Ex 10.4
COLLATERAL ASSIGNMENT OF MEMBERSHIP INTEREST
THIS COLLATERAL ASSIGNMENT OF MEMBERSHIP INTEREST (the “Agreement”) is
made as of the 31st day of March, 2004, by and between TALX
CORPORATION, a Missouri corporation (the “Assignor”), and LASALLE BANK NATIONAL
ASSOCIATION, a national banking association, as Administrative Agent (“Agent”).
WITNESSETH:
WHEREAS, Assignor obtained an Aggregate Commitment in the principal amount
of up to Forty Million and 00/100 Dollars ($40,000,000.00) pursuant to that
certain Loan Agreement dated March 27, 2002 entered into by the Assignor,
Agent, and Southwest Bank of St. Louis (“Southwest”) (the “Initial Loan
Agreement”), as amended by that First Amendment to Loan Agreement dated July
29, 2002 among Assignor, Agent and Southwest (the “First Amendment”), as
further amended by that Second Amendment to Loan Agreement dated January 27,
2003 among Assignor, Agent, and Southwest (the “Second Amendment”), as further
amended by that Third Amendment to Loan Agreement dated June 30, 2003 among
Assignor, Agent and Southwest (the “Third Amendment”).
WHEREAS, in order to refinance the indebtedness outstanding under the
Initial Loan Agreement, Assignor, Agent, Southwest and the Lender named therein
(hereto collectively the “Lenders”) are entering into that certain Amended and
Restated Loan Agreement of even date herewith increasing the Aggregate
Commitment to an amount up to Eighty Three Million and 00/100 Dollars
($83,000,000.00)(the “Amended and Restated Loan Agreement”) (collectively, the
Initial Loan Agreement as so amended by the First Amendment, Second Amendment,
Third Amendment, and the Amended and Restated Loan Agreement and as may be
amended, restated, and modified from time to time, is referred to herein as the
“Loan Agreement”), pursuant to which loans made to Assignor thereunder (each a
“Loan” and collectively “Loans”) are evidenced by certain Revolving Notes and
Term Notes dated even date therewith in the aggregate amount of up to Eighty
Three Million and 00/100 Dollars ($83,000,000.00) and which are all due and
payable at the times and pursuant to the terms and conditions of the Loan
Agreement (collectively, the Revolving Notes and Term Notes as each may be
amended, restated or modified from time to time, are referred to herein as the
“Notes”). The term “Loan Documents” and all other capitalized terms used
herein and not defined herein have the meanings given to them in the Loan
Agreement;
WHEREAS, Assignor and Lenders acknowledge that portions of the Loans are
being used to finance the purchase of certain assets by TALX Employer Services,
LLC, a Missouri limited liability company (“TES”);
WHEREAS, Assignor has agreed to grant to Agent a security interest in and
to collaterally assign to Agent, all of its right, title and ownership interest
in TES;
WHEREAS, Lenders refuse to make the Loans unless Assignor executes this
Agreement.
NOW, THEREFORE, to induce the Agent to make the Loans to the Assignor and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Assignor hereby jointly and severally agree as follows:
1. Grant of Security Interest; Collateral Assignment. To secure the
complete and timely satisfaction of all liabilities, indebtedness and
obligations of Assignor to Lenders under the Notes, the Loan Agreement, this
Agreement, and any other Loan Documents (collectively, the “Obligations”),
Assignor hereby, jointly and severally, grants to Agent a continuing security
interest in all of Assignor’s present and future right, title and ownership
interest in and to TES and all present and future rights to receive payments
and other distributions from TES, whether they are paid in cash, or in kind or
mixed or howsoever evidenced and all other interests arising under or with
respect to TES (the “LLC Interest”). Until the occurrence of an Event of
Default, Assignor, or any one of them, shall have the right to collect any
amount or thing assigned pursuant to this Agreement payable to Assignor, or any
one of them, by TES. Upon the occurrence of an Event of Default and expiration
of the applicable cure period, however, Assignor authorizes Agent, at its
option, to collect any amount or thing assigned by this Agreement and upon
notification to TES, all such payments shall be made directly to Agent.
Assignor authorizes Agent to endorse and receipt for any such payments and to
apply same to the Obligations.
2. Further Assurances. Assignor agrees that, until all of the Obligations
shall have been satisfied in full and the Notes have been satisfied in
accordance with their terms, they will not enter into any agreement which is
inconsistent with Assignor’s obligations under this Agreement, without Agent’s
prior written consent. Assignor further agrees that at any time and from time
to time, at the expense of Assignor, Assignor will 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 interest and collateral assignment granted or
purported to be granted hereby or to enable Agent to exercise its rights and
remedies hereunder.
3. Event of Default. The term “Event of Default” has the meaning set
forth in the Loan Agreement and the occurrence and continuance of any event or
the existence of any condition which is specified as an Event of Default under
the Loan Agreement shall constitute an Event of Default hereunder.
4. Representations, Warranties and Covenants of Assignor. Assignor
represents, covenants and warrants to Agent that:
(a) Assignor has furnished Agent with true and correct copies of the
articles of organization and operating agreement of TES together with all
amendments thereto;
(b) This Agreement and the assignment of the LLC Interest given
herein does not violate the terms of TES’s articles of organization and
operating agreement or any Material Agreement to which TES or Assignor is
a party and have been authorized by the members of TES;
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(c) Unless an Event of Default shall have occurred, Assignor shall
be entitled to exercise (but only in a manner consistent with the terms
hereof) the voting, consent and other rights and remedies of Assignor
with respect to TES, provided, however, that no action shall be taken or
failed to be taken by Assignor which could reasonably be expected to (i)
directly or indirectly authorize or permit the dissolution, liquidation
or sale of TES or the sale, lease, assignment, transfer or other
disposition of any of the assets of TES; (ii) have the result of
materially and adversely affecting any of the rights of Agent under this
Agreement or the Loan Documents; (iii) violate the terms of this
Agreement or the Loan Documents; (iv) have the effect of impairing the
validity or priority of the security interests created hereunder in favor
of Agent in any manner whatsoever; or (v) cause an Event of Default.
Notwithstanding anything herein to the contrary, in no event shall Agent
have any of the obligations or liabilities of Assignor with respect to
TES by virtue of this Agreement or the exercise of its rights hereunder,
and Assignor hereby covenants and agrees to hold harmless Agent from and
against any and all liability, loss or damage which Agent may suffer by
reason of its security interest in the LLC Interest, except to the extent
cause by Agent’s gross negligence or willful misconduct. If Agent
becomes a substituted member of TES in place of Assignor, Agent shall not
be liable for any of the obligations or liabilities of Assignor with
respect to TES unless expressly agreed to in writing by Agent;
(d) Assignor has not previously and will not further assign,
transfer or encumber the interests hereby assigned to Agent and any such
purported assignment shall be void and of no effect;
(e) Upon the occurrence of an Event of Default, Assignor authorizes
Agent, at its option, to collect any amount or thing assigned by this
Agreement and upon notification to TES, all such payments shall be made
directly to Agent. Assignor authorizes Agent to endorse and receipt for
any such payments and to apply same to the Obligations and, in
furtherance thereof, Assignor appoints and designates Agent as Assignor’s
irrevocable attorney-in-fact to endorse and receipt for checks and to
collect any and all amounts and things assigned hereby;
(f) Assignor has the unqualified right to enter into this Agreement
and perform its terms;
(g) Assignor is the sole member in good standing of TES;
(h) Except for the assignment granted by this Agreement and except
for any liens permitted by the Loan Documents, the LLC Interest is not
subject to any lien, pledge or encumbrance; and
(i) Assignor shall not, without the prior written consent of Agent,
amend or modify TES’s operating agreement or articles of organization,
except to the extent such change could not reasonably be expected to
adversely affect the Agent or the Lenders.
5. Default and Remedies. If any Event of Default shall have occurred,
Agent shall have, in addition to all other rights and remedies given it by this
Agreement, those provided in
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the Loan Documents and those allowed at law or in equity and the rights and
remedies of a secured party under the Uniform Commercial Code. In the event
Agent reasonably believes an Event of Default has occurred, Agent shall have
the right to receive all distributions and payments from TES that otherwise
would be made to Assignor and shall immediately have the right to exercise any
and all right, title and interest of Assignor in and to the LLC Interest,
including the right to vote and to participate in the management of TES. Upon
the occurrence of any Event of Default, Agent shall have the right to sell,
assign or deliver the LLC Interest in a commercially reasonable manner, upon
ten (10) days written notice to TES and without demand or adjustment. Agent
shall apply the proceeds of any sale of the LLC Interest first toward any costs
or expenses incurred by Agent in exercising its rights hereunder and then
towards satisfaction of the Obligations. Assignor hereby waives any claims
which may arise by reason of the fact that the price Agent receives for sale of
the LLC Interest is below market value or insufficient. If the LLC Interest is
sold pursuant to this Agreement and a sufficient sum is not realized to pay in
full the Obligations, Assignor hereby covenants to pay Agent the resulting
deficiency.
6. Termination of Agreement. At such time as Assignor shall completely
satisfy all of the Obligations and the Notes are satisfied in accordance with
their terms, this Agreement shall terminate and Agent shall execute and deliver
to Assignor, at Assignor’s expense, all releases, assignments and other
instruments as may be necessary or proper to re-vest in Assignor full title to
the LLC Interest, subject to any disposition thereof which may have been made
by Agent pursuant hereto.
7. Expenses. Any and all reasonable fees, costs and out-of-pocket
expenses, of whatever kind or nature, including, without limitation, attorneys’
fees and legal expenses, incurred by Agent from and after the date hereof in
connection with the payment or discharge of any taxes, counsel fees,
maintenance fees, encumbrances or otherwise protecting, maintaining or
preserving the LLC Interest, or in defending or prosecuting any actions or
proceedings arising out of or related to this Agreement or the LLC Interest,
shall, to the extent permitted by applicable law, be borne and paid by Assignor
on demand by Agent and until so paid shall be added to the principal amount of
the Obligations and shall bear interest at the interest rate then applicable
under the Loan Documents. Assignor shall indemnify, defend and hold Agent
harmless from and against any losses costs, expenses, damages or liabilities of
any kind whatsoever arising or accruing as a result of Agent’s enforcement or
attempted enforcement of this Agreement or any of the Loan Documents.
8. Financing Statements. Assignor hereby agrees to execute and authorize
Agent to file UCC-1 financing statements, or any other document or instrument
reasonably necessary or desirable in order to evidence and perfect the
assignment and security interest granted under this Agreement.
9 Agent May Act. If Assignor fails to comply with any of its obligations
hereunder, Agent may do so in Assignor’s name or in Agent’s name to the extent
permitted by applicable law, but at Assignor’s expense, and Assignor hereby
agrees to reimburse Agent in full for all reasonable expenses, including,
without limitation, reasonable attorneys’ fees, incurred by Agent in
protecting, defending or maintaining the value of the LLC Interest.
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10 Severability. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid and unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Agreement in any jurisdiction.
11 Rights Cumulative. All of Agent’s rights and remedies with respect to
Assignor, whether established hereby or by the Loan Documents or by law, shall
be cumulative and may be exercised singularly or concurrently. To the maximum
extent permitted by applicable laws (which matters shall survive termination,
repayment in full of, and/or release of the liens and security interests of
Agent arising under the Loan Documents), Assignor hereby waives protest of all
commercial paper at any time held by Agent on which Assignor is any way liable
and notice and opportunity to be heard, before exercise by Agent of the
remedies of self-help, setoff, or of other summary procedures permitted by any
applicable laws or by any agreement with Assignor and, except where required
hereby or by any applicable laws, notice of any other action taken by Agent and
Assignor hereby releases Agent and its officers, attorneys, agents and
employees from all claims for loss or damage caused by any act or omission on
the part of any of them, except willful misconduct or gross negligence.
12 Modification. This Agreement is subject to modification only by a
writing signed by all of the parties.
13 Inurement. The benefits and burdens of this Agreement shall inure to
the benefit of and be binding upon the respective successors and assigns of the
parties; provided however, that the foregoing provision shall not invalidate or
otherwise modify the restrictions imposed on Assignor hereunder with respect to
transferring any part of or interest in the Assignor.
14 Notice. Except as otherwise provided herein, all notices, requests and
demands to or upon a party hereto to be effective shall be in writing and shall
be personally delivered, mailed by certified or registered mail, return receipt
requested, sent prepaid by reliable overnight courier or sent by facsimile
transmission. Unless otherwise expressly provided herein, notices shall be
deemed to have been validly given when delivered, or, in the case of mailing,
two (2) business days after deposit in the mail in the continental United
States, postage prepaid; or, in the case of reliable overnight courier, on the
business day after the courier accepts delivery of such item for next business
day delivery; or, in the case of facsimile transmission, when sent against
confirmation of receipt prior to 5:00 p.m. local time at the recipient’s
office, in each case addressed as follows:
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If to Agent:
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LaSalle Bank National Association |
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One Metropolitan Square |
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000 X. Xxxxxxxx, Xxxxx 0000 |
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Xx. Xxxxx, Xxxxxxxx 00000 |
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Attn: Xxx Xxxxxx |
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With a Copy to:
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Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx LLP |
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000 Xxxxx Xxxxxx, 00xx Xxxxx |
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