
(j) Such Grantor has used consistent standards of
quality in the provision of each service provided under any
Collateral, and has taken all steps necessary to ensure that
all licensed users of any Collateral use such consistent
standards of quality.
(k) None of such Grantor's Subsidiaries (except to the
extent that such Subsidiaries are also Grantors hereunder)
has an ownership interest in any trademark, trade name,
trade dress, service marks, trademark or service mark
registrations or any applications for trademark or service
mark registration or any other intellectual property of a
nature that would be Collateral hereunder if owned by such
Grantor.
(l) No claim has been made (and, as to Collateral with
respect to which such Grantor is a licensor, to the
knowledge of such Grantor, no claim has been made against
the third party licensee), and such Grantor has no knowledge
of any claim that is likely to be made, that the use by such
Grantor of any Collateral may be reasonably likely to
violate the rights of any Person.
6. Trademark Representations and Warranties. Each Grantor
represents and warrants as follows:
(a) It is the sole, legal and beneficial owner of the
entire right, title and interest in and to the Trademarks
purported to be granted by it hereunder, free and clear of
any Lien, security interest, option, charge, pledge,
registered user agreement, assignment (whether conditional
or not), or covenant, or any other encumbrance, except for
the Security Interests created or permitted by this
Agreement or the Credit Agreement and certain Licenses and
registered user agreements described on Schedule II and any
liens relating to that certain $50,000,000 Senior Credit
Facilities dated September 15, 1997 between the Borrower,
ING (U.S.) Capital Corporation and the various lenders named
therein, which liens are being terminated on the date
hereof. No financing statement or other instrument similar
in effect covering all or any part of the Trademarks
purported to be granted by such Grantor hereunder is on file
in any recording office, including, without limitation, the
Patent and Trademark Office and the equivalent offices in
any foreign jurisdiction, except such as may have been filed
in favor of the Agent, for the benefit of the Lenders.
(b) Set forth on Schedule I is a list of all of the
Trademarks owned by such Grantor necessary for the conduct
of its business as currently conducted or utilized in such
Grantor's commercial manufacturing operations or used in the
selling or marketing of such Grantor's products.
(c) Each Trademark of such Grantor identified on
Schedule I is validly subsisting and has not been abandoned
or adjudged invalid, unregistrable or unenforceable, in
whole or in part, and is, to such Grantor's knowledge,
valid, registrable and enforceable.
7. Transfers and Other Liens. No Grantor shall:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of, or grant any option with
respect to, the Collateral, except as permitted by the
Credit Agreement, except that any Grantor may license the
Collateral (i) in the ordinary course of such Grantor's
business, provided that such license is necessary or
desirable in the conduct of such Grantor's business, or (ii)
in connection with a sale of assets in compliance with the
Credit Agreement, provided that such license shall be on
terms reasonably expected to maximize the gain to such
Grantor resulting from the granting of such license. The
Agent, for the benefit of the Lenders, shall execute any
documents that such Grantor may reasonably request in order
to permit the Grantor to exercise its right hereunder to
license the Collateral, provided that the Agent shall not be
required to do anything that may, in the sole judgment of
the Agent, adversely affect the validity of the Security
Interests or the assignment of the Collateral located in any
foreign jurisdiction;
(b) create or suffer to exist any Lien, security
interest or other charge or encumbrance upon or with respect
to any of the Collateral except for the Security Interests
created by this Agreement; or
(c) take any other action in connection with any of
the Collateral that would impair the value of the interest
or rights of such Grantor in the Collateral taken as a whole
or that would impair the interest or rights of the Agent for
the benefit of the Secured Parties.
8. Agent Appointed AttorneyinFact. Without limiting any
other provision of this Agreement, upon the occurrence and during
the continuance of an Event of Default, each Grantor hereby
irrevocably appoints the Agent, for the benefit of the Lenders,
as such Grantor's attorneyinfact, with full authority in the
place and stead of such Grantor and in the name of such Grantor
or otherwise, from time to time in the Agent's discretion, to
take any action and to execute any instrument that the Agent may
deem necessary or advisable to accomplish the purposes of this
Agreement, including without limitation:
(a) to ask, demand, collect, sue for, recover,
compromise, receive and give acquittance and receipts for
moneys due and to become due under or in respect of any of
the Collateral;
(b) to receive, endorse and collect any drafts or
other instruments, documents and chattel paper in connection
with clause (a) above;
(c) to file any claims or take any action or institute
any proceedings that the Agent may deem necessary or
desirable for the collection of any of the Collateral or
otherwise to enforce the rights of the Agent, for the
benefit of the Secured Parties, with respect to any of the
Collateral; and
(d) to execute, in connection with the sale provided
for in Section 11 hereof, any endorsement, assignments, or
other instruments of conveyance or transfer with respect to
the Collateral.
9. Agent May Perform.
(a) If any Grantor fails to perform any agreement
contained herein, the Agent may itself perform, or cause
performance of, such agreement, and the expenses of the
Agent incurred in connection therewith shall be payable by
such Grantor under Section 12(b) hereof to the fullest
extent permitted by applicable law.
(b) The Agent or its designated representatives shall
have the right to the extent reasonably requested and upon
reasonable prior notice, at any reasonable time during
normal business hours of such Grantors and from time to
time, to inspect the Grantors' premises and to examine the
Grantors' books, records and operations relating to the
Collateral; provided, however, that prior to the occurrence
and continuation of an Event of Default, such right to make
such inspections shall be limited to twice annually.
10. The Agent's Duties. The powers conferred on the Agent,
for the benefit of the Secured Parties, hereunder are solely to
protect the interest of the Secured Parties in the Collateral and
shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder,
neither the Agent nor any Lender shall have any duty as to any
Collateral or as to the taking of any necessary steps to preserve
rights against other parties or any other rights pertaining to
any Collateral. Each Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of the
Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which such party accords
its own similar property.
11. Remedies Upon Acceleration Event. If an Event of
Default shall have occurred and be continuing:
(a) The Agent, for the benefit of the Lenders, may
exercise in respect of the Collateral of any defaulting
Grantor, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and
remedies of a secured party upon default under the Uniform
Commercial Code as in effect in the State of New York (the
"UCC") and also may (i) exercise any and all rights and
remedies of such Grantor under, in connection with, or
otherwise in respect of, such Collateral, including the
completion and filing of the IP Assignment, (ii) require
such Grantor to, and each Grantor hereby agrees that it will
at its expense and upon request of the Agent forthwith,
assemble all or part of the documents embodying such
Collateral as directed by the Agent and make it available to
the Agent, for the benefit of the Lenders, at a place to be
designated by the Agent that is reasonably convenient to
both the Agent and such Grantor, (iii) occupy any premises
owned or leased by such Grantor where documents embodying
such Collateral or any part thereof are assembled for a
reasonable period in order to effectuate the Agent's rights
and remedies hereunder or under applicable law, without
obligation to such Grantor in respect of such occupation,
(iv) license such Collateral or any part thereof, and (v)
without notice except as specified below, sell such
Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Agent's offices or
elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Agent may deem commercially
reasonable. Each Grantor agrees that at least ten days'
notice to such Grantor of the time and place of any public
sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Agent shall
not be obligated to make any sale of the Collateral
regardless of notice of sale having been given. The 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.
(b) All payments received by any defaulting Grantor
under or in connection with any of such Collateral shall be
received in trust for the benefit of the Secured Parties,
shall be segregated from other funds of such Grantor and
shall be immediately paid over to the Agent, for the benefit
of the Secured Parties, in the same form as so received
(with any necessary endorsement).
(c) All payments made under or in connection with or
otherwise in respect of the Collateral of any defaulting
Grantor, and all cash proceeds received by the Agent in
respect of any sale of, collection from, or other
realization upon all or any part of such Collateral may, in
the discretion of the Agent, be held by the Agent, for the
benefit of the Lenders, as collateral for, and then or at
any time thereafter applied (after payment of any amounts
payable to the Agent pursuant to Section 12 hereof) for the
ratable benefit of the Secured Parties against all or any
part of the Secured Obligations, in such order set forth in
Section 10.5 of the Credit Agreement. Any sale or other
disposition of the Collateral and the possession thereof by
the Agent shall be in compliance with all provisions of
applicable law (including applicable provisions of the UCC).
12. Indemnity and Expenses.
(a) Each Grantor agrees to indemnify each of the
Secured Parties from and against any and all claims, losses
and liabilities growing out of or resulting from this
Agreement that are incurred thereby (including without
limitation enforcement of this Agreement), except claims,
losses or liabilities directly resulting from such Secured
Party's gross negligence or willful misconduct.
(b) Each Grantor will upon demand pay to the Agent the
amount of any and all reasonable expenses, including the
reasonable fees and disbursements of its counsel and of any
experts and agents, that the Agent, for the benefit of the
Secured Parties, may incur in connection with (i) the
administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of,
collection from or other realization upon, any of the
Collateral, (iii) the exercise or enforcement of any of the
rights of the Secured Parties, or (iv) the failure by any
Grantor to perform or observe any of the provisions hereof.
13. Absolute Rights and Obligations. All rights of the
Secured Parties in the Security Interests granted hereunder, and
each of the Secured Obligations, shall be absolute and
unconditional irrespective of:
(a) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured
Obligations, or any other amendment or waiver of or any
consent to departure from, the Credit Agreement or any other
Loan Document, including, but not limited to, (i) an
increase or decrease in the Secured Obligations and (ii) an
amendment of any Loan Document to permit the Agent or the
Lenders or any one or more of them to extend further or
additional credit to the Borrower in any form including
credit by way of loan, purchase of assets, guarantee or
otherwise, which credit shall thereupon be and become
subject to the Credit Agreement and the other Loan Documents
as a Secured Obligation;
(b) any taking and holding of collateral or guarantees
(including without limitation any collateral pledged as
security for the Secured Obligations under the other
Security Instruments) for all or any of the Secured
Obligations; or any amendment, alteration, exchange,
substitution, transfer, enforcement, waiver, subordination,
termination or release of any such collateral or guarantees,
or any nonperfection of any such collateral, or any consent
to departure from any such guaranty;
(c) any manner of application of collateral, or
proceeds thereof, securing payment or enforcement of all or
any of the Secured Obligations, or the manner of sale of any
such collateral;
(d) any consent by the Secured Parties to the change,
restructure or termination of the corporate structure or
existence of the Borrower or any Grantor and any
corresponding restructure of the Secured Obligations, or any
other restructure or refinancing of the Secured Obligations
or any portion thereof;
(e) any modification, compromise, settlement or
release by the Secured Parties, by operation of law or
otherwise, collection or other liquidation of the Secured
Obligations or the liability of the Borrower, any Grantor or
any Guarantor or of any collateral for the Secured
Obligation (including without limitation any collateral
pledged as security for the Secured Obligations under the
other Security Instruments), in whole or in part, and any
refusal of payment by the Agent or any Lender in whole or in
part, from any obligor or Guarantor in connection with any
of the Secured Obligations, whether or not with notice to,
or further assent by, or any reservation of rights against,
any Grantor; or
(f) any other circumstance (including without
limitation any statute of limitations) that might otherwise
constitute a defense available to, or a discharge of, the
Borrower, any Guarantor or a Grantor.
The granting of a Security Interest in the Collateral shall
continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Secured Obligations is
rescinded or must otherwise be returned by any Secured Party,
upon the insolvency, bankruptcy or reorganization of the Borrower
or any Grantor or otherwise, all as though such payment had not
been made.
14. Waiver. Each Grantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect
to any of the Secured Obligations and this Agreement and any
requirement that the Secured Parties protect, secure, perfect or
insure any Security Interest or any Collateral subject thereto or
exhaust any right or take any action against any Grantor or any
other Person (including without limitation any Guarantor) or any
collateral securing payment of the Secured Obligations (including
without limitation any collateral pledged as security for the
Secured Obligations under the other Security Instruments).
15. Subrogation. Prior to termination of this Agreement in
accordance with the provisions of Section 17(c) hereof, no
Grantor will exercise any rights that it may acquire by way of
subrogation under this Agreement. If an amount shall be paid to
such Grantor on account of such subrogation rights at any time
prior to termination of this Agreement in accordance with the
provisions of Section 17(c) hereof, such amount shall be held in
trust for the benefit of the Secured Parties and shall forthwith
be paid to the Agent, for the benefit of the Secured Parties, to
be credited and applied upon the Secured Obligations, whether
matured or unmatured, in accordance with the terms of the Credit
Agreement and the Guaranty.
16. Amendments, Etc.
(a) Except as provided in subsection (b) of this
Section 16 no amendment or waiver of any provision of this
Agreement nor consent to any departure by any Grantor
therefrom shall in any event be effective unless the same
shall be in writing and signed by the Agent, and then such
waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
(b) Upon the execution and delivery by any Person of a
supplement to this Agreement, which such supplement shall be
in the form of Exhibit B hereto, pursuant to which such
Person agrees to become a party hereto (each an
"Intellectual Property Security Agreement Supplement"), (i)
such Person or entity shall be referred to as an "Additional
Grantor" and shall be and become a Grantor and each
reference in this Agreement to "Grantor" shall also mean and
be a reference to such Additional Grantor, and (ii) the
schedules attached to each Intellectual Property Security
Agreement Supplement shall be incorporated into and become a
part of and supplement Schedules I and II hereto, and the
Agent may attach such supplements to such Schedules, and
each reference to such Schedules shall mean and be a
reference to such Schedules as supplemented pursuant hereto.
(c) Any person that executes an Intellectual Property
Security Agreement Supplement shall also execute and deliver
such financing statements and all further instruments and
documents and take all further action that may be necessary
or desirable or that the Agent may reasonably request in
order to perfect and protect any Security Interest purported
to be granted thereby.
17. Continuing Security Interest; Assignments Under the
Credit Agreement; Release of Collateral.
(a) This Agreement shall create a continuing Security
Interest in the Collateral and shall (i) remain in full
force and effect until terminated in accordance with the
provisions of Section 17(c) hereof, (ii) be binding upon
each Grantor, its successors and assigns, provided, however,
subject to Section 9.7 of the Credit Agreement, no Grantor
shall make any assignment hereof without the prior consent
of the Agent, and (iii) inure, together with the rights and
remedies of the Secured Parties hereunder, to the benefit of
the Secured Parties and their respective successors,
transferees and assigns. Without limiting the generality of
the foregoing clause (iii), any Lender may assign to one or
more Persons, or grant to one or more Persons participations
in or to, all or any part of its rights and obligations
under the Credit Agreement (to the extent permitted by the
Credit Agreement); and to the extent of any such assignment
or participation such other Person shall, to the fullest
extent permitted by law, thereupon become vested with all
the benefits in respect thereof granted to such Lender
herein or otherwise, subject however, to the provisions of
the Credit Agreement, including Article XI thereof
(concerning the Agent) and Section 12.1 thereof concerning
assignments and participations.
(b) Except as permitted by the Credit Agreement, no
Grantor shall sell, lease, transfer or otherwise dispose of
any item of Collateral during the term of this Agreement
without the prior written consent of the Agent to such sale,
lease, transfer or other disposition.
(c) On the Collateral Termination Date, the Collateral
shall be automatically released from the Liens created
hereby, all rights to the Collateral shall automatically
revert to the Grantors, and this Agreement and all
obligations of the Grantors hereunder shall terminate
without delivery of any instrument or performance of any act
by any party. Upon such termination of this Agreement, the
Agent shall reassign and redeliver such Collateral then held
by or for the Agent and the Lenders and execute and deliver
to each Grantor such documents as it shall reasonably
request to evidence such termination.
18. Additional Collateral. If any Grantor shall acquire or
hold any additional Trademarks not listed on Schedules I or II
hereto which are required to be subject to an Intellectual
Property Security Agreement pursuant to the terms of Article IV,
Section 8.19 or any other provision of the Credit Agreement (any
such Trademarks being referred to herein as the "Additional
Collateral"), such Grantor shall deliver to the Agent for the
benefit of the Lenders (i) a revised Schedule I or II hereto, as
applicable, reflecting the ownership and pledge of such
Additional Collateral and (ii) an Intellectual Property Security
Agreement Supplement in the form of Exhibit B hereto with respect
to such Additional Collateral duly completed and signed by such
Grantor. Each Grantor shall comply with the requirements of this
Section 18 concurrently with the acquisition of any such
Additional Collateral within the time period specified in Article
IV of the Credit Agreement.
19. Definitions. All terms used herein shall be defined in
accordance with the appropriate definitions appearing in the
Uniform Commercial Code as in effect in New York, and such
definitions are hereby incorporated herein by reference and made
a part hereof.
20. Entire Agreement. This Agreement, together with the
Credit Agreement, the Guaranty Agreement and other Loan
Documents, constitutes and expresses the entire understanding
between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings,
inducements, commitments or conditions, express or implied, oral
or written, except as herein contained. The express terms hereof
control and supersede any course of performance or usage of the
trade inconsistent with any of the terms hereof. Neither this
Agreement nor any portion or provision hereof may be changed,
altered, modified, supplemented, discharged, canceled,
terminated, or amended orally or in any manner other than by an
agreement, in writing signed by the parties hereto.
21. Further Assurances. Each Grantor agrees at its own
expense to do such further acts and things, and to execute and
deliver such additional conveyances, assignments, financing
statements, agreements and instruments, as the Agent may at any
time reasonably request in connection with the administration or
enforcement of this Agreement or related to the Collateral or any
part thereof or in order better to assure and confirm unto the
Agent its rights, powers and remedies for the benefit of the
Secured Parties hereunder. Each Grantor hereby consents and
agrees that the issuers of or obligors in respect of the
Collateral shall be entitled to accept the provisions hereof as
conclusive evidence of the right of the Agent, on behalf of the
Secured Parties, to exercise its rights hereunder with respect to
the Collateral, notwithstanding any other notice or direction to
the contrary heretofore or hereafter given by any Grantor or any
other Person to any of such issuers or obligors.
22. Binding Agreement; Assignment. This Agreement, and the
terms, covenants and conditions hereof, shall be binding upon and
inure to the benefit of the parties hereto, and to their
respective successors and assigns, except that no Grantor shall
be permitted to assign this Agreement or any interest herein or
in the Collateral, or any part thereof, or otherwise pledge,
encumber or grant any option with respect to the Collateral, or
any part thereof, or any cash or property held by the Agent as
Collateral under this Agreement. All references herein to the
Agent shall include any successor thereof, each Lender and any
other obligees from time to time of the Obligations.
23. Swap Agreements. All obligations of the Borrower under
Swap Agreements to which any Lender or its affiliates are a party
shall be deemed to be Secured Obligations secured hereby, and
each Lender or affiliate of a Lender party to any such Swap
Agreement shall be deemed to be a Secured Party hereunder.
24. Severability. If any term or provision of this
Agreement is or shall become illegal, invalid or unenforceable in
any jurisdiction, all other terms and provisions of this
Agreement shall remain legal, valid and enforceable in such
jurisdiction and such illegal, invalid or unenforceable provision
shall be legal, valid and enforceable in any other jurisdiction.
25. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together
shall constitute one and the same agreement.
26. Termination. This Agreement and all obligations of
each Grantor hereunder shall terminate on the Collateral
Termination Date, at which time the Liens and rights granted to
the Agent for the benefit of the Secured Parties hereunder shall
automatically terminate and no longer be in effect, and the
Collateral shall automatically be released from the Liens created
hereby. Upon such termination of this Agreement, the Agent
shall, at the sole expense of the Grantors, reassign and
redeliver to each applicable Grantor such Collateral then held by
or for the Agent and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request and take such
further actions as may be necessary to effect the same and as
shall be reasonably acceptable to the Agent.
27. Remedies Cumulative. All remedies hereunder are
cumulative and are not exclusive of any other rights and remedies
of the Agent provided by law or under the Credit Agreement, the
other Loan Documents, or other applicable agreements or
instruments. The making of the Loans to, and issuing of Letters
of Credits for the benefit of, the Borrower pursuant to the
Credit Agreement shall be conclusively presumed to have been made
or extended, respectively, in reliance upon the each Grantor's
grant of a Security Interest in the Collateral pursuant to the
terms hereof.
28. Notices. Any notice required or permitted hereunder
shall be given, (a) with respect to each Pledgor, at the address
of the Borrower indicated in Section 12.2 of the Credit Agreement
and (b) with respect to the Agent or a Lender, at the Agent's
address indicated in Section 12.2 of the Credit Agreement. All
such notices shall be given and shall be effective as provided in
Section 12.2 of the Credit Agreement.
29. Governing Law; Venue; Waiver of Jury Trial.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED,
IN SUCH STATE NOTWITHSTANDING ITS EXECUTION AND DELIVERY
OUTSIDE SUCH STATE.
(b) EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY
AGREES AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY
STATE OR FEDERAL COURT SITTING IN THE COUNTY OF NEW YORK,
STATE OF NEW YORK, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE IN, OR TO THE EXERCISE OF JURISDICTION
OVER IT AND ITS PROPERTY BY ANY SUCH COURT IN ANY SUCH SUIT,
ACTION OR PROCEEDING, AND IRREVOCABLY SUBMITS GENERALLY AND
UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY
SUCH SUIT, ACTION OR PROCEEDING.
(c) EACH GRANTOR AGREES THAT SERVICE OF PROCESS MAY BE
MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND
COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE
PREPAID) TO THE ADDRESS OF THE BORROWER PROVIDED BY SECTION
12.2 OF THE CREDIT AGREEMENT, OR BY ANY OTHER METHOD OF
SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN
THE STATE OF NEW YORK.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF
SHALL PRECLUDE ANY SECURED PARTY FROM BRINGING ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT IN THE COURTS OF ANY
PLACE WHERE ANY GRANTOR OR ANY OF SUCH GRANTOR'S PROPERTY OR
ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT PERMITTED BY
THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH GRANTOR
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH
COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT,
ACTION OR PROCEEDING, OBJECTION TO THE EXERCISE OF
JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER
COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE
UNDER APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED
OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH
THE FOREGOING, EACH GRANTOR AND THE AGENT ON BEHALF OF THE
SECURED PARTIES HEREBY AGREE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY WAIVE,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH
PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION OR
PROCEEDING.
IN WITNESS WHEREOF, the parties have duly executed this
Intellectual Property Security Agreement on the day and year
first written above.
GRANTORS:
HEADWAY CORPORATE RESOURCES, INC.
By: (Signature)
WHITNEY PARTNERS, L.L.C.
HEADWAY CORPORATE STAFFING SERVICES,
INC.
CERTIFIED TECHNICAL STAFFING, INC.
CORPORATE STAFFING ALTERNATIVES, INC.
HEADWAY CORPORATE STAFFING SERVICES
OF NEW YORK, INC.
HEADWAY PERSONNEL, INC.
HEADWAY CORPORATE STAFFING SERVICES
OF NORTH CAROLINA, INC.
HEADWAY CORPORATE STAFFING SERVICES
OF CONNECTICUT, INC.
ASA PERSONNEL SERVICES, L.L.C.
E.D.R. ASSOCIATES, INC.
HCSS WEST, INC.
HCSS HOLDINGS, INC.
HCSS EAST, INC.
CHENEY ASSOCIATES, L.L.C.
By: (Signature)
AGENT:
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By: (Signature)