CONFORMED COPY
THE INDEBTEDNESS EVIDENCED BY THIS INSTRUMENT IS SUBORDINATED TO THE PRIOR
PAYMENT IN FULL OF THE SENIOR OBLIGATIONS AS SUCH TERM IS DEFINED IN THE
SUBORDINATION AND INTERCREDITOR AGREEMENT DATED AS OF MAY 4, 1998 BY AND
BETWEEN BANK ONE, TEXAS, N.A. AND XXXXXX EQUITY INVESTORS III, L.P.
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of May 4, 1998, between Advanced
Telemarketing Corporation, a Nevada corporation ("GRANTOR"), and Xxxxxx
Equity Investors III, L.P., a Delaware limited partnership ("XXXXXX").
W I T N E S S E T H:
WHEREAS, Xxxxxx has agreed to provide certain financial
accommodations to Grantor and ATC Communications Group, Inc., a Delaware
corporation ("Parent") and Grantor, Xxxxxx and Parent have entered into that
certain Reimbursement and Indemnity Agreement dated May 4, 1998 (including
all annexes, exhibits and schedules thereto, as from time to time amended,
restated, supplemented or otherwise modified, the "REIMBURSEMENT AGREEMENT");
WHEREAS, in order to induce Xxxxxx to enter into the Reimbursement
Agreement and the other Basic Documents, Grantor has agreed to grant a
continuing Lien on the Collateral (as hereinafter defined) to secure the
Obligations;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINED TERMS. All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Reimbursement
Agreement. All other undefined terms contained in this Security Agreement,
unless the context indicates otherwise, have the meanings provided for by
Article 9 of the Texas Uniform Commercial Code ("Code") to the extent the
same are used or defined therein.
2. GRANT OF LIEN.
(a) To secure the prompt and complete payment, performance and
observance of all of the Obligations, Grantor hereby grants, assigns,
conveys, mortgages, pledges, hypothecates and transfers to Thayer a Lien upon
all of its right, title and interest in, to and under all of its personal
property, tangible or intangible, whether now owned by or owing to, or
hereafter acquired by or arising in favor of Grantor (including under any
trade names, styles or derivations thereof), and whether owned or consigned
by or to, or leased from or to, Grantor, and regardless of where located,
including the following (all of which being hereinafter collectively referred
to as the "COLLATERAL"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Documents;
(v) all Equipment;
(vi) all Fixtures;
(vii) all General Intangibles;
(viii) all Goods;
(ix) all Instruments;
(x) all Inventory;
(xi) all Investment Property;
(xii) all Deposit Accounts and other bank accounts and all
deposits therein;
(xiii) all money, cash or cash equivalents of Grantor;
(xiv) to the extent not otherwise included, all Proceeds and
products of the foregoing and all accessions to, substitutions and
replacements for, and rents and profits of, each of the foregoing; and
(xv) in addition all books, records, software programs,
computerized disks and other management and information systems, data or
technology related to any of the foregoing or to the business of Grantor as
a whole.
(b) In addition, to secure the prompt and complete payment,
performance and observance of the Obligations and in order to induce Xxxxxx
as aforesaid, Grantor hereby grants to Xxxxxx a right of set-off against the
property of Grantor held by Xxxxxx, consisting of property described above in
SECTION 2(a) now or hereafter in the possession or custody of or in transit
to Xxxxxx, for any purpose, including safekeeping, collection or pledge, for
the account of Grantor, or as to which Grantor may have any right or power.
-2-
3. XXXXXX'X RIGHTS; LIMITATIONS ON XXXXXX'X OBLIGATIONS.
(a) It is expressly agreed by Grantor that, anything herein to the
contrary notwithstanding, Grantor shall remain liable under each of its
Contracts and each of its Licenses to observe and perform all the conditions
and obligations to be observed and performed by it thereunder. Xxxxxx shall
not have any obligation or liability under any Contract or License by reason
of or arising out of this Security Agreement or the granting herein of a Lien
thereon or the receipt by Xxxxxx of any payment relating to any Contract or
License pursuant hereto. Xxxxxx shall not be required or obligated in any
manner to perform or fulfill any of the obligations of Grantor under or
pursuant to any Contract or License, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by it or
the sufficiency of any performance by any party under any Contract or
License, or to present or file any claims, or to take any action to collect
or enforce any performance or the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
(b) Subject to the Subordination and Intercreditor Agreement,
Xxxxxx may at any time after a Default or an Event of Default shall have
occurred and be continuing, without prior notice to Grantor, notify Account
Debtors, parties to the Contracts and obligors in respect of Instruments and
Chattel Paper, that the Accounts and the right, title and interest of Grantor
in and under such Contracts, Instruments and Chattel Paper have been assigned
to Xxxxxx and that payments shall be made directly to Xxxxxx. Subject to the
Subordination and Intercreditor Agreement, upon the request of Xxxxxx after
the occurrence and during the continuance of any Event of Default, Grantor
shall so notify Account Debtors, parties to Contracts and obligors in respect
of Instruments and Chattel Paper.
(c) Xxxxxx may at any time in Xxxxxx'x own name or in the name of
Grantor communicate with Account Debtors, parties to Contracts, obligors in
respect of Instruments and obligors in respect of Chattel Paper to verify
with such Persons, to Xxxxxx'x satisfaction, the existence, amount and terms
of any such Accounts, Contracts, Instruments or Chattel Paper. If a Default
or Event of Default shall have occurred and be continuing, Grantor, at its
own expense, shall cause the independent certified public accountants then
engaged by Grantor to prepare and deliver to Xxxxxx at any time and from time
to time promptly upon Xxxxxx'x request after the occurrence and during the
continuance of any Event of Default, the following reports with respect to
Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts;
(iii) trial balances; and (iv) a test verification of such Accounts as Xxxxxx
may request. Grantor, at its own expense, shall deliver to Xxxxxx the
results of each physical verification, if any, which Grantor may in its
discretion have made, or caused any other Person to have made on its behalf,
of all or any portion of its Inventory.
4. REPRESENTATIONS AND WARRANTIES. Grantor represents and
warrants that:
(a) Grantor is the sole owner of each item of the Collateral upon
which it purports to xxxxx x Xxxx hereunder, and has good and marketable
title thereto free and clear of any and all Liens other than Permitted
Encumbrances.
-3-
(b) No effective security agreement, financing statement,
equivalent security or Lien instrument or continuation statement covering all
or any part of the Collateral is on file or of record in any public office,
except such as may have been filed (i) by Grantor in favor of Xxxxxx pursuant
to this Security Agreement or the other Basic Documents, and (ii) in
connection with any other Permitted Encumbrances.
(c) This Security Agreement is effective to create a valid and
continuing Lien on and, upon the filing of the appropriate financing
statements in the jurisdictions listed on SCHEDULE I hereto, a perfected Lien
in favor of Xxxxxx on the Collateral with respect to which a Lien may be
perfected by filing pursuant to the Code. Such Lien is prior to all other
Liens, except Permitted Encumbrances, and is enforceable as such as against
any and all creditors of and purchasers from Grantor (other than purchasers
of Inventory in the ordinary course of business). All action by Grantor
necessary or desirable to attach and perfect such Lien on each item of the
Collateral has been duly taken.
(d) SCHEDULE II hereto lists all Instruments and Chattel Paper of
Grantor. All action by Grantor necessary or desirable to protect and perfect
the Lien of Xxxxxx on each item set forth on SCHEDULE II (including the
delivery of all originals thereof to Xxxxxx and the legending of all Chattel
Paper as required by SECTION 5(b) hereof) has been duly taken. The Lien of
Xxxxxx on the Collateral listed on SCHEDULE II hereto is prior to all other
Liens, except Permitted Encumbrances, and is enforceable as such against any
and all creditors of and purchasers from Grantor.
(e) Grantor's chief executive office, principal place of business,
corporate offices, all warehouses and premises where Collateral is stored or
located, and the locations of all of its books and records concerning the
Collateral are set forth on SCHEDULE III hereto.
(f) With respect to the Accounts, except as specifically disclosed
to Xxxxxx (i) they represent bona fide sales of Inventory or rendering of
services to Account Debtors in the ordinary course of Grantor's business and
are not evidenced by a judgment, Instrument or Chattel Paper; (ii) there are
no setoffs, claims or disputes existing or asserted with respect thereto and
Grantor has not made any agreement with any Account Debtor for any extension
of time for the payment thereof, any compromise or settlement for less than
the full amount thereof, any release of any Account Debtor from liability
therefor, or any deduction therefrom except a discount or allowance allowed
by Grantor in the ordinary course of its business for prompt payment and
disclosed to Xxxxxx; (iii) to Grantor's knowledge, there are no facts,
events or occurrences which in any way impair the validity or enforceability
thereof or could reasonably be expected to reduce the amount payable
thereunder as shown on Grantor's books and records and any invoices or
statements delivered to Xxxxxx with respect thereto; (iv) Grantor has not
received any notice of proceedings or actions which are threatened or pending
against any Account Debtor which might result in any adverse change in such
Account Debtor's financial condition; and (v) Grantor has no knowledge that
any Account Debtor is unable generally to pay its debts as they become due.
Further with respect to the Accounts (x) the amounts shown on such records
and all invoices, statements which may be delivered to Xxxxxx with respect
thereto are actually and absolutely owing to Grantor as indicated thereon and
are not in any way contingent; (y) no
-4-
payments have been or shall be made thereon except payments immediately
delivered to the Xxxxxx as required pursuant to the terms the Agreement; and
(z) to Grantor's knowledge, all Account Debtors have the capacity to contract.
(g) With respect to any Inventory, (i) such Inventory is located
at one of Grantor's locations set forth on SCHEDULE III hereto, (ii) no
Inventory is now, or shall at any time or times hereafter be stored at any
other location without Xxxxxx'x prior consent, and if Xxxxxx gives such
consent, Grantor will concurrently therewith obtain, to the extent required
by the Agreement, bailee, landlord and mortgagee agreements, (iii) Grantor
has good, indefeasible and merchantable title to such Inventory and such
Inventory is not subject to any Lien or security interest or document
whatsoever except for the Lien granted to Xxxxxx and except for Permitted
Encumbrances, (iv) except as specifically disclosed to Xxxxxx, such Inventory
is of good and merchantable quality, free from any defects, (v) such
Inventory is not subject to any licensing, patent, royalty, trademark, trade
name or copyright agreements with any third parties which would require any
consent of any third party upon sale or disposition of that Inventory or the
payment of any monies to any third party as a precondition of such sale or
other disposition, and (vi) the completion of manufacture, sale or other
disposition of such Inventory by Xxxxxx following an Event of Default shall
not require the consent of any Person and shall not constitute a breach or
default under any contract or agreement to which Grantor is a party or to
which such property is subject, other than Permitted Encumbrances.
(h) Grantor does not have any interest in, or title to, any
Patent, Trademark or Copyright except as set forth in SCHEDULE IV hereto.
This Security Agreement is effective to create a valid and continuing Lien on
and, upon filing of the Copyright Security Agreements with the United States
Copyright Office and filing of the Patent Security Agreements and the
Trademark Security Agreements with the United States Patent and Trademark
Office, perfected security interests in favor of Xxxxxx in Grantor's Patents,
Trademarks and Copyrights and such perfected security interests are
enforceable as such as against any and all creditors of and purchasers from
Grantor. Upon filing of the Copyright Security Agreements with the United
States Copyright Office and filing of the Patent Security Agreements and the
Trademark Security Agreements with the United States Patent and Trademark
Office and the filing of appropriate financing statements in the
jurisdictions listed on SCHEDULE I hereto, all action necessary or desirable
to protect and perfect Xxxxxx'x Xxxx on Grantor's Patents, Trademarks or
Copyrights shall have been duly taken.
5. COVENANTS. Grantor covenants and agrees with Xxxxxx that from
and after the date of this Security Agreement and until payment in full of
the Obligations:
(a) FURTHER ASSURANCES; PLEDGE OF INSTRUMENTS. Subject to the
Subordination and Intercreditor Agreement, at any time and from time to time,
upon the written request of Xxxxxx and at the sole expense of Grantor,
Grantor shall promptly and duly execute and deliver any and all such further
instruments and documents and take such further actions as Xxxxxx may xxxx
desirable to obtain the full benefits of this Security Agreement and of the
rights and powers herein granted, including (i) using its best efforts to
secure all consents and approvals necessary or appropriate for the assignment
to or for the benefit of Xxxxxx of any License or Contract held
-5-
by Grantor or in which Grantor has any rights not heretofore assigned, (ii)
filing any financing or continuation statements under the Code with respect
to the Liens granted hereunder or under any other Basic Document, (iii)
transferring Collateral to Xxxxxx'x possession if such Collateral consists of
Chattel Paper, Instruments or if a Lien on such Collateral can be perfected
only by possession, or if requested by Xxxxxx, and (iv) obtaining, or using
its best efforts to obtain, waivers of Liens, if any exist, from landlords
and mortgagees in accordance with the Reimbursement Agreement, other than
Permitted Encumbrances. Grantor also hereby authorizes Xxxxxx to file any
such financing or continuation statements without the signature of Grantor to
the extent permitted by applicable law. If any amount payable under or in
connection with any of the Collateral is or shall become evidenced by any
Instrument, such Instrument, other than checks and notes received in the
ordinary course of business, shall be duly endorsed in a manner satisfactory
to Xxxxxx immediately upon Grantor's receipt thereof.
(b) MAINTENANCE OF RECORDS. Grantor shall keep and maintain, at
its own cost and expense, satisfactory and complete records of the
Collateral, including a record of any and all payments received and any and
all credits granted with respect to the Collateral and all other dealings
with the Collateral. Grantor shall xxxx its books and records pertaining to
the Collateral to evidence this Security Agreement and the Liens granted
hereby. All Chattel Paper shall be marked with the following legend: "This
writing and the obligations evidenced or secured hereby are subject to the
security interest of Xxxxxx Equity Investors III, L.P."
(c) Covenants Regarding Patent, Trademark and Copyright Collateral.
(i) Grantor shall notify Xxxxxx immediately if it knows or
has reason to know that any application or registration relating to any
Patent, Trademark or Copyright (now or hereafter existing) may become
abandoned or dedicated, or of any adverse determination or development
(including the institution of, or any such determination or development in,
any proceeding in the United States Patent and Trademark Office, the United
States Copyright Office or any court) regarding Grantor's ownership of any
Patent, Trademark or Copyright, its right to register the same, or to keep
and maintain the same.
(ii) In no event shall Grantor, either directly or through any
agent, employee, licensee or designee, file an application for the
registration of any Patent, Trademark or Copyright with the United States
Patent and Trademark Office, the United States Copyright Office or any
similar office or agency without giving Xxxxxx prior written notice
thereof, and, upon request of Xxxxxx, Grantor shall execute and deliver any
and all Patent Security Agreements, Copyright Security Agreements or
Trademark Security Agreements as Xxxxxx may request to evidence Xxxxxx'x
Xxxx on such Patent, Trademark or Copyright, and the General Intangibles of
Grantor relating thereto or represented thereby.
(iii) Grantor shall take all actions necessary or requested by
Xxxxxx to maintain and pursue each application, to obtain the relevant
registration and to maintain the registration of each of the Patents,
Trademarks and Copyrights (now or hereafter
-6-
existing), including the filing of applications for renewal, affidavits
of use, affidavits of noncontestability and opposition and interference and
cancellation proceedings, unless Grantor shall determine that such Patent,
Trademark or Copyright is not material to the conduct of its business.
(iv) In the event that any of the Patent, Trademark or
Copyright Collateral is infringed upon, or misappropriated or diluted by a
third party, Grantor shall notify Xxxxxx promptly after Grantor learns
thereof. Grantor shall, unless it shall reasonably determine that such
Patent, Trademark or Copyright Collateral is in no way material to the
conduct of its business or operations, promptly xxx for infringement,
misappropriation or dilution and to recover any and all damages for such
infringement, misappropriation or dilution, and shall take such other
actions as Xxxxxx shall deem appropriate under the circumstances to protect
such Patent, Trademark or Copyright Collateral.
(d) INDEMNIFICATION. In any suit, proceeding or action brought by
Xxxxxx relating to any Account, Chattel Paper, Contract, Document, General
Intangible or Instrument for any sum owing thereunder or to enforce any
provision of any Account, Chattel Paper, Contract, Document, General
Intangible or Instrument, Grantor will save, indemnify and keep Xxxxxx
harmless from and against all expense (including reasonable attorneys' fees
and expenses), loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the obligor
thereunder, arising out of a breach by Grantor of any obligation thereunder
or arising out of any other agreement, indebtedness or liability at any time
owing to, or in favor of, such obligor or its successors from Grantor, except
in the case of Xxxxxx, to the extent such expense, loss, or damage is
attributable solely to the gross negligence or willful misconduct of Xxxxxx
as finally determined by a court of competent jurisdiction. All such
obligations of Grantor shall be and remain enforceable against and only
against Grantor and shall not be enforceable against Xxxxxx.
(e) COMPLIANCE WITH TERMS OF ACCOUNTS, ETC. In all material
respects, Grantor will perform and comply with all obligations in respect of
its Accounts, Chattel Paper, Contracts and Licenses and all other agreements
to which it is a party or by which it is bound relating to the Collateral.
(f) LIMITATION ON LIENS ON COLLATERAL. Grantor will not create,
permit or suffer to exist, and will defend the Collateral against, and take
such other action as is necessary to remove, any Lien on the Collateral
except Permitted Encumbrances, and will defend the right, title and interest
of Xxxxxx in and to any of Grantor's rights under the Collateral against the
claims and demands of all Persons whomsoever, other than holders of Permitted
Encumbrances.
(g) LIMITATIONS ON DISPOSITION. Grantor will not sell, lease,
transfer or otherwise dispose of any of the Collateral, or attempt or
contract to do so except as permitted by the Reimbursement Agreement.
(h) FURTHER IDENTIFICATION OF COLLATERAL. Grantor will, if so
requested by Xxxxxx, furnish to Xxxxxx, as often as Xxxxxx requests,
statements and schedules further
-7-
identifying and describing the Collateral and such other reports in
connection with the Collateral as Xxxxxx may reasonably request, all in such
detail as Xxxxxx may specify.
(i) NOTICES. Grantor will advise Xxxxxx promptly, in reasonable
detail, (i) of any Lien (other than Permitted Encumbrances) or claim made or
asserted against any of the Collateral, and (ii) of the occurrence of any
other event which would have a material adverse effect on the aggregate
value of the Collateral or on the Liens created hereunder or under any other
Basic Document.
6. REMEDIES; RIGHTS UPON DEFAULT.
(a) In addition to all other rights and remedies granted to it
under this Security Agreement, the Reimbursement Agreement, the other Basic
Documents and under any other instrument or agreement securing, evidencing or
relating to any of the Obligations, if any Event of Default shall have
occurred and be continuing, Xxxxxx may exercise all rights and remedies of a
secured party under the Code. Without limiting the generality of the
foregoing, Grantor expressly agrees that in any such event Xxxxxx, without
demand of performance or other demand, advertisement or notice of any kind
(except the notice specified below of time and place of public or private
sale) to or upon Grantor or any other Person (all and each of which demands,
advertisements and notices are hereby expressly waived to the maximum extent
permitted by the Code and other applicable law), may forthwith enter upon the
premises of Grantor where any Collateral is located through self-help,
without judicial process, without first obtaining a final judgment or giving
Grantor or any other Person notice and opportunity for a hearing on Xxxxxx'x
claim or action, and may collect, receive, assemble, process, appropriate and
realize upon the Collateral, or any part thereof, and may forthwith sell,
lease, assign, give an option or options to purchase, or sell or otherwise
dispose of and deliver said Collateral (or contract to do so), or any part
thereof, in one or more parcels at a public or private sale or sales, at any
exchange at such prices as it may deem acceptable, for cash or on credit or
for future delivery without assumption of any credit risk. Xxxxxx shall have
the right upon any such public sale or sales and, to the extent permitted by
law, upon any such private sale or sales, to purchase the whole or any part
of said Collateral so sold, free of any right or equity of redemption, which
equity of redemption Grantor hereby releases. Such sales may be adjourned
and continued from time to time with or without notice. Xxxxxx shall have
the right to conduct such sales on Grantor's premises or elsewhere and shall
have the right to use Grantor's premises without charge for such time or
times as Xxxxxx xxxxx necessary or advisable.
Grantor further agrees, at Xxxxxx'x request following the
occurrence and during the continuation of an Event of Default, to assemble
the Collateral and make it available to Xxxxxx at places which Xxxxxx shall
select, whether at Grantor's premises or elsewhere. Until Xxxxxx is able to
effect a sale, lease, or other disposition of Collateral, Xxxxxx shall have
the right to hold or use Collateral, or any part thereof, to the extent that
it deems appropriate for the purpose of preserving Collateral or its value or
for any other purpose deemed appropriate by Xxxxxx. Xxxxxx shall not have
any obligation to Grantor to maintain or preserve the rights of Grantor as
against third parties with respect to Collateral while Collateral is in the
possession of Xxxxxx. Xxxxxx may, if it so elects, seek the appointment of a
receiver or keeper to take
-8-
possession of Collateral and to enforce any of Xxxxxx'x remedies with respect
to such appointment without prior notice or hearing as to such appointment.
Xxxxxx shall apply the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale to the Obligations as provided in
the Reimbursement Agreement, and only after so paying over such net proceeds,
and after the payment by Xxxxxx of any other amount required by any provision
of law, need Xxxxxx account for the surplus, if any, to Grantor. To the
maximum extent permitted by applicable law, Grantor waives all claims,
damages, and demands against Xxxxxx arising out of the repossession,
retention or sale of the Collateral except such as arise solely out of the
gross negligence or willful misconduct of Xxxxxx as finally determined by a
court of competent jurisdiction. Grantor agrees that ten (10) days prior
notice by Xxxxxx of the time and place of any public sale or of the time
after which a private sale may take place is reasonable notification of such
matters. Grantor shall remain liable for any deficiency if the proceeds of
any sale or disposition of the Collateral are insufficient to pay all
Obligations, including any attorneys' fees and other expenses incurred by
Xxxxxx to collect such deficiency.
(b) Except as otherwise specifically provided herein, Grantor
hereby waives presentment, demand, protest or any notice (to the maximum
extent permitted by applicable law) of any kind in connection with this
Security Agreement or any Collateral.
7. GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY. For the
purpose of enabling Xxxxxx to exercise rights and remedies under SECTION 7
hereof (including, without limiting the terms of SECTION 7 hereof, in order
to take possession of, hold, preserve, process, assemble, prepare for sale,
market for sale, sell or otherwise dispose of Collateral) at such time as
Xxxxxx shall be lawfully entitled to exercise such rights and remedies,
Grantor hereby grants to Xxxxxx an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to Grantor) to
use, license or sublicense any Intellectual Property now owned or hereafter
acquired by Grantor, and wherever the same may be located, and including in
such license access to all media in which any of the licensed items may be
recorded or stored and to all computer software and programs used for the
compilation or printout thereof.
8. LIMITATION ON XXXXXX'X DUTY IN RESPECT OF COLLATERAL. Xxxxxx
shall use reasonable care with respect to the Collateral in its possession or
under its control. Xxxxxx shall not have any other duty as to any Collateral
in its possession or control or in the possession or control of any agent or
nominee of Xxxxxx, or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto.
9. REINSTATEMENT. This Security Agreement shall remain in full
force and effect and continue to be effective should any petition be filed by
or against Grantor for liquidation or reorganization, should Grantor become
insolvent or make an assignment for the benefit of any creditor or creditors
or should a receiver or trustee be appointed for all or any significant part
of Grantor's assets, and shall continue to be effective or be reinstated, as
the case may be, if at any time payment and performance of the Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In
-9-
the event that any payment, or any part thereof, is rescinded, reduced,
restored or returned, the Obligations shall be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.
10. NOTICES. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon
any of the parties by any other party, or whenever any of the parties desires
to give and serve upon any other party any communication with respect to this
Security Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be given in
the manner, and deemed received, as provided for in the Reimbursement
Agreement.
11. SEVERABILITY. Whenever possible, each provision of this
Security Agreement shall be interpreted in a manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under applicable law, such provision shall
be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Security Agreement. This Security Agreement is to be read, construed
and applied together with the Agreement and the other Basic Documents which,
taken together, set forth the complete understanding and agreement of Xxxxxx
and Grantor with respect to the matters referred to herein and therein.
12. NO WAIVER; CUMULATIVE REMEDIES. Xxxxxx shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder, and no waiver shall be valid unless in writing, signed by
Xxxxxx and then only to the extent therein set forth. A waiver by Xxxxxx of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which Xxxxxx would otherwise have had on any
future occasion. No failure to exercise nor any delay in exercising on the
part of Xxxxxx, any right, power or privilege hereunder, shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or future exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
hereunder provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights and remedies provided by
law. None of the terms or provisions of this Security Agreement may be
waived, altered, modified or amended except by an instrument in writing, duly
executed by Xxxxxx and Grantor.
13. LIMITATION BY LAW. All rights, remedies and powers provided
in this Security Agreement may be exercised only to the extent that the
exercise thereof does not violate any applicable provision of law, and all
the provisions of this Security Agreement are intended to be subject to all
applicable mandatory provisions of law that may be controlling and to be
limited to the extent necessary so that they shall not render this Security
Agreement invalid, unenforceable, in whole or in part, or not entitled to be
recorded, registered or filed under the provisions of any applicable law.
14. TERMINATION OF THIS SECURITY AGREEMENT. Subject to
-10-
SECTION 10 hereof, this Security Agreement shall terminate upon payment in
full of the Obligations.
15. SUCCESSORS AND ASSIGNS. This Security Agreement and all
obligations of Grantor hereunder shall be binding upon the successors and
assigns of Grantor (including any debtor-in-possession on behalf of Grantor)
and shall, together with the rights and remedies of Xxxxxx hereunder, inure
to the benefit of Xxxxxx, all future holders of any instrument evidencing any
of the Obligations and their respective successors and assigns. No sales of
participations, other sales, assignments, transfers or other dispositions of
any agreement governing or instrument evidencing the Obligations or any
portion thereof or interest therein shall in any manner affect the Lien
granted to Xxxxxx hereunder. Grantor may not assign, sell, hypothecate or
otherwise transfer any interest in or obligation under this Security
Agreement.
16. COUNTERPARTS. This Security Agreement may be executed in any
number of separate counterparts, each of which shall collectively and
separately constitute one and the same agreement.
17. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY
OF THE BASIC DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS SECURITY AGREEMENT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA.
18. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE
STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
DESIRE THAT DISPUTES ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST
COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE, BETWEEN XXXXXX AND GRANTOR ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED IN CONNECTION
WITH, THIS SECURITY AGREEMENT OR ANY OF THE OTHER BASIC DOCUMENTS OR THE
TRANSACTIONS RELATED HERETO OR THERETO.
19. SECTION TITLES. The Section titles contained in this Security
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
-11-
20. NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Security Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Security Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Security Agreement.
21. ADVICE OF COUNSEL. Each of the parties represents to each
other party hereto that it has discussed this Security Agreement and,
specifically, the provisions of SECTION 18 and SECTION 19, with its counsel.
-12-
IN WITNESS WHEREOF, each of the parties hereto has caused this
Security Agreement to be executed and delivered by its duly authorized
officer as of the date first set forth above.
ADVANCED TELEMARKETING CORPORATION, as Grantor
By: /s/ Xxxxx X. Xxxx, Xx.
-------------------------------------------
Name: Xxxxx X. Xxxx, Xx.
Title: Secretary
XXXXXX EQUITY INVESTORS III, L.P.,
By: /s/ Xxxx X. Xxxxxxxxxx
-------------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Member
-13-
SCHEDULE I
to
SECURITY AGREEMENT
FILING JURISDICTIONS
Secretary of State of Texas
Secretary of State of Missouri
Jasper County, Missouri
SCHEDULE II
to
SECURITY AGREEMENT
INSTRUMENTS
AND
CHATTEL PAPER
None
SCHEDULE III
to
SECURITY AGREEMENT
SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL
AND RECORDS CONCERNING COLLATERAL
I. Chief Executive Office and principal place of business of Grantor:
0000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
II. Corporate Offices of Grantor:
0000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
III. Warehouses: None
IV. Other Premises at which Collateral is Stored or Located:
00000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxxx, Xxxxx 00000
0000 Xxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
0000 Xxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
0000 Xxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
V. Locations of Records Concerning Collateral:
0000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
SCHEDULE IV
to
SECURITY AGREEMENT
PATENTS, TRADEMARKS AND COPYRIGHTS
Patent Application Number 08/814,492 filed March 10, 1997, titled "DATA
TRANSFER PROTOCOL;" Inventor is Lin Song, application is assigned of record
to Advanced Telemarketing Corporation.
-18-
