Document:

exv10w3

 

Ex 10.3

SECURITY AGREEMENT

     THIS
SECURITY AGREEMENT (the “Agreement”) dated
this 31st day of March, 2004 is executed and delivered by TALX EMPLOYER SERVICES, LLC, a
Missouri limited liability company (“Grantor”) in favor of LASALLE BANK
NATIONAL ASSOCIATION, a national banking association, as Administrative Agent
(the “Secured Party”) pursuant to the terms of the Loan Agreement (hereinafter
defined).

WITNESSETH

     WHEREAS, TALX Corporation, a Missouri corporation (“Borrower”) 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 Borrower, Secured Party, 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 Borrower, Secured
Party and Southwest (the “First Amendment”), as further amended by that Second
Amendment to Loan Agreement dated January 27, 2003 among Borrower, Secured
Party, and Southwest (the “Second Amendment”), as further amended by that Third
Amendment to Loan Agreement dated June 30, 2003 among Borrower, Secured Party
and Southwest (the “Third Amendment”).

     WHEREAS, in order to refinance the indebtedness outstanding under the
Initial Loan Agreement, Borrower, Secured Party, Southwest and the Lenders
named therein (hereto collectively the “Lenders”) are entering into that
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 Borrower thereunder (each a
“Loan” and collectively “Loans”) are evidenced by certain Revolving Notes and
Term Notes dated of 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”).

     WHEREAS, Secured Party and Lenders acknowledge that portions of the Loans
are being used to finance the purchase of certain assets by Grantor;

     WHEREAS, Grantor, desirous of having Lenders make and/or continue to make
the Loans to Borrower which will inure to the direct and indirect financial
benefit of Grantor, executes this Agreement in the favor of Secured Party for
the ratable benefit of the Lenders in order to induce Lenders to make the Loans
and any other advances, loans, extensions of credit, future advances or
additional loans, directly or indirectly, to Borrower and to grant to Borrower
such renewals, extensions, forbearances, releases of collateral or other
relinquishments of rights as Secured Party may deem advisable; and

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     WHEREAS, Grantor and the Secured Party desire to secure the Obligations
(hereinafter defined) for the ratable benefit of Lenders pursuant to the terms
of the Loan Agreement.

     NOW, THEREFORE, in consideration of the execution and delivery by the
Lenders of the Amended and Restated Loan Agreement, and other good and valuable
consideration, receipt and sufficiency of which are hereby acknowledged by the
Grantor, the Grantor hereby agrees with the Secured Party as follows.

     1. GRANT OF SECURITY INTEREST. To secure the Obligations, Grantor hereby
grants to Secured Party, for the ratable benefit of the Lenders pursuant to the
terms of the Loan Agreement, a continuing lien on and security interest in, and
the right to set off against, any and all right, title and interest of the
Grantor, whether now, or hereafter, owned, existing, created, acquired or
arising, in and to any and all of Grantor’s personal property, wherever located
and whomever held by (collectively the “Collateral”). The Collateral includes,
but is not limited to, the following:

     (i) All Accounts, accounts receivable, Deposit Accounts, promissory
notes and other obligations owed to Grantor that arise from the sale,
rental or lease of Inventory, goods or other property of Grantor or the
rendering of services by Grantor, and all Chattel Paper, Instruments
(including Promissory Notes), Documents, drafts, contract rights and
acceptances, Health-Care-Insurance Receivables, Letter-of-Credit Rights
and other forms of obligations (including but not limited to all
obligations that may be characterized as General Intangibles or otherwise
under the UCC) respecting the rights of Grantor to the payment of money
from others and all other rights to the payment of money;

     (ii) All Goods and Inventory, and all documents of title of at any
time evidencing or representing a part thereof, including all inventories
of raw materials, work-in-process, finished goods, and merchandise,
materials and supplies and all other personal property and assets of
every kind and description held for sale, rental or lease or held to be
furnished under contracts for services or consumed in Grantor’s business,
or in any case held, used or useable in the supply, servicing,
advertising, processing, packaging, delivery or shipping of such
property;

     (iii) All Equipment, machinery, tools, furniture, and fixtures of
every sort and spare parts therefor, all storage media containing
computer programs and data, and all tools, dies, and molds, and all motor
vehicles, trailers, tractors, barges, and ships of every sort and spare
parts and accessories therefor, whether or not titled or certificated;

     (iv) All General Intangibles, including Payment Intangibles, all
computer programs, data and databases, leases, licenses, claims and
causes of action against others (whether in litigation, settlement or
otherwise), and tax refunds, and all summaries, compilations, mailing and
customer, client or supplier lists, and other supporting evidence records
relating to the business, assets, liabilities or capital of Grantor, and
all disks, files, tapes, printouts, books, records, periodicals,
directories, publications and other documents and media where the
foregoing is stored or embodied, and all patents, patent applications,
trademarks, trademark applications, trade secrets, trade names,

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service marks, trade styles, and copyrights, in each case whether or
not registered, licensed or filed, including, but not limited to, any of
the aforementioned specifically listed on the Addendum A attached hereto;

     (v) All rights under all licenses, permits, leases, contracts,
governmental approvals, franchises, applications for any of the
foregoing, renewals of any of the foregoing, and similar rights or
privileges or immunities;

     (vi) (A) all dividends, cash, securities, instruments and other
property from time to time paid, payable or otherwise distributed to
Grantor in respect of or in exchange for any shares or other capital
stock or trust, partnership or limited liability company interests, all
Investment Property, Certificated Securities, Uncertificated Securities,
Security Entitlements, Securities Accounts, securities accounts, margin
accounts, financial assets, hedging contracts, options contracts, and
futures contracts; (B) any and all distributions made to Grantor in
respect of any such shares or capital stock, or trust, partnership or
limited liability company interests, whether in cash or in kind, by way
of dividends or stock splits, or pursuant to a merger or consolidation or
otherwise, or any substitute security issued to Grantor upon conversion,
reorganization or otherwise; and (C) any and all other property hereafter
delivered to Grantor or Secured Party in substitution for or in addition
to any of the foregoing (including without limitation all securities
issued pursuant to any shareholder agreement, stock purchase agreement,
partnership agreement, trust agreement or indenture, limited liability
company operating agreement, stock purchase rights or other agreement to
which Grantor may now or hereafter be a party, all certificates and
instruments representing or evidencing such property and all cash,
securities, interest, dividends, rights, and other property at any time
and from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all thereof);

     (vii) All of Grantor’s property in the possession, custody or
control of Secured Party in any way, whether or not for safekeeping,
custody, pledge, transmission, collection or otherwise;

     (viii) All funds paid to Secured Party or in transit to any deposit
account or fund established by Grantor, and any securities in which such
funds may be invested; and

     (ix) All cash and non-cash proceeds and products of the foregoing,
all proceeds from insurance on any of the foregoing, all goodwill
associated with the foregoing, all additions and accessions to and
replacements and substitutions for any of the foregoing, everything that
becomes (or is held for the purpose of being) affixed to or installed in
any of the foregoing, and all products, rents, income, dividends,
royalties, and profits of or from any of the foregoing.

     This Agreement is made and given to secure, and shall secure, the payment
and performance of, whether arising by the Guaranty or otherwise, (i) any and
all indebtedness, obligations and liabilities of the Grantor to the Lenders, or
any of them individually, evidenced by or otherwise arising out of or relating
to the Guaranty and (ii) any and all reasonable expenses and charges, legal or
otherwise, suffered or incurred by the Secured Party in collecting or enforcing
any of such indebtedness, obligations or liabilities or in realizing on or
protecting or

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preserving any security therefor, including, without limitation, the lien
and security interest granted hereby (all of the foregoing being herein
referred to as the “Obligations”).

     2. DEFINED TERMS. The term “Loan Documents” and all other capitalized
terms used herein but not otherwise defined herein have the meanings given them
in the Loan Agreement. All capitalized terms used and not otherwise defined
herein or in the Loan Agreement have the meanings given them in the Uniform
Commercial Code as in effect from time to time in the State of Illinois
(“UCC”). To the extent the provisions of this Agreement conflict with the
provisions of the Loan Agreement, the Loan Agreement shall govern. The prior
sentences notwithstanding, any reference to any agreement, document, or
instrument, including this Agreement, any other Loan Document and any
agreement, document or instrument defined herein or therein, means such
agreement, document, or instrument as it may have been or may be amended,
restated, extended, renewed, replaced, or otherwise modified and in effect from
time to time in accordance with the terms thereof and, if applicable, the terms
hereof, and includes all attachments thereto and instruments incorporated
therein, if any.

     3. POSSESSION OF COLLATERAL. Until the occurrence of an Event of Default,
Grantor may have possession of all Collateral except for Collateral which is in
the possession of Secured Party or Collateral which Secured Party must possess
in order to have a perfected first priority Security Interest therein, and
Grantor may use each item of the Collateral in its possession in any lawful
manner not inconsistent with this Agreement, the other Loan Documents or with
any policy of insurance covering the same.

     4. GRANTOR’S REPRESENTATIONS AND WARRANTIES. Grantor represents and
warrants to the Secured Party the following:

     4.1. NAME; JURISDICTION; TAXPAYER ID NUMBER. The correct corporate
name and jurisdiction of formation of the Grantor is set forth in the
first paragraph of this Agreement, and the Grantor does not conduct and,
during the five-year period immediately preceding the date of this
Agreement, has not conducted, business under any trade name or other
fictitious name other than those set forth on Schedule A attached hereto;
and in any event, the only trade name or style under which Grantor sells
Inventory or creates Accounts, or to which instruments in payment of
Accounts are made payable, is the name which identifies Grantor as
aforementioned. The Internal Revenue Service taxpayer identification
number of the Grantor and the organizational identification number of the
Grantor issued by the Grantor’s jurisdiction of formation are set forth
on Schedule A attached hereto.

     4.2. OFFICES; PLACES OF BUSINESS. Grantor’s chief executive office
and principal place of business and the books and records relating to all
Accounts and the Collateral is located at the address set forth on
Schedule A. All addresses (including applicable counties) of all other
places of business of the Grantor shall at all times be additionally
listed on Schedule A. Unless Secured Party otherwise consents in
writing, all of the tangible Collateral will be kept at Grantor’s chief
executive office or such other places of business described in the Loan
Agreement, including Collateral which is movable when the same is not in
use; and without Grantor first making arrangements satisfactory to
Secured Party to protect Secured Party’s Security Interest therein,
Grantor

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will not place any of the tangible Collateral in any other location.
No Collateral shall at any time be in the possession or control of any
warehouseman, bailee or any of Grantor’s agents or processors without
Secured Party’s prior written consent and unless Secured Party, if
Secured Party has so requested, has received warehouse receipts or bailee
letters satisfactory to Secured Party prior to the commencement of such
storage. Grantor shall, upon the request of Secured Party, notify any
such warehouseman, bailee, agent or processor of the Security Interests
created hereby and shall instruct such person to provide a written
agreement to Secured Party that such person holds all such Collateral for
Secured Party’s account subject to Secured Party’s instructions.

     4.3. NAME, ENTITY OR OFFICE CHANGES. If Grantor intends to change
its name, change its structure, change the location of Grantor’s chief
executive office, create new or otherwise amend its trade names or
trademarks, change its state of organization, or open other places of
business, Grantor will, prior to taking any such action, provide Secured
Party no less than thirty (30) days prior written notice of the same and,
prior to taking any such action, will promptly execute such additional
documents as Secured Party may reasonably request in order to maintain a
fully perfected first priority Security Interest in favor of Secured
Party in the Collateral, excepting only Permitted Security Interests (as
defined in the Loan Agreement).

     4.4. INSURANCE. Grantor will keep the Collateral insured in
accordance with the terms of the Loan Agreement.

     4.5. COLLATERAL NOT TO BECOME FIXTURES. Without first making
arrangements satisfactory to Secured Party to protect its Security
Interest, Grantor will not allow the Collateral to become affixed to or
installed in any property (including but not limited to any real estate)
except, however, to or in other items of Collateral or as otherwise
permitted by the terms of the Loan Agreement.

     4.6. CONDITION OF COLLATERAL; DISPOSAL OF COLLATERAL. Grantor will
keep the Collateral in the condition required under the terms of the Loan
Agreement. Grantor will not transfer, convey or otherwise dispose of any
Collateral (or any interest therein) unless and only to the extent
permitted herein or by the Loan Agreement.

     4.7. LIENS. Grantor is the lawful owner of the Collateral free and
clear, and will keep free and clear, of all security interests, liens,
encumbrances, registered pledges, adverse claims, voting trust
restrictions and any other claims of others except with respect to
Permitted Security Interest or as otherwise disclosed to Secured Party in
the Loan Agreement. Grantor will pay and discharge all taxes assessed on
the Collateral in accordance with the terms of the Loan Agreement.

     4.8. COLLATERAL DISPOSITION. Grantor has not, and will not, sell,
assign, transfer, encumber or otherwise dispose of any of Grantor’s
rights in the Collateral except (i) with respect to Permitted Security
Interests, (ii) in the ordinary course of Grantor’s business or (iii)
upon the prior written consent of Secured Party, to be withheld,
conditioned or delayed by Secured Party in Secured Party’s sole
discretion.

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     4.9. AUTHORIZATION. Grantor has the full right, power and authority
to enter into this Agreement and to pledge the Collateral. Grantor’s
articles of formation and operating agreement do not prohibit execution
of this Agreement by Grantor or any term or condition contained in this
Agreement.

     4.10. BINDING EFFECT. This Agreement is binding upon Grantor, as
well as Grantor’s heirs, successors, representatives and assigns, and is
legally enforceable in accordance with its terms.

     5. INSPECTION. Secured Party and any of its authorized agents may examine
and inspect the Collateral in accordance with the terms of the Loan Agreement.

     6. DISBURSEMENT DIRECTLY TO SELLER OF COLLATERAL. To the extent, if any,
that Grantor has advised Secured Party that any of the Collateral is being
acquired with proceeds of any loan, advance or other financial accommodation
from Secured Party, such proceeds may be disbursed by Secured Party directly to
the seller of such Collateral.

     7. ADVERSE CONDITIONS AFFECTING COLLATERAL. Grantor will notify Secured
Party within 30 days of becoming aware of any material adverse fact or
condition which bears upon the value of the Collateral including any adverse
fact or condition, or the occurrence of any event, which (i) bears upon the
collectibility of any material Account including the ability of any Account
Grantor to perform under any agreement evidencing any material Account
(including the bankruptcy, insolvency or failure of any Account Grantor to pay
its debts as they become due), or (ii) causes material loss or depreciation in
the value of any material item of the Collateral and the amount of such loss or
depreciation. Grantor will provide such additional information to Secured
Party regarding the amount of any loss or depreciation in value of the
Collateral as Secured Party may reasonably request from time to time.

     8. PROTECTION OF SECURITY INTEREST. Secured Party may, at Grantor’s sole
cost, file a copy of this Agreement or a Financing Statement in any public
office deemed necessary by Secured Party to perfect or continue its Security
Interest in the Collateral, and Grantor hereby ratifies any such Financing
Statement previously filed by Secured Party and irrevocably authorizes Secured
Party to do any of the foregoing. Grantor will execute or cause the execution
of such additional Financing Statements and other documents (and pay the cost
of filing or recording the same in all public offices deemed necessary by
Secured Party) and do such other acts and things, including execution of
applications and certificates of title naming Secured Party as a secured party
and delivery of same to Secured Party, as Secured Party may from time to time
request or deem necessary to establish and maintain a valid and perfected
Security Interest in the Collateral, subject only to the Permitted Security
Interests. Grantor will, immediately upon Secured Party’s reasonable request,
place a durable notice of the existence of Secured Party’s Security Interest,
in form and by means reasonably acceptable to Secured Party, upon such items of
the Collateral as are designated by Secured Party. Grantor will not create any
Chattel Paper without placing a legend on the Chattel Paper acceptable to
Secured Party indicating Secured Party has a Security Interest in the Chattel
Paper. Grantor will not file any document releasing Secured Party’s Security
Interest in any of the Collateral without the prior written authorization of
Secured Party.

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     9. PRESERVATION OF COLLATERAL; EXPENDITURES. After first giving notice to
Grantor, Secured Party may perform any obligation of Grantor hereunder or under
any other Loan Document which Grantor fails to perform; provided, however, that
after the occurrence of an Event of Default and during the continuance, Secured
Party will not be obligated to provide Grantor with any such notice. After
first giving notice to Grantor, Secured Party may, in its commercially
reasonable judgment at any time, take any other action which it reasonably
deems necessary for the maintenance or preservation of any of the Collateral or
the Security Interest of Secured Party therein, including the payment and
discharge of taxes, liens, security interests and encumbrances of any kind
against the Collateral, or the procurement of insurance; provided, however that
after the occurrence of an Event of Default and during the continuance, Secured
Party will not be obligated to provide Grantor with any such notice. Any
actions taken by Secured Party pursuant to this Section will not be deemed a
waiver of any Event of Default. Upon the occurrence and during the continuance
of an Event of Default, Secured Party may adjust, settle or cancel claims under
any policy of insurance covering items of the Collateral and endorse any draft
received in connection therewith in payment of a loss or otherwise. Grantor
agrees to reimburse Secured Party on demand for all costs and expenses incurred
or paid by Secured Party pursuant to this Section, together with interest
thereon at the highest default or post-maturity rate provided in the Loan
Agreement or the Notes. Any amounts, until so reimbursed to Secured Party,
will, without further action by Secured Party or Grantor, be added to and
become a part of the Obligations and secured hereby. Secured Party may, for
the foregoing purposes, act in its own name or that of Grantor. Grantor hereby
grants to Secured Party its power of attorney, irrevocable so long as any of
the Obligations are outstanding, to take any of the actions described or
permitted by this Section. Secured Party is not obligated to exercise its
rights under this Section and will not be liable to Grantor for any failure to
do so.

     10. LIMITATION OF OBLIGATION OF SECURED PARTY. Secured Party shall use
ordinary reasonable care in the physical preservation and custody of the
Collateral in Secured Party’s possession, but shall have no other obligation to
protect the Collateral or its value. In particular, but without limitation,
Secured Party shall have no responsibility for: (a) any change in the market
value of the Collateral or for the collection or protection of any income and
proceeds from the Collateral; (b) ascertaining any maturities, calls,
conversions, exchanges, offers, tenders, or similar matters relating to any of
the Collateral; or (c) informing Grantor about any of the above, whether or not
Secured Party has or is deemed to have knowledge of such matters. Secured
Party will be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession (even if it fails to sell or
convert Collateral which is falling in market value) if Secured Party treats
such Collateral in substantially the same way that Secured Party treats the
collateral of its other customers when dealing with similar types of collateral
under similar circumstances. The failure of Secured Party to preserve or
protect any rights with respect to any of the Collateral against other parties
will not be deemed a failure to exercise reasonable care in the custody or
preservation of such Collateral.

     11. DEFAULT. The term “Event of Default” has the meaning as set forth in
the Loan Agreement and thus the occurrence and continuance of any event of 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.

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     12. REMEDIES. Upon the occurrence and during the continuation of an Event
of Default, Secured Party will have and may exercise any or all of its rights
and remedies as provided in the Loan Agreement and in the other Loan Documents,
at law or in equity, including any or all of its rights and remedies against
any Guarantor, and/or treat all of Grantor’s property in Secured Party’s
possession as part of the Collateral to secure payment of the Obligations, in
addition to exercising any one or more of the following rights and remedies:

     (i) Declare all Obligations immediately due and payable, without
notice of any kind to Grantor.

     (ii) Utilize any and all of its rights and pursue any and all of its
remedies under the UCC, under any other applicable law, at equity, or
pursuant to this Agreement and the other Loan Documents with respect to
the Collateral.

     (iii) Register any securities included in the Collateral in Secured
Party’s name and exercise any rights normally incident to the ownership
of securities.

     (iv) Maintain a judicial suit for foreclosure and sale of the
Collateral.

     (v) Effect transfer of title upon sale of all or part of the
Collateral. For this purpose, Grantor irrevocably appoints Secured Party
as its attorney-in-fact to execute endorsements, assignments and
instruments in the name of Grantor and each of them (if more than one) as
shall be necessary or reasonable.

     All of Secured Party’s rights and remedies, whether evidenced by this
Agreement, the Loan Agreement or other Loan Documents or by any other writing,
shall be cumulative and may be exercised singularly or concurrently. Election
by Secured Party to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an
obligation of Grantor under this Agreement, after Grantor’s failure to perform,
shall not affect Secured Party’s right to declare an Event of Default and to
exercise its remedies hereunder. Grantor agrees that, to the extent notice of
sale shall be required by applicable law, ten (10) days notice shall constitute
commercially reasonable notification.

     13. CERTIFICATE REGARDING COLLATERAL. Upon the occurrence and during the
continuation of an Event of Default, whenever Secured Party so requires,
Grantor will execute and deliver to Secured Party a certificate, in form and
detail satisfactory to Secured Party and signed by a knowledgeable officer of
Grantor, scheduling all material Collateral, as Secured Party may reasonably
require, together with such copies of invoices (with evidence of shipment
attached), if available, original purchase orders, service contracts, bills of
lading, original warehouse receipts or similar documents of title, pertaining
to Grantor’s Accounts and Inventory as Secured Party may reasonably require.

     14. INVESTMENT PROPERTY AS COLLATERAL. If any of the property which is
part of the Collateral is, from time to time, Investment Property:

     14.1. Grantor agrees (a) to deliver immediately to the Secured Party
or the Secured Party’s nominee all certificates evidencing any of the
Investment Property which may at any time come into the possession of
Grantor, (b) to execute and deliver to the

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Secured Party such financing statements as the Secured Party may
request with respect to the Investment Property, and, additionally,
however, Grantor hereby authorizes Secured Party to file any such
financing statements as Secured Party deems necessary or appropriate in
Secured Party’s sole discretion without the need for Grantor’s signature
or further approval as provided for in Section 8 hereof, (c) to take such
other steps as the Secured Party may from time to time reasonably request
to perfect the Secured Party’s security interest in the Investment
Property under applicable law, including, but not limited to, (i) with
respect to any portion of the Investment Property which may constitute
uncertificated securities, to obtain the agreement of issuer of such
securities to transfer or dispose of the securities only upon Secured
Party’s instructions without Grantor’s further consent and (ii) with
respect to any portion of the Investment Property which may constitute a
“security entitlement” (as defined in the UCC), to, in the Secured
Party’s sole discretion, obtain an agreement of the “securities
intermediary” (as defined in the UCC) to transfer or dispose of such
security entitlement only upon Secured Party’s instructions without the
further consent of Grantor.

     14.2. Upon the occurrence of an Event of Default, Secured Party may
transfer or register the Investment Property into its name or the name of
its nominee for so long as the Investment Property remains part of the
Collateral.

     14.3. The issuer of any Investment Property which is part of the
Collateral is hereby granted the authority to make the transfer or
registration pursuant to Section 14.2 of this Agreement into Secured
Party’s name or the name of Secured Party’s nominee, without the consent
of or further instruction from the Grantor.

     14.4. Secured Party has the sole right to vote any Investment
Property which is Collateral with regard to any proposed amendment to the
Charter Documents of the issuer of such Investment Property which could
reasonably be expected to have an adverse effect on the Secured Party.
Otherwise, Grantor has the sole right to vote such Investment Property
except upon the occurrence and during the continuance of an Event of
Default.

     14.5. All income from the Investment Property is to be paid and
delivered to Grantor; provided, however, that any Investment Property
received by Grantor by reason of Grantor’s ownership of the Investment
Property pledged hereunder are to be promptly delivered to Secured Party
as part of the Collateral, as provided above.

     15. NO RELEASE OR IMPAIRMENT OF COLLATERAL. Secured Party’s Security
Interest hereunder and Secured Party’s rights in connection therewith will
continue unimpaired, except with respect to Permitted Security Interests,
notwithstanding that Secured Party takes, exchanges or releases the Collateral
or other security, releases any person primarily or secondarily liable for any
of the Obligations, grants or allows extensions, renewals, modifications,
rearrangements, restructures, replacements or refinancings thereof, whether or
not the same involve modifications to interest rates or other payment terms
thereof, or indulgences with respect to the Obligations. Secured Party may
apply to the Obligations in such order as Secured Party determines, any
proceeds or other amounts received on account of the Collateral pursuant hereto
by the exercise of any right permitted under this Agreement, regardless of

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whether there is any other security for the Obligations. Grantor hereby
waives all requirements of presentment, protest, demand, and notice of dishonor
or non-payment to Grantor or any other party to the Obligations or the
Collateral

     16. RELEASES. In the event all of the Obligations have been fully and
indefeasibly paid, all of the Commitments have been canceled or terminated, all
Letters of Credit have expired, and the Secured Party have no other commitment
to extend credit or make advances to or for the account of Grantor, and Secured
Party has received a written request from Grantor in connection therewith to
execute and deliver all applicable UCC termination statements and releases with
respect to the Collateral (collectively, the “Releases”), Secured Party will,
at Grantor’s sole cost and expense (and Grantor will promptly reimburse Secured
Party for any reasonable fees and expenses, including but not limited to
reasonable legal fees and expenses, incurred in connection with the
preparation, review, filing or recording of any such releases or terminations)
execute and deliver such Releases to the person and address designated by
Grantor in its notice within a commercially reasonable time after Secured
Party’s receipt of such notice.

     17. NO LIABILITY OF SECURED PARTY FOR CONTRACTS. Anything herein to the
contrary notwithstanding: (i) Grantor shall remain liable under the contracts
and agreements included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed; (ii) the exercise by Secured Party of any
of its rights hereunder shall not release Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral; and
(iii) Neither Secured Party nor Lenders shall have any obligation or liability
under the contracts and agreements included in the Collateral by reason of this
Agreement, or be obligated to perform any of the obligations or duties of
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.

     18. FURTHER ASSURANCES. From time to time, Grantor shall execute and
deliver to Secured Party such additional documents and will provide such
additional information as Secured Party may reasonably require to carry out the
terms of this Agreement and be informed of Grantor’s status and affairs.

     19. CONTINUING AGREEMENT. This Agreement shall be a continuing agreement
in every respect and shall remain in full force and effect until all of the
Obligations, both for principal and interest, have been fully paid and
satisfied all Commitments have been cancelled or terminated and all Letters of
Credit have expired.

     20. MISCELLANEOUS.

     20.1. NOTICES. All notices, consents, requests and demands to or
upon the respective parties hereto shall be in writing, and shall be
deemed to have been given or made when delivered to Grantor or Secured
Party in person or when deposited in the United States mail, postage
prepaid, or, in the case of overnight courier services, when delivered to
the overnight courier service, or in the case of telecopy notice, when
sent, verification received, and in the case of Grantor at the address on
the signature page hereto and in the case of Secured Party at the address
as set forth on the signature page of the Loan Agreement, or such other
address as any party may designate by notice to the

10

 

other in accordance with the terms of this Section. No notice given
to or demand made on Grantor or Secured Party in any instance shall
entitle Grantor to notice or demand in any other instance.

     20.2. AMENDMENTS AND WAIVERS. No amendment to this Agreement will
be effective unless it is in writing and signed by authorized officers of
Grantor and Secured Party. No waiver of full compliance with any
provision of this Agreement or consent to any departure by Grantor
herefrom will be effective unless it is in writing and signed by an
authorized officer of Secured Party; provided, however, that any such
waiver or consent will be effective only in the specific instance and for
the purpose for which given. No failure by Secured Party to exercise,
and no delay by Secured Party in exercising, any right, remedy, power or
privilege hereunder will operate as a waiver thereof, nor will any single
or partial exercise by Secured Party of any right, remedy, power or
privilege hereunder preclude any other exercise thereof, or the exercise
of any other right, remedy, power or privilege.

     Oral agreements or commitments to loan money, extend credit or to
forbear from enforcing repayment of a debt including promises to extend
or renew such debt are not enforceable. To protect you (Borrower(s)) and
us (creditor) from misunderstanding or disappointment, any agreements we
reach covering such matters are contained in this writing, which is the
complete and exclusive statement of the agreement between us, except as
we may later agree in writing to modify it.

     20.3. RIGHTS CUMULATIVE. Each of the rights and remedies of Secured
Party under this Agreement is in addition to all of their other rights
and remedies under applicable law, and nothing in this Agreement may be
construed as limiting any such rights or remedies.

     20.4. SUCCESSORS AND ASSIGNS. This Agreement binds Grantor and its
successors and assigns and inures to the benefit of Secured Party, and
each of their successors, transferees, participants and assignees.
Grantor may not delegate or transfer any of its obligations under this
Agreement without the prior written consent of Secured Party. With
respect to Grantor’s successors and assigns, such successors and assigns
include any receiver, trustee or debtor-in-possession of or for Grantor.

     20.5. SEVERABILITY. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction is, as to
such jurisdiction, ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality
of such provision in any other jurisdiction unless the ineffectiveness of
such provision would result in such a material change as to cause
completion of the transactions contemplated hereby to be unreasonable.

     20.6. GOVERNING LAW; NO THIRD PARTY RIGHTS. This Agreement is to be
governed by and construed and interpreted in accordance with the internal
Laws of the State of Illinois applicable to contracts made and to be
performed wholly within such state, without regard to choice or conflicts
of law principles; except that the

11

 

provisions of this Agreement pertaining to the creation or
perfection of a security interest in or the enforcement of rights in the
Collateral which is located in a state other than the State of Illinois
shall governed by the by the laws of such other state. This Agreement is
solely for the benefit of the parties hereto and the Lenders and their
respective successors and assigns pursuant to the terms of the Loan
Agreement, and no other person has any right, benefit, priority or
interest under, or because of the existence of, this Agreement.

     20.7. FINAL EXPRESSION; NO COURSE OF DEALING. This Agreement,
together with the Loan Agreement, the other Loan Documents and any other
agreement executed in connection herewith or therewith, is intended by
the parties as a final expression of their agreement and is intended as a
complete and exclusive statement of the terms and conditions thereof.
Acceptance of or acquiescence in a course of performance or course of
dealing rendered or taken under or with respect to this Agreement, the
Loan Agreement or the other Loan Documents will not be relevant to
determine the meaning of this Agreement, the Loan Agreement or the other
Loan Documents even though the accepting or acquiescing party had
knowledge of the nature of the performance and opportunity for objection.

     20.8. NEGOTIATED TRANSACTION. Grantor and Secured Party each
represent to the other that in the negotiation and drafting of this
Agreement each has been represented by and has relied upon the advice of
counsel of its choice. Each of Grantor and Secured Party affirm that its
counsel has had a substantial role in the drafting and negotiation of
this Agreement; therefore, this Agreement will be deemed drafted by each
of Grantor and Secured Party, and the rule of construction to the effect
that any ambiguities are to be resolved against the drafter will not be
employed in the interpretation of this Agreement.

     20.9. SECURED PARTY EXPENSES AND ATTORNEYS’ FEES. Grantor will
reimburse Secured Party for all expenses incurred by Secured Party in
connection with preparation, administration, amendment, modification and
in seeking to collect or enforce the Obligations and any other rights
under this Agreement or any of the other Loan Documents or under any
other instrument, document or agreement evidencing or executed in
connection with any of the Obligations, including reasonable attorneys’
fees and actual attorneys’ expenses (whether or not there is litigation),
court costs and all costs in connection with any proceedings under the
United States Bankruptcy Code, and any expenses incurred on account of
damage to any property to which any of the Collateral may be affixed.

     20.10. ASSIGNMENT BY SECURED PARTY. To the extent permitted in the
Loan Agreement, Secured Party may grant a participation interest in or
assign or transfer to another person any instrument, document or
agreement evidencing any of the Obligations and Secured Party’s rights
under this Agreement, and may deliver all the property which is part of
the Collateral and in its possession to the participant, assignee or
transferee or to any person acting as agent for Secured Party.

12

 

     20.11. PARAGRAPH HEADINGS. The titles to the paragraphs of this
Agreement are solely for the convenience of the parties and shall not be
used to explain, modify, simplify, or aid in the interpretation of the
provisions of this Agreement.

     20.12. REINSTATEMENT. This Agreement and any and all Security
Interests created or evidenced hereby will continue to be effective or be
reinstated, as the case may be, as though such payments had not been
made, if at any time any amount received by Secured Party or Lenders in
respect of the Obligations is rescinded or must otherwise be restored or
returned by Secured Party or Lenders, including upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of Grantor or upon
the appointment of any intervenor or conservator of, or trustee or
similar official for, Grantor, any substantial part of its assets, or
otherwise.

     20.13. CHOICE OF FORUM. SUBJECT ONLY TO THE EXCEPTION IN THE NEXT
SENTENCE, GRANTOR AND SECURED PARTY HEREBY AGREE TO THE EXCLUSIVE
JURISDICTION OF THE FEDERAL COURT OF THE NORTHERN DISTRICT OF ILLINOIS
AND THE STATE COURTS OF ILLINOIS LOCATED IN COOK COUNTY AND WAIVES ANY
OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY
ACTION INSTITUTED THEREIN, AND AGREES THAT ANY DISPUTE CONCERNING THE
RELATIONSHIP BETWEEN SECURED PARTY AND GRANTOR OR THE CONDUCT OF ANY OF
THEM IN CONNECTION WITH THIS AGREEMENT OR OTHERWISE SHALL BE HEARD ONLY
IN THE COURTS DESCRIBED ABOVE. NOTWITHSTANDING THE FOREGOING: (1) SECURED
PARTY SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST
GRANTOR OR ITS PROPERTY IN ANY COURTS OF ANY OTHER JURISDICTION DEEMED
NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL, OR OTHER
SECURITY FOR THE LOAN OBLIGATIONS, AND (2) GRANTOR AND SECURED PARTY
ACKNOWLEDGE THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY
PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE
JURISDICTIONS.

     20.14. WAIVER OF JURY TRIAL. GRANTOR AND SECURED PARTY HEREBY WAIVE
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
(2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF
THE GRANTOR AND SECURED PARTY OR EITHER OF THEM IN RESPECT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS RELATED HERETO
OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. GRANTOR AND SECURED
PARTY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT EITHER MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT
AS

13

 

WRITTEN EVIDENCE OF THE CONSENT OF THE GRANTOR OR SECURED PARTY TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

     20.15. SERVICE OF PROCESS. GRANTOR HEREBY WAIVES PERSONAL SERVICE
OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED)
DIRECTED TO GRANTOR AT ITS ADDRESS SET FORTH ON THE SIGNATURE PAGE
HERETO, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS
AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAILS; OR AT
SECURED PARTY’S OPTION, BY SERVICE UPON CT CORPORATION, WHICH GRANTOR
IRREVOCABLY APPOINTS AS GRANTOR’S SECURED PARTY FOR THE PURPOSE OF
ACCEPTING SERVICE OF PROCESS WITHIN THE STATE OF ILLINOIS. SECURED PARTY
SHALL PROMPTLY FORWARD BY REGISTERED MAIL ANY PROCESS SO SERVED UPON SAID
SECURED PARTY TO GRANTOR AT ITS ADDRESS ON THE SIGNATURE PAGES HERETO.
NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF THE SECURED PARTY TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

(signatures on following page)

14

 

     IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first above written.

	 	 	 	 	 
	

	 	GRANTOR:
	 
	 	 	 	 
	

	 	TALX EMPLOYER SERVICES, LLC, a

Missouri limited liability company
	 
	 	 	 	 
	

	 	By:
	 /s/ L. Keith Graves

	

	 	Name:	 L. Keith Graves

	

	 	Title:	 CFO

	 
	 	 	 	 
	

	 	WITH A NOTICE ADDRESS OF:
	

	 
	

	 	1850 Borman

	

	 	St. Louis, MO 63146

	

	 	

	 
	 	 	 	 
	

	 	AND COPY TO:
	 
	 	 	 	 
	

	 	Karen W. Fries, Esq.

Bryan Cave LLP

One Metropolitan Square, Suite 3600

St. Louis, Missouri 63102-2750

 

 

SCHEDULE A

	(a)	 	Additional Trade or Fictitious Names:

	(b)	 	Taxpayer ID Number:

	(c)	 	Chief Executive and principal place of business at:

	(d)	 	Additional places of business:

 

 

EXHIBIT A

Collateral Description for Financing Statement

Naming TALX EMPLOYER SERVICES, LLC, a Missouri limited liability company, as

“Grantor” and LaSalle Bank National Association, a national banking association,

as Administrative Agent, as “Secured Party"

Grantor hereby grants a Security Interest to Secured Party in all personal
property and assets of Grantor, and all of Grantor’s rights, title and interest
therein, in all cases whether now or hereafter owned or acquired by or
consigned to Grantor and wherever located, and whether held by Grantor or any
other person (including a securities intermediary) including, but not limited
to, the following:

     (i) All Accounts, accounts receivable, Deposit Accounts, promissory
notes and other obligations owed to Grantor that arise from the sale,
rental or lease of Inventory, goods or other property of Grantor or the
rendering of services by Grantor, and all Chattel Paper, Instruments
(including Promissory Notes), Documents, drafts, contract rights and
acceptances, Health-Care-Insurance Receivables, Letter-of-Credit Rights
and other forms of obligations (including but not limited to all
obligations that may be characterized as General Intangibles or otherwise
under the UCC) respecting the rights of Grantor to the payment of money
from others and all other rights to the payment of money;

     (ii) All Goods and Inventory, and all documents of title of at any
time evidencing or representing a part thereof, including all inventories
of raw materials, work-in-process, finished goods, and merchandise,
materials and supplies and all other personal property and assets of
every kind and description held for sale, rental or lease or held to be
furnished under contracts for services or consumed in Grantor’s business,
or in any case held, used or useable in the supply, servicing,
advertising, processing, packaging, delivery or shipping of such
property;

     (iii) All Equipment, machinery, tools, furniture, and fixtures of
every sort and spare parts therefor, all storage media containing
computer programs and data, and all tools, dies, and molds, and all motor
vehicles, trailers, tractors, barges, and ships of every sort and spare
parts and accessories therefor, whether or not titled or certificated;

     (iv) All General Intangibles, including Payment Intangibles, all
computer programs, data and databases, leases, licenses, claims and
causes of action against others (whether in litigation, settlement or
otherwise), and tax refunds, and all summaries, compilations, mailing and
customer, client or supplier lists, and other supporting evidence records
relating to the business, assets, liabilities or capital of Grantor, and
all disks, files, tapes, printouts, books, records, periodicals,
directories, publications and other documents and media where the
foregoing is stored or embodied, and all patents, patent applications,
trademarks, trademark applications, trade secrets, trade names, service
marks, trade styles, and copyrights, in each case whether or not
registered, licensed or filed;

 

 

     (v) All rights under all licenses, permits, leases, contracts,
governmental approvals, franchises, applications for any of the
foregoing, renewals of any of the foregoing, and similar rights or
privileges or immunities;

     (vi) (A) all dividends, cash, securities, instruments and other
property from time to time paid, payable or otherwise distributed to
Grantor in respect of or in exchange for any shares or other capital
stock or trust, partnership or limited liability company interests, all
Investment Property, Certificated Securities, Uncertificated Securities,
Security Entitlements, Securities Accounts, securities accounts, margin
accounts, financial assets, hedging contracts, options contracts, and
futures contracts; (B) any and all distributions made to Grantor in
respect of any such shares or capital stock, or trust, partnership or
limited liability company interests, whether in cash or in kind, by way
of dividends or stock splits, or pursuant to a merger or consolidation or
otherwise, or any substitute security issued to Grantor upon conversion,
reorganization or otherwise; and (C) any and all other property hereafter
delivered to Grantor or Secured Party in substitution for or in addition
to any of the foregoing (including without limitation all securities
issued pursuant to any shareholder agreement, stock purchase agreement,
partnership agreement, trust agreement or indenture, limited liability
company operating agreement, stock purchase rights or other agreement to
which Grantor may now or hereafter be a party, all certificates and
instruments representing or evidencing such property and all cash,
securities, interest, dividends, rights, and other property at any time
and from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all thereof);

     (vii) All of Grantor’s property in the possession, custody or
control of Secured Party in any way, whether or not for safekeeping,
custody, pledge, transmission, collection or otherwise;

     (viii) All funds paid to Secured Party or in transit to any deposit
account or fund established by Grantor, and any securities in which such
funds may be invested; and

     (ix) All cash and non-cash proceeds and products of the foregoing,
all proceeds from insurance on any of the foregoing, all goodwill
associated with the foregoing, all additions and accessions to and
replacements and substitutions for any of the foregoing, everything that
becomes (or is held for the purpose of being) affixed to or installed in
any of the foregoing, and all products, rents, income, dividends,
royalties, and profits of or from any of the foregoing.

 

 

ADDENDUM A

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Serial	 	Date of	 	Regist.	 	 
	Trademarks
	 	Number
	 	Filing
	 	Number
	 	Date Reg.exv10w4

 

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;

Page 2 of 8

 

     (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

Page 3 of 8

 

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.

Page 4 of 8

 

     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:

	 	 	 	 	 
	

	 	If to Agent:
	 	LaSalle Bank National Association
	

	 	 	 	One Metropolitan Square
	

	 	 	 	211 N. Broadway, Suite 4050
	

	 	 	 	St. Louis, Missouri 63102
	

	 	 	 	Attn: Tom Harmon
	 
	 	 	 	 
	

	 	With a Copy to:
	 	Blackwell Sanders Peper Martin LLP
	

	 	 	 	720 Olive Street, 24th Floor

Page 5 of 8

 

	 	 	 	 	 
	

	 	 	 	St. Louis, Missouri 63101
	

	 	 	 	Attn: John P. McNearney, Esq
	 
	 	 	 	 
	

	 	If to Assignor:
	 	TALX Corporation
	

	 	 	 	1850 Borman Court
	

	 	 	 	St. Louis, Missouri 63146
	

	 	 	 	Attn: William Canfield
	 
	 	 	 	 
	

	 	With a Copy to:
	 	Bryan Cave
	

	 	 	 	One Metropolitan Square
	

	 	 	 	211 N. Broadway, Suite 3600
	

	 	 	 	St. Louis, Missouri 63102
	

	 	 	 	Attn: Karen W. Fries, Esq.

or to such other address or telecopy number as each party may designate for
itself by like notice given in accordance with this Section.

     15 Governing Law. The validity and interpretation of this Agreement and
the rights and obligations of the parties shall be governed and construed in
accordance with the internal laws of the State of Illinois.

[signatures on following page]

Page 6 of 8

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

	 	 	 	 	 
	

	ASSIGNOR:
	 
	 	 	 	 
	

	TALX CORPORATION, a Missouri Corporation
	 
	 	 	 	 
	

	 	By: 
	 /s/ L. Keith Graves

	

	 	Name: 	L. Keith Graves

	

	 	Title: 	CFO

 

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

	 	 	 	 	 
	

	 	AGENT:
	 
	 	 	 	 
	

	 	LASALLE BANK NATIONAL ASSOCIATION, as

Administrative Agent and a Lender
	 
	 	 	 	 
	

	 	By: 
	 /s/ Tom Harmon

	

	 	Print Name: 	 Tom Harmon

	

	 	Title:
	RVP

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